Wednesday, May 20, 2020

Wow!

It's been quite a few weeks since my last post. I haven't really changed my thoughts since then, but maybe the economic impact of this will have more than a blip on the long term charts after all.

So far, the economy seems to be doing much worse (or will soon) than the stock market. The initial decline was shocking, but not at all unexpected. The recovery rally is kind of incredible too.

As I watch all these commentators, I realize nobody really has any idea. The commentators / pundits that survive a long time are masters at saying things that will make them look 'correct' in hindsight later on. You make enough calls and predictions, you will at least be able to pick one and say you were right. Also, they are very careful to word their comments so that they can't be called out for being wrong. 'If this happens, then this will happen, if that happens, then that might happen...' etc. You say enough of that, and you will be right about something, eventually... It's kind of a joke, but whatever.

Buffett and Airlines
A lot of things have happened since my last post, including the virtual BRK annual meeting. Nothing really new or unexpected, as usual, but one thing that may have shocked people was how Buffett dumped all his airline stocks. We are supposed to be long term investors, and are not supposed to be reacting to headlines, however scary.

But if you look at their income statements and realize that their revenues are down 90% and may be down for a year or more, it's hard to imagine them surviving. Most of them will be out of business by the end of the year or long before that. The government will have to bail them out, but that will be costly. Either they will have to take on a lot of debt that will take years to pay off, or they will have to issue a lot of equity, basically wiping out current shareholders.

Many businesses will not survive this, and even if they do, there will be big losses to equity investors.

A lot of restaurants will go out of business too, but mostly the independent ones. Major chains, especially fast food and fast casual should be fine.

Retailers are out too, for the most part. A lot of retailers should probably not even exist, and this pandemic is just accelerating what is going to happen anyway. The Micrsoft CEO, Nadella, said that there was two years worth of virtualization in two months since the pandemic. I think that's the case with retailers. This will just accelerate the demise of retailers with flawed (or out of date) business models.

No Bargains?
One thing Buffett said was that he didn't really see any bargains during the decline in March. We know from the 2008-2009 crisis that Buffett is not really a trader, so he is not going to be buying the lows on big down days, necessarily. So on fast declines with quick rebounds, he is not going to get much done.

If you look at what's going on, the stocks that were really hit are the ones that you don't really want to own, necessarily. Airlines, real estate, retail, travel-related stocks etc. And the ones you want to own didn't really get cheap. I can see Buffett piling into things like Amazon or Google if they were dumped with the bath water, but they weren't, really. Neither was Microsoft. Not sure what he thinks of Netflix, but that wasn't dumped either.

So crappy stocks got cheap, but as Buffett said, the way to succeed in the stock market (or at least not lose money) is "don't buy crummy businesses". And there are a lot of them out there now.

People also view Buffett as being 'bearish' because he sold stocks, and he is still sitting on a growing cash balance. He did mention during the meeting that he has a lot of cash, but he has a lot of equity exposure too. I wrote about it a while back, but his equity exposure is not limited to his listed equity portfolio. Kraft is not included in his list of stock holdings, but he still owns it. Same with Burlington Northern, and his many other operating companies (some of which were listed until recently).  If you add it all up, BRK is still fully exposed and is not as conservative as it seems if one were to look only at his listed equity portfolio and cash balance.

Which leads to the next thing being talked about a lot these days (as it has been for the last few years).


Value Investing is Dead?
One thing people need to keep in mind about value investing is that the way the general press talks about it and the way investors talk about it are completely different. The press just looks at nominal valuation and that's it. There is no concept of what something should be worth, and whether it is trading above or below that. They don't understand the concept of intrinsic value. Indexes split between growth and value don't help either.

Value investing used to be about low P/E's and things like that, I suppose, but the more modern approach is what something is trading at versus intrinsic value. This is not that modern, actually, as Buffett has been saying that for many decades.

Here is something from the second edition of Graham's Securities Analysis. This is in the section where he discusses the difference between investment and speculation.

