David Fleer
Bristlecone Value Partners, LLC
12301 Wilshire Blvd., Suite 320
Los Angeles, CA 90025 USA
Work 1-877-806-4141
www.Bristlecone-VP.com


Oil Future; Increasing Allocation to Foreign Stocks

June 23rd, 2017

Oil Future
Total S.A., one of the world’s largest oil companies, was reported in a recent article as seeing its future in electricity generation, rather than oil production. This is a startling admission in our opinion and worth mulling over. Total is the 2nd company in the last 6 months announcing a surprisingly early peak in worldwide oil demand (Royal Dutch Shell has said oil could peak somewhere between five and 15 years, while Total thinks demand for oil will peak in the 2030s.)

The recent example from the coal industry should serve as a warning to investors in oil companies. After demand for coal peaked, a little over a decade ago, it took about 2 years for coal companies’ finances to start deteriorating. The downtrend has been relentless since then and investors who tried to bottom fish got burned. The main culprit was competition from cheap and cleaner US natural gas for power generation. Read the rest of this entry »

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Berkshire Meeting, Baumol’s Cost Disease, and Amazon

May 17th, 2017

Berkshire Hathaway’s 2017 shareholder meeting was held on the first weekend in May.  The Wall Street Journal carried a helpful live-blog with notes from the lengthy Q&A session with Warren Buffett and Charlie Munger (the event’s main attraction).  One of Mr. Buffett’s more interesting points—particularly in light of current partisan debate on the subjects—concerned the relative impact of taxation versus health care costs for U.S. businesses. Read the rest of this entry »

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1st Quarter 2017 Review: Another Positive 3 Months

April 12th, 2017

U.S. stocks continued their march higher during 2017’s first quarter. The S&P 500, an index tracking the 500 biggest companies traded on US stock markets, was up over 6% in the quarter, and is up more than 17% over the past 12 months (including the reinvestment of dividends).

For most of the quarter, investors remained upbeat that a Donald Trump presidency would result in pro-growth policy changes, including changes to the tax code, rolling back of regulations, and infrastructure spending. Doubts emerged after a failed effort to reform U.S. healthcare in late March, which helped pharmaceutical stocks. Read the rest of this entry »

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Berkshire Hathaway: In Praise of Synthetic Leverage

March 22nd, 2017

“Life is like a snowball. The important thing is finding wet snow and a really long hill.”

–Warren Buffett

A few weeks ago, Warren Buffett published his annual letter to shareholders of Berkshire Hathaway–one which we read with interest each year.  The letter’s opening page contains a performance table tracking the annual percentage change in Berkshire’s per-share book value, compared to the return of the S&P 500 Index. By this very basic performance measure, Mr. Buffett’s track record is remarkable, outpacing the S&P 500 by an average of 9.3% per year over the past 52 years!   Read the rest of this entry »

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