Recent

% | $
Quotes you view appear here for quick access.

Berkshire Hathaway Inc. Message Board

jad1148 83 posts  |  Last Activity: 30 minutes ago Member since: Dec 8, 2002
SortNewest  |  Oldest  |  Highest Rated Expand all messages
  • Reply to

    To buy at 6.94 or not to buy

    by par7551 Aug 4, 2015 7:07 AM
    jad1148 jad1148 30 minutes ago Flag

    I've lost interest in NCZ and currently have no plans to invest in it. I'll continue to follow it for a bit longer, just to see how it works out.

    I was disappointed that they didn't reset the monthly distribution on August 3rd, considering that they have warned at least twice now, that they're not earning enough to pay $0.085 per share per month.

    Here's an excerpt from their current "Latest Section 19 Notice":

    "The Fund’s previously declared (July 1, 2015) distribution of $0.085 per common share was paid or reinvested on August 3, 2015 to shareholders of record on July 13, 2015. Fund Management estimates $0.06798 per common share of this distribution is from net investment income and $0.01702 is from paid-in capital in excess of par."

    and here's an excerpt from the previous one, that they've now deleted:

    "The Fund’s previously declared (June 1, 2015) distribution of $0.085 per common share was paid or reinvested on July 1, 2015 to shareholders of record on June 11, 2015. Fund Management estimates $0.06892 per common share of this distribution is from net investment income and $0.01608 is from paid-in capital in excess of par."

  • Reply to

    Question?

    by mvmitchell99 Aug 2, 2015 2:08 PM
    jad1148 jad1148 Aug 4, 2015 4:51 AM Flag

    Hi Beach,

    I don't see correcting the payout ratio as financial engineering. For a no growth, slow growth company, IBM's payout ratio has been too low, for far too long (look at the bottom row, "All Div'ds to Net Prof" on the VL report). Ginni is just coming to terms with reality and redirecting the free cash flow to something that makes more sense (pay ALL the shareholders rather than just enrich WEB by giving him a bigger slice of the company each year --- keep that up and eventually you'll be out of a job). IMO, she is remaking IBM in the image of T & VZ. Now buying back stock, which, by the way, she still plans to do, but in a much smaller way, THAT'S financial engineering (creating faux PER SHARE growth by reducing the denominator).

  • Reply to

    Question?

    by mvmitchell99 Aug 2, 2015 2:08 PM
    jad1148 jad1148 Aug 3, 2015 1:29 PM Flag

    Beach, I agree with you.

    Based on Ginni's plan (slide #30 of IBM's 26Feb2015 8-K) and VL's projection of EPS for 2016 here's my GUESSTIMATE for the future annual dividend stream:

    { 5.20, 6.40, 7.68, 9.00, 10.40, 10.72, ... }

    Note that the growth rate is very high, a double over the next four years, as Ginni puts the pedal to metal and drives up the payout ratio, but then it drops to a sustainable 3% thereafter.

    Don't you just love Ginni?

  • Reply to

    Where is the dividend yield

    by y708bigbuck Jul 18, 2015 9:20 AM
    jad1148 jad1148 Aug 3, 2015 11:51 AM Flag

    « Probably a quarterly. »

    From their website:

    Why O’Shares ETFs
    Income: We believe you should be rewarded for investing your hard earned income so our family of ETFs are developed with a primary focus on dividend paying companies and dividends will be distributed monthly.

  • Reply to

    serious discussion

    by scorman May 25, 2015 9:53 AM
    jad1148 jad1148 Jul 31, 2015 4:06 PM Flag

    « what source? »

    You are currently on the message board page.

    In the bar above the messages, click "Headlines" and then click the "Business Wire" report for Thursday, July 30, 2015.

    Note that Net Investment Income per share for the THREE months ended 5/31/2015 was $0.19. That isn't enough to cover the distributions over the same period of time, i.e., $0.19 is less than 3 X $0.085.

