A Nor’easter is coming my way (up to two to three feet of snow with high winds) so I may be out of contact for two or three days. But push on we must. We continue to study Chapter 3, in Deep Value and Buffett’s investing career.
The best investment article I have ever read of Buffett’s is:
Buffett & Inflation Highlighted plus if you wish to read all that Buffett has said about inflation then Buffett inflation file.
A key case for you to focus on is See’s_Candies_Case_Study. Combined with Buffett’s Inflation Swindles the Equity Investor (Fortune Article: Buffett – How Inflation Swindles the Equity Investor), you will see a leap in Buffett’s thinking. Both are important to understand and complementary to each other.
Finally, Sanborn_Map_Case_Study_BPLs is another case mentioned in Chapter 3 of Deep Value.
Hopefully, students will discuss in the comments section.
Time to bring out the snowshoes!
It’s not entirely clear what will happen in the near term, but the financial markets are already pushed to extremes by central-bank induced speculation. With speculators massively short the now steeply-depressed euro and yen, with equity margin debt still near record levels in a market valued at more than double its pre-bubble norms on historically reliable measures, and with several major European banks running at gross leverage ratios comparable to those of Bear Stearns and Lehman before the 2008 crisis, we’re seeing an abundance of what we call “leveraged mismatches” – a preponderance one-way bets, using borrowed money, that permeates the entire financial system. With market internals and credit spreads behaving badly, while Treasury yields, oil and industrial commodity prices slide in a manner consistent with abrupt weakening in global economic activity, we can hardly bear to watch.. John Hussman, Jan. 26, 2015 www.hussmanfunds.com