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    warren buffet

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    © All Rights Reserved
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    8 views8 pages

    Whitney Tilson Berkshir..

    Uploaded by

    GurjeevAnand
    warren buffet

    Copyright:

    © All Rights Reserved
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    ovisr2015 Whitney Tilson: Berkshire Hathaway Intrinsic Value Is $261 PP UTEY | werner) Whitney Tilson: Berkshire Hathaway Intrinsic Value Now $261,000 f y s in & a 3 ‘Whitney Tilson (http://w.valuewalk.com/tag/ Whitney-Tilson/) email to investors 1) Ive updated my side presentation on Berkshire Hathaway Ine. (NYSH:ARK.A (tp: wow vahuewalk.com/stock-data/?stock_symbol=NYSE:BRK.A)) © stock_symbol=NYSE:BRK.B) to ieorporate the Q1 earnings YSE:BRKB (http//oww-valuewalkcom/stock-data/? (hp: wor vauewalk.com/2015/05/berkshire-bathaway-2015-meeting-notes)that ‘wore reported on Friday and have posted it at: wor:stilsonfonds.com/BRK pf (http:/wontisonfunds.com/BRKC pal). My estimate of Berkshires intrinsic value has risen to $261,000, implying thatthe stock, which closed today at $218,000, is 7% undervalue. 2) Buffett and Munger got « number of tough questions a the meeting about their partnership with 3G, through which Berkshire has acquired stakes in Burger King Worldwide Ine (NYSE:BKW 0htt://www.valuewalkcom/stock-data/? stoe ttp://worw.vahtewalkcom/stock-data/?stock_symbol=NYSF:IINZ)) and Kraft syibol=NYSE-BKW), Hl. Heing Company (NYSEHINZ. Foods Group Inc (NASDAQ:KRFT (http: /worw-valuewalk com/stock-data/? ntpstww valuewalk.com/20 18/08/whitney-tison-berkshire-hathaway-ninsic-value-now-26 1000! com/sign-emal/) Sack Scenery eer area ieeeiend eer fay Get our free daily new mall Aderess View prwouscareagns (htostuse.camparearenvet cor nedebvetooneieoerra4e08 Subscribe cl (tpsa batersurcomwer1595/2 ‘m4 Secucton Tecinque Wormer (pura batarsur cower 59512 (repuia batarsurcomwerS95/2 psa batarsur comer S952 Underses Discovery May tend ve o71osr2015, Whitney Tison: Berkshire Hathaway Intrinsic Value Is $261 stock_symbol=NASDAQ:KRFTI) ve long believed that they are the best operating ‘managers in the world, in part beeause they are able to run businesses with far fewer employees. This is cleanly beneficial to the owners of the business and, overall, to society, but there's no doubt that significant lays take areal toll on the people being Iai off. [Le’sbe honest: 3G ist laying off the superstars, but rather the lesser performers ~ the ones who will really struggle to find another comparable jb, These are the people ‘who linger around for years in companies that ae poorly run ~ but often highly profitable, which is why layers of fat ean build up and nobody does anything about it. Obviously, 10% ofthe people in any company are in the bottom 10% and, in most eases, the company wil perform BETTER i they are let go. One of my big ako-aways from Walter Isaacson brilliant book, Sieve Jobs (http://w. amazon.com/gp/product/1451648537/ref=as_i tI? UTF8keamp=211i8okereative=3734SoRcreativeASIN=14516485378link_eode=asgtag=valucinveso8e- _206linkld-AQGD)DKGOgBYUTGS) (probably the best business book I've ever read), Js that Jobs was RUTHLESS in weeding out "B” players He was unnecessarily cruel in the way he drove them out I think, but he was right to recognize that, especialy ina tech company, “A” players wil lave if enough “B” players are tolerated. Bill Gates, ‘understood this ~ and look what happened to Microsoft Corporation (NASDAQ:MSFT (http://w valuewall com/stoek-data/2stock_symbol=NASDAQ2ISFT)) after he len. Here's Andrew Ross Sorkin om this topic in today’s NYT: Some in Mr. Buffets audience questioned his esent embrace (tp://mww.nytimes.com/2015/03/26 fbusiness/dealbook/3g-captal ‘utets-fvorite-partner-in-deals-worth-ilions. htm of the Brazilian investment firm 36, which Berkshire has supported by investing alongside it in deals for Burger King and the recent merger of H J Heinz wth Kraft Foods, One shareholder expressed concern that 3G zro-based budgeting approach — which looks at every cost as something to consider eutting — i out of syne with Mr. Buffet’ aspiration to “balance capitalism with compassion,” asthe questioner put it ‘But that disconnect may be misplaced. Mr. Buffet’savuncular ways often disguise another truth: He isnt always a cuddly teddy bear. While e says he prefers a hands- off management approach, he runs a pretty lean organization, “Wedo have some businesses where we probably have more people than we need, and 1 don’t do anything about ihe said. “But that doesn’t mean that endorse it. 1 ‘basically tolerate it.” Atanother point, Mr, Buffett sad: “Eficeney is required overtime in capitalism.” ‘Mr. Buffets longtime friend and Berkshires vie chairman, Charlie Munger, went even further, suggesting that ifbusinesses did not seek to be as efficient as posible, they would end up like those inthe Soviet Union, declaring, “They pretend to pay us| and we pretend to work The whole economy “didn't work," he said, tps valuewalk.com2018/08iwhitney-tison-berkshire-hathaway-ninsie-valve-now-261000! (hetp/rebatarsurcomie!t59/521 (xp baarsur.comme!t59/52 (hetpsfabaarsurcomiwe!55/5/1 1m How To Make Any Woman Obs« (penpfabatarsurcommwe!55/5/1 (tetpstebacarsur comiel159/51 (perp batarsur comwe!55/5/1 Nutritionist’ Breakthrough Muscle (herp batarsurcomiwc!155/5/1 (perp baarsurcoméwe!155/5/1 Secs wena ae es ; Feam Slapping fon Ekowing. Le ‘Shere ous aece te