LC

Bailout out the airlines without forcing them to change is essentially a transfer of wealth from the many (taxpayers) to the few (airline bondholders). Airlines will exist either way. In one case, we have subsidized profits to bondholders who are continuously bailed out and never have to change their behavior (by forcing the airline to hold more capital, pay higher rates, etc.) In the other case (which I suspect will not happen) the government either lets them fail, or saves them and forces capital regulations, as they did the banks/mortgage insurers they bailed-out in 2009.

Wow, what a contribution. Thank you!

I think the transcript is the best. You can skip the stuff you aren't interested in.

He's OK endangering lives of Minnesotans, just not his native Indianans. What a patriot. Great VP. The best.

Greg Abel gives further context later in the meeting regarding BHE, towards the end, here is the entire context: Greg, let me ask you one of these capital allocation questions. This one comes from [Matt Libel 00:03:16:53] and he says “Berkshire directed 46% of capital expenditure in 2019 to Berkshire Hathaway Energy. Can you walk us through with round numbers how you think differences in capex spending versus economic depreciation versus gap depreciation and help explain the timeframe over which we should recognize the contract of return on equity from these large investments, as we as shareholders are making in Berkshire Hathaway Energy?” Greg Abel: (03:17:22) So when we look at Berkshire Hathaway Energy and their capital programs, we try to really look at it as it was highlighted, really in a couple of different packages. One, what does it actually require to maintain the existing assets for the next 10 20 30 years i.e. it’s not incremental, it’s effectively maintaining the asset, the reflection of depreciation. And, our goal is always to clearly understand across our businesses, do we have businesses that require more than our depreciation or equal or less? And happy to say with the assets we have in place and how we’ve maintained the energy assets, we generally look at our depreciation as being more than adequate if we deploy it back into capital to maintain the asset. Now the unique thing in the lion’s share of our energy businesses that are regulated and that exceeds 85% of them, 83% of them, we still earn on that capital we deploy back into that business. So it’s not a traditional model where you’re putting it in, but you’re effectively putting it into maintain your existing earnings stream. So it’s not drastically different, but we do earn on that capital. Greg Abel: (03:18:43) But what we do spend a lot of time, and that’s what when Warren and I think about the substantial amounts of opportunities, that’s incremental capital that is truly needed within new opportunities. So it’s to build incremental wind, incremental transmission, that services the wind or other types of renewable, solar. That’s all incremental to the business and drives incremental both growth in the business. It does require capital, but it does drive growth within the energy business. So there’s really the two buckets. I think we would use a number a little bit lower than the depreciation. We’re comfortable the business can be maintained at that level and as we deploy amounts above that, we really do view that as quote incremental or growth CapEX. Warren Buffett: (03:19:33) Yeah, we have what, 40 billion or something? What do we have in sort of kind of in the works? Greg Abel: (03:19:42) So we have basically, as Warren’s highlighting 40 billion in the works of capital. That’s over the next effectively nine years, 10 year period, a little approximately half of that we would view as maintaining our assets. A little more than half of it’s truly incremental. And those are known projects we’re going to move forward with. And I would be happy to report, we probably have another thirty billion that aren’t far off of becoming real opportunities in that business. Greg Abel: (03:20:16) As Warren said, that it takes a lot of time. It’s a lot of work. The transmission projects, for example, we’re finishing in 2020, were initiated in 2008 when we bought Pacific Corp. I remember working on that transmission plan, putting it together, thinking “Six to eight years from now, we’ll, we’ll have them in operation.” 12 years later and over that period of time we earned on that capital, we have invested and then when it comes into service, we earn on the whole amount. So we’re very pleased with the opportunity, but we plant a lot of seeds, put it that way. Warren Buffett: (03:20:48) Yeah. And these are not, it’s not like they’re super high return thing, they’re decent returns over time. And we’re almost uniquely situated to deploy the capital. As opposed, you could have government entities do it too, but, but in terms of the private enterprise. And they take a long time, they earn decent returns. I’ve always said about the energy business, it’s not a way to get real rich, but it’s a way to stay real rich. Warren Buffett: (03:21:23) And we will deploy a lot of money at decent returns, not super returns. You shouldn’t earn super returns on that sort of thing. I mean, you are getting rights to do certain things that governmental authorities are authorizing and that they should protect consumers, but they also should protect people that put up the capital. And, it’s worked now for 20 years and it’s got a long runway ahead.

But scorpion, how many times has WB said he can't predict rates and does not take that into account when evaluating investment options? Holding cash would make sense if you expect deflation/negative IR. Perhaps the large cash balance is his hedge against the large lending portfolio he has (banks, insurance & bonds). It's the only rationale that seems to make sense (at least to me)

Of which year? 2017? ;D

An Indian and two Pakistanis were seated together on a plane. The Indian got a seat between two Pakistanis on the plane. Relaxing, he took his shoes off. Soon enough, he got hungry. "Hey, I'm going to get myself a snack. You guys want anything?" He asked the Pakistanis. The man to his right said he would like a Coke. "Of course." said the Indian. "After all, Indians and Pakistanis are Brothers!" When the Indian went to get the coke, the man who asked for the Coke spit in one of his shoes. Once the Indian came back, the guy to his left asked him for another Coke. He happily obliged. While he was gone, the man spit in his other shoe. Soon enough, the Indian returned, with the Coke, of course. After everyone had settled down, and the Pakistanis had had half their Cokes, the Indian put his legs in his shoes and sighed. "How long will we keep doing this, brothers? Spitting in each others shoes, pissing in each others Cokes?"

