keep in mind when looking at IBM that the non-gaap purchase related adjustment and retirement related adjustments are done on a pretax basis. Only the after-tax (20%) effect is added back to non-gaap eps when in reality its the entire amount that is true cash flow. These adjustments can be fairly significant as last quarter they were about $325 million pretax.
I'm not saying it was a good investment, only about a $1 billion gain so far. Lost opportunity cost so far. is 3 years enough time to measure an investment? perhaps, I dont know.
$38 as a real estate play is fine and all but he bought in at $80, just as he bought BAC at $15. I think hes a good investor but at the very least he's been early lately.
Heinz non-gaap (I know but for Heinz its appropriate given its restructuring) first quarter earnings were just under $330 million after tax. After the 180 million to berkshire, you have run-rate earnings of $600 million. For berkshire, that's $300 million on its 4.25 billion investment, which is decent. However, we may still see some more benefit from the restructuring and of course the interest rate on the preferred at 9% after tax is particularly unattractive. As that gets redeemed, heinz' earnings power will look much better.
It happened one day last month too, i believe. We'll see if it stays that way by the end of next week. If so, then he'll be behind on 3 of his 4 funds. And hstrx really isnt a straight comarison because it mixes in some equities along with its bonds.
His unhedged investments have roughly tripled from the 2009 bottom similar to the index, although he did outperform somewhat on the way down and his long-term unhedged comparison is very good. Heres a look at recent years.
HSGFX UNHEDGED SP500
12/31/06 3.51% 13.88% 15.79%
12/31/07 4.16% 0.89% 5.49%
12/31/08 -9.02% -33.97% -37.00%
12/31/09 4.63% 40.31% 26.46%
12/31/10 -3.62% 16.57% 15.06%
12/31/11 1.64% 3.19% 2.11%
12/31/12 -12.62% 8.99% 16.00%
12/31/13 -6.62% 37.74% 32.39%
Since Inception 3.95% 9.51% 3.79%
He controlled the price when he thought it was going too cheap, and if the market didnt respond he would have bought back plenty of stock. So foundations get a decent price and everyones happy. DJCO doesnt matter and IBM has problems but I think the current valuation certainly reflects those problems.
I dont believe that but where i find fault with hussman is betting against the market even when overvalued. Although i understand as a fund manager you cant exactly sit in cash but you could short the index instead of options
It is interesting, especially as trading has gotten to be so inexpensive for individual investors. My guess is that theres just a great deal of investor confidence, fear tends to be a better trading motivator
Dow now only about $1 away from conversion price. I believe if it maintains above 53.50 that dow will choose to force conversion. If so berkshire will lose the $219 million after tax dividend but would have a roughly $4 billion common stock position with about a $100 million dividend
I think in general the convertible preferreds are one of the most attractive parts of the market today. Own a couple myself and theres often only a small premium between the preferreds and the underlying.
Maybe, i dont know. There are a lot more CA casinos than there used to be, three within an hour of me. Vegas is still a fun place to go to and i will go back at some point and while i dont think its going anywhere, i wouldnt bet on a rebound either.
I'm not sure where the info comes from but I think hes said about 0.8. But he only counts data prior to the early 90's ("pre-bubble years")
My biggest beef is the comments about wiping out all excess returns since 1995. As if it would be possible to get back in at the exact low of the market which in 2009 lasted about 2 days
I think the best thing to do with banks, at least the high quality ones is to normalize loan losses to about 1% of assets. They're still generally decent investments here but its easy to overestimate what normal provisions should be. However, companies like wells with great deposit bases are also somewhat a bet on higher interest rates.
I understand the fear of loss, but his fear of drawdowns is pretty significant. In the last fourteen years, he's really only been unhedged for 1 of them. Granted valuations have been high most of that time but thats a lot of hedging.
Even if you count dividends hsgfx is still down over 29% from its peak in 2008, but at least its not 32 :)
Agreed. The staggered strike position is essentially a net short position even when the notional value is equal. If he wanted to just be fully hedged, he would set the strike prices to be even.
Of course its not, i was agreeing that how the fund is currently positioned (fully hedged with a staggered strike) is essentially a net short position. That position depends on OVOB conditions and will eventually change.