13F Fun

So, for fun, I wrote a script that grabs manager holdings and compares the portfolio since the last time a 13F was filed. This is available at places like dataroma.com but I wanted to be able to check out my own institutions that may not be superinvestors.

When I wanted to diff the 13F files, I used to download them to a spreadsheet and do it manually.  It was a pain because for companies like BRK who may have the same stock listed across subsidiaries, you had to aggregate the holdings. Many of you know what a pain that is.

Computer Stuff (uh, yes, it's a tangent)
Anyway, to make matters more interesting (OK, for most of you this part is irrelevant and not very interesting) I wrote this whole program on a Linux laptop (Ubuntu 14.04 at the time; I have since upgraded to Ubuntu 16.04) using the VIM editor (I used to use vi in a Unix environment a long time ago in my hedge fund days). Programmers know how much of a pain VI/VIM is until you get used to it. I had to refresh my memory but thought it was so cool to use vi again so I stuck it out and used it to write the whole program.  (Now I use mostly Geany on my Linux machine, Notepad++ on Windows machines, and Idle or Spyder (depending on project) for Python).

The program itself is written in PHP, and I used the XAMPP/Apache web server as my local host.  Anyway, something like this would have been much easier for me to write in Python, but I think I wanted some stuff on the web so wrote it directly in PHP.  I haven't worked with Flask/Django so wouldn't know how to put Python-generated content on a website (well, there are other ways; I do use Python to update google sheets and then use PHP to grab google sheet data etc. for some non-financial stuff I do).

All of this happened a few months ago, actually.

Linux/Open Source
...and here's another thing (another tangent off a tangent).  After turning my old, dead (or so I thought) Dell laptop (XPS M1710 that used to run Windows XP) into a Linux machine, I have really been loving the experience.

And what I noticed is that if you go to Barnes & Noble and look for computer-related magazines, you will see a bunch of them about Ubuntu, Linux and others.  I love those Linux magazines but they are expensive.  Why are they expensive?  Because they are all published in Britain!  Linux Voice, Linux Format etc... they are all published in the UK.  Even the website design/programming related magazines are all UK magazines.

If you have kids, the other cool thing these days (other than Pokemon Go) is the Raspberry Pi, which is basically just a cheap computer on a motherboard  (google it to see what it's about).  And that's a UK invention, so of course, all of the Raspberry Pi related magazines are published in the UK.

Maybe there is something about the publishing industry in the UK that make these magazines possible.  Or maybe there is too much commercialism in the U.S. for there to be support for anything open source (and therefore anything threatening Microsoft). I don't know. If it's open source, nobody is going to make money, and if nobody is going to make money, who is going to buy ad pages?  Maybe that's it.

But it makes me wonder.  As a geek into this sort of thing, it seems like the UK is a much more exciting place. Also, it seems like they are more committed to teaching coding in the schools.

This sort of makes me wonder where the next wave of great innovations will come from. But, OK, who am I kidding? I'm sure the U.S. will keep leading the way.

Anyway, that's straying too far from what this blog is supposed to be about.

Back to 13F's
Let's browse through some 13F's.  Most of this stuff has been seen and discussed already.  Many websites track 13F's closely and write about it, so I won't mention most of the big investors.

Having said that, let's look at BRK.


