When reading a post with a keyboard, you can type the keys , and . to move backwards and forward between posts! You can also press 'return' to read through posts one at a time. There's freedom in Shrewd'm!
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 1
Good morning (at least it is in the western USA), Jim and all:
Wondering what your thoughts are on ANCTF these days given that Pilot seems to have undergone a sobering 2024.
My ANCTF position, begun in 2023, is down a little more than 5%, -3.6% when dividends are added back.
Appreciate your time.
No. of Recommendations: 4
Short disjointed thoughts:
ATD has been a fabulous business. In some ways, it's a bit of a mystery: with so many acquisitions they seem to be edging towards the toxic category "roll up", but for decades they have actually made their acquisitions work. The only risk I ever appreciated is what if their exceptionalism in that regard ends? Maybe it's not something you can extrapolate?
I owned it for a while and sold on some temporary strength to buy something else with temporary (big) weakness. I make a nice bundle on the alternative, but I've regretted selling. It is rarely conventionally cheap, so I hesitated to get back in.
Their attempted purchase of Seven & i (Japanese home of 7-Eleven) has been in the news lately, so they are much more in the spotlight than they usually are. That may be what has caused (for them) an unusually large amount of price movement. Seven & i's controlling family's bid just fell through, so maybe the acquisition is still in the cards? The market doesn't like giant acquirers, as a rule.
You mention that you're down on your position entered in 2023. I'm not sure how that's possible, isn't today's price still higher than almost every day in 2023? I guess it's because you're counting in US dollars, and the greenback has soared?
Thanks for the reminder, I might finally get back in at some point...
Once you smooth out the short term squiggles, earnings per share are up about 15-16%/year compounded in the last decade, plus dividends. Not to be sneezed at.
Never sell a farm just because it's winter and there is no crop imminent.
Jim
No. of Recommendations: 0
Up 34.6% since 11/26/2021 acquisition
A steady upward price trajectory since last year or so, I'll take slow and steady. Not sure about valuation now.
No. of Recommendations: 1
Higher today than most days in 2023? Yes.
Higher than my purchase days? No.
July 6, purchased half the position at $49.515
December 1, purchased a quarter of the position at $56.2977.
December 10, purchased final quarter of the position at $56.79.
Thanks for the reminder (followed by whatever key is a winking emoji).
No. of Recommendations: 9
Higher today than most days in 2023? Yes.
Higher than my purchase days? No.
July 6, purchased half the position at $49.515
December 1, purchased a quarter of the position at $56.2977.
December 10, purchased final quarter of the position at $56.79.
It does look like a currency effect; the US dollar is up a fair bit since then. About 5.8% versus the Canadian dollar.
Looking at the Canadian dollar prices on those days, you'd be up about 2.4%.
As an aside---
Strange as it is to contemplate for Americans (and many professional investors), the US dollar is one of the more volatile majors. e.g., standard deviation of FX for USD versus CAD or EUR or GBP since 1999 is about 13.6%. By contrast, standard deviation of CAD versus EUR is about 6.6%.
When I want a quick and dirty "currency adjusted" return, for a constant yardstick I use a synthetic currency that's measured in "buckets". Each bucket is 15 Canadian dollars and 10 pounds sterling, because those two seem to be more like steady landmarks in the last quarter century, and even more steady when considered together. In the last decade, one "bucket" would buy you between (US) $21.60 and $28.29, quite a range. The current number is $22.94. As the steady(ish) bucket is currently buying fewer US dollars, that shows that the US dollar is at the high end of that decade's range.
The US dollar index is the usual way to measure this, but it is weighted based on US trade flows, which doesn't consider the steadiness or global significance of the currencies to which it's doing the comparisons. Some volatile, and (more importantly) some pegged or semi-pegged to the dollar, so US dollar movements are shown as smaller than they really are.
Jim
No. of Recommendations: 5
Jim,
Is there a simple “currency hedge for dummies” for US-based folks like me holding mostly Berkshire and cash, all in USD?
I feel like the soon to be boiled frog sitting here in the US, watching everything that’s going on geopolitically, but not knowing what to do.
After Brexit, didn’t the pound fall significantly? Is that a good comparison to what the US is going through?
No. of Recommendations: 8
Is there a simple “currency hedge for dummies” for US-based folks like me holding mostly Berkshire and cash, all in USD?
I presume your thinking here is that you think the US dollar will/might fall. The problem is that currencies are about the least predictable things there are, so I would be hesitant to recommend that anyone go down that road. As with any "hedge", one side of the position will always lose money. Very few people are comfortable with that--it takes a lot of practice to only ever look at the sum of the two positions.
If you just want to do it for a reason that doesn't actually involve a prediction, like a bit of diversification which might protect against a possible and potentially unexpected and large US dollar slide, the simplest hedge is to convert your USD cash to something else. I swapped a lot of mine for GBP lately, but various currencies have their pros and cons. You can also borrow US dollars and use them to buy something. You could buy a different currency, but you'd probably be richer buying equities of companies whose revenues are largely in a non-US currency. It's a good reminder that anyone with a non-zero cash position, positive or negative, is making a wager on currencies whether they realize it or not.
A very mile approach is to buy stock in good companies with very large percentages of their revenue in currencies other than the dollar. It doesn't matter where the stock is listed, or where their headquarters are.
After Brexit, didn’t the pound fall significantly? Is that a good comparison to what the US is going through?
This is the popular narrative. Technically, yes it did--but not in the logical this-follows-that way that most people think. If you look at a longer term view, the trade weighted pound was remarkably flat for many years before and after Brexit, except for a little rise before, which unwound just after. The 2016 drop (unwinding) is what makes all the headlines, but the trade weighted pound level after the drop was surprisingly close to its typical level 2009-2013. It's actually a bit higher than that pre-Brexit stretch now.
Some folks feel that current US policies in aggregate will drive the dollar up, for a while, then down later. The reasoning is compelling, but your mileage may vary...see comment above about near total unpredictability.
Jim
No. of Recommendations: 0
Thank you. That was enlightening.
