2016-08-19

So, for fun, I wrote a script that grabs manager holdings and compares the portfolio since the last time a 13F was filed. This is available at places like dataroma.com but I wanted to be able to check out my own institutions that may not be superinvestors.

When I wanted to diff the 13F files, I used to download them to a spreadsheet and do it manually.  It was a pain because for companies like BRK who may have the same stock listed across subsidiaries, you had to aggregate the holdings. Many of you know what a pain that is.

Computer Stuff (uh, yes, it's a tangent)
Anyway, to make matters more interesting (OK, for most of you this part is irrelevant and not very interesting) I wrote this whole program on a Linux laptop (Ubuntu 14.04 at the time; I have since upgraded to Ubuntu 16.04) using the VIM editor (I used to use vi in a Unix environment a long time ago in my hedge fund days). Programmers know how much of a pain VI/VIM is until you get used to it. I had to refresh my memory but thought it was so cool to use vi again so I stuck it out and used it to write the whole program.  (Now I use mostly Geany on my Linux machine, Notepad++ on Windows machines, and Idle or Spyder (depending on project) for Python).

The program itself is written in PHP, and I used the XAMPP/Apache web server as my local host.  Anyway, something like this would have been much easier for me to write in Python, but I think I wanted some stuff on the web so wrote it directly in PHP.  I haven't worked with Flask/Django so wouldn't know how to put Python-generated content on a website (well, there are other ways; I do use Python to update google sheets and then use PHP to grab google sheet data etc. for some non-financial stuff I do).

All of this happened a few months ago, actually.

Linux/Open Source
...and here's another thing (another tangent off a tangent).  After turning my old, dead (or so I thought) Dell laptop (XPS M1710 that used to run Windows XP) into a Linux machine, I have really been loving the experience.

And what I noticed is that if you go to Barnes & Noble and look for computer-related magazines, you will see a bunch of them about Ubuntu, Linux and others.  I love those Linux magazines but they are expensive.  Why are they expensive?  Because they are all published in Britain!  Linux Voice, Linux Format etc... they are all published in the UK.  Even the website design/programming related magazines are all UK magazines.

If you have kids, the other cool thing these days (other than Pokemon Go) is the Raspberry Pi, which is basically just a cheap computer on a motherboard  (google it to see what it's about).  And that's a UK invention, so of course, all of the Raspberry Pi related magazines are published in the UK.

Maybe there is something about the publishing industry in the UK that make these magazines possible.  Or maybe there is too much commercialism in the U.S. for there to be support for anything open source (and therefore anything threatening Microsoft). I don't know. If it's open source, nobody is going to make money, and if nobody is going to make money, who is going to buy ad pages?  Maybe that's it.

But it makes me wonder.  As a geek into this sort of thing, it seems like the UK is a much more exciting place. Also, it seems like they are more committed to teaching coding in the schools.

This sort of makes me wonder where the next wave of great innovations will come from. But, OK, who am I kidding? I'm sure the U.S. will keep leading the way.

Anyway, that's straying too far from what this blog is supposed to be about.

Back to 13F's
Let's browse through some 13F's.  Most of this stuff has been seen and discussed already.  Many websites track 13F's closely and write about it, so I won't mention most of the big investors.

Having said that, let's look at BRK.

