The amortization of prior service credits by itself makes it appear that pensionand postretirement costs are $1 billion lower than what would otherwise be reported. Combine that with still rosy return assumptions of 7.75% and you are approaching an opearnings overstatement of close to $1.5 billion. Granted that still a pe of around 14.5, but does change the story somewhat.
yeah the sad part is that even if the fund does decent over time on a per share basis, he's almost destined to be a net destroyer of capital in the long-run because of the fickle nature of individual investors to chase performance.
I agree, I put this among one of the few stocks I like. Personally, I think the valuation is attractive even though I think the pension assumptions are still quite inadequate. Because of this, I wouldn't mind a smaller dividend increase in favor of repurchases.
just so you know, its fairly hard for an mreit to go bankrupt, particularly one that's already acting defensively. Doesnt mean that there can't be further losses though
He's saying that the basic structure of the fund is fine as a passive investment. That structure being hedged in expensive over-bullish markets, aggressive when valuations support it. Problem is that hussman gets emotional.
This seems like a pretty attractive price. Below 13 p/e, good buyback program. Would never buy a stock for a dividend but a strong dividend like this does tend to reduce the chance of a loss on your investment. I have some cincerns over the long-term margins of the wireless segment but overall i think its a solid pick in an expensive market
The company is performing very well. These types of returns on investment are very rare in a REIT. And a pretty attractive valuation too. I'm long the series c convertible. Currently about a 7% yield and based on today's price conversion rights will start at essentially $57 per share, dropping every year due to conversion rate adjustments.
oh okay. He's just saying he prefers to buy directly if given the opportunity, as he did last december. To continue the shareholder letter:
Instead, we will respond to offers made directly to us at or below the NYSE bid. If you wish to offer stock, have your broker call Mark Millard
Well he does have greater percentage of assets in sectors that are supposedly less cyclical such as healthcare (20 vs roughly 14 for the market), practically no exposure to financials, etc. So yes it is possibly for the fund to move up in a down market.
His record wasn't perfect. I'd consider the GE investment a single at best.
I expect you might already know the answer but what he meant was that he viewed his shareholders as partners and felt that them selling to him was a very bad move on their part. He wanted to give them a chance to rethink the valuation of berkshire. Of course, they did so and the shares were quickly bid up above the limit.
I believe it was a mistake on buffett's part. However, if he did announce a buyback with the same threshold, its very likely that shares would have been bid up before much could be repurchased, just like in 2011.
agreed. The massive equity raise earlier this year and then stating that corvex underbid at 24.50. If you think its worth so much more than 24.50, then don't issue shares at $19
Good article, although of course writing weekly they are somewhat repetitive. I like how he talks about how he was aggressive on the market in the early 90s, which he was but he went negative starting all the way back in 1994. So even with him ultimately being right about valuations, the result of his market calls were not that great. Fortunately, his fund didnt start til 2000. I think if theres something to learn from hussman, its dont bet against the market with options. Being out of the market at this time may be reasonable, but do it with cash or short-term bonds, you can guarantee that way that you wont end up with 10 year negative annual returns.
75% of buffetts exxon buy was purchased in 2nd quarter, seems odd to me that he would ask the sec to conceal the transaction when he was almost done buying it. Almost like he was planning a bigger position but changed his mind.
The lack of alternatives definitely makes it more interesting. In 1999 you could buy 4% tips and in 2008 5-6% CDs
I respectfully disagree. I've looked at a lot of stocks and have never seen a material difference in valuation based on the amount of turnover of the shares or the % of shares floating