If you haven’t read Mosaic or The Dhandho Investor, I encourage you to do so. Pabrai has a unique way of describing his philosophy as a value investor. Of course, there’s a lot in common with Buffett, Munger and many other investors, but his books are really a good read.
Numbers are staggering. Berkshire Hathaway, the holding chaired by Warren Buffett and Charlie Munger, earned $44.94 billion last year vs $24.07 billion in 2016, in large part thanks to tax cuts decided by the Trump administration. Operating earnings actually declined to $14.46 billion from 17.58 billion a year ago, mainly because the insurance business lost money. Tax cut contributed $29.11 billion to results, which « derives from a reduction of net deferred income tax liabilities that arose as a result of the reduction in the U.S. corporate income tax rate from 35% to 21%. »
A more meaningful number for understanding the valuation of BRK is the evolution of the net asset per share or book value per share. Last year, the number grew 23% to $211,750, outperforming S&P 500 by 1.2%. CAGR return for book value per share over 1965-2017 is 19.1% vs 9.9% for S&P 500. Patience, discipline, opportunistic approach, great deal of focus on price and knowing his circle of competence explain such an amazing performance.
The most important part of BRK release of its annual report is Buffett’s letter to shareholder. This year, Buffett covers the following topics :
If you don’t know Greenlight Capital and its founder David Einhorn, you can watch the following video where he presents his investment style. He really his a brilliant mind in investing, someone you should listen to. A younger Warren Buffett of some sort 🙂
According to Investopedia a « melt-up » is a « A dramatic and unexpected improvement in the investment performance of an asset class driven partly by a stampede of investors who don’t want to miss out on its rise rather than by fundamental improvements in the economy. »
Depuis le mois de juillet, HSBC estime que le style « value » (recherche de titres décotés) est plus attrayant que le style « growth » (recherche de valeurs de croissance). La banque vient de publier une nouvelle étude sur le sujet, avec quelques idées d’investissement pour les investisseurs intéressés par ce style de gestion. Continuer la lecture de « A son tour, HSBC redécouvre l’intérêt du style value »