BERKSHIRE HATHAWAY INC

Name

dollar amt

%port

#shares

change

%chg

KRAFT HEINZ CO

28,812,169

22.21%

325,634,818

WELLS FARGO & CO NEW

22,704,405

17.50%

479,704,270

COCA COLA CO

18,132,000

13.98%

400,000,000

INTERNATIONAL BUSINESS MACHS

12,329,439

9.51%

81,232,303

AMERICAN EXPRESS CO

9,211,866

7.10%

151,610,700

PHILLIPS 66

6,250,563

4.82%

78,782,000

3,231,255

4%

US BANCORP DEL

3,430,598

2.64%

85,063,167

DAVITA HEALTHCARE PARTNERS I

2,981,889

2.30%

38,565,570

WAL MART STORES INC

2,937,332

2.26%

40,226,402

-15,009,461

-27%

MOODYS CORP

2,311,805

1.78%

24,669,778

CHARTER COMMUNICATIONS INC N

2,134,924

1.65%

9,337,491

9,337,491

new

DEERE & CO

1,779,577

1.37%

21,959,246

-1,321,748

-6%

GOLDMAN SACHS GROUP INC

1,628,365

1.26%

10,959,519

APPLE INC

1,455,768

1.12%

15,227,702

5,415,955

55%

GENERAL MTRS CO

1,415,000

1.09%

50,000,000

VERISIGN INC

1,119,894

0.86%

12,952,745

-32,255

-0%

LIBERTY MEDIA CORP DELAWARE

1,073,699

0.83%

37,499,996

7,499,996

25%

U S G CORP

1,051,494

0.81%

39,002,016

LIBERTY GLOBAL PLC

902,592

0.70%

30,712,739

6,903,848

29%

VERIZON COMMUNICATIONS INC

837,652

0.65%

15,000,928

BANK OF NEW YORK MELLON CORP

809,137

0.62%

20,827,212

VISA INC

759,438

0.59%

10,239,160

COSTCO WHSL CORP NEW

680,511

0.52%

4,333,363

M & T BK CORP

636,319

0.49%

5,382,040

AXALTA COATING SYS LTD

618,786

0.48%

23,324,000

SUNCOR ENERGY INC NEW

617,696

0.48%

22,275,381

-7,724,619

-26%

KINDER MORGAN INC DEL

496,708

0.38%

26,533,525

MASTERCARD INC

434,555

0.34%

4,934,756

TORCHMARK CORP

392,788

0.30%

6,353,727

RESTAURANT BRANDS INTL INC

351,030

0.27%

8,438,225

GENERAL ELECTRIC CO

333,233

0.26%

10,585,502

WABCO HLDGS INC

296,420

0.23%

3,237,094

TWENTY FIRST CENTY FOX INC

242,148

0.19%

8,951,869

SANOFI

163,461

0.13%

3,905,875

VERISK ANALYTICS INC

126,763

0.10%

1,563,434

MEDIA GEN INC NEW

59,672

0.05%

3,471,309

GRAHAM HLDGS CO

52,663

0.04%

107,575

JOHNSON & JOHNSON

39,677

0.03%

327,100

NOW INC

33,116

0.03%

1,825,569

PROCTER & GAMBLE CO

26,705

0.02%

315,400

MONDELEZ INTL INC

26,305

0.02%

578,000

UNITED PARCEL SERVICE INC

6,399

0.00%

59,400

LEE ENTERPRISES INC

170

0.00%

88,863

CHARTER COMMUNICATIONS INC D

0

0.00%

10,326,803

-10,326,803

-100%

Total Sum

129,704,731

(sorry, but my tables show adding and dumping Charter Communication, but that's due to change in the class of stock, I suppose, from the merger.  Name changes also show up like this in my tables so look at the whole table before assuming a position was dumped).

Buffett has really been accumulating PSX. It's been on my to-do list for a while, to make a post about it.  It is interesting because it is reasonably valued and doesn't seem to be impacted too much by crude oil prices.  They haven't been growing much, but their earnings have been pretty stable throughout a period when crude oil prices just tanked.  Their refining margins seem pretty stable too so it doesn't look like they are over-earning on excessive refinery margins either.

You know that Buffett likes management as he has owned COP in the past. Maybe this is the good side.

Buffett has been reticent, in recent years, about making comments about individual investments.  I remember he shied away from answering someone's question about why he bought DE, and didn't answer a question about PSX either.  He just said it's not a crude oil play. He used to talk up a lot of his holdings much more liberally.  I think the change came after IBM. He did explain why he liked IBM and it hasn't turned out too well. Maybe he didn't like the attention of talking up a name and having so many people focus on it as a big mistake (my view is that it's still too early to tell!).

But we know that he likes managements that explain very clearly what they are going to do, and especially when they accomplish it. He is most interested in what management has in mind in terms of capital allocation; how much capex will be done, how much will be returned to shareholders in dividends and share repurchases.  And you will notice that PSX is very clear on those issues in their reports and presentations.

Anyway, looking at the BRK 13-F, I was curious what it would look like if we exclude Buffett's big picks and looked only at Todd and Ted's excellent adventure. I just cut and pasted the above into a spreasheet and deleted what I thought were obvious Buffett picks.  Of course, that includes the big ones, and some other smaller ones.  This list may still include some Buffett stocks, but that's OK.

Here's a look-see:

