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Author: Dizzy99 Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 41316  
Subject: Deleted Message Date: 4/21/2007 2:25 PM
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Author: SpocksBrainRtns Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25928 of 41316
Subject: Re: barrons article re buffett Date: 4/21/2007 9:48 PM
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Another downside to the problem of the too-much-cash for too-few-investing-opportunities paradigm is cash intoxication, which causes management to abandon sensibility and seek positive net-present value outside of normal business activities. Buffett's recent foray into less-than-zero-sum games, such as currency and commodity speculation, suggests he's susceptible to the effect.

this is the point where my growing chuckles morphed into a full scale belly laugh. Suggesting WEB is participating in less-than-zero-sum games (which are far more serious than simple old less than zero sum games) is like saying that the SpongeBob ain't a sponge and ain't yellow. And heavens do those A share guys lord it over us B share people...



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Author: Metal27 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25930 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 1:09 AM
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I am a BRK.B shareholder and for my money, Mauzy is right on target. When it comes to his shareholders, this emperor is wearing few clothes. Like any human being, Buffett has his strong points and his weak points. Unfortunately, his weaknesses are in the investor relations area. His refusal to split the stock could be taken as an evidence of a prejudice against the small investor. And it is belied by the issuance of the B shares, which are in effect a 30 to 1 split of the A shares.

His refusal to pay a dividend in effect says he believes he can allocate our company's earnings--ALL of them--better than the thousands of individual shareholders, few of whom he even knows. This patrician, "father knows best" approach is wearing increasingly thin as his stockholders age--and realize the only way they'll get a dime out of him is to sell shares. So the shareholders end up bearing the trading expenses instead of the corporation, and gradually become ex-shareholders.

As Mauzy points out, Berkshire has so much cash they cannot invest it properly. I think Buffett and the rest of us would all be enjoying the experience a lot more if Buffett had paid out dividends over the years. Then he'd actually be challenged by the problem of how best to allocate the remainder, instead of playing King Midas.

Don't mistake me--I think he's great in many ways, one of a kind in our era when it comes to investing and to motivating wealthy managers. But I wonder if he has anyone around who dares disagree with him on these important matters.

The stock has appreciated nicely in the year or so that I've owned it, but I bought it at my wife's insistence (she is purely subjective about these things) and last night, out of a clear blue sky, she suddenly wanted to sell. Do I want to try for two hurricane-free seasons? Or would I rather avoid any hurricanes in our home?

Cheers,

Scott

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Author: SpocksBrainRtns Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25931 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 9:48 AM
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His refusal to split the stock could be taken as an evidence of a prejudice against the small investor. And it is belied by the issuance of the B shares, which are in effect a 30 to 1 split of the A shares.

Gee, I thought he issued the B shares precisely out of concern for smaller shareholders.

So the shareholders end up bearing the trading expenses instead of the corporation, and gradually become ex-shareholders.

At my broker it costs $10 to get out of as many shares of Berkshire as you want. Plus, if you hold it a year you get a lower tax on the sale. Some cost.

I think Buffett and the rest of us would all be enjoying the experience a lot more if Buffett had paid out dividends over the years. Then he'd actually be challenged by the problem of how best to allocate the remainder, instead of playing King Midas.

Everyone is entitled to an opinion and I would welcome a small dividend from Berkshire at this point.

But I wonder if he has anyone around who dares disagree with him on these important matters.

The problem is that articles like this are long on opinions and short on facts. If the author had painstakingly detailed opportunities missed and explored existing capital decisions then perhaps the opinion might have meant something. However, claiming something like currency trading is a zero sum game ignores the profits that WEB made in this area.

In the end, if an author wants to criticize, at least speak from a position of authority. This author doesn't do that - which means Mauzy probably has a great career path in politics...



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Author: MadCapitalist Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25932 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 10:52 AM
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His refusal to pay a dividend in effect says he believes he can allocate our company's earnings--ALL of them--better than the thousands of individual shareholders, few of whom he even knows.

Should a company pay dividends if even a single shareholder could earn higher returns than the company could by reinvesting them? If it isn't a single shareholder, then how many?