BERKSHIRE HATHAWAY INC

Name	dollar amt	%port	#shares	change	%chg
KRAFT HEINZ CO	28,812,169	22.21%	325,634,818
WELLS FARGO & CO NEW	22,704,405	17.50%	479,704,270
COCA COLA CO	18,132,000	13.98%	400,000,000
INTERNATIONAL BUSINESS MACHS	12,329,439	9.51%	81,232,303
AMERICAN EXPRESS CO	9,211,866	7.10%	151,610,700
PHILLIPS 66	6,250,563	4.82%	78,782,000	3,231,255	4%
US BANCORP DEL	3,430,598	2.64%	85,063,167
DAVITA HEALTHCARE PARTNERS I	2,981,889	2.30%	38,565,570
WAL MART STORES INC	2,937,332	2.26%	40,226,402	-15,009,461	-27%
MOODYS CORP	2,311,805	1.78%	24,669,778
CHARTER COMMUNICATIONS INC N	2,134,924	1.65%	9,337,491	9,337,491	new
DEERE & CO	1,779,577	1.37%	21,959,246	-1,321,748	-6%
GOLDMAN SACHS GROUP INC	1,628,365	1.26%	10,959,519
APPLE INC	1,455,768	1.12%	15,227,702	5,415,955	55%
GENERAL MTRS CO	1,415,000	1.09%	50,000,000
VERISIGN INC	1,119,894	0.86%	12,952,745	-32,255	-0%
LIBERTY MEDIA CORP DELAWARE	1,073,699	0.83%	37,499,996	7,499,996	25%
U S G CORP	1,051,494	0.81%	39,002,016
LIBERTY GLOBAL PLC	902,592	0.70%	30,712,739	6,903,848	29%
VERIZON COMMUNICATIONS INC	837,652	0.65%	15,000,928
BANK OF NEW YORK MELLON CORP	809,137	0.62%	20,827,212
VISA INC	759,438	0.59%	10,239,160
COSTCO WHSL CORP NEW	680,511	0.52%	4,333,363
M & T BK CORP	636,319	0.49%	5,382,040
AXALTA COATING SYS LTD	618,786	0.48%	23,324,000
SUNCOR ENERGY INC NEW	617,696	0.48%	22,275,381	-7,724,619	-26%
KINDER MORGAN INC DEL	496,708	0.38%	26,533,525
MASTERCARD INC	434,555	0.34%	4,934,756
TORCHMARK CORP	392,788	0.30%	6,353,727
RESTAURANT BRANDS INTL INC	351,030	0.27%	8,438,225
GENERAL ELECTRIC CO	333,233	0.26%	10,585,502
WABCO HLDGS INC	296,420	0.23%	3,237,094
TWENTY FIRST CENTY FOX INC	242,148	0.19%	8,951,869
SANOFI	163,461	0.13%	3,905,875
VERISK ANALYTICS INC	126,763	0.10%	1,563,434
MEDIA GEN INC NEW	59,672	0.05%	3,471,309
GRAHAM HLDGS CO	52,663	0.04%	107,575
JOHNSON & JOHNSON	39,677	0.03%	327,100
NOW INC	33,116	0.03%	1,825,569
PROCTER & GAMBLE CO	26,705	0.02%	315,400
MONDELEZ INTL INC	26,305	0.02%	578,000
UNITED PARCEL SERVICE INC	6,399	0.00%	59,400
LEE ENTERPRISES INC	170	0.00%	88,863
CHARTER COMMUNICATIONS INC D	0	0.00%	10,326,803	-10,326,803	-100%
Total Sum	129,704,731

(sorry, but my tables show adding and dumping Charter Communication, but that's due to change in the class of stock, I suppose, from the merger.  Name changes also show up like this in my tables so look at the whole table before assuming a position was dumped).

Buffett has really been accumulating PSX. It's been on my to-do list for a while, to make a post about it.  It is interesting because it is reasonably valued and doesn't seem to be impacted too much by crude oil prices.  They haven't been growing much, but their earnings have been pretty stable throughout a period when crude oil prices just tanked.  Their refining margins seem pretty stable too so it doesn't look like they are over-earning on excessive refinery margins either.  

You know that Buffett likes management as he has owned COP in the past. Maybe this is the good side.  

Buffett has been reticent, in recent years, about making comments about individual investments.  I remember he shied away from answering someone's question about why he bought DE, and didn't answer a question about PSX either.  He just said it's not a crude oil play. He used to talk up a lot of his holdings much more liberally.  I think the change came after IBM. He did explain why he liked IBM and it hasn't turned out too well. Maybe he didn't like the attention of talking up a name and having so many people focus on it as a big mistake (my view is that it's still too early to tell!). 

But we know that he likes managements that explain very clearly what they are going to do, and especially when they accomplish it. He is most interested in what management has in mind in terms of capital allocation; how much capex will be done, how much will be returned to shareholders in dividends and share repurchases.  And you will notice that PSX is very clear on those issues in their reports and presentations. 

Anyway, looking at the BRK 13-F, I was curious what it would look like if we exclude Buffett's big picks and looked only at Todd and Ted's excellent adventure. I just cut and pasted the above into a spreasheet and deleted what I thought were obvious Buffett picks.  Of course, that includes the big ones, and some other smaller ones.  This list may still include some Buffett stocks, but that's OK. 

Here's a look-see: 

