在2014年Ackman & Valeant剛啟動併購Allergan時這位匿名仁兄居然就對Valeant有此獨道見解，與蒙格的評論一致。
另外自從看到Brooklyn Investor Blog之後，每每看其文章都收穫滿滿。
我只看Brooklyn Investor的review便大約可以感受到為何巴菲特會推薦Jamie Dimon的股東信了。
Comment on Valuation models:
Other comments on Valeant:
Of course, it's not a good idea to bring in GS and other banks to defend KO; I can imagine the outcry of some folks (who think bankers are even more overpaid). But Buffett is a large shareholder of GS and is well aware of this. I also don't mind this stuff too much at financial firms as I tend to look at BPS growth over time, and all of this is reflected in shareholders' equity. For example, if JPM has a high looking burn rate of 2.1% but has grown BPS in double digits, that's fine with me.
此篇brooklyn談到過去巴菲特的大交易案企業買價/pretax earnings都接近10， 以下的匿名者回應非常卓越! 除了AXP巴菲特當初買的非常便宜，並且其當初是買可轉換的優先證券，並在股價回升時不確定是否要脫手，他傾向脫手(1997年報)，但是當他與一位CEO打高爾夫並運用"閒聊法"(scuttlebutt)後，那位CEO使巴菲特確定AXP的franchise非常強壯，故巴菲特非但一股都沒賣還轉買。如果對一有franchise的企業，就算其P/pretax earning自7倍上升到10倍多，約漲了5成，理性的投資人該作的是加碼而非賣出，巴菲特運用閒聊法得出結論後便反向加碼，此運用閒聊法的過程其在2017接受CNBC訪問再次提到過。 如果去看最近的Apple 和 航空股，我想其買價應也是接近 P/pretax earnings = 10x ， 其亦以閒聊法確認Apple的franchise。巴菲特的進化令人驚嘆。
Thank you again!
I would like to add, that in 2007 Buffett bought almost 9 percent of the KFT at an average cost of 33,2 USD per share. Kraft's 2006-2007 net EPS was 1.73-1.56, pretax EPS was about 2.23 in the both years. So it seems multiple in this case was 14.4x. Perhaps one could say that at that time margins and earnings were depressed and using pretax EPS of say year 2003, which was about 3 USD, one would get to the 10.7 multiple, however later EPS temporarily would become even lower. At the same time this is kind of the business, which is a little bit different from banks (with leverage) or utilities (regulated, capital intensive) and I think he paid more than 13 pretax for J&J in 2006-2007 and again earlier even more fore BUD. So if you look only at these "very wonderful" and "very predictable" businesses, it seems that price Buffett was willing to pay, was even higher?
Now for the tangent: it appears that AXP price really was an outlier, but it seems, that at the time the company was more than just "unloved", just see this: http://money.cnn.com/magazines/fortune/fortune_archive/1995/10/30/207195/index.htm. "More recently the tarnished American Express card has been losing market share to Visa and MasterCard as Amex's principal consumer benefit--prestige--becomes a tougher sell. And the company's international business, say analysts, is in the doldrums." And Buffett himself, after being quite for some time about his rationale, later wrote in 1997 report "Our Percs were due to convert into common stock in August 1994, and in the month before I was mulling whether to sell upon conversion. One reason to hold was Amex's outstanding CEO, Harvey Golub, who seemed likely to maximize whatever potential the company had (a supposition that has since been proved -- in spades). But the size of that potential was in question: Amex faced relentless competition from a multitude of card-issuers, led by Visa. Weighing the arguments, I leaned toward sale. Here's where I got lucky. During that month of decision, I played golf at Prouts Neck, Maine with Frank Olson, CEO of Hertz. Frank is a brilliant manager, with intimate knowledge of the card business. So from the first tee on I was quizzing him about the industry. By the time we reached the second green, Frank had convinced me that Amex's corporate card was a terrific franchise, and I had decided not to sell. On the back nine I turned buyer, and in a few months Berkshire owned 10% of the company." So boy, it seems that at that time AXP future was looking really scary (in this light current IBM problems looks like peanuts?), so perhaps this 7x multiple could even be put into distressed category?
"I have absolutely enjoyed practicing all these styles of value investing. Over the years, I also learnt…about the idea of returns per unit of stress.