  • Reply to

    serious discussion

    by scorman May 25, 2015 9:53 AM
    jad1148 jad1148 Jul 31, 2015 6:15 AM Flag

    Yesterday's Business Wire press release: "AllianzGI Convertible & Income Fund II Reports Results for the Fiscal Quarter Ended May 31, 2015", wasn't very encouraging. Looking back at previous quarterly reports, it looks to me like this is the fifth quarter in a row, that they have not earned enough to cover the current distribution.

  • Reply to

    jad,

    by hjclasvegas6969 Jul 30, 2015 10:18 AM
    jad1148 jad1148 Jul 30, 2015 10:59 AM Flag

    « 6/30/1998 break point »

    Years ago, I began plotting BRK-A's inflation adjusted (ala Shiller) book value per share (log) vs date (linear). I wish I could share the graph with you. It shows two distinct lines with very different slopes (growth rates). The data within the period between 6/30/1998 and 9/30/1999 is a just a mess, no doubt due to the consolidation of GenRe, so yes, 6/30/1998 is somewhat arbitrary, but only by a couple of quarters at best. By the way, the REAL (inflation adjusted) CAGR for the earlier period is ~22%, the second period is ~7%, so, in my opinion, the party ended in mid 1998.

  • Reply to

    jad,

    by hjclasvegas6969 Jul 30, 2015 10:18 AM
    jad1148 jad1148 Jul 30, 2015 10:32 AM Flag

    Yes, that's based on BRK-A's price per share. For me, busting out the individual stock returns (other than IBM) is just more work than it's worth.

  • jad1148 jad1148 Jul 30, 2015 8:06 AM Flag

    WEB#1 was fabulous! WEB#2, not so much.

    WEB#1, 12/31/1979 to 6/30/1998, 18.5 years, 34.6% ATR.

    WEB#2, 6/30/1998 to 6/30/2015, 17.0 years, 5.8% ATR.

  • jad1148 jad1148 Jul 30, 2015 7:26 AM Flag

    Worth the read, IMO, Ben Inker's "Price-Insensitive Sellers". It is one of two articles in GMO's 2Q2015 Quarterly Letter (free).

    Some excerpts:

    "The last decade has seen an extraordinary rise in the importance of a unique class of investor. Generally referred to as “price-insensitive buyers,” these are asset owners for whom the expected returns of the assets they buy are not a primary consideration in their purchase decisions."
    ...
    "Making matters worse, in order to see massive changes in the price of a security, you don’t need the price-insensitive buyer to become a seller. You merely need him to cease being the marginal buyer."

    Something to think about, yainvestor2.

  • jad1148 jad1148 Jul 29, 2015 2:29 PM Flag

    Sorry I can't help, hc, but I gave up on both BRK & WEB the moment I read the paragraph on page 36 of the 2014AR that starts: "Eventually – probably between ten and twenty years from now – ". That really was the last straw for me. For your sake, I hope Sean responses. Quite honestly, he's better at that type of analysis than I am. Best regards, jad.

  • Reply to

    Americans hording cash

    by tomandjanewright Jul 26, 2015 4:32 PM
    jad1148 jad1148 Jul 26, 2015 6:49 PM Flag

    Better to make nothing safely, than to take the risk of losing 20% or more to make 2%.

  • Reply to

    Americans hording cash

    by tomandjanewright Jul 26, 2015 4:32 PM
    jad1148 jad1148 Jul 26, 2015 4:43 PM Flag

    Smart!

  • Reply to

    I blame the Fed

    by hirsct Jul 24, 2015 2:45 PM
    jad1148 jad1148 Jul 26, 2015 6:38 AM Flag

    IMO, it isn't a fear of increasing interest rates that is causing the drop in NCZ's NAV/s, it's the drop in the selling prices (and thus, the profits) of the stuff that funds the portfolio's creditors' coupons. As of 6/30/2015, NCZ's Portfolio Leverage-Adjusted Duration was only 2.53% years, which is similar to a short-term "bond" or note. Not a big deal.