Name

dollar amt

%port

DAVITA HEALTHCARE PARTNERS I

2,981,889

16.74%

CHARTER COMMUNICATIONS INC N

2,134,924

11.99%

APPLE INC

1,455,768

8.17%

GENERAL MTRS CO

1,415,000

7.95%

VERISIGN INC

1,119,894

6.29%

LIBERTY MEDIA CORP DELAWARE

1,073,699

6.03%

LIBERTY GLOBAL PLC

902,592

5.07%

VERIZON COMMUNICATIONS INC

837,652

4.70%

BANK OF NEW YORK MELLON CORP

809,137

4.54%

VISA INC

759,438

4.26%

AXALTA COATING SYS LTD

618,786

3.47%

SUNCOR ENERGY INC NEW

617,696

3.47%

KINDER MORGAN INC DEL

496,708

2.79%

MASTERCARD INC

434,555

2.44%

TORCHMARK CORP

392,788

2.21%

RESTAURANT BRANDS INTL INC

351,030

1.97%

GENERAL ELECTRIC CO

333,233

1.87%

WABCO HLDGS INC

296,420

1.66%

TWENTY FIRST CENTY FOX INC

242,148

1.36%

SANOFI

163,461

0.92%

VERISK ANALYTICS INC

126,763

0.71%

MEDIA GEN INC NEW

59,672

0.34%

GRAHAM HLDGS CO

52,663

0.30%

JOHNSON & JOHNSON

39,677

0.22%

NOW INC

33,116

0.19%

PROCTER & GAMBLE CO

26,705

0.15%

MONDELEZ INTL INC

26,305

0.15%

UNITED PARCEL SERVICE INC

6,399

0.04%

LEE ENTERPRISES INC

170

0.00%

CHARTER COMMUNICATIONS INC D

0

0.00%

Total Sum

17,808,288

Anyway, the concentration in DVA, CHTR and AAPL etc. is very interesting. I am still not a big fan of AAPL, by the way.  But this is a long term thing, not a short term thing.  I know AAPL is evolving from a hardware, gadget company to a services company, but I am still not convinced this market cap can be maintained.

Plus, I saw a video about AAPL recently and the thing that struck me was how old all the senior managers are.  Now, age discrimination is not cool at all, and I love how companies are hiring older people; we need to keep older folks working, and many do want to work.  I love that sort of thing. Not to mention Buffett/Munger.

But when you have a company in a quickly evolving industry, especially in tech, my impression is that youth is pretty important.  The AAPL senior management seems older than the IBM senior management back in the 80's and 90's when they were sort of stuck.  Those aren't the kind of guys that are going to be the leaders in innovation.

Anyway, that's just my impression.  I felt like, holy cow, no wonder why they make some mind-boggling and strange decisions; they are a generation apart from a lot of their users. I think this will be an issue at some point.

But then again, what do I know. I am not a tech guy, really.

Moving on...

SQ Advisors

Let's see what Lou Simpson has been up to.  He obviously still likes his main holdings, but look!  There's a new name!  Allison Transmission Holdings (ALSN).  This is an old Carlyle name, and ValueAct has a position. Carlyle is completely out, I think.

ALSN seems like a good post idea here too; I may do that after taking a closer look.  Revenues haven't grown much, but the story is in the free cash flows from increasing margins.  They are generating tons of cash and are repurchasing shares etc.  A formula that we like.  This leads to another digression.

Name

dollar amt

%port

#shares

change

%chg

BROOKFIELD ASSET MGMT INC

395,284

16.73%

11,961,690

-979,557

-8%

BERKSHIRE HATHAWAY INC DEL

356,730

15.10%

2,432,332

-222,699

-8%

AMETEK INC NEW

344,723

14.59%

7,456,694

-484,585

-6%

SCHWAB CHARLES CORP NEW

292,606

12.39%

11,560,900

-719,054

-6%

WELLS FARGO & CO NEW

275,483

11.66%

5,820,464

-381,628

-6%

LIBERTY GLOBAL PLC

249,859

10.58%

8,685,850

-505,729

-6%

ALLISON TRANSMISSION HLDGS I

129,536

5.48%

4,588,604

4,588,604

new

WABCO HLDGS INC

128,135

5.42%

1,399,310

-102,928

-7%

CROWN HOLDINGS INC

74,230

3.14%

1,464,961

-1,496,522

-51%

US BANCORP DEL

62,431

2.64%

1,548,005

-413,603

-21%

VALEANT PHARMACEUTICALS INTL

48,868

2.07%

2,427,903

-163,496

-6%

BROOKFIELD BUSINESS PARTNERS

4,632

0.20%

243,059

243,059

new

Total Sum

2,362,517

Share Repurchases

There was an article the other day in the New York Times about how bad share repurchases are. I was scratching my head throughout the whole article because we sort of like share repurchases. This is a typical problem with the press.  Something is either good or bad. Corporations are good or bad. All banks are good or bad.  Moslems are good or bad. Cops are good or bad.

Anyway, I don't want to spend much time getting too much into this, but I think most of us here agree that there are good share repurchases and bad ones.  If you buy shares under intrinsic value with excess cash flow, it's probably good.  If you overpay with debt-funded cash, then it might be bad.  Even still, it depends.

The examples sited in the article were typical errors in thinking too.  Oftentimes, companies repurchase shares because there is no better alternative.  For example, companies that have very little growth potential will start to repurchase shares more. So you can mistake cause and effect. Someone may argue that they aren't growing because they are using their capital to repurchase shares. Managements will tell you that they are repurchasing shares because the growth opportunities are not that exciting.

