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Latest Comments88 Comments
Take-Two Should Be a Bigger Acquisition Target
ERTS underperformed TTWO by quite a bit in the last month so they are in less of a position to do the buyout now. It's anyone's guess if ATVI would be interested.
Citi's Share Price Problem
Felix, you write good articles most of the time.
This statement you just made implies you believes that the stock price going too low implies it will cause the company to go bankrupt. Call me old-fashioned, I thought it was always the other way around.
Am I missing something in your reasoning here? It's one thing to say a low stock price indicates uncertainty about a company's prospects, it another entirely to see a low stock price actually becomes the cause for those low prospects.
Value Investors: Stay Strong, and Follow Warren Buffett
Duh.
1) "37 Billion" is if the entire stock market goes to zero. You're being facetious here. If you think that's going to happen, then maybe you should just move on and not follow the stock market. It won't exist.
2) The puts are not in ten years. SEC documents say fifteen to twenty years.
3) BRK has cashed in 5B$ of premiums from the puts. The loss must exceed that amount before being a true loss.
4) Calculate the value of this "potential" 30B$ loss twenty years from now when accounting for inflation. Calculate that the 5B$ premium that is now is now in Buffet's hands can be put into Treasuries or CDs or invested and yield a non-negative return, mitigating any "loss". Finally establish how significant this 30B$ loss would be in a Berkshire's cash flow twenty years in the future.
"how does one assess the "value" of that?..."
There are ways and I've shown you some. That questions suggests to me it is you, not Buffet, who is out of his element here.
Buffett Serving Free Lunch?
Hmm, no, apparently, you don't. As it's been stated a million times before, the puts are non-exercisable before expiration. Please look up "non-exercisable&... in a dictionary. Buffet got the premiums, and he doesn't pay up until the options expire (15 years from now).
Looks like it needs to be broken down in little bitesize pieces. for you. The flow of cash:
- Buffet engages in contracts with counterparty.
- Buffet receives premiums = cash flows to BRK.
- Market tanks. Contracts are quoted at a higher value on open market. Counterparty offers to sell contracts at higher ask. Cash flows to counterparty.
- Other counterparties engage in trade, exchanging cash. BRK does not trade its own contract.
Get it?
Your spurious argument about "the market may not be higher twenty years from now" is irrelevant. The market is down now, not twenty years. When the market is still at S&P 1200 twenty years you can come back here and strut your stuff - but it has NOTHING to do with the current decline.
Did you really expect Buffet to engage in these contracts at a twenty-year low and they would NEVER get in the money for twenty years??? You must be some kind of magician - whenever I write options, most of them do end up being in-the-money at least momentarily, ESPECIALLY long-dated ones.
Anyone who studies the markets expects the market will crash at some point over a twenty year period - always has, always will. And in fact crashing early on when the puts have just been written is actally the least detrimental to the reported losses, because the delta on them is low as the time value is quite high.
Berkshire Hathaway's Peculiar Volatility Numbers
Berkshire Hathaway's Peculiar Volatility Numbers
"
And this is where I'm lost as to why this affectes any of the company's valuation at this point. We're talking imaginary dollars here no? Even if these are marked to market, shouldn't these outflow be discounted twnety years in the future, making them rather muted?
S&P Set To Launch New Indexes of Condo Prices
Buffett's Gamble: $40 Billion Bet on Volatility
There's no "bath" taken because he's not going to trade in or out of them. Your "bath" is simply he could have written off those same puts for more money now then before. That's like saying he's taking a "bath" because he could have bought a rising stock for the lowest possible price but instead bought it 10$ more while turning down a profit.
You wake up!
Citigroup: The End Draws Near
It's ridiculous how these writers operator:
a) look at stock market
b) jot down list of biggest gainers and losers
c) cross-reference with archives to see if you can find old bits of informations to throw around
d) write doomsday article
Good job, smartass. But you're going to have to do better than say "It's dead and I don't know quite exactly why in details it's dying right now but the stock is down 50% so there you go".
Can You See Apple Under $60?
Ya isn't that funny logic, heh.
Unfortunately that's the way the MARKET seems to think. Aka. "If I crash so hard that people tremble in their homes, maybe I can trigger the depression by myself".
Google Has More Room to Fall - Merriman
Exploiting the Downside of the Markets
"Hello silly longs! Mark here, folks, hey who do these losses feel? Bad huh? Well, psst, let me whisper in your ear. See, it doesn't have to be that way. You can look like a genius like me, and make money too! Just short everything! It's easy! It always works! "Short & Hold" baby! Here's 4 stock tips to get you started - I did a lot of research on these. Here's my investment thesis, I'll write it doesn on this piece of napking: "Short these stocks because Cramer liked them at some point before". That's it! Just go run through those old Cramer tapes, short it all, that's all you need!
Why be a sucker when you can make easy money like me!"
Ugly
Gah. Let me rephase that.
I'd wager you really don't have any hard data to know you're going to get fired from you're job but you're preparing for it
Ugly
Re-read your comments and yuo will know why the stock market falls endlessly.
I'd wager you really don't have any hard data to know you're going to know you're job but you're preparing for it. Everybody's doing the same thing.
Perception becomes reality, and what was a small snowball becomes an avalanche only through mass hysteria.
Can We Use the 1970s, 1980s or 1990s as an Unemployment Benchmark?
Meanwhile, in the real world, I got a 10% raise today.
Hmmm, how is that even possible? Isn't this 1929? Isn't there a soup line right around the corner? What about those flaming cars I should be seeing in the street?