It may be helpful to elaborate our definition from a somewhat different angle, which will stress the fact that investment must always consider the price as well as the quality of the security. Strictly speaking, there can be no such thing as an “investment issue” in the absolute sense, i.e., implying that it remains an investment regardless of price. In the case of high-grade bonds, this point may not be important, for it is rare that their prices are so inflated as to introduce serious risk of loss of principal. But in the common-stock field this risk may frequently be created by an undue advance in price—so much so, indeed, that in our opinion the great majority of common stocks of strong companies must be considered speculative during most of the time, simply because their price is too high to warrant safety of principal in any intelligible sense of the phrase. We must warn the reader that prevailing Wall Street opinion does not agree with us on this point; and he must make up his own mind which of us is wrong.
Nevertheless, we shall embody our principle in the following additional criterion of investment:
An investment operation is one that can be justified on both qualitative and quantitative grounds

I would look at the opposite of this example and say that many cheap stocks may not necessarily be safe. Would you buy junk bonds just on yield? Nope. Someone showed me years ago a quantitative report basically showing that the valuation of a stock is pretty much determined by it's credit quality (I don't know if there was an adjustment for long-term growth or returns on capital), but it made sense to me. The industrial cyclicals were always 'cheap', like steel, auto manufacturing etc. And consumer stocks were always expensive.

Anyway, today, I think a lot of this gap between value and growth just may be reflecting huge secular changes in the economy. You can say AMZN is overpriced and BBBY is cheap. But really, who would short AMZN and go long BBBY?


MKL Dumping Stocks
On the 1Q earnings call, MKL said they dumped a few stocks they thought would be hugely affected by Covid-19. Here are the stocks they dumped:

Anheuser-Busch Inbev ADR 0    0.00%13,000-13,000-100%
CDK Global Inc 0    0.00%176,897-176,897-100%
Discovery Communications 0    0.00%117,000-117,000-100%
Dollar Tree Inc 0    0.00%123,100-123,100-100%
Hasbro, Inc 0    0.00%364,000-364,000-100%
Kraft Heinz Co 0    0.00%68,000-68,000-100%
Rockwell Automation Inc 0    0.00%140,100-140,100-100%
Scotts Miracle-Gro Co 0    0.00%422,000-422,000-100%
Unilever PLC ADR 0    0.00%1,527,600-1,527,600-100%
United Health Group Inc 0    0.00%599,000-599,000-100%

This is as of end the March, and they may have dumped more things in April. Buffett dumped airline stocks in April, so that dumpage doesn't show up on his 13-F, which is here, by the way:

BERKSHIRE HATHAWAY INC

Filing Date: 2020-05-15

Namedollar amt%port#shareschange%chg
APPLE INC 62,340,609    35.52%245,155,566

BANK AMER CORP 19,637,932    11.19%925,008,600

COCA COLA CO 17,700,001    10.09%400,000,000

AMERICAN EXPRESS CO 12,979,391    7.40%151,610,700

WELLS FARGO & CO NEW 9,276,210    5.29%323,212,918

KRAFT HEINZ CO 8,056,205    4.59%325,634,818

MOODYS CORP 5,217,658    2.97%24,669,778

JPMORGAN CHASE & CO 5,196,030    2.96%57,714,433-1,800,499-3%
US BANCORP DEL 4,563,233    2.60%132,459,618

DAVITA HEALTHCARE PARTNERS I 2,897,549    1.65%38,095,570-470,000-1%
BANK OF NEW YORK MELLON CORP 2,686,487    1.53%79,765,057

CHARTER COMMUNICATIONS INC N 2,367,684    1.35%5,426,609

VERISIGN INC 2,307,964    1.32%12,815,613-137,132-1%
DELTA AIR LINES INC DEL 2,050,935    1.17%71,886,963976,5071%
SOUTHWEST AIRLS CO 1,910,218    1.09%53,642,713-6,5000%
VISA INC 1,701,823    0.97%10,562,460

GENERAL MTRS CO 1,551,872    0.88%74,681,000-319,0000%
LIBERTY MEDIA CORP DELAWARE 1,446,433    0.82%45,711,345-240,000-1%
COSTCO WHSL CORP NEW 1,235,572    0.70%4,333,363

MASTERCARD INC 1,192,040    0.68%4,934,756

AMAZON COM INC 1,039,786    0.59%533,300-4,000-1%
PNC FINL SVCS GROUP INC 880,431    0.50%9,197,984526,9306%
UNITED CONTL HLDGS INC 699,073    0.40%22,157,608218,9661%
SIRIUS XM HLDGS INC 654,149    0.37%132,418,729-3,857,000-3%
KROGER CO 570,475    0.33%18,940,079