We can bash companies for repurchasing shares, but let's not forget that there was popular word in the old days called di-worsification.  I think that was a Peter Lynch word.  What about M&A? People keep reminding us that M&A's usually end badly. What about excess capacity? Building more factories with not much demand growth won't help anybody. As for retailers, do we really need more stores?

Share repurchases recycle capital back into the economy. It is not automatically good or bad. Look at Japan and their low returns on capital; largely because they don't want to return capital to shareholders. They would rather hoard the cash, make stupid acquisitions overseas, speculate, buy expensive real estate, diworsify into an industry they have no knowledge of, build unnecessary facilities for unnecessary employees etc...

So maybe unbelievable to some, there are things far worse than share repurchases.

Anyway, I am preaching to the choir here, so let's move on...

Alleghany

This is a company many of us follow and like.  The equity portfolio manager, though, is relatively new and doesn't have much to do with Y's long term performance so there may not be much interest in picking apart this portfolio.

But we are curious so we will take a look.  Who knows where the next great idea comes from? Anyway, it is kind of interesting to look at this as the characteristic of the portfolio seems to have changed from before.

Notice GOOG at the top with an 11% position.  This is not what you would really imagine as a Y stock. But I like GOOG so it's fine with me. Not that I would second guess anyone. It is a relatively concentrated portfolio and I usually consider that a good thing.

Name

dollar amt

%port

#shares

change

%chg

ALPHABET INC

288,446

11.06%

410,000

CVS HEALTH CORP

205,841

7.89%

2,150,000

MICROSOFT CORP

153,510

5.89%

3,000,000

BLACKROCK INC

136,984

5.25%

400,000

175,000

78%

ROPER INDS INC NEW

136,429

5.23%

800,000

-25,000

-3%

CSX CORP

130,400

5.00%

5,000,000

ALLERGAN PLC

115,517

4.43%

500,000

500,000

new

VISA INC

111,255

4.27%

1,500,000

-1,500,000

-50%

JPMORGAN CHASE & CO

108,383

4.16%

1,744,178

BARRICK GOLD CORP

106,750

4.09%

5,000,000

5,000,000

new

PPG INDS INC

104,149

3.99%

1,000,000

-525,000

-34%

WALT DISNEY CO

102,711

3.94%

1,050,000

DENTSPLY INTL INC NEW

99,264

3.81%

1,600,000

EXXON MOBIL CORP

93,740

3.60%

1,000,000

700,000

233%

VERIZON COMMUNICATIONS INC

92,417

3.54%

1,655,000

-375,000

-18%

DISNEY WALT CO

83,148

3.19%

850,000

EOG RES INC

56,995

2.19%

683,406

-316,594

-32%

AIR PRODS & CHEMS INC

54,685

2.10%

385,000

COMCAST CORP NEW

51,817

1.99%

795,000

795,000

new

OLD REP INTL CORP

48,225

1.85%

2,500,000

-331,467

-12%

ARAMARK

46,628

1.79%

1,395,000

BERKSHIRE HATHAWAY INC DEL

41,986

1.61%

290,000

HOME DEPOT INC

32,561

1.25%

255,000

DEVON ENERGY CORP NEW

31,890

1.22%

880,000

NEWELL BRANDS INC

30,985

1.19%

637,877

637,877

new

KIMBERLY CLARK CORP

27,493

1.05%

200,000

PEPSICO INC

27,016

1.04%

255,000

HESS CORP

24,338

0.93%

405,000

L BRANDS INC

23,163

0.89%

345,000

OCCIDENTAL PETE CORP DEL

21,535

0.83%

285,000

POLARIS INDS INC

14,309

0.55%

175,000

175,000

new

ARES CAP CORP

2,674

0.10%

188,326

4,660

3%

ARES COML REAL ESTATE CORP

1,538

0.06%

125,115

CONSOLIDATED TOMOKA LD CO

578

0.02%

12,166

12,166

new

ARES DYNAMIC CR ALLOCATION F

131

0.01%

9,550

224

2%

SABRE CORP

0

0.00%

1,890,000

-1,890,000

-100%

SMUCKER J M CO

0

0.00%

205,000

-205,000

-100%

PERRIGO CO PLC

0

0.00%

750,000

-750,000

-100%

JARDEN CORP

0

0.00%

740,000

-740,000

-100%

CHURCH & DWIGHT INC

0

0.00%

365,000

-365,000

-100%

ISHARES TR

0

0.00%

181,000

-181,000

-100%

Total Sum

2,607,491

OK, this post is getting a little long so I will break it up. More to follow... 

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