I love how you claim something that nobody else would claim so that you can shoot it down, its quite entertaining.
I think we might have ongoing buybacks at some point in time but not at the lower prices that he was trying to get, just as an alternative to a dividend. There are a lot of high net worth investors in BRK that would much rather defer their gains than get taxed with a dividend. Eventually, most of them will sell but being able to defer those taxes is incredibly beneficial in growing wealth.
well he wants to get a discount of course. I think its worth $122 but would perhaps benefit from a higher interest rate environment.
I expect it's at least partially due to it's lower level of debt. They both have about $20 billion bit of course xom is the much bigger entity
Lets say the indices that he wrote the puts on give up all the gains they've made since the end of 2010 and then stay completely flat till their respective expiration dates between 2018 and 2026(weighted average of about 7 years). Berkshire would then have a liability of $3.8 billion, which compares to its current gaap liability of $5.5 billion. Could the markets go lower? Certainly possible if there is some significant 70's style inflation but I think its fairly unlikely.
I think you'd see a move to at least $21. I would guess about 20.80 which would be about a 7.8% yield. Not really that out of line with the preferreds of other REITS even some of the convertibles with far away conversion prices.
looks good to me. The railroad has offered good returns on investment. I like the strategy of focusing on volume growth while UP focuses on price gains. This kind of investment is a lot harder to do when you have to worry about preserving dividends and share buybacks.
I kinda like t. Earnings have been somewhat overstated due to the amortization of prior service credits in the pension and post retirement plans. This was about 1.15 bilion pretax this year. I like that they adjusted their rate of return to 7.75 but think its still a bit high. Id put T's pe at about 14 instead of the 13 it appears to be.
$10,000 share per loss in 1 day certainly possible. Berkshire selling at $33000 in 3 months, that seems quite farfetched.
very possible. Problem is you never know. Theres still the risk of the correction without the recession like september 2011 that would not be very beneficial for Mr. Hussman as its unlikely that he will take equity exposure in that situation.
They still got a ways to go. In 2012, state farm earned about $33 billion in premiums but geico is now writing $5 billion a quarter and growing at a decent rate. Any guesses on how long it takes to be #1?
I think one time $5 billion dividend and reevaluate next year
based on the index values at september 30th, if the contracts settled at that level than Berkshire would owe $2.3 billion. If the prices were lower, than they would owe more. But these are undiscounted figures and the weighted average life was 7.25 years at the end of last quarter, and of course prices are higher now than they were in September. Stocks moving nowhere for 7 years are a bad enough result, so I wouldn't expect the exposure to be much more than 2.3 billion, even though the GAAP liability is $5.35 billion