A VC - Latest Comments in The Berkshire Hathaway 2008 Annual Letter

Re: The Berkshire Hathaway 2008 Annual Letter

LongTimeRez — Wed, 11 Mar 2009 00:00:16 -0000

Check out Jeremy Rifkin's "The End of Work"--2003 Edition. He's been writing about these issues since the early '90s.

Re: The Berkshire Hathaway 2008 Annual Letter

Bogdan — Thu, 05 Mar 2009 08:36:40 -0000

Energy utilities were always a hot sector, even in times of crisis.

Re: The Berkshire Hathaway 2008 Annual Letter

cristi — Thu, 05 Mar 2009 08:28:47 -0000

Warren is god.

Re: The Berkshire Hathaway 2008 Annual Letter

cristi — Thu, 05 Mar 2009 08:27:42 -0000

Warren is god.

Re: The Berkshire Hathaway 2008 Annual Letter

fredwilson — Wed, 04 Mar 2009 15:59:23 -0000

thanks

Re: The Berkshire Hathaway 2008 Annual Letter

JLM — Tue, 03 Mar 2009 18:32:39 -0000

Funny thing about being "aggressive" with low cost money --- for the first time in a long. long time I am completely consumed with the investment equivalent of ennui, torpor, languor and melancholy.

I was visiting w/ my banks today (they tell me that I am their favorite boy just now cause I don't owe them enough and I have never screwed them yet --- one young guy w/ a bit of mousse told me I was their "most attractive and ideal target client" --- I told him, we'll have none of that young man, I am happily married, thank you very much) and they all are most cooperative and falsely cheerful and we were laughing at the low, low cost of capital at P - 1% --- but I cannot think of a single good thing to do with it

Who in their right mind would lend money to someone at P - 1% today? It's too damn cheap. Frankly it feels obscene.

I have not one good idea (well, other than my day job) because things just keep sliding further down. I think I need a month in Mexico at the beach to further my liberal arts education. My wife keeps telling me we need a personal stimulus plan --- her best idea is Steamboat Springs --- nice opening bid and I am addicted to spring skiing.

While I am a contrarian and I dearly love Mexico and there are some unbelievable bargains out there, I fear that the whole world has stopped spending money. Myself included. I have started looking at the wine prices at dinner. I don't need to but I somehow feel compelled to.

I wonder what will happen to Mexican resort real estate? I would love to own a sprawling Cuban beach house.

Re: The Berkshire Hathaway 2008 Annual Letter

fredwilson — Tue, 03 Mar 2009 17:49:32 -0000

He talks a lot about that. He says they have a negative cost of capital. Most people would be a lot more agressive with a negative cost of capital. He and charlie have not been very reckless but they've benefitted from it enormously anyway

Re: The Berkshire Hathaway 2008 Annual Letter

JLM — Tue, 03 Mar 2009 17:24:03 -0000

One of the reasons he likes the insurance business is the ability to invest the reserves. This "float" is enormous given the magnitude of required reserves. They gotta hold it somehow.

Re: The Berkshire Hathaway 2008 Annual Letter

Eagle — Tue, 03 Mar 2009 15:25:16 -0000

Warren Buffett holding company, from $12 a share in 1967 to $70,900 in 2002. The company beat the S&P 500's performance by about 13.02% on average annually! only last year is not good.
Buy a dollar value stock for 50 cents. www.Trade4Rich.com

Re: The Berkshire Hathaway 2008 Annual Letter

RacerRick — Tue, 03 Mar 2009 10:45:52 -0000

This amp goes to 11.

Re: The Berkshire Hathaway 2008 Annual Letter

RacerRick — Tue, 03 Mar 2009 10:22:35 -0000

FYI there's a pretty good book that categories the annual letters into one not-that-long book.

"The Essays of Warren Buffett"

https://www.amazon.com/dp/0...

Re: The Berkshire Hathaway 2008 Annual Letter

fredwilson — Tue, 03 Mar 2009 07:06:07 -0000

They don't know what each seller's cost of living is so no they don't

I figure its 10pcnt and may get to 20pcnt someday

Another significant group supplements their income or their partner's income by selling on etsy

Re: The Berkshire Hathaway 2008 Annual Letter

fredwilson — Tue, 03 Mar 2009 06:41:09 -0000

Always wanting to do more than I really can

Re: The Berkshire Hathaway 2008 Annual Letter

fredwilson — Tue, 03 Mar 2009 06:38:09 -0000

That could well be. But he's got great cash flow in his operating businesses so he maybe sells to buy in order to maintain his cash balances