    To see the problem visually, bring up a Yahoo Charts, Interactive, 2 year graph for XNCZX (NCZ's NAV/s). For comparison, add DBC (a basket of commodities) and OIL (an ETF that tracks West Texas Crude Oil). Now, change the date range to: starts, 01/01/2014 and ends, 07/24/2015. It looks like NCZ's NAV 18.51% decrease over that period is tracking the decreases in commodity prices (36.18%) and the price of oil (57.55%).

    As always, just my opinions.

  • Reply to

    Bought more COP & BP

    by axpkocop Jul 22, 2015 10:54 AM
    jad1148 jad1148 Jul 25, 2015 4:47 AM Flag

    « How low does COP go? »

    axpkocop,

    Take a look at the following article in today's BARRON'S: "Low Oil Prices Squeeze Energy Dividends".

    Some excerpts:
    " ... ConocoPhillips (COP) offered a token 1% bump along with cuts in spending. “They have the ability to reduce capital spending significantly over the next three to four years if current commodity prices sustain,” says Dowd."
    ...
    "But according to a recent note from Oppenheimer & Co., if prices remain below $60 a barrel for a prolonged period, payouts across the sector could come under the gun. “At this low price, all oil companies are funding their dividend through additional borrowing or asset sales, and even the majors could be forced to freeze or cut their dividend,” wrote Oppenheimer."

  • Reply to

    mornin jad, ncz, 4.2 % discount,

    by hjclasvegas6969 Jul 22, 2015 7:48 AM
    jad1148 jad1148 Jul 24, 2015 9:05 AM Flag

    « ... amazing punishment for retail investors. »

    Yes, and incurable optimists that they are, they appear to be pricing in ONLY a one cent decrease in the monthly distribution per share on a future reset.

    V/s = 12 x ( $0.085 - $0.010 ) / 13% = $6.92
    Yesterday's closing P/s = $6.93

    I did take a look at their recent Form N-Q over on the SEC. One of their holdings, Arch Coal, Inc., 9.875%, 6/15/19, appears to have a YTM of ~68%. To understand why, search for : « Arch Coal in Trouble: Will Reverse Stock Split Help? ».

  • jad1148 jad1148 Jul 21, 2015 11:40 AM Flag

    Beachlawyer2003,

    I very likely won't buy it. IMO you need to trade it very carefully, i.e., buy it after, and then sell it before, a step down. It would not be a something to leave for my wife to have to sort out after I'm gone. I'm much more interested in OUSA now, but I need to see the first dividend. I'm guesstimating ~$0.20 per share quarter. I also want some specs (P/E, D/E, growth rate, etc.). I see OUSA as something to buy instead of the 500, but only after a correction.

  • jad1148 jad1148 Jul 21, 2015 11:09 AM Flag

    « What is it about this particular fund that attracted your attention? »

    Last November (Nov 8, 2014 6:45 PM) some poor, disillusioned cheerleader, who was hoping, no doubt, (in my opinion) to prop the price up, made the mistake of posting the following on the IBM message board:

    « Retirees. Looking for a dividend paying stock yielding 11%
    Dividends payed monthly. The stock is ncz and it is traded on the nyse. »

    Not being a believe in free lunches, it piqued my curiosity.

    I found the negative growth rate absolutely fascinating, and the idea that something that pays you very well even while it slowly dies could still be a good investment.

  • jad1148 jad1148 Jul 21, 2015 10:34 AM Flag

    IMO, NAV and Book Value are very similar concepts. Stand alone, their both meaningless. The premium/discount (to NAV) or multiple (to BV) a rational investor should be willing to pay should depend on how much distributable cash the investment generates today and the investor's expectations regarding it's future rate of change.

  • jad1148 jad1148 Jul 21, 2015 10:07 AM Flag

    My buy-in target (IF I buy at all) is just a bit south of $6. I believe, to avoid a return of capital, they'll probably have to reset the monthly distribution per share from the current $0.085 to ~$0.065 (in September?, their FY ends in February). I am willing to wait and see.

BRK-A
214,150.00Aug 4 4:00 PMEDT