M & T BK CORP 556,665    0.32%5,382,040

AMERICAN AIRLS GROUP INC 510,871    0.29%41,909,000-591,000-1%
GLOBE LIFE INC 457,278    0.26%6,353,727

LIBERTY GLOBAL PLC 434,229    0.25%26,656,968-481,000-2%
AXALTA COATING SYS LTD 415,689    0.24%24,070,000-194,000-1%
TEVA PHARMACEUTICAL INDS LTD 384,248    0.22%42,789,295-460,000-1%
RESTAURANT BRANDS INTL INC 337,782    0.19%8,438,225

STORE CAP CORP 337,425    0.19%18,621,674

SYNCHRONY FINL 323,860    0.18%20,128,000-675,000-3%
STONECO LTD 308,410    0.18%14,166,748

GOLDMAN SACHS GROUP INC 296,841    0.17%1,920,180-10,084,571-84%
SUNCOR ENERGY INC NEW 236,195    0.13%14,949,031-70,0000%
OCCIDENTAL PETE CORP 219,245    0.12%18,933,054

BIOGEN INC 203,440    0.12%643,022-5,425-1%
RH 171,638    0.10%1,708,348

JOHNSON & JOHNSON 42,893    0.02%327,100

PROCTER & GAMBLE CO 34,694    0.02%315,400

MONDELEZ INTL INC 28,946    0.02%578,000

VANGUARD INDEX FDS 10,183    0.01%43,000

SPDR S&P 500 ETF TR 10,155    0.01%39,400

UNITED PARCEL SERVICE INC 5,549    0.00%59,400

PHILLIPS 66 0    0.00%227,436-227,436-100%
TRAVELERS COMPANIES INC 0    0.00%312,379-312,379-100%
Total175,485,996


Insurance Companies
By the way, insurance companies are going to hurt for a while. People keep saying that business disruption doesn't cover pandemics, or that it requires physical damage etc. But the way things work in this country, that doesn't matter. We have enough lawyers with a poorly structured incentive system so insurance companies can get bogged down in years and years of lawsuits. Even if insurance companies win, who knows how much all of that is going to cost.

Plus, interest rates are now 0% all the way out to 5 years, and 1% to 20 years. That's going to be painful, and makes BRK's float basically worthless. Yes, this may be temporary, but we have been saying that for more than 10 years now. I have always suspected we will follow Japan in terms of interest rates. I didn't expect a pandemic to cause rates to go to zero, though.

I still think BRK, MKL and others are great investments for the long haul, but there are serious issues for them out there for sure.

Banks
JPM and other banks are going to take some huge credit losses. There is no way around that. One rule of thumb is that credit card losses will follow the unemployment rate. Unemployment got up to 10% during the financial crisis, and sure enough, JPM's credit card charge-offs peaked at 10% or so. Total charge offs were 5%, I think, back then.

Unemployment is now over 15%, and headed to 20%. JPM has $160 billion in credit card loans, so credit card charge-offs can get over $30 billion. Total credit losses may get to 10% and they have around $1 trillion in loans outstanding. Who knows, really.

JPM is still the best managed big bank and they will get through this for sure, but they face some very serious problems. I think the view expressed during the 1Q conference call (expecting rebound in second half of the year) is way too optimistic.

Even if we start to reopen the economy, we can't really have a real recovery as a lot of events won't come back, and restaurant / bars / retailers will run at 30-50% capacity.

An interesting thing to look at is Sweden. They didn't have a hard lockdown like the U.S. and European countries, but their economy is taking a hit anyway. Reopening the economy doesn't mean we are all going to go back to the way we were right away. Many people tell me that they won't change anything even if the economy reopens until they get a vaccine. This could be years away.

I tend to believe things will normalize when we get a treatment that makes Covid-19 far less fatal. If we take that off the table, people will start to get back to normal.

I have no idea about these things, but I tend to think the odds of us finding a treatment is far higher than us finding a vaccine (there is a chance we may never find a vaccine).

Anyway, the mitigating factor to the above bank credit disaster is the amount of money being injected into the economy. I don't know if people are going to use their stimulus / Covid-19 help checks to pay off their credit card (they seem not to be paying their rent), but it will have some positive impact on bank credit, I assume (and hope).  Well, but don't assume because...

Is the Market Being Rational?
So, people are saying that the market is being too optimistic about a return to normal, but it's hard to tell. The market is full of stocks with different exposure. If the airline stocks got back to their highs, I would agree that the market is being too optimistic. But that hasn't happened; not even close. Same with retailers. And restaurant stocks.  OK, Amazon, Netflix, and others are going to new highs, but I doubt that is reflective of the market's optimism about a return to normal.

