"Berkshire has grown its float at an 8% compounded annual growth rate while achieving a negative 2% average cost of float due to its profitable insurance underwriting, while incurring an underwriting loss in only one out of the last 15 years." Ackman
$122 billion in cash
$208 billion in public securities
490-330= operating companies valued at $160 million? They include "the world’s largest insurance business", and argues Ackman:
Whoops $160 Billion not million would be amount attributed to operating businesses after deducting cash and public securities. BRK can be bought at wholesale rather than retail through Ackman. But reading his letter is free though. What's fair value for the operating businesses?
Clues regarding valuing operating businesses: "For the quarter ending in June, Berkshire posted $6.14 billion in operating earnings, compared with $6.89 billion in the same quarter last year." google.com/amp/s/finance.… How would those operating earnings be valued stand alone?
"AAPL is currently the largest BRK13F portfolio stake at ~24% [of the $208B public equities.] BRK's overall cost-basis on Apple is ~$141 per share.... a ~5% ownership stake in the business." "Top three public stock holdings are ~47% of entire portfolio." google.com/amp/s/seekinga…
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1/ A friend asked me to summarize Charlie Munger's framework with a few of his quotes from after my book was published. "Extra points for a short explanation."
Four categories form a checklist and create the pneumonic "RISE”:
Rationality
Inversion
Self-Regulation
Emulation
Rational:
"There's hardly anything more important than being rational or objective. Think of the people who are just utterly brilliant who do some of the dumbest things. You won't have any trouble thinking of examples. It's hard to be rational."
Inversion
"The way complex adaptive systems work, and the way mental constructs work, problems frequently become easier to solve through inversion. If you turn problems around into reverse, you often think better."
John Malone: "At the moment, there’s a lot of blood flowing down the gutters, of people who are streaming, and some can afford it and some cannot.” hollywoodreporter.com/business/busin…
"With WBD backing out of their RSNs, when combined with the Bally Sports networks, 17 of the league's 30 clubs, or 2/3 of MLB’s total now are on the edge of financial collapse." forbes.com/sites/maurybro…
"The leagues are gonna have to be careful, they don't want to end up with a very high price premium service with no reach because then the kids will stop watching the sport." cnbc.com/amp/2022/11/17…
Of the 300 poss I wrote on 25iQ the one about Steve Jobs was perhaps the trickiest to write. To make sure that everything I said was accurate I had every word checked by someone who was his direct report for 7 years. Steve Jobs would have been 68 this week.25iq.com/2014/12/28/a-d…
On the August day in 1981 Bill Gates hosted a summit meeting at the Seattle Tennis Club (pictured) on the shores of Lake Washington. Steve Jobs gave a mesmerizing performance. Macintosh would offer exponentially greater value than anything on the market. siliconvalley.com/2014/08/29/199…
One giant advantage of being born in 1955 was the the magic of the microprocessor arrived while you were in high school. This changed the world at just the right time for Steve Jobs and Bill Gates. That birth year meant you missed the Vietnam draft and were too old for disco. 🕺
"I’ve never made an investment in the movie business in any way, shape, manner or form. It may be a very good place to make a living as an actor or a writer or something or a musician. But it’s a hard place to make money if you’re an investor."
Charlie Munger this past week.
Warren Buffett: "The nice thing about the mouse is that he doesn't have an agent. You know I mean the mouse is yours and he is not in there renegotiating and you know every every week or every month. [Disney] understands all of that very well."
1/ What is Roku's customer acquisition cost (CAC)? What is churn? How about ARPU? Gross Margin? Do you understand Roku's unit economics? Can you calculate per customers CLV/CBCV? variety.com/2023/digital/n…
2/ "The YOY compression in platform and player margins resulted in gross profit growth of negative 2% YOY versus the 12% YOY growth in total net revenue. Q3 adjusted EBITDA was negative $34 million and we ended the quarter with >$2 billion of cash." fool.com/earnings/call-…
3/ Is nine months right?
"So churn is job one for 2023. You have to get your churn down because the customer acquisition costs means you have to have a subscriber for like nine months before you get a payback just on your customer acquisition cost. ca.finance.yahoo.com/video/streamin…
"IBM was the bear and we were going to ride the back of the bear. You just had to try to stay on the bear's back and the bear would twist and turn and try to buck you and throw you, but darn, we were going to ride the bear."
“IBM is proposing to take over the definition of PC desktop operating systems. Thru have a plan to design the operating system so that their hardware Micro Channel architecture and applications are tied in.” Bill Gates PC Week, June 24, 1991