by Travis Johnson, Stock Gumshoe | January 19, 2018 10:29 pm
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What about the jump in Blackberry the last few months goosing Fairfax’s book value?
I haven’t checked the dates of when that stock moved, but the recent move is not likely to make more than a 2%ish difference to Fairfax’s book value in the quarter, all else being equal.
$BOMN np
Fascinated by their approach, I wish more companies that I love were worthy of gainful investing, though there’s still too much up in the air for me to buy in this early.
Thanks for the homework, definitely something to look into. Please continue to keep us in the loop, looking forward to tracking them in the real money portfolio this year.
Thanks Travis for these previous views on this sector. I am also long $BRK^B and $MKL. I will take a closer look at Boston Omaha, it got my curiosity 😉
Keep up the valuable and appreciated work!!
Have a good day
Thanks Travis!
As usual excellent work. I am very grateful for your sharing and caring.
I am especially pleased with your opinions on what to invest in and how you arrived at your conclusions.
And please let nobody tell you that you have changed your style or whatever. The last 8 years you have been doing your thing(that is at least the time frame i have been reading your stuff) and you have done an outstanding job so far.
Muchos Gracias!
Berkshire Hathaway has always bemused me. If you are very young, say, in your 30’s thru late 40’s, it looks like a decent investment. In your mid 50’s and beyond, not so good. Why? BH is a shrewd example of starting up and telling everyone that you are not paying a cent in dividends..ever!! It’s tax status enables it to make money for itself…not for investors…unless you are young enough to cash out later in life for a divident cash flow stock, and pay tax, on your gains. If the Democrats are in power…look to get nailed on gains. Tell me where I am wrong about this sacred cow that everyone lets graze and produce no milk. Sorry, lactose intolerant!
Dividends are not the only source of return for investors — certainly if you want a steady flow of cash from an investment you’d want to hold dividend paying stocks or sell covered calls, but if you would just let your dividends reinvest and compound, as is my habit, then buybacks or letting the company reinvest in growth are more efficient. Of course, that assumes the company can reinvest their earnings in profitable enterprises, which many cannot do very well, or that the company won’t overpay when doing buybacks… which is also fairly rare. But I have no complaints when it comes to Berkshire, so far they’ve been able to compound their earnings very successfully.
FYI, Barron’s had a note last week on BOMN that basically says what most of us have probably been thinking (the stock got too expensive just because of the tenuous affiliation with the Buffett family) — though they also call attention to the material weakness in the reports, I don’t know if that will end up meaning anything or is just a result of a closely-managed firm with few employees at the top but lots of acquisitions of very small companies. I’m not particularly worried, since I bought my small position as a placeholder for an intriguing idea that will take time to develop, but it’s a reminder that there’s no reason to rush in… the article compares them to a SPAC, in that they raised almost $100 million in their IPO and haven’t put much of it to work yet, and no one wants to pay a big premium for cash.
It’s encouraging to see the shares slowly drift below 2X book value this week, at least, so I’ll cross my fingers that they keep falling and may nibble a bit along the way if I still like the strategy and implementation. They could report anytime between mid-February and mid-March, but the article indicates February is when they’ll report.
Barron’s note is here through Yahoo: https://www.barrons.com/articles/enthusiasm-for-boston-omaha-shares-seems-misplaced-1516731160?mod=yahoobarrons&ru=yahoo&yptr=yahoo
Markel just reported, haven’t looked at the details yet but it appears to be another decent quarter given the record 2017 disaster year, and they now report a book value of $684 per share — so in case you’re looking to avoid some math, that puts my easy buy point of 1.3X book value at about $890, and the more optimistic buy point of 1.5X book, for those looking for an excuse to nibble, at about $1,026. The price was in that range as recently as last September, so hopefully we’ll see some market weakness and the price will dip further. Fingers crossed.
Hi Travis! I’m wondering, does the recent Wells Fargo ruling affect your fair value for Berkshire?