CS {Dion vive com293509 {Rovorpressnatnehnaogyn am SPONSORED FINANCIAL CONT Expert views onthe bal market Wealth Staogenent Sirk ias) Astrng US jobs report eonfses Tate pile Sarre ‘Which vestments to look ot for toswoid artes? Whereis the clever money ging? Expert views onthe lal mathe Weal Stanogement Stores) 218 ov1os2015, Whitney Tilson: Berkshire Hathaway Intrinsic Value Is $261 Mr. Munger added later, “There's no question that waves of layofs hurt people” But then he asked rhetorically: "What would our country be ifwe kept everyone on the farm?" ‘And here's link to wateh a 4-minute video of Bulfet’s answering Becky Quick and Sorkin’s questions on itzwww. nytimes.com /2015/05/05 fbusiness/dealbookyberkshires-warren-busfet- shows-his-teddy-bear-image-has-tough-side htm (btp:// wow nytimes.com /2015/05/05/business/dealbook/berkshiresvarren- Dulet-shows-his-teda-bear-image-has-tough-side hl) 2) Thave yet to see anyone's notes from the annual meeting, but did transeribe my question about income inequality and Buffett and Munger’ answer: 1’m Whitney Tilson, a shareholder from NY. ‘Mr. Bute, Fknow many sharcholders have felt eritation (to putt mildly) when. ‘yulve weighed in on social issues such tax policy or endorsed and raised money fora particular candidate, but I fr one applaud it, think everyone, but especially people ‘who've achieved wealth and prominence and, thus, have real ability to effect change, havea duty to try to make the world a better place, not jus through charitable Aonations but also through political engagement ~ and Yd say that even to people ‘ose politcal views are contrary to miy wa, >My question relates to one ofthe big issues today: rising income inequality and, related to this, the campaign to rise the minimum wage, which has had some recent successes with some ofthe largest businesses in the country like Wal-Mart Stores, Te. (NYSE:WMT (http://www. valuewallkceom/stock-data/? stock_symbol=NVSE:WMT)) and MeDonala's, How concerned are you about income o ‘inequality, do you think raising the minimum ‘wage is a good idea, and do you think these efforts might meaningfully affect the profitability of eorporate America? Answer Buret: [think t's extraordinary in the United States to see how far we've gone. Let's just goback to my own ease. Since I was born Jn 1990, the average GDP per capita ofthe United States has gone up 6 for. And my parents thought they were Ing in reasonably decent economy in 1990, and here {her son has lived to where the averages sx times what it was then, Ifyou'd asked ‘them at that ime, and they'd knovn that fact, that it would go fom $8 or $9 ‘thousand in today’s terms to $54,000, they would've said, “Well, everybody in Ameriea is going tobe enjoying perfect lives.” But clearly theyre not. ntpstww valuewalk.com/20 18/08/whitney-tison-berkshire-hathaway-ninsic-value-now-26 1000! ‘Value Investing Pls LockerDome ‘aus Investing Pls lo? lo? Value & Growth invesent Philosophies? — lave! dinini Fora limited ume were giving oy {Pad Min to one sky ValueWa Con the actions low fay ha 318 ov1os2015, Whitney Tilson: Berkshire Hathaway Intrinsic Value Is $261 SoI think t isa huge factor. There are a million causes for it, and I dont pretend to ‘Know al the answers in terms of working toward solutions, But Ido think that ‘everybody that is wiling to work should have a reasonably decent livelihood in ‘country lke the United States. [applause] How that is best achieved..'m actually going to write something on it prety son. have nothing against raising the minimum wage, bu to raise it to level sufficient to really change things very much Ithink would costa while lot of obs, There are sch ‘things as supply and demand curves, and ifyou were to move it up dramatically, thinkyou would.tsa form of price ixing..1 think you would change the ‘opportunities avallable to people very dramatically. So1'm much more ofa believer in reforming and enlarging the earned income tax credit, which rewards people that work but alo takes care ofthose whose skis don't fit wel into the market system. | think you've put your finger on a very big problem. I don't have anything against -alsing the minimum wage, but dont think you can doit ina significant enough way without ereating lot of distortions, whereas T do think the earned income tax eredit ‘makes alot of sense, and Tthinkt can be improved. “There's Tot of fraud in itt pays out juste ump sum so you get nto these payday ‘ype loans against it. There's lot of improvements to be made in it, but I think the answer lies more in that particular poliey than the minimum wage. ASI sad, I hink Tl rite something on it petty soon, and if there’s anybody T haven't ‘made mad yet, then Il take care oft inthe next one. [laughter] hase? ‘Munger: Well you've just heard « Democrat speaking, and here's a Republican who says Lagree with him. [laughter] I Uhink ifwe raise the minimum wage alot, i would ‘be massively stupid and hurt the poor. And I thinkt would help the poor to make the ‘earned income credit bigger. fapplause) 4) Lattended the Ira Sohn conference in NYC yesterday. Some great speakers, but fewer good investment ideas than usual ~ due mainly to us being six years into orwerfil bull market. Here are links to someone's notes 1. fsputhereformedroker.comn/201S/0S/o4/note-romhe-201Sraahn-confeenc: arcu (epuitharetormedbroker-com/201S/05/04ntes-rom-the2015:r-sohr conference pare) 2. nesufthereformedorokercom/201$/08/04/notesom-the-2015-ra-shn-

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