So when the markets move, I think we have to look by sector, and by stock, to see what they're expecting. It makes no sense to look at the index itself.

What to do?
When this started, I told people the same thing I always told them. Ignore the headlines and just think 3-5 years ahead. This works, though, for people with diversified portfolios. I wouldn't know what to say if they owned a lot of airlines, hotel and other travel related businesses, or other areas that may not recover so quickly. I have no idea.

I haven't owned any retail stocks in a long time (except BRK, which is the closest thing to a retailer I own), and the only restaurant stocks I own are CMG, QSR and SHAK.  Well, SHAK was never cheap so it's a token position that is not significant; it's more of a moral support, I like this company, kind of position. CMG was a large position that I scaled back and had to do again as it went over $1,000. It's not a cheap stock, and I have no idea why it's above $1,000; maybe they are going to take market share after many of their competitors go out of business within a few months). Oops, after writing this, I just realized I do own Costco. So I lied. I own Costco and have no problem with it. I will hold on to it. Yes, it's expensive, but I really like the business for all the reasons we've all heard already a gazillion times.

If you own the S&P 500 index, it doesn't really matter. Many companies will go bust, but that happens all the time. Some big banks, AIG and FNM went bust (or was massively diluted) during the financial crisis and yet the S&P 500 index was fine. It should be fine over the long term this time too, but many of the components won't be.

As usual, just don't invest based on the headlines. OK, evaluating your holdings on long term potential incorporating Covid-19 might not be a bad idea (like Buffett's dumping of airlines), but I would be careful about that too.

One thing is for sure. You really don't want to go chase Covid-19 stocks. You can buy AMZN, NFLX, MSFT thinking these are the pandemic-proof stocks, but the worst time to buy stocks is when everyone piles into them for the same reason (I wouldn't short them either!). For example, I wouldn't touch Zoom stock, of course.


Things are Interesting
I have to admit I have sort of been lazy about my investments over the past few years, kind of just let it go... Looking for things to do wasn't all that interesting as things got expensive.

But things are getting interesting again. I haven't read through so many conference calls and 10-Q's in a long time, and it's been fun. I have to say, though, that the 10-Q's only reflect a small portion of what's happening as the 1Q included the relatively healthy January and February. NYC shut down in mid-March. So there was only 2 weeks of really bad data included in 1Q. The 2Q reports are going to be really scary, but I can't wait to sift through that stuff.

Maybe this will lead to more blog posts. That would be fun, as I do enjoy this process. Until now, though, things are more interesting, but nothing really stands out to me. The really devastated industries are just 'too hard' for now, like cruise lines, airlines, casinos, and the solid businesses that you want to own are not cheap (AMZN, MSFT, COST etc...).

So to those who feel that ETFs and the indexing bubble has lead to a lack of differentiation in the evaluation of individual stocks, it is quite obvious that this is not the case at all. I've always maintained that this is not the case. Sure, there may be excess valuation in some large cap index stocks where index funds are 'forced' to buy regardless. I think overall, crummy stocks are cheap and higher quality stocks are expensive.

OK, banks and insurance companies are cheap now, and not all of them are crummy. But there are massive uncertainties they are facing now. The market is probably wrong and these stocks are probably too cheap.


26 comments:

  1. As always great analysis and commentary! Looking forward to more frequent posts.

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  2. Always enjoy your posts, it's amazing how a continual reminder of clear logic helps!
    I did want to know if you had any thoughts on XOM (or oil industry in general). I know you have reviewed them in the past but was wondering if you had any recent thoughts? As you had mentioned Exxon is known to be thoughtful at capital allocation so I wonder if their dividend, financial strength and size will allow them to be even more dominant coming out the other side.

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    1. That's an interesting question. XOM has historically been one of the best in terms for capital allocation, and maybe it's a good trade for a bounce / recovery. But I want to buy stuff that I can own for the long term, not so much for a quick bounce. And on that front, XOM is not so interesting. It's not a management issue, but an industry issue. Remember what Buffett said about great managers in terrible industries; the industry will win.

      I owned COP a while back (before Buffett bought it) and have sold it long ago. My concern was that oil and gas just seemed to get harder and harder to find and more expensive... and then shale happened. It was very hard to figure out how all that was going to pan out. Oil majors were saying the only way to get more oil is from the really deep reserves (Brazil), and that was going to be expensive.

