zaterdag 16 augustus 2014

hoog licht

Ziehier enkele van de passages uit de verzameling brieven

In 1 van de eerste brieven aan de aandeelhouders, beschrijft Buffett de logica om de cash van de textiel business te investeren in een andere, niet-gerelateerde of gecorreleerde inkomstenstroom (in dit geval, verzekeringen) : 

"We expect that there will be years in the future when the order of relative profitability is reversed, reflecting different stages in both the insurance and textile cycles. However, we believe it is an added factor of strength to have these two unrelated sources of earnings rather than to be solely exposed to the conditions of one industry, as heretofore"

Zij die zich de idee achter de investering in Tessenderlo chemie herinneren, hebben zonet een déjà vu beleefd. Tack's uitleg kwam haast woord voor woord overeen met wat Buffett daar schreef.  
Of beter, ze beleefden de echte déjà vu toen ze Tack's uitleg lazen... 

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Soms is Buffett langdradiger : 
"Our unrealized gain in stocks at yearend 1977 was approximately $74 million but this figure, like any other figure of a single date (we had an unrealized loss of $17 million at the end of 1974), should not be taken too seriously. Most of our large stock positions are going to be held for many years and the scorecard on our investment decisions will be provided by business results over that period, and not by prices on any given day. Just as it would be foolish to focus unduly on short-term prospects when acquiring an entire company, we think it equally unsound to become mesmerized by prospective near term earnings or recent trends in earnings when purchasing small pieces of a company; i.e., marketable common stocks"

Tack noemde lui die focussen op short-term prospects gewoon "prutsers." 

:-)
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Geen comment nodig, over de aandelenmarkten: 

"... fractional-interest purchases can be made in an auction market where prices are set by participants with behavior patterns that sometimes resemble those of an army of manic-depressive lemmings"

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Veel later zou er heel wat behavioural economic dinges over verschijnen,  maar Buffett beschreef  "career risk" uiterst treffend: 
"Most managers have very little incentive to make the intelligent-but-with-some-chance-of-looking-like-an-idiot decision. Their personal gain/loss ratio is all too obvious: if an unconventional decision works out well, they get a pat on the back and, if it works out poorly, they get a pink slip. (Failing conventionally is the route to go; as a group, lemmings may have a rotten image, but no individual lemming has ever received bad press.) Our equation is different. With 47% of Berkshire's stock, Charlie and I don't worry about being fired, and we receive our rewards as owners, not managers. Thus we behave with Berkshire's money as we would with our own. That frequently leads us to unconventional behavior both in investments and general business management. We remain unconventional in the degree to which we concentrate the investments of our insurance companies, including those in WPPSS bonds. This concentration makes sense only because our insurance business is conducted from a position of exceptional financial strength. For almost all other insurers, a comparable degree of concentration (or anything close to it) would be totally inappropriate. 
Their capital positions are not strong enough to withstand a big error, no matter how attractive an investment opportunity might appear when analyzed on the basis of probabilities"

Een jaar later kwam hij nog even terug op dit voordeel voor BRK : 
"We have several things going for us: 
(1) we don't have to worry about quarterly or annual figures but, instead, can focus on whatever actions will maximize long-term value; 
(2) we can expand the business into any areas that make sense—our scope is not circumscribed by history, structure, or concept; and 
(3) we love our work.
 All of these help. Even so, we will also need a full measure of good fortune to average our hoped-for 15%—far more good fortune than was required for our past 23.2%"


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Over dividend policy:
"Dividend policy is often reported to shareholders, but seldom explained. A company will say something like, "Our goal is to pay out 40% to 50% of earnings and to increase dividends at a rate at least equal to the rise in the CPI"
And that's it—no analysis will be supplied as to why that particular policy is best for the owners of the business. Yet, allocation of capital is crucial to business and investment management. Because it is, we believe managers and owners should think hard about the circumstances under which earnings should be retained and under which they should be distributed."


Wel begrijpelijk, gezien er nogal wat couponverslaafden rondhangen, die de kar voor het paard gespand willen zien, en dus dergelijk dividend beleid belangrijker vinden dan een gezond bedrijf.   
Jammer genoeg voor hen duikt steevast Acomo op in hun lijstjes, zodat er heel wat nieuwe aandeelhouders het aandeel kopen zonder te snappen hoe de firma geld verdient, en zonder de inherente risico's in fysieke commodity handel in te kunnen schatten. 
Dit kan mooie bijkoop-momenten opleveren, als de onvermijdelijke grote tegenslagen elkaar opvolgen, de cash in de firma moet blijven en de couponverslaafden de handel dumpen.  

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En Munger... : 
"Our Vice Chairman, Charlie Munger, has always emphasized the study of mistakes rather than successes, both in business and other aspects of life. He does so in the spirit of the man who said: "All I want to know is where I'm going to die so I'll never go there."

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Herinnert u zich de contraire stier?  Zelfverklaard groot Buffett kenner, maar bijlange niet slim genoeg om in te zien dat de business economics van een "paper mill" fundamenteel identiek is aan die van een textile mill zoals het originele Brk.  

   Samengevat komt het hierop neer: 
"The situation is suggestive of Samuel Johnson's horse: "A horse that can count to ten is a remarkable horse—not a remarkable mathematician." Likewise, a textile company that allocates capital brilliantly within its industry is a remarkable textile company—but not a remarkable business."


By the way, de papiermolen, FTP noteerde recent aan 1,82CAD, en een remarkable paper mill was het nooit.   Hoog tijd dat er nog eens een pump and dump verhaaltje zoals dit verschijnt op seeking alpha om nog wat stiertjes van hun spaarcentjes te verlossen.  
Aan de belangrijkste denkfout wilde de stier niks doen, hij begreep niet hoe fysieke commodity markten werken. Doch hij dacht het véél beter te weten dan een gewezen fysiek commodity trader zelve.   hihi. 
    

Terug naar de textile mill, en naar het fenomeen "Boekwaarde": 

"There is an investment postscript in our textile saga. Some investors weight book value heavily in their stock-buying decisions (as I, in my early years, did myself). And some economists and academicians believe replacement values are of considerable importance in calculating an appropriate price level for the stock market as a whole. Those of both persuasions would have received an education at the auction we held in early 1986 to dispose of our textile machinery. The equipment sold (including some disposed of in the few months prior to the auction) took up about 750,000 square feet of factory space in New Bedford and was eminently usable. It originally cost us about $13 million, including $2 million spent in 1980-84, and had a current book value of $866,000 (after accelerated depreciation). Though no sane management would have made the investment, the equipment could have been replaced new for perhaps $30-$50 million. Gross proceeds from our sale of this equipment came to $163,122. Allowing for necessary pre- and post-sale costs, our net was less than zero. Relatively modern looms that we bought for $5,000 apiece in 1981 found no takers at $50. We finally sold them for scrap at $26 each, a sum less than removal costs"

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Ik stel vast dat er nogal veel hoge lichten zijn,  wordt vervolgd.
 

Disclosure : Long Picanol, Amsterdam Commodities


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