Buffett once wrote:
“Unrestricted earnings should be retained only when there is a reasonable prospect - backed preferably by historical evidence or, when appropriate, by a thoughtful analysis of the future - that for every dollar retained by the corporation, at least one dollar of market value will be created for owners. This will happen only if the capital retained produces incremental earnings equal to, or above, those generally available to investors.”
1984 Letter to Berkshire Hathaway shareholders
http://www.berkshirehathaway.com/letters/1984.html

Generally available to investors. This is far more reasonable than having dividend policy directed to benefit a few excellent investors who shouldn't be invested in Berkshire in the first place since they can earn higher returns elsewhere.

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Author: Metal27 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25933 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 2:57 PM
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Should a company pay dividends if even a single shareholder could earn higher returns than the company could by reinvesting them? If it isn't a single shareholder, then how many?

MadCapitalist,
Help me here, please. The shareholder invests to make a profit personally; what he or she does with that profit is not the company's business. Neither Mr. Buffett nor you seem to contemplate any other use for the money than reinvestment. Even so, his policy precludes the shareholder from reinvesting in any business other than his own. And what if the investor has other non-investment uses for the money?

Put another way, corporations exist at the pleasure of their investors. At any time they deem appropriate, those investors have the prerogative to wind up the corporation's affairs and pay out ALL the retained earnings. I understand there are good reasons why that rarely happens, but the fact remains that it is possible and does happen (and more frequently these days in the form of spin-offs, which are at least a partial winding up of a corporation's business).

Investors in this country have largely acquiesced to the retention of all earnings by their investees, no matter how much cash those companies produce, no matter how mature the business. BRK is just one example of a large, established business producing more cash than it knows what to do with but paying no dividends, there are many more.

I need your help in finding ONE other developed economy anywhere in the world in which investors allow their investees to treat them this way. I don't know of one. I do believe we in this country are alone in allowing so much cash (and with it, the power) to be accumulated by our investees' managements.

(I also fully understand that with Buffett's and Munger's ownership percentage, the rest of us are merely junior partners.)

As for your second point, I'm afraid I do not understand how BRK could have a "...dividend policy directed at a few excellent investors who shouldn't be invested in Berkshire in the first place..." or how paying no dividends makes anything "generally available to investors".

BTW, Buffett says in that 1984 President's Letter you cited:

We expect to continue to diversify while also supporting the
growth of current operations though, as we've pointed out, our
returns from these efforts will surely be below our historical
returns. But as long as prospective returns are above the rate
required to produce a dollar of market value per dollar retained,
we will continue to retain all earnings. Should our estimate of
future returns fall below that point, we will distribute all
unrestricted earnings that we believe can not be effectively
used.


Much has been made--even by Buffett--of his increasing difficulty in finding acquisitions that meet his criteria and are large enough to be worthwhile (in 1984 he defined large as a company making more than $5M in net income!). If he is still living by his words above, isn't it time he paid a dividend?

Cheers,

Scott




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Author: Metal27 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25934 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 3:14 PM
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SpocksBrainRtns,

Gee, I thought he issued the B shares precisely out of concern for smaller shareholders.

Nice to meet someone as sarcastic as I am!

At my broker it costs $10 to get out of as many shares of Berkshire as you want. Plus, if you hold it a year you get a lower tax on the sale. Some cost.

Ahh, but you bear the cost, not BRK, which is my point.

I fully agree with your last point. I think the problem is that Mauzy did not work the numbers. If he had, I think the results would have buttressed his argument. BRK is plainly suffering from an increasingly large embarrassment of riches.

Cheers,

Scott
(Still re-reading Fisher's book. I don't yet know if I like it or not, but it has definitely caused me to re-think my approach to investing.)



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Author: SpocksBrainRtns Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25935 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 4:11 PM
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Ahh, but you bear the cost, not BRK, which is my point.

If he splits the stock than as a shareholder I get to bear the cost so I'm not sure of the distinction. I guess expenses on the corporate level don't impact me? What are you saying? Plus, I then have to twiddle with my portfolio program and rework my spreadsheets.


