Almost all businesses not related to residential businesses have gotten better qtr by qtr. What was different, the first qtr was the second worst wtr in insurance due to catastrophes, katrina was the worst ever. Asia hit reinsurance particuallary hard, estiamted cost 50b brk represents 3-5%. Insurance lost 821, usually assume breakeven, unlikely to have underwriting profit for 2011 unless no hurricanes. First time in 9 years will have a reinsurance loss, does not effect my opinion that we will have breakeven going forward. Insurance income will drop with GS and GE or pfd going away. 43b in cash earning nothing, will not be that way forever so that will help (Sounds like view on short rates). Believes railroads competitive adv becoming more clear as oil prices rise. Lost on australian floods, new zealand earthquake, and japan earthquake. Swiss re not interested going forward, they had 5 yr deal in fourth year and they get 20% of eanings, wb jokehe wished they cancelled early. 700mm of loss
25000 autos will get insured this year.
Wb _ how many ppl are in NZ charlie?
Cm - well id guess 5b
Wb did quick math and showed 10x worse than katrina.
Could be one of the worst years for reinsurance because 3rd qtr is usually worst for hurricanes.
Goodwill does not grow for Geico but he estiamates good will 14b on the books 1b. Same goodwill that mars and coke has, policy holder has significant value that is not on balance sheet , if only 66 of you sign up that is a goodwill 100000.
Accouting Lesson
Other than temporary impairment
Nobody knows what "quite a while" means for at a depressed price is when you run it through income statement. Wells fargo required to markdown 337mm but had to ignore 3.7b gain. Could have used avg cost instead of specifi identifiactiom method which we use for tax purposes so you can realize largest loss. Ignore gains and losses in investment securities focus on operating earnings. Headlines will say net incoem but it can be useless from an operating performance.
Comments on Sokol
You saw in the movie the Salomon testimony. I was elected chairman of solomon on a sunday at 3pm, someone asked me what happened? What happened was inexplicable and inexcusable, looking back at solamon I still feel the same way and to some extent with what happened with sokol and failing to tell me about his contact with Citi and then his purchase of stock before the recommendation to me, there is no question of it being inexcusable. The inexplicable part but I would like to talk about it but what goes through my mind, dave made no attempt to disguise what was doing, in insider trading people use their neighbors the third cousin, dave left a clear record of his purchases. After Leer deal we supply of list of everyone who knew and when and then a while later FINRa you get a list of who traded to see if you recognize any of them, its inexicable if he thought if he was doing something wrong why do it in the open. Brk paid David 24mm yr last year. Walter Scott said dave and greg should get special compensation we called it that lollapalooza in honor of charlie. It was a cash payout based on a 5 yr operating income and if they hit it dave got 50mm and dave for 25mm. Dave looked at it and said this more than generous, you should split it equal with me and greg. I witnessed dave transfer 12.5mm to his jr partner with no fanfare no push. What I find inexplicable is that 3mm caused this? What causes a man to turn away 12.5mm and ten years later buy stock in advance of a deal for 3mm. Tracy Brit got a shout out. Wb was debating what day sokol told him and how he told him. I should have pushed harder and asked him but what someone says I owned the stock I usual assume more than a week.
I believe it is mistkae to assume.greu haired people are no more rational
Any explaniation for irrational?
Hubris