      Sure enough, if you look at the returns on capital / ROE of XOM, they have been single digits for the past few years. In the early 2010s, they were up above 20%, high teens. Now it's single digits, consistently... Even before the recent oil crash.

      So it's not really an exciting place to be looking. To be sure, because it is out of favor, people who really know oil / energy can probably do really well by picking the right stocks, but I've never been comfortable picking through this industry (I did spend a lot of time on it at one point a few years back, but it was just too hard for me, lol... expert opinions are worthless...)

      So that's where I am with XOM... kind of like, great company, probably great management (haven't heard or followed recently so no idea, actually, now), but maybe not a place I want to have my money...

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  3. an awesome blog thanks a lot for giving me this great opportunity to write on this.please visit our website I assure you that it will be very useful for you @ Packers and Movers mumbai

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  4. Love your posts! Always so clear and rational. Looking forward to reading more. Thank you!

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  5. "The initial decline was shocking, but not at all unexpected." Heh? If something is shocking, it must at least be unexpected. An expected fall can't be shocking even if the magnitude or speed wwas greated than expected. A contradiction in terms. Please explain.

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    1. lol... just bad writing. Put it this way, a large decline is not unexpected in a situation like this, but the speed was a little shocking... or something like that. May still not make much sense, but whatever... :)

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  6. Amazing post. Thank you very much. I would appreciate learning your thoughts as you go through the second quarter results (when they come in). Thanks again!

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  7. Thanks, great writing.
    What would you like to see before investing in a bank stock like JPM?

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    1. Not sure. I already own it but haven't done anything with it. No plan on buying or selling. During the crisis I bought a bunch and I lightened up over the years even though it never got expensive, but it was no longer a 'special situation', so sold it down. It is cheap again now, so certainly worth buying some. I imagine Q2 to be terrible, so if it goes down more then, I may buy more.

      On the other hand, I am not sure how banks are going to treat things during this mess; if they can get away with extending or restructuring loans including credit cards, they may not need to set reserves against them as much, or write them off as quickly as they normally would. If regulators loosen up and let them 'work things out' and then stretch the charge-offs over a period of time, then figures may not have to be as shocking... The figures I mention above doesn't take that into consideration... I would not want to see JPM having to charge off $100 billion in a single year, double their pre-provision profit... (which may be done substantially this year due to lower interest rates and lower economic activity).

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  8. Wow indeed! So in what sectors do you concentrate right now?

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    1. Well, I don't think in terms of sectors weightings. I still own banks and insurance companies, but I probably have more in tech than your typical value investor. I own things like MSFT, GOOG and a few others, some of which I can't justify on valuation, lol...

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  9. Super interesting. Might to sure your portfolio changes due to COVID19?

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    1. I have done absolutely nothing this year. In fact, I didn't even look at any marks until a week or so ago; too scary, lol... and I wasn't planning on doing anything anyway, so what's the point? I haven't bought or sold anything at all, except I sold some CMG last week, but that was just due to price... not COVID 19.

      Also, over the past couple of years, I was selling some things just on price, like TDG, CHTR (I still own a lot of CHTR via Liberty), but have not done anything at all this year.

      I hope to do some things this year, though.

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  10. Superb writing. So you don't think that software-eats-the-world and the tech companies will come as a winners here?

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    1. Oh, they will. Not sure about software, necessarily, but yes, tech are winners for sure, from AMZN, MSFT all the way down the line. Cloud, AI/ML etc... I think what is happening is an acceleration of what was going to happen anyway, but just happening much faster.

      My point was you have to be careful now as a buyer of stocks; many of these stocks are going through the roof because of this, and I just don't think it's a good idea to chase them now. When things normalize, there may be some mean-reversion even if many of the companies retain a lot of what they gain in terms of customer accounts, revenues etc...

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  11. Really great read again; I just waited for your first comment after Covid arrived. And I am happy reading about insurance, having a lot of skin in the game with BRK, MKL and Fairfax Financial (and tech, so proabably nor that much different than you). They all haven't been that cheap within the last decades (I don't know, if Fairfax Financial ever traded around half book value...? And I am pretty sure BRK hasn't traded below book since the 1970ies - I know book value isn't following intrinsic value any more at BRK and the others; so let's just say, in aggregate they haven't been trading that cheap). I don't know if I get you right about insurance; my opinion would be, that they mostly excluded pandemics and that's it. O.K., maybe some lawsuits, but e. g. Gayner to me haven't seemed upset and the 3xx mn dollar they put to the site to me seemed conservative (as MKL normally is conservative as could be) If you don't pay for such an insurance, why should the insurer pay you? But I don't live in the us, so I don't now much about it. WOuld be very happy, if you could share a bit more about your thoughts regarding insurance.