I fully agree with your last point. I think the problem is that Mauzy did not work the numbers. If he had, I think the results would have buttressed his argument. BRK is plainly suffering from an increasingly large embarrassment of riches.

and

Still re-reading Fisher's book. I don't yet know if I like it or not, but it has definitely caused me to re-think my approach to investing.

Ah, but can't you at least see the irony here? You are 're-reading' Fisher but apparently have learned enough to question the foremost capital allocator of our time, to the point of making definitive statements about what he should do.

Maybe you don't get this, but there is NO 'working the numbers'. The idea of Mauzy's that FX trading is a zero sum game is something he just made up. The idea that commodity speculation is a zero sum game is something he just made up. The idea that there is a problem with the high stock price (on the A shares) is something he just made up. The idea that BH is a closed end fund is just something he made up. Mauzy built his thesis on the sort of goober talk you here about any stock (hey, do you think it will go up?)

It is embarrassing that a major publication like Barron's would publish trash pieces like this. If you want to make a case, make a case. Don't make stuff up, and don't preach your ignorance where all can see it. This article was laughable, just laughable.

(and yep, I still think BH should pay a dividend)


Nice to meet someone as sarcastic as I am!

I don't get your meaning. I wasn't being sarcastic. Mauzy's arguments against the share price are less than meaningless - they are flat out idiotic. The idea that WEB 'can't raise above the fray' is so patently absurd I couldn't get the giggles to stop coming...


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Author: MadCapitalist Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25936 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 4:41 PM
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And what if the investor has other non-investment uses for the money?

The investor could sell a share or shares.

Or was this a trick question?

I need your help in finding ONE other developed economy anywhere in the world in which investors allow their investees to treat them this way.

What in the world are you talking about? Most of Berkshire's investors have made excellent returns. The ones that haven't achieved excellent returns purchased the stock when it was overvalued, which is most certainly not Buffett's fault.

You certainly haven't made a case that Buffett isn't acting in the shareholders' interests. Earnings continue to grow strongly.

As for your second point, I'm afraid I do not understand how BRK could have a "...dividend policy directed at a few excellent investors who shouldn't be invested in Berkshire in the first place..." or how paying no dividends makes anything "generally available to investors".

"Returns generally available to investors" means returns available to investors in the market place.

Much has been made--even by Buffett--of his increasing difficulty in finding acquisitions that meet his criteria and are large enough to be worthwhile (in 1984 he defined large as a company making more than $5M in net income!). If he is still living by his words above, isn't it time he paid a dividend?

This has been debated at length on the Berkshire Hathaway board. Feel free to read those posts. I have made my case far too many times to repeat it here.

I'm obviously wasting my time, so excuse me if I don't continue.

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Author: richinaz Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25939 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 7:17 PM
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Scott,

I guess I don't see your problem with BRK. First if you don't like a stock don't buy it. It seems like if you have an issue in that you bought something you didn't want because of your wife. Maybe your problem is with her.
I would have more sympathy if you had bought a stock and over the years management had changed (either in personnel or philosophy). Then I could an investor being frustrated with how the new management is negatively affecting a company but that isn't the case with BRK. They have consistently said they were not considering a dividend and also were not interested in splitting the stock.

Rich

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Author: Calpinist Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25940 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 7:24 PM
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And what if the investor has other non-investment uses for the money?

The investor could sell a share or shares.

Or was this a trick question?


I think many small investors hold only one or two BRK-B shares. For my own portfolio, owning BRK would mean committing a sizable portion of my investments to BRK in one go ($3628 is larger than my usual initial position size). So I don't own it. Selling BRK might mean selling all a small investor owns. That's not attractive for income investors.

However, I agree with you that this is a moot point. If there was really a lot of demand for fractional BRK shares, there would be a closed end mutual fund out there that invested exclusively in BRK shares at very low cost and would have a low share price, e.g. $10. Something like that could be a living for one not very easily bored portfolio manager.

Best,
Calpinist

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Author: MadCapitalist Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25942 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 9:17 PM
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And what if the investor has other non-investment uses for the money?

The investor could sell a share or shares.

