I dont even get the claim, i havent seen any change in the resale value of the affected cars
yeah they are in bad shape. $1.1 billion on credit facility plus I assume they still have a bit of cash. I was very surprised to see the stock pop from the rights offering but I guess thats just how concerned shareholders were of the liquidity situation. They have assets that they can sell to buy them time but it takes time, these properties are not easy to sell and the bleeding is quick. And given their pricing, future profits are near impossible. Kmart is selling at less than a 20% gross margin while their S&A costs are at 25%. Maybe an REIT will happen but all that does is buy time, increase losses and ultimately leave an REIT with a bunch of empty properties.
Bruce thought it was worth that much, but that was before we got 25% dilution to go with the new high cost debt as well as the very cheap sale of Sears Canada. Bruce also paid about that much back in 2005 so that didn't work out too well.
You would still be talking of about $200 billion in Debt for Coca Cola. I dont see how that would be possible.
50x earnings - ~35% taxes(the vast majority was a capital gain)= 32 x earnings but at a time when the market was more expensive as well as coke's growth looked more promising. He hasnt bought a share since the 80's so its been more about not paying capital gains than anything else. But yes berkshire would still have been better off if he had sold.
Yeah its not doable even if buffett wanted coke, which I very much doubt he's interested in. Firstly it would cost more than $200 billion, maybe a little less if you lever it up a bit but I doubt you could add more than maybe $20 billion in debt. Beyond that though, the valuation is high and future prospects are less than stellar
Yep. particularly strong day for healthcare which hes heavily overweight in
Yeah he didnt sell before september 30th, but earnings were particularly bad and they threw out their forecasts. It may not be likely but i think its a possibility he chooses to sell here
It took a couple days after IBMs earnings to find its price level but its been sitting around 162 since then. Nothing more material just trying to figure out how much more ibms business has deteriorated, with ginny saying that the slowdown started in september
They basically already reported earnings, about the same loss as third quarter last year. Not good but its a mild improvement
did he mention if hes still short berkshire? From what I remember he was short for a long time and then ended it and then reestablished it sometime after IBM earnings
I had to search it lol. Apparently its the second after the May 2005 comment "a fine line"
Yeah grantham could be right, i like most of his work. Although I think he reached with his close to 0% gdp forecast, basing it largely on a shift to rising real commodity prices.
You also have a small tax benefit from selling shares now, it will be interesting to see
Consumer sentiment now well above its average with the latest consumer confidence sitting on its average and likely to surpass it later this month. I suppose this bolsters hussman's position as high confidence is generally necessary to precede a decline. I wonder if he'll say anything about it
Its a fine strategy to sit on some cash and invest as you go along as berkshire has done. And really an extra $35 billion above berkshires minimum is not really that significant. Where you can get into trouble is staying 100% cash for years or like hussman taking a short position. just becauce the market is overvalued doesnt mean there arent pockets that are priced reasonably. Imo, some of the convertibles are priced very reasonably
I dont see much reason to buy the common though. Id play it safer with the convertible, take the 6.75% yield and you still get conversion at $45.31 which adjusts quarterly with each dividend payment. Its a good combination of yield and upside. And if something does go wrong with their business, much less downside