I think he pretty much said as much, either this meeting or in the interview he did prior. I also agree here, he did seem exceedingly worried. But he made it clear that he knows just as much about this virus as we all do - so perhaps he is more worried about the economic fallout vs. the virus itself? But that view doesn't make total sense either in the context of buffetteer's point #2: "2. Berkshire at 185 is now equally as valuable as at 220 a few months back therefore impairment of actual long term value of 15% more or less so far from corona. "

I found his comment on "not wanting to talk about specific scenarios - as it may increase the probability of them occurring" Very bearish tune from a person whose opinion can shift entire markets...

Yes, looks like about 2B of additional equity sales assuming he sold out of the airlines. WFC? OXY? GS?

April 1-30 Repurchases: 0 Equity purchases: 426MM Equity sales: 6500MM (airlines) :-X

Interesting to see MSCHF posted here on COBF :D https://mschf.xyz/ They do funky stuff every now and then.

Around 23 min mark he admits the mistake passing on Google, and moreso that Sergey Brin/Larry Page came to Warren prior to IPO'ing Google. Can you imagine what would have been? ;D

Do you have any other hobby? Just use that as a descriptor. If you garden: "I work in commercial landscaping" If you exercise: "I train amateur athletes" etc.

There was an off-tangent discussion in the Tesla thread about Buffett and his personal contribution to the world. It got me thinking, what his legacy will be after he passes. To investors I think he has certainly contributed a great deal of in terms of both philosophy and example of behavior. To business owners and employees, I also think he did quite a bit to keep businesses operating and people employed. Or perhaps it is a bit inconsistent - i.e. he kept Berkshire functioning but I recall in some of his Partnership letters he complained about having to shut down uneconomic businesses and being labeled "the bad guy". Also there is the 3G/Heinz debacle. But I think part of being a "home" for business owners to sell is an implicit promise that he will keep those people employed. A P/E firm with a heart, if you will. And I think his biggest contribution will not be realized until after he's gone - which is the giving pledge / charitable ownership of BRK shares to Gates' foundation. Interestingly the giving pledge has over 500B in commitments - more than BRK's entire market cap.

That's why I purchased back in the $30/sh range. I've been selling in the 43-47 range, playing with house money now.

Perhaps Trump was onto something when he suggested to shove sunlight where the sunlight don't shine ;D ;D ;D

I feel like you and I live exactly the same life except I'm at Eastern Market and my park is Kingman Island/Anacostia bike trail/with an occasional Arlington loop sprinkled in. Having visited DC and done lots of tours of multi-family rentals, I have to say that I am incredibly jealous of what a $3,500 budget gets you amenity wise in DC vs NYC. Of course, I live and work from a pre-war apartment for $1,800 in Queens. The value guy in me can't pony up $6,000 for a NYC apartment. Well, not sure what you've got now but a buddy of mine has a decent spot up around your hood, 2600 for 1200sqft. If you're interested PM me I can pass along your info.

Anyone who's ever wandered home depot knows all about simpson strong tie.

Oh thats a good one :D

I think that's wrong conclusion to draw. Flu infections don't hit all at the same time as covid infections kinda did. Well, I was comparing the COVID timeframe, which is why I prefaced with "at its peak". Annually you can probably reduce that by a factor of 5-10. In NYC, weeks 12-15 COVID contributed aprox. 12,100 incremental deaths; compared to about 3,300 combined annual deaths from flu,pneumonia,chronic lower resp. diseases, and other respiratory diseases.

Thanks Liberty. The NYT article linked CDC all cause mortality data by week per state which I wasn't previously able to find. Undercounting COVID is not a problem I am concerned with. We can infer COVID deaths incrementally looking back. Here is all-cause deaths in NYC: Week 2020 2019 2018 2017 2016 2015 2014 1 1,062 1,170 1,351 1,190 1,149 1,279 610 2 1,108 1,106 1,331 1,192 1,126 1,180 1,165 3 1,129 1,158 1,171 1,142 1,113 1,254 1,065 4 1,180 1,157 1,277 1,207 1,110 1,207 1,025 5 1,169 1,116 1,171 1,143 1,077 1,226 1,127 6 1,170 1,225 1,218 1,159 1,148 1,195 1,088 7 1,122 1,104 1,197 1,115 1,064 1,218 1,058 8 1,081 1,073 1,084 1,064 1,152 1,191 1,008 9 1,101 1,087 1,122 1,056 1,173 1,158 979 10 1,111 1,102 1,139 1,066 1,151 1,052 1,027 11 1,116 1,091 1,070 1,109 1,118 1,099 1,031 12 1,383 1,036 1,033 1,071 1,086 1,053 1,082 13 2,675 1,097 1,008 986 1,042 1,071 1,070 14 5,570 1,038 1,065 990 1,030 1,104 1,110 15 6,506 1,054 1,093 1,053 1,100 1,024 1,142 16 4,085 955 1,058 1,038 1,060 994 1,077 I truncated weeks 17,18 as those numbers are still most likely being revised. The real question is whether week 16 is up-for-revision. Hopefully it is not, and we are truly seeing deaths starting to sharply decline. Week 15 in NYC sees 80-120 influenza, pneumonia, lower respiratory, and other respiratory deaths (combined). At the peak we are seeing 5,500 incremental weekly deaths for week 15 - indicating that at its peak, COVID is 55x deadlier than the flu.

But quite a bit flabby :)

You're going in circles. Density alone is not a strong predictor as Taiwan has shown. I provided both sources in my previous post. Data collection is surely a problem. Here, I'll make the opposing argument on your behalf: https://www.sciencealert.com/more-than-70-of-americans-hospitalised-with-covid-19-had-at-least-1-underlying-health-condition-the-cdc-says I have no problem acknowledging this because as the (2) point in my earlier post alludes, pre-existing conditions will not model well vs. observed sample of hospitalized cases.