I really like the way he went into excruciating detail on his derivative contracts

I just don't see this guy hiding anything

Re: The Berkshire Hathaway 2008 Annual Letter

fredwilson — Tue, 03 Mar 2009 06:25:11 -0000

Its also true that the market is down roughly 50pcnt in the past year. Most portfolios will ve under water on recent investments

And its also true that BH makes a lot of money on its operating companies so the investment protfolio is only part of the story

Re: The Berkshire Hathaway 2008 Annual Letter

steve — Tue, 03 Mar 2009 02:32:26 -0000

What struck me was that 7 out of 15 stock positions are under water. If you exclude the long-term
holdings (amex,coke,wapo,wellsfargo), it appears that most recently opened positions
are under water. Its too early to tell but its likely that Mr. Buffet didnt follow the margin-of-safety mantra that he
so dearly loves

Re: The Berkshire Hathaway 2008 Annual Letter

NF — Mon, 02 Mar 2009 23:25:19 -0000

That was my own conclusion. Since October I have been buying stocks I want to own for the next 3-4 years and matching them against a somewhat larger short ETF position, and there is certainly a case for adding this one now. The one point I'm not comfortable with is that he said he had to sell stocks to make his recent preferred investments. I had thought his cash hoard was way bigger than he needed to do the deals I'm aware of, so I'm concerned that there is a liquidity drain somewhere in the business that I'm not seeing.

Re: The Berkshire Hathaway 2008 Annual Letter

Facebook User — Mon, 02 Mar 2009 22:31:44 -0000

Aw come on, you have to explain what the deal with 11 is.

Re: The Berkshire Hathaway 2008 Annual Letter

karen_e — Mon, 02 Mar 2009 21:29:51 -0000

It's a bit weird for him to be planning (I read somewhere) to not leave his children a single dime. Not saying it's crazy or sick, but a bit weird, yes.

Re: The Berkshire Hathaway 2008 Annual Letter

karen_e — Mon, 02 Mar 2009 21:24:24 -0000

Does Etsy have stats yet about how many users can support themselves selling their wares on Etsy?

Re: The Berkshire Hathaway 2008 Annual Letter

Chris Dodge — Mon, 02 Mar 2009 19:41:25 -0000

While I like to think, I've been thinking this for awhile, there was a NYTime article recently to the contrary:

http://www.nytimes.com/2009...

It's actually all very tricky, if you think about it. While freelance or project-based engagements are common place for technologists and developers, I really don't think most americans are ready for the plunge.

Re: The Berkshire Hathaway 2008 Annual Letter

Kyle — Mon, 02 Mar 2009 19:32:51 -0000

Amen. He focuses very heavily on psychology, but he lacks the clear crisp writing that Buffett has been gifted with. If you're looking for tips on how to design a human "system" or product that has a high likelihood of capitalizing on (or some would say manipulating) factors intrinsic to human nature, look no further.

Re: The Berkshire Hathaway 2008 Annual Letter

Guest — Mon, 02 Mar 2009 18:14:48 -0000

Interesting question, in that it's relevance is manifest only in the last few months. I remember back in the day, say, up to mid-2008, the biggest worry was demographics. Pretty much all of the developed world has a population bulge heading into retirement (including China, due to its one-child policy)... After this economic malaise is over, we'll find out that efficiency and productivity is our friend as a diminishing working-age cohort will have to service a large retiree base.

The biggest problem is: what do these people pay with? They have been absolutely creamed by all of this and by the people who manage their money... When the smoke clears there will be winners and losers and the biggest losers will be the 55+ who have seen their IRAs and 401(k) evaporate with no time left on the clock to make it up... This is a huge issue.

Re: The Berkshire Hathaway 2008 Annual Letter

JLM — Mon, 02 Mar 2009 18:06:46 -0000

I fear that the political objectives have begun to overwhelm the triage of the economy.

I do not see any way you can stabilize the economy, rebuild the banking system, rehab significant industries, redistribute wealth, increase taxes on the most productive segment of the economy, increase taxes on capital and enact huge new programs which must be funded by tax dollars.

Please note I am not suggesting any intellectual opposition to any particular social program --- I just don't think you can do it all at the same time. There is no incrementalism when almost every development or building program is based upon a step by step iterative process which makes the next move based upon the success of the prior move.

Ready, aim, fire is a sequence which cannot be reordered with a successful outcome. Even if you control the US Congress.

Re: The Berkshire Hathaway 2008 Annual Letter

fredwilson — Mon, 02 Mar 2009 18:04:17 -0000

Why wouldn't they be reflecting those losses in their book value?