You can make a lot of money by being an activist investor, which I’ve done in the past. But it’s stressful. You can make a lot of money by shorting over-valued stocks of companies run by promotional and fraudulent managements. But it’s stressful…I found that investing in moats is not stressful. It involves a slow and more meaningful understanding of how a business creates value over the very long term. And boy does it work!
Moats are internal compounding machines. History shows that you get rich by just sitting on them because they do all the hard work for you. And I realized that over the years. Just as Mr. Buffett did when he too moved from classic Graham-and-Dodd to moats."
by Prof. Bakshi
上述這段是我認為BRK below 1.2 PB 非常值得買進，就算是100%買入亦是如此，如果發生金融海嘯，BRK的內在價值只會成長的更快而已，Pabrai過去有個想法讓我認為很卓越，那就是把BRK當作現金部位，不知道他現在是否仍如此作，但我認為這個idea卓越到現在仍適用，甚至比以前更加適用。 當然前提是BRK未高估，也許1.3倍以下PB的BRK很適合當作現金持有。
簡單幾句道出buy decent business with reasonable price的道理和其安全邊際所在
我曾經思考過Philip Fisher的scuttlebutt在現今網路發達時代是否可以用廣泛閱讀得到資訊，巴菲特曾經說過他光靠閱讀就能打敗大多數的人，我想這部分在現今網路時代將更顯著，勤奮閱讀的人將有龐大競爭優勢。 上述觀點非常有insight
Buffett is no market timer. He looks at valuations. That much is obvious. He always gives his viewpoints of the *valuation* of securities and markets, and he never makes predictions about *when* the market will change. He doesn't have to, because if he is right about the valuation, then it will lead to a good investment return regardless of whether he gets the timing right. However, when the market gets really out of whack, it *appears* as if he is timing the market because severe over- or under-valuations are not a stable situation.
As Buffett once wrote:
“We try to *price*, rather than *time*, purchases. In our view, it is folly to forego buying shares in an outstanding business whose long-term future is predictable, because of short-term worries about an economy or a stock market that we know to be unpredictable. Why scrap an informed decision because of an uninformed guess?
We purchased National Indemnity in 1967, See's in 1972, Buffalo News in 1977, Nebraska Furniture Mart in 1983, and Scott Fetzer in 1986 because those are the years they became available and because we thought the prices they carried were acceptable. In each case, we pondered what the business was likely to do, not what the Dow, the Fed, or the economy might do. If we see this approach as making sense in the purchase of businesses in their entirety, why should we change tack when we are purchasing small pieces of wonderful businesses in the stock market?”
- 1994 Letter to Berkshire Hathaway shareholders
完全的真知灼見 在此篇Brooklyn 探討巴菲特是否是一market timer的評論
I think he has evolved over time. He said that he used to be more quantitative like Graham but gradually moved to the qualitative approach (away from cigar butts and to more moated businesses etc.).
As for how much to stay invested is a tough question, but it will vary according to your situation. If you have an income and you are young, then there should be no problem being 100% invested. Why not? Even if there is a bear market, it doesn't matter as you can keep buying with new cash you are earning.
But on the other hand, if you are the nervous type and you freak out from big numbers, then maybe you want to temper your exposure (and then let it grow). For example, if you inherit $1 million suddenly and then put that in the market, you might see $100,000 or $200,000 losses (temporarily). That would freak out most people who are not used to those kinds of numbers. In that case, it's probably a better idea to gradually move into stocks and get used to the volatility. Or else your first monthy statement that shows you down $60,000 in a single month might prove too upsetting.
I can imagine billionaires not wanting to see even a $1 million mark against them.
Also if you have so much money that money is not an issue, then you can probably afford to have a lot in the markets too. Buffett is 99% in BRK and doesn't worry about volatility because he has so much that even after a 90% loss, he would still have more than enough to live comfortable. So why worry? Plus his 1% is probably enough to live off of too.
So there are all these different factors involved. And yes, there may be a tactical reason to keep cash too; have some cash available in case of another bear market. For some people, if it makes them feel better, its probably not a bad idea. But then again, if you have income, there is always cash coming in so maybe people don't need as much cash lying around as they think.
On the other hand, if you need cash in the near future, that cash probably shuoldn't be in the market. Again, unless you have so much that it's not going to affect your lifestyle...
Oh, and for generals, in BPL, I do think it's just regular undervalued situations; low p/e and things like that.
Thanks for reading.