Or was this a trick question?


I think many small investors hold only one or two BRK-B shares. For my own portfolio, owning BRK would mean committing a sizable portion of my investments to BRK in one go ($3628 is larger than my usual initial position size). So I don't own it. Selling BRK might mean selling all a small investor owns. That's not attractive for income investors.


Yes, stocks that aren't paying dividends are often not attractive for income investors. This doesn't mean that the company should start paying dividends.

However, I agree with you that this is a moot point. If there was really a lot of demand for fractional BRK shares, there would be a closed end mutual fund out there that invested exclusively in BRK shares at very low cost and would have a low share price, e.g. $10. Something like that could be a living for one not very easily bored portfolio manager.

Best,
Calpinist


You can sell fractional shares through Sharebuilder if it is really important to you.

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Author: Metal27 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25943 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 10:21 PM
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Despite claims to the contrary, I don't believe BRK could accurately measure the cost of splitting the stock, although in their case they could certainly account for that cost as an extra-ordinary item, assuming it was material.

As for when I learned to question the foremost capital allocator of our time, I certainly didn't need Fisher's assistance; that questioning came long before Fisher' book and was not influenced by it. And do note that I am not questioning Buffett's abiities in capital allocation, as I said earlier. I am merely questioning whether he is doing the best thing for his shareholders in the areas of stock price and dividends. (BTW, Fisher has a real affection for Buffett, as we all do, I think.)

And I mis-understood your point about Mauzy--I was only focused on working some numbers to come up with an approximation of how much BRK really ought to retain in the business. I missed the FX argument.

And I guess I mis-understood your comment on the B shares because if Buffett truly cared about the little guy he would have saved time and money by simply splitting the A shares and avoiding the cost and complexities of the two-class share structure he now has. That is an irony I do see.

So we do agree on dividends--and Barrons! And probably more other things than we realize.

Cheers,

Scott

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Author: Metal27 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25944 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 10:33 PM
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Rich,
I knew what I was buying with BRK and I'm very happy with any investment that returns over 20% in a year. And I have no problem with my wife; she does that sometimes and often has good intuition.

I try to be as dispassionate as possible about my investments; I don't like or dislike them. But I do like a good debate!

Cheers,

Scott



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Author: Metal27 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25945 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 10:37 PM
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Calpinist,
I can't name one, but I think there are such funds, or at least funds that are primarly composed of BRK.

Cheers,

Scott

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Author: SpocksBrainRtns Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25946 of 41316
Subject: Re: barrons article re buffett Date: 4/22/2007 11:12 PM
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And I guess I mis-understood your comment on the B shares because if Buffett truly cared about the little guy he would have saved time and money by simply splitting the A shares and avoiding the cost and complexities of the two-class share structure he now has. That is an irony I do see.

I'll let this go but your facts are wrong - splitting the A shares several times ala everyone else would have been far more costly than doing the one shot B share deal. Thus, the 'cost' you refer to is a virtue. As far as 'complexity' is concerned, I have no idea what you are talking about cause here's all the complexity you get:

http://www.berkshirehathaway.com/compab.html


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Author: MDCigan Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25947 of 41316
Subject: Re: barrons article re buffett Date: 4/23/2007 1:28 AM
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His refusal to split the stock could be taken as an evidence of a prejudice against the small investor. And it is belied by the issuance of the B shares, which are in effect a 30 to 1 split of the A shares.

Gee, I thought he issued the B shares precisely out of concern for smaller shareholders.


FWIW, I think the original poster is right on target here. Buffett's refusal to split the stock to create a substantially lower share price is very problematic for the small investor.

Take someone just getting started in investing who is opening a Roth IRA account and funding it with the MAXIMUM LEGAL amount of $4,000. The only option is to buy 1 B share, and then Berkshire constitutes nearly 90% of the account value. In effect, the share price of the B shares makes it impossible to establish a Berkshire position in an account and at the same time maintain at least a reasonably diversified portfolio. As much as I respect Buffett as a CEO and capital allocator, and as much as I see the downside risk of Berkshire as being highly limited under almost all possible scenarios, I am not going to have a 75%+ greater allocation to Berkshire in either my account, or that of my clients.