Name	dollar amt	%port
DAVITA HEALTHCARE PARTNERS I	2,981,889	16.74%
CHARTER COMMUNICATIONS INC N	2,134,924	11.99%
APPLE INC	1,455,768	8.17%
GENERAL MTRS CO	1,415,000	7.95%
VERISIGN INC	1,119,894	6.29%
LIBERTY MEDIA CORP DELAWARE	1,073,699	6.03%
LIBERTY GLOBAL PLC	902,592	5.07%
VERIZON COMMUNICATIONS INC	837,652	4.70%
BANK OF NEW YORK MELLON CORP	809,137	4.54%
VISA INC	759,438	4.26%
AXALTA COATING SYS LTD	618,786	3.47%
SUNCOR ENERGY INC NEW	617,696	3.47%
KINDER MORGAN INC DEL	496,708	2.79%
MASTERCARD INC	434,555	2.44%
TORCHMARK CORP	392,788	2.21%
RESTAURANT BRANDS INTL INC	351,030	1.97%
GENERAL ELECTRIC CO	333,233	1.87%
WABCO HLDGS INC	296,420	1.66%
TWENTY FIRST CENTY FOX INC	242,148	1.36%
SANOFI	163,461	0.92%
VERISK ANALYTICS INC	126,763	0.71%
MEDIA GEN INC NEW	59,672	0.34%
GRAHAM HLDGS CO	52,663	0.30%
JOHNSON & JOHNSON	39,677	0.22%
NOW INC	33,116	0.19%
PROCTER & GAMBLE CO	26,705	0.15%
MONDELEZ INTL INC	26,305	0.15%
UNITED PARCEL SERVICE INC	6,399	0.04%
LEE ENTERPRISES INC	170	0.00%
CHARTER COMMUNICATIONS INC D	0	0.00%
Total Sum	17,808,288

Anyway, the concentration in DVA, CHTR and AAPL etc. is very interesting. I am still not a big fan of AAPL, by the way.  But this is a long term thing, not a short term thing.  I know AAPL is evolving from a hardware, gadget company to a services company, but I am still not convinced this market cap can be maintained.

Plus, I saw a video about AAPL recently and the thing that struck me was how old all the senior managers are.  Now, age discrimination is not cool at all, and I love how companies are hiring older people; we need to keep older folks working, and many do want to work.  I love that sort of thing. Not to mention Buffett/Munger.  

But when you have a company in a quickly evolving industry, especially in tech, my impression is that youth is pretty important.  The AAPL senior management seems older than the IBM senior management back in the 80's and 90's when they were sort of stuck.  Those aren't the kind of guys that are going to be the leaders in innovation. 

Anyway, that's just my impression.  I felt like, holy cow, no wonder why they make some mind-boggling and strange decisions; they are a generation apart from a lot of their users. I think this will be an issue at some point. 

But then again, what do I know. I am not a tech guy, really. 

Moving on... 

SQ Advisors

Let's see what Lou Simpson has been up to.  He obviously still likes his main holdings, but look!  There's a new name!  Allison Transmission Holdings (ALSN).  This is an old Carlyle name, and ValueAct has a position. Carlyle is completely out, I think. 

ALSN seems like a good post idea here too; I may do that after taking a closer look.  Revenues haven't grown much, but the story is in the free cash flows from increasing margins.  They are generating tons of cash and are repurchasing shares etc.  A formula that we like.  This leads to another digression.  

Name	dollar amt	%port	#shares	change	%chg
BROOKFIELD ASSET MGMT INC	395,284	16.73%	11,961,690	-979,557	-8%
BERKSHIRE HATHAWAY INC DEL	356,730	15.10%	2,432,332	-222,699	-8%
AMETEK INC NEW	344,723	14.59%	7,456,694	-484,585	-6%
SCHWAB CHARLES CORP NEW	292,606	12.39%	11,560,900	-719,054	-6%
WELLS FARGO & CO NEW	275,483	11.66%	5,820,464	-381,628	-6%
LIBERTY GLOBAL PLC	249,859	10.58%	8,685,850	-505,729	-6%
ALLISON TRANSMISSION HLDGS I	129,536	5.48%	4,588,604	4,588,604	new
WABCO HLDGS INC	128,135	5.42%	1,399,310	-102,928	-7%
CROWN HOLDINGS INC	74,230	3.14%	1,464,961	-1,496,522	-51%
US BANCORP DEL	62,431	2.64%	1,548,005	-413,603	-21%
VALEANT PHARMACEUTICALS INTL	48,868	2.07%	2,427,903	-163,496	-6%
BROOKFIELD BUSINESS PARTNERS	4,632	0.20%	243,059	243,059	new
Total Sum	2,362,517

Share Repurchases

There was an article the other day in the New York Times about how bad share repurchases are. I was scratching my head throughout the whole article because we sort of like share repurchases. This is a typical problem with the press.  Something is either good or bad. Corporations are good or bad. All banks are good or bad.  Moslems are good or bad. Cops are good or bad. 

Anyway, I don't want to spend much time getting too much into this, but I think most of us here agree that there are good share repurchases and bad ones.  If you buy shares under intrinsic value with excess cash flow, it's probably good.  If you overpay with debt-funded cash, then it might be bad.  Even still, it depends. 

The examples sited in the article were typical errors in thinking too.  Oftentimes, companies repurchase shares because there is no better alternative.  For example, companies that have very little growth potential will start to repurchase shares more. So you can mistake cause and effect. Someone may argue that they aren't growing because they are using their capital to repurchase shares. Managements will tell you that they are repurchasing shares because the growth opportunities are not that exciting. 

