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Any thoughts on whether they buybacks should start really kicking in here?

Anyone getting greedy while the world is fearful?
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No. of Recommendations: 12
Any thoughts on whether they buybacks should start really kicking in here?

I think they should, and are.
But only maybe $100m a day, since management seems keen on not disturbing the share price by trading more than 5% of volume.

Hey, we're all entitled to guess, and it's only a guess, but that fits the data to date pretty well.
Buybacks? For sure. Huge? Not a chance.

But don't forget there are lots of OTHER stocks that might be interesting at today's prices.
And a large number of those offer better prospective returns that Berkshire even at these juicy prices.
The interesting question is what subset of those Berkshire's equity management team know, trust, like the price of, and are willing to buy today.

One thing's for sure: a lack of dry powder isn't a limiting factor.
My comments on a recent mood of "swing, ya bum":
https://boards.fool.com/how-might-an-quotuntypical-punterquo...

"prices have to fall".
That's all it would take.
We haven't had a bear market in over a decade. That's pretty unusual.
Anybody waiting for a good buying opportunity, including Berkshire head office, has had an unusually long wait and therefore is perceived as having made a bad decision.
Not only a decision that hasn't turned out well [yet], but perceived as a strategy that can never work out again.
Prices will of course fall. We don't know when, but there's always a bear market coming.
Given the large pockets of extreme gearing in the markets these days, the "swimming naked" phrase may become pointedly salient again.


Jim
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Would be willing to share what OTHER shares you might be watching or considering?
Consider me a huge fan of yours
Linda
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"But don't forget there are lots of OTHER stocks that might be interesting at today's prices.
And a large number of those offer better prospective returns that Berkshire even at these juicy prices."

Maybe we should set up a "semi-long" bet:

BRKA closes February at 309096.
S&P500 closed at 2954.22.

What US common stocks would we buy that will outrun Berkshire and/or the S&P500 to December 31?

Would love to hear Jim's ideas.
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No. of Recommendations: 20
What US common stocks would we buy that will outrun Berkshire and/or the S&P500 to December 31?
Would love to hear Jim's ideas.


They probably aren't stocks you'd want to buy.

This isn't a big bad bear, but let's say for a moment it had been, and today was the bottom.
In that case, it's almost certain that the things that would be about to soar the most will be the junk that fell the most.
I track a lot of quant screens, and the ones that do best in such situations are invariably those intended as short screens.
They generally seek the worst possible companies with the worst possible price falls.
But, a quick short hand rule after a really big fall is simply to buy what has fallen most.
In spring 2009 you wanted to be buying banks hand over fist.
Hmmm...
How about Tupperware (TUP)? 90% off its 52 week high and one week return of -51%.
Not a "widows and orphans" kind of stock, but there is a prima facie case for a margin of safety: today's price roughly matches next year's consensus earnings per share.
At that level, maybe even an accounting probe and a need for credit relief at a slowly dying business is just par for the course.
Others thrown up by such a screening process. (emphasis on throwing up)
At Home Group (HOME $5.00). They're the one that has fallen the most but is apparently making a profit at the moment.
Tailored Brands (TLRD $3.27), same idea, but actually apparently cheap on current earnings, 76% off its high, one week -23%. Mens Wearhouse and other clothes chains.

Conversely, if you think the market will continue sliding much of the year, you'd probably want something like Berkshire which will fall more slowly because of its perceived security or steadiness of earnings.
If you could find something like Berkshire.

One stock I think "should" rise a lot, but may not if recent history is a guide, is Brookfield Property (BPY) at $16.32.
Currently at 55% of book value and 7.97% dividend.
I own this. Price wise it has been much like owning a lump of clay. Well, a lump which pays a dividend.

Jim
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The market is down what, 13% from its all-time high after an 11 year run up, still incredibly overvalued (a stock like NVDA with a P/E of 60? Seriously?), and we’re only just in the opening scenes of a global pandemic horror movie, and people are already bottom-fishing?
Does that prima facie sound like a good idea?
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we’re only just in the opening scenes of a global pandemic horror movie, and people are already bottom-fishing?
Does that prima facie sound like a good idea?


If that were the only information, you have a point.
But the biggest determinant of where you are is not how far you travelled this week, but where you started the week.
Stuff that was horribly overvalued is mostly still pretty overvalued.
Stuff that was already kinda cheap is now quite cheap.
Unless you can predict stock prices, it's never a bad time for bottom fishing for things that are cheap.

That wouldn't include the broad US market, nor a randomly selected stock within it.
However I see there are 15 stocks in the S&P 500 that fell more than 20% this week and are now at a P/E under 10 (based on unrevised current earnings rates).
Of those, average fall -24.0%, average current earnings yield equates to a P/E of 5.8.
Some of them will be disasters with terminal issues, but perhaps not all of them.
Hey, it might be worth having a glance. Berkshire owns 1.2bn worth of one of those 15.
Or maybe the three cruise lines in that group are oversold due to headlines.

Jim
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Unless you can predict stock prices, it’s never a bad time for bottom fishing for things that are cheap.

In my experience, when things are cheap in an overpriced market, and the rest of the market drops by another 30%, then the cheap things will probably get even cheaper, unless we’re talking about 2000, when small caps with really good earning potential were just totally out of favor.
Do we have a situation like that, or are those cheap companies cheap because they are in some kind of financial trouble? Because that’s not likely to get better in the coming downturn, and there’s nothing so cheap it cannot get cheaper. I don’t have to remind you of 2008 :)
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Or maybe the three cruise lines in that group are oversold due to headlines.


Without so much as having glanced at their financials, I’m betting they will probably go insolvent. I expect that they will have to cease operating their ships for months, either because the governments shut down cruises, or because people just decide that it’s not fun to spend their holiday in a floating sarcophagus with a bunch of potential plague victims, to be followed by a quarantine.

Is there any cruise line that can survive, say, 4 months without running any of their ships? Because I cannot see a future where something like that is not going to happen.
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However I see there are 15 stocks in the S&P 500 that fell more than 20% this week and are now at a P/E under 10 (based on unrevised current earnings rates).


You have better screening tools, but using the finviz stock screener I get 11, among them AAL, USL and DAL. The other 8 are:

RCL
ALK
UNM
XEC
HFC
NAVI
NCLH
SIVB
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TUP market cap now around $92 million.
TLRD around $119 million.

Jim, if you rally enough of the long-time BRK.A owners on this board, we might actually be able to buy a controlling stake in one or both of these companies.

Just an idea...
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I have to say, you don't see a forward P/E of 2 all that often.
I suspect hat if you put a small amount into a bunch of firms in that situation, your average result would be quite satisfactory.
Provided their outcomes were not overly correlated...

It's a strange market.
Panic and volatility seem high, but prices are all over the map.
Some things seem crazily cheap, but many others still seem crazily expensive.

Jim
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