So for the small investor who is maybe just getting started and opening a 4K Roth and maybe a 4-5K regular account, establishing a Berkshire position is NOT possible without basically concentrating the entire portfolio in Berkshire. Buffett's refusal to split the price creates an ALL or NONE option for the small investor. I don't know if it is an intentional prejudice against the small investor. I don't think so as Buffett doesn't strike me as an elitist. But in the end, the effect is a negative on the small investor.

As an active portfolio manager, I absolutely loathe the share price because it creates logistical problems. At my previous employer, one reason we didn't include Berkshire in the model portfolio was because of the share price (although I did disagree with that decision). Because of the share price, it is basically impossible to maintain a consistent percentage allocation across all accounts, especially if you decide to scale up or scale down (take partial profits) the position.

As an example, I have a 90K account that has 7 B shares, a 73K account that has 6 B shares, and a 26K account with 2 B shares. If Berkshire moves up to say $4200, and I want to scale down and reallocate elsewhere, I can't keep the 90K account and 26K account the same if I only want to scale back a little.

I know Buffett doesn't want Berkshire to become a high-turnover trading stock, and can appreciate that, but IMO it is long past time to create C shares that trade for maybe 1/10 a B share. That would put the stock around $360 a share. That should be high enough to ward off active traders, yet low enough for small investors to purchase a meaningful position, and make portfolio management easier.

I think Buffett and the rest of us would all be enjoying the experience a lot more if Buffett had paid out dividends over the years. Then he'd actually be challenged by the problem of how best to allocate the remainder, instead of playing King Midas.

Everyone is entitled to an opinion and I would welcome a small dividend from Berkshire at this point.


I disagree here. As long as Buffett is alive, I have ZERO problem with NO dividend. If dividends are what one is after, there are PLENTY of S&P 500 stocks with decent dividend yields that consistently raise their dividends. In fact, there are a couple of ETFs that own nothing but dividend paying stocks.

In my mind, when you buy Berkshire, you are in effect making the decision to also buy Buffett's capital allocation decisions. If he decides holding a substantial amount of cash is warranted, and one disagrees then I think you sell the stock. For me, buying Berkshire is alot like buying a strong mutual fund where I am essentially outsourcing part of the portfolio to a proven investment manager. Why interfere with him by demanding a dividend? Frankly, I like the cash position, and it is one of the reasons I own the stock. I personally believe the aggregate market is substantially overvalued, and therefore holding Berkshire is like simultaneously holding equities and cash. The cash position should be a major reason the stock outperforms in a down market, although I think it has been a drag on stock performance from 2003-present. I still wonder why Buffett wasn't more aggressive in late 2002/early 2003 in terms of buying equities. I can only assume he was expecting stocks to get even cheaper, and that just didn't happen.

If the author had painstakingly detailed opportunities missed and explored existing capital decisions then perhaps the opinion might have meant something.

One I'd love to ask Buffett about was McDonalds in 2003. The business seems to fit his typical investment criteria. I can't say I identified it as an attractive opportunity, but numerous value investors and some smart posters here on TMF did. It certainly qualifies as an elephant. I am sure Buffett was familiar with the business.

However, claiming something like currency trading is a zero sum game ignores the profits that WEB made in this area.

I do think this is a stupid argument the author made in the article. Who cares if currency trading, options trading, or whatever is zero-sum or not? If Buffett can make money consistently engaging in these areas and create value for shareholders that is all that matters. Money is money, and profits are profits. I've never understood the perspective that some endeavors are somehow "better" then others for making money.





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Author: MDCigan Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25948 of 41316
Subject: Re: barrons article re buffett Date: 4/23/2007 1:38 AM
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If there was really a lot of demand for fractional BRK shares, there would be a closed end mutual fund out there that invested exclusively in BRK shares at very low cost and would have a low share price, e.g. $10. Something like that could be a living for one not very easily bored portfolio manager.

