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Say goodbye to Berkshire Hathaway
- Thread starter Port1385
- Start date
Quote from Port1385:
In a few years, BRK.A will resemble a tech stock from 2000 which made incredible highs and then went out of business. [/B]
LOL X INFINITY.
Do you actually realize the implications of what you're saying here? let's be honest, if Berkshire goes "out of business" we clearly have much bigger problems to worry about.... as in, you won't be laughing all the way to the bank about how right you were.
I'll be honest. Right now I feel as if I am on the Titanic.
There has been a lot that has happened, but the economy has not sunk just yet. I fully expect that in the future to come we might see some shocking events. What might those be? Probably similiar to the Great Depression with mass unemployment and overall misery.
I have mentioned in other posts about the "Cinderella Man". That move is fairly representative of what I think will occur. You wil have the once fairly affluent living in run-down apartments with no heat, electric or water diluting milk. Those people will be the ones who will be fairly well off. Then you will have those who had to settle for a lesser state of living such as in run-down shacks or "Hoovervilles".
If you look at certain third-world countries like Mexico or the Phils, then I believe American society might grow into something similiar.
This is no surprise to me. Right now I am listening to the band on the deck of the Titanic wondering when the inevitable will come.
There has been a lot that has happened, but the economy has not sunk just yet. I fully expect that in the future to come we might see some shocking events. What might those be? Probably similiar to the Great Depression with mass unemployment and overall misery.
I have mentioned in other posts about the "Cinderella Man". That move is fairly representative of what I think will occur. You wil have the once fairly affluent living in run-down apartments with no heat, electric or water diluting milk. Those people will be the ones who will be fairly well off. Then you will have those who had to settle for a lesser state of living such as in run-down shacks or "Hoovervilles".
If you look at certain third-world countries like Mexico or the Phils, then I believe American society might grow into something similiar.
This is no surprise to me. Right now I am listening to the band on the deck of the Titanic wondering when the inevitable will come.
Quote from chrisjs87:
LOL X INFINITY.
Do you actually realize the implications of what you're saying here? let's be honest, if Berkshire goes "out of business" we clearly have much bigger problems to worry about.... as in, you won't be laughing all the way to the bank about how right you were.
Poor ole man Buffet now getting margin calls and deep in the water on many of his positions. I cant believe he didnt see this coming.
http://blogs.moneycentral.msn.com/topstocks/archive/2009/02/24/is-buffett-getting-margin-calls.aspx
http://blogs.moneycentral.msn.com/topstocks/archive/2009/02/24/is-buffett-getting-margin-calls.aspx
Berkshire Hathaway is in a lot better shape than you think, although no one is happy that the economy is getting the stuffing knocked out of it, so it affects every company.
Berkshire does not have to post collateral (no margin calls) under any circumstances (including a downgrade--but to be clear the AAA rating on Berkshire is in no way in peril) on almost all of its derivatives contracts, Felix Salmon was apparently unaware of that, too. Capvandal explains it here:
http://capitalvandalism.blogspot.co...www.berkshirehathaway.com/letters/2008ltr.pdf
These positions are marked-to-market, but Berkshire Hathaway negotiated its contracts so that it does not put up cash in the intererim. It will only owe, if it owes anything, at the expiration date of the equity index put contracts in 2019 to 2028.
Operating income was actually pretty good, but net income reflected the fact that the mark-to-market went against Berkshire, even though (unlike AIG) there has been nothing going out the door for colllateral or margin calls. Even if there were, however, you can see from the financials, that Berkshire's cash position and revenue generation more than covers the entire nut. That is what we used to mean by AAA.
If there is a credit default, it will pay out on a credit derivative. This may be offset by the upfront premium. Tavakoli gives a good explanation of that in her new book: http://www.amazon.com/Dear-Mr-Buffe...bs_sr_1?ie=UTF8&s=books&qid=1236522366&sr=8-1
Berkshire does not have to post collateral (no margin calls) under any circumstances (including a downgrade--but to be clear the AAA rating on Berkshire is in no way in peril) on almost all of its derivatives contracts, Felix Salmon was apparently unaware of that, too. Capvandal explains it here:
http://capitalvandalism.blogspot.co...www.berkshirehathaway.com/letters/2008ltr.pdf
These positions are marked-to-market, but Berkshire Hathaway negotiated its contracts so that it does not put up cash in the intererim. It will only owe, if it owes anything, at the expiration date of the equity index put contracts in 2019 to 2028.
Operating income was actually pretty good, but net income reflected the fact that the mark-to-market went against Berkshire, even though (unlike AIG) there has been nothing going out the door for colllateral or margin calls. Even if there were, however, you can see from the financials, that Berkshire's cash position and revenue generation more than covers the entire nut. That is what we used to mean by AAA.
If there is a credit default, it will pay out on a credit derivative. This may be offset by the upfront premium. Tavakoli gives a good explanation of that in her new book: http://www.amazon.com/Dear-Mr-Buffe...bs_sr_1?ie=UTF8&s=books&qid=1236522366&sr=8-1
Quote from Greg Richards:
(including a downgrade--but to be clear the AAA rating on Berkshire is in no way in peril)
If there is a global depression there will not be a single triple A company in the world. You really think BRK will do fine in that enviroment, even in the phony GAAP standard they lost 10% of their networth in a year, much more if they were taking marks in their private equity
Buffett makes money from insurance and owning some Coke and Washington Post here and there... He isn't that great of a stock picker when he has a lot of capital.
He was a lot better back in the 'day'
He was a lot better back in the 'day'
When I first started this thread, I had shorted just 1 share of the stock. All of the stocks I bash, I usually short them.
I have made about 10 grand off of that 1 share. This is a long term short. I truly think Berkshire will soon get cut in half from this point as I stated in my first post.
In the coming weeks I expect it to fall fast and furious as more news comes out of margin calls and other shipwrecks of Buffet.
I have made about 10 grand off of that 1 share. This is a long term short. I truly think Berkshire will soon get cut in half from this point as I stated in my first post.
In the coming weeks I expect it to fall fast and furious as more news comes out of margin calls and other shipwrecks of Buffet.
Quote from Daal:
If there is a global depression there will not be a single triple A company in the world. You really think BRK will do fine in that enviroment, even in the phony GAAP standard they lost 10% of their networth in a year, much more if they were taking marks in their private equity
Global depressions hurt everybody, but look at the balance sheet. It is strong, but more than that, it is poised to come roaring out of the gates when the economy turns around, and that is not necessarily true of other formerly strong looking companies.
Quote from Port1385:
I have made about 10 grand off of that 1 share. This is a long term short. I truly think Berkshire will soon get cut in half from this point as I stated in my first post.
Your first post was based on incorrect information from Andrew Horowitz who had no idea that Berkshire Hathaway does not have to post collateral under any circumstances for all but a handful of its derivatives contracts.