We can bash companies for repurchasing shares, but let's not forget that there was popular word in the old days called di-worsification.  I think that was a Peter Lynch word.  What about M&A? People keep reminding us that M&A's usually end badly. What about excess capacity? Building more factories with not much demand growth won't help anybody. As for retailers, do we really need more stores?

Share repurchases recycle capital back into the economy. It is not automatically good or bad. Look at Japan and their low returns on capital; largely because they don't want to return capital to shareholders. They would rather hoard the cash, make stupid acquisitions overseas, speculate, buy expensive real estate, diworsify into an industry they have no knowledge of, build unnecessary facilities for unnecessary employees etc...  

So maybe unbelievable to some, there are things far worse than share repurchases. 

Anyway, I am preaching to the choir here, so let's move on... 

Alleghany

This is a company many of us follow and like.  The equity portfolio manager, though, is relatively new and doesn't have much to do with Y's long term performance so there may not be much interest in picking apart this portfolio. 

But we are curious so we will take a look.  Who knows where the next great idea comes from? Anyway, it is kind of interesting to look at this as the characteristic of the portfolio seems to have changed from before. 

Notice GOOG at the top with an 11% position.  This is not what you would really imagine as a Y stock. But I like GOOG so it's fine with me. Not that I would second guess anyone. It is a relatively concentrated portfolio and I usually consider that a good thing. 

Name	dollar amt	%port	#shares	change	%chg
ALPHABET INC	288,446	11.06%	410,000
CVS HEALTH CORP	205,841	7.89%	2,150,000
MICROSOFT CORP	153,510	5.89%	3,000,000
BLACKROCK INC	136,984	5.25%	400,000	175,000	78%
ROPER INDS INC NEW	136,429	5.23%	800,000	-25,000	-3%
CSX CORP	130,400	5.00%	5,000,000
ALLERGAN PLC	115,517	4.43%	500,000	500,000	new
VISA INC	111,255	4.27%	1,500,000	-1,500,000	-50%
JPMORGAN CHASE & CO	108,383	4.16%	1,744,178
BARRICK GOLD CORP	106,750	4.09%	5,000,000	5,000,000	new
PPG INDS INC	104,149	3.99%	1,000,000	-525,000	-34%
WALT DISNEY CO	102,711	3.94%	1,050,000
DENTSPLY INTL INC NEW	99,264	3.81%	1,600,000
EXXON MOBIL CORP	93,740	3.60%	1,000,000	700,000	233%
VERIZON COMMUNICATIONS INC	92,417	3.54%	1,655,000	-375,000	-18%
DISNEY WALT CO	83,148	3.19%	850,000
EOG RES INC	56,995	2.19%	683,406	-316,594	-32%
AIR PRODS & CHEMS INC	54,685	2.10%	385,000
COMCAST CORP NEW	51,817	1.99%	795,000	795,000	new
OLD REP INTL CORP	48,225	1.85%	2,500,000	-331,467	-12%
ARAMARK	46,628	1.79%	1,395,000
BERKSHIRE HATHAWAY INC DEL	41,986	1.61%	290,000
HOME DEPOT INC	32,561	1.25%	255,000
DEVON ENERGY CORP NEW	31,890	1.22%	880,000
NEWELL BRANDS INC	30,985	1.19%	637,877	637,877	new
KIMBERLY CLARK CORP	27,493	1.05%	200,000
PEPSICO INC	27,016	1.04%	255,000
HESS CORP	24,338	0.93%	405,000
L BRANDS INC	23,163	0.89%	345,000
OCCIDENTAL PETE CORP DEL	21,535	0.83%	285,000
POLARIS INDS INC	14,309	0.55%	175,000	175,000	new
ARES CAP CORP	2,674	0.10%	188,326	4,660	3%
ARES COML REAL ESTATE CORP	1,538	0.06%	125,115
CONSOLIDATED TOMOKA LD CO	578	0.02%	12,166	12,166	new
ARES DYNAMIC CR ALLOCATION F	131	0.01%	9,550	224	2%
SABRE CORP	0	0.00%	1,890,000	-1,890,000	-100%
SMUCKER J M CO	0	0.00%	205,000	-205,000	-100%
PERRIGO CO PLC	0	0.00%	750,000	-750,000	-100%
JARDEN CORP	0	0.00%	740,000	-740,000	-100%
CHURCH & DWIGHT INC	0	0.00%	365,000	-365,000	-100%
ISHARES TR	0	0.00%	181,000	-181,000	-100%
Total Sum	2,607,491

OK, this post is getting a little long so I will break it up. More to follow...