I don't know about this. I think there probably is sufficient demand for a product like this, but the problem with creating it is that once you go through the work, cost, man-hours, and regulatory effort to do it, that would probably be the kick in the butt to Buffett to create something like lower priced C shares which would make the product obsolete.

In my mind, it is something of a catch 22. As long as there is no threat of a product like this, there is no reason or motivation for Buffett to create a lower priced alternative. But as soon as someone invests the time and money to do so, Buffett would respond and make that investment worthless so why would any rational person do so? I think anybody contemplating such a product learned their lesson from the B shares.


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Author: MDCigan Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25949 of 41316
Subject: Re: barrons article re buffett Date: 4/23/2007 1:52 AM
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(BTW, Fisher has a real affection for Buffett, as we all do, I think.)

I was hanging out with my girlfriend at Borders a few weeks ago (yes, we have exciting dates :) ), and decided to start perusing the Fisher book after remembering the review here on the board (not to mention all the unsolicited e-mails I get for the book).

Anyways, Fisher pretty much destroyed any credibility he had in my mind when he tried to basically state that Buffett wasn't a money/portfolio manager, and that the performance of Berkshire the stock over time wasn't comparable to a mutual fund or separate account portfolio manager.

I thought this point was close to asinine. I'll grant him that technically the performance of Berkshire stock over time isn't the same as managing a portfolio of stocks and that part of Berkshire's performance comes from the insurance operations, but it is ridiculous to somehow imply that the performance of Berkshire's stock over the long-term isn't an accurate reflection of Buffett's investing and capital allocation decisions.

More importantly, there is an academic study (sorry, don't have the link handy) that thoroughly examined just Buffett's stock-picking over a long time frame (not the performance of Berkshire the stock), and found it substantially outperformed the S&P 500. Either Fisher is aware of this study and deliberately ignored it in making his point, or is not aware of it. So he is either dishonest or doesn't do thorough research in making his points. Either way, it reflects poorly on him.

I may go back and peruse the part where he supposedly demonstrates that high P/E stocks being more risky is a myth, but I'm guessing this is another case of him distorting or ignoring data to the contrary.

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Author: MDCigan Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25950 of 41316
Subject: Re: barrons article re buffett Date: 4/23/2007 1:56 AM
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Calpinist,
I can't name one, but I think there are such funds, or at least funds that are primarly composed of BRK.

Cheers,

Scott


Off the top of my head, I think Sequoia is around 30% Berkshire (which happens to be my current allocation). Fairholme is around 17%. I think Tilson has a pretty big stake as well. Those are substantial allocations, but certainly not primarily. I know of no fund that is primarily composed of BRK.


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Author: gocanucks Big red star, 1000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25951 of 41316
Subject: Re: barrons article re buffett Date: 4/23/2007 8:14 AM
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One question that I always have is why BRK does not have option contracts? Stock price/liquidity making hedging near impossible? WB does not want options on the stock?

To me, LEAP calls on BRK would be much more attractive than the commons.

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Author: bogwan Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25953 of 41316
Subject: Re: barrons article re buffett Date: 4/23/2007 10:06 AM
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So should I short BNI?

"currency and commodity speculation" He held those positions a fairly long time. Having foreign currencies and commodities could be considered diversification.

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Author: dividendgrowth Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25972 of 41316
Subject: Re: barrons article re buffett Date: 4/23/2007 9:57 PM
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To have options, a stock's average volume must exceed 50000 shares a day.

Actually, the average daily dollar volume of B-shares is quite high. Its bid-ask spread is low enough for me to use market orders.

If the B shares were to split another 1:10, it would have a lower per share price than GOOG, a very hot stock among active traders.

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Author: TheNajdorfDefens Big funky green star, 20000 posts Feste Award Nominee! Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25975 of 41316
Subject: Re: barrons article re buffett Date: 4/23/2007 11:22 PM
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Gee, I thought he issued the B shares precisely out of concern for smaller shareholders.


'The Class B shares satisfy a certain investor demand, to be sure, though Class B investors are indeed second-class parishioners, for the Class B shares carry one-thirtieth the rights of Class A shares, except that they wield one-two-hundredth of Class A shares' voting rights.'

cough,

Naj

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