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    1. I don't have much to say about insurance, actually, but I think there may be problems... Not sure issue will go away. Not enough information yet; we'll have to see as this evolves. Plus, the full economic impact has not hit yet at all, not even remotely, so we will have to see what happens over the next few months, and over the next year or two.

      I think I read that some insurance companies were paying out even with pandemics excluded; they came to some compromise due to political pressure or some such. But I don't have a lot of information on that.

      I think one reason why Buffett said that in a worst case scenario, $120 billion cash is not a lot of liquidity, part of it may be insurance payouts that they haven't accounted for (again, due to political pressure, who knows what will happen). True, a lot of it will be operating business issues too as they must be taking a big hit here... 1Q earnings have shown none of the real damage yet... Most of the quarter was strong for many businesses except for the last two weeks.

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  12. Great post!
    If I can pick your insights,
    What do you think about Ray Dalio's recent commentary on end of the long term debt cycle with US government/fed getting into a bind of printing $$$ to get out of this crises (much easier path than raising taxes). He is saying this will force us treasury bond holders to dumb it .. financial choas..usd will loose reserve currency status..
    Of course this is going to happen at some point, do you think there is a material risk of it happening within next 10-15 years?

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    1. Oh, I have no idea. This kind of talk by prominent people has been going on since the 1980's. I have been looking to Japan as our path forward, and Japan hasn't blown up yet for some reason. As for losing reserve currency status, that is probably inevitable at some point. But as Munger said years ago, if we go down like the Brits, that's not such a bad thing.

      As for the dollar, it has already been devalued 98% (gold $35 -> $1700), and things seem to be fine.

      We shall see what happens. I don't pay much attention to this sort of stuff even from very credible people...

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  13. Great post as always, thank you for providing clarity and context when we need it most!

    In past posts you've talked about Alleghany being really well run, great management, etc., but in this post you mentioned the political pressure that may be put on insurers to make payouts that were explicitly excluded from their policies. Alleghany mentioned this in their most recent letter to shareholders:
    "The pandemic losses at TransRe were for event cancellation and other specific covers providing affirmative pandemic coverage, as well as increased loss provisions on certain lines including accident and health and trade credit in the quarter. Although most of RSUI’s contracts do not provide coverage for pandemic losses, and in fact specifically exclude losses related to pathogens, in cases where coverage is provided, we will respond as quickly as possible and pay legitimate claims."

    I'm curious to know if you still follow Alleghany - haven't seen you write about them in a while - and have any thoughts on how their situation may be different than other Berkshire-like companies? Or thoughts on them in general.

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    1. I do read their annuals every year, and it is still one of the best reads out there, and they are a very well managed company. I do love how they lay out tables for their performance too, making it easy to see how they are doing. They are the best at that sort of disclosure for sure.

      But with these things, like BRK and MKL, there really is not much to say over time as they just keep chugging along doing well. Y does face the same challenges as BRK and MKL, though. I'm sure they will be facing issues in their insurance operations, and the zero interest rates flattening out even on the long end is going to definitely jeoperdize their BPS growth target.

      But I don't feel they are any better or worse than BRK, MKL in that regard.

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  14. What are your thoughts on Berkshire selling out of Goldman Sachs over the last few quarters. They were totally out of it by end of March so I imagine Covid-19 wasn't a huge factor.

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    1. Yeah. Not sure. Given his patience with other holdings that have done nothing, it is curious. To be sure, GS seems to have lost it's way and I'm not sure what they are trying to do, actually... I don't know why he would necessarily dump everything.

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  15. Thanks for another great post.

    Wondering if you have any further thoughts on FFXDF at this point. When you posted on them in May 2017, you noted the potential but felt the value/price wasn't right for you. A few years after that post the price is down ~30% but they've been consistently adding compelling (my opinion) investments to their portfolio.

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    1. No, no new comments. Basically, it's a bet on the managers and if you believe in these guys, it's good to own. I do own some but don't follow short term stuff at all. Politics is probably not as good as was initially expected, and then we have this Covid thing. So it's one of those things you just hold on, leave it there for the long haul and hope it is multiples higher years later... Otherwise, too complicated to try to call over short term etc...

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