valueinvesting101

I wonder if he is planning to do something with his own holding of Berkshire Hathaway. He recently made a change for donation to Gate's charity. It could a trade to swap Apple holding for a large buyback. With the recent sale of BAC in July, possibly more shares sales of other holdings such as CVX, continued cash generation from operating companies, dividend interest income in the next few months, cash could easily top $300 billion soon. I wonder if he is planning to make an announcement around his birthday.

I wonder if he is trying to go below 10% for operational or some other reason. As I remember, there are considerable operation/regulatory issues for Berkshire and/or BAC to hold more than 10% of the bank. Amex is already a bank so getting exception for another Bank is tougher. May be regulator are indicating that holding should go below 10% threshold.

Difference between Berkshire and Fairfax investment style seems to be that Fairfax is more willing to bet on turnaround or new business even at times following old business model such Digit or EuroBank or may be IDBI. Berkshire has gone after KO, AXP, WFC, Geico, Sees which were started decades or centuries before Berkshire established position into them. Buffett often mentions stories about KO about something that happened 1920/1940, having that history gives him more evidence of how company/brand/business model navigated threat of competition over that time period. I wish Fairfax would take a look at existing proven compounder in India and elsewhere when they are available at cheaper valuation due to short-term factors while maintaining longer term moats. Similar to salad oil of AXP or mid 2010s competitive threats to Apple. HDFC Bank and Kotak Mahindra Bank come to my mind as proven compounder in India in financial space with proven history of long term compounding but currently available at decadal low valuation instead of or in addition to pursuing turnaround/control play such as IDBI. Even for turnarounds, IDFC First/IDFC were turnaround story in India with decent margin of safety in last 2-3 years. I always felt it was very much in the circle of competence of Fairfax and similar to lot of other investments they have made.

@dartmonkey In above calculations, for Berkshire, only its equity portfolio has been included but it also has lot of 100% owned subsidiaries which should be included for its equity portfolio. BNSF + BHE could easily add $200 to its equity portfolio. MSR could be another $150 billion equity position. Berkshire equity exposure is still higher than its book value as equity assets are financed with huge deferred taxes liabilities which is guaranteed to be 0% compared to float. Book value also understates economic/market value of its 100% subsidiaries. Book value of NFM or Sees would be much lower than price needed to acquire similar asset today. It is similar to Pet insurance business sold by Fairfax.

Looks like repurchasing continued from February 12 to March 6. About 2813 A shares were repurchased. Not sure if these were purchased from market or via private transaction. May be it was a private purchase from Gottesman family. Bit surprised that purchases continued during this period when average price of above 400 and lowest was around 395 for B shares.

I was looking at management of IIFL Finance as listed here: https://www.iifl.com/finance/about-us/leaders. Rupal Jain who is leaving IIFL had 10 years of experience total professional experience after finishing her bachelor's education in 2013-2014. Upcoming Chief compliance officer Mauli Agarwal also has less than 10 years of professional experience as she has finished her education in 2015. It might incorrect equate experience with capability but definitely make me circumspect about their ability to monitor complex operation effectively. I wouldn't be surprised if RBI's regulatory personnel looking down upon younger compliance manager in IIFL purely due to age or may be due to communication gaps. Definitely seems to have less experience than I would have expected for someone as head of compliance. Bio of some of the other leaders in the Gold loan business also seems like they have recently assumed responsibilities for larger operation.

https://www.bseindia.com/xml-data/corpfiling/AttachLive/1d915198-cd20-434b-a2f5-360169c0b09e.pdf Fairfax India Agrees to Invest up to US$200 Million Liquidity Support to IIFL Finance Not much details about the possible investment. It seems IIFL Finance is in damage control mode right now. May need bigger liquidity support than $200 Million

Thanks a lot @gfp for posting this. There are no depository from Japan on page 39 of this filing. Can Japanese companies be held without depository? Also ICICI Bank, Mumbai India is listed as a depository with balance of 1,500. Does that mean Berkshire is holding investment in India valued at 1.5 Billion? I couldn't find any mention of Indian security in the filing. Is it related to Paytm holding which was liquidated earlier in 2023?

This one seems more serious than IIFL securities. That one was imposed by SEBI which was related to past misconduct which was overturned on an appeal. RBI action letter is flagging deficiencies about the entire gold loan business workflow. Gold loan is nearly 30% of the loan book. ”Certain material supervisory concerns were observed in the gold loan portfolio of the company, including serious deviations in assaying and certifying purity and net weight of the gold at the time of sanction of loans and at the time of auction upon default; breaches in Loan-to-Value ratio; significant disbursal and collection of loan amount in cash far in excess of the statutory limit; non-adherence to the standard auction process; and lack of transparency in charges being levied to customer accounts, etc. These practices, apart from being regulatory violations, also significantly and adversely impact the interest of the customers. Over the last few months, the RBI has been engaging with the senior management and the statutory auditors of the company on these deficiencies; however, no meaningful corrective action has been evidenced so far. This has necessitated the imposition of business restrictions with immediate effect, in the overall interest of customers.” https://m.rbi.org.in//scripts/BS_PressReleaseDisplay.aspx?prid=57444

RBI bans IIFL finance from gold loan business due to regulatory violations https://www.vccircle.com/rbibars-fairfax-backed-iifl-finance-from-sanctioning-disbursing-gold-loans

Great article! @gfp thanks a lot for sharing. You have been very valuable member on this board. Thanks for posts and I hope you continue to prosper and share your wisdom with us. I hope medical school doesn’t increase fees and other expenses going forward too much such that this gift can benefit large numbers of doctors and hopefully inspire them for further philanthropy.

Welcome Charlie!! Great first post and hopefully many more to come. Wow!! 85 bagger over 33 years! Nice returns of 4 bagger and 2.5 bagger for 12 and last 4 years. Not sure how much of net worth people felt comfortable putting in Berkshire in early years especially when Buffett was hitting it out of the park but Berkshire investment had key man risk. Not sure if I would have felt tempted to reduce position after great returns over 5-10 year period. @charlieruane How did you made decision about holding Berkshire during 1998-2000 period? Was just ignoring daily prices or potential taxes or investment opportunities after paying taxes of gains were not interesting? I started holding it from 2015 and slowly built it over last few years. It seems much less risky to own it now as even in 2015 Buffett was playing in his extra time. I felt comfortable about it succeeding beyond Buffett as well.

Yeah Mr. Buffett definitely seems to have soured on investing additional sums in BHE and BNSF given the regulatory environment. He also highlighted the fact that "Berkshire does not currently pay dividends". Going back to last 5 letters from 2018 onwards, dividend was only reference when Berkshire was receiving dividends from investee or subsidiary. May be with rising valuation, reduced investment and acquisition opportunities, rising net equity sales, growing cash flows and cash balances, Berkshire dividend might be coming in 12-24 months.

Looks like Berkshire total asset base will cross 1 trillion this quarter. Market cap should follow it in 2025.

Another purchase of 3.46M shares for around $200M. https://www.sec.gov/Archives/edgar/data/315090/000089924323013283/xslF345X04/doc4.xml Now ownership at 24.4%.