John Hjorth

This is imperative to understand about Berkshire structure : Annual report 2023, p. K-92, note 15, top of page paragraph [there is no avaiable information about it on quarterly basis in the 10-Qs]: So the sale of some securities in the insurance subsidiaries may generate some cash [in the insurance subsidiaries, that is], but that cash may still 'be on the hook' [and thereby restricted for dividend purposes], based on claims from ongoing or finished litigation etc., taking the actual dividend restrictions into consideration. That said, the above stated is in a way quite academic and hypothetical, because Berkshire and it's insurance subsidiaries will pay according to rulings and verdicts against them, at latest when there is no further possible alternative of appeal or trial. I would personally be shocked to see a Berkshire insurance subsidiary go bankrupt, by Berkshire leaving its own subsidiary on its own, to swim in its own pond with whatever problems it may have. - - - o 0 o - - - So the whole premis and basis for your line of thinking as basis for your question, @Hektor , is void. Berkshire will honor such claims untill the day it any longer can't, or untill the sun in its process of burning up has swollen so much that it has had the Earth for lunch, unless something else has hapened before that.

@Eldad, True, in the meaning he said at an AGM that 'he couldn't sit here in front of the shareholders with 150 B of cash on the balance sheet and at the same time consider himself a success'. But : Focus on studying what he does in stead of what he says. [This also includes that I personally think that about every person can be 'caught' in inconsistencies over time spans of several years.] Another way of expressing it could also be that his investment style over time still evolves.

Thanks, @adventurer , Your post actually made me turn on CNBC in the morning. No luck so far, - it's around 4:30 PM local time here now, and I'm switching back to Bloomberg TV, as the usual channel, when I'm at my usual spot during the day. I checked Becky Quick's account on X also, no news about something like that upcoming there either. Maybe later today ...

This. This is absolutely worth to keep in mind when reminded about it, and to really appreciate.

And it's all speculative, and just that : speculative. None of us actually know what papers - and about what - are laying on Mr. Buffetts office desk and what may have his attention by now - today -, and what he might be messing around with, - or any day, for that sake.

@Xerxes, It's more like number 8 now, 7 to go. [I think we never talk about Aramco here on CoBF, which we perhaps should].

This is a report by the consultancy company McKinsey & Company, as a collaborative effort among five authors, representing the views of McKinsey’s Private Equity & Principal Investor’s Practice and its Family-Owned Business Special Initiative. So it's actually intended, directed and adressed at the companys clients in those two departments. I think there for us as DIY investors and stock pickers as members of CoBF there is a lot of useful stuff touched in this piece, that I think many of us may find interesting and worth the readers time to study. Based on the report It's possible - as a DIY investor to deduct which criteria to assess and dive into when looking at such family controlled groups / companies, that appear from a rear viewing perspective appear to be long term successful. I think the sample analysed and the underlying dataset may be of interest, but likely access to that is based on McKinsey client relation. I really can't define or for my self explain how it is for my personal part, I can just conclude, that I after now more than a decade in investing have ended up buying a lot of such family controlled and well diversified stuff, and as years have passed, involved as long-only, long-term buy-and-hold, I have seen those positions have been pleasant experiences in most cases, with satisfactory returns, and very rare disapointments or negative surprises along the way, in short : how I like it most. In many my cases, such stuff has been conglomerates, and thereby by their nature quite complicated, which I like, so there is always something interesting to study further, as the basic pro-business person I am, deep down in my roots. So I would like to share the report here and discuss it with those interested, who may want to discuss it. Link to report, and attached. Mc Kinsey Co. - The-secrets-of-outperforming-family-owned-businesses-how-they-create-value-and-how-you-can-become-one - 20240829.pdf

Yes, @Hektor, - which change?

USD 50 B from an activist to do what, @Hektor ?

Mike [ @cubsfan ], If you're alluding to what will happen to and about the market value of this basket of 'magnificent [now] eight', it will for sure be exciting to follow going forward, I have no idea about what will happen.

Yeah, and I recall quite a few - likely quite young - CoBF members some years back here on CoBF - bashing both Buffett and Berkshire for being a louzy investor and a louzy investment, respectively. The really funny point about it is that none of chose posters do not post about it any more here on CoBF. [Look at all that cash, the man is old, and he has for sure lost it, it's 'old economy', now see what he has been buying of listed companies, the price paid in this acquisition is crazy, etc., etc.], in fact they don't post any more - at all, that is. And despite all that, it has, on average and long term, worked out really well.

@Xerxes, Back in the middle of July, one day I had to recheck my meds [at that moment hooked on morphine], and I also carefully checked the bottle from which I had a glass - nothing wrong with those, so I asked Luke - the new guy around - the same question. It turns out that there were problems with multiple accounts due to some patch to the board so Luca asked Parsad to edit his user name to his nickname : Luke.

Yes, It's actually mind provoking to think about the 1 trillion USD market Cap value af Berkshire. The issue at hand and of importance to us as shareholders, is for management - at all times - to do it's very best.

I still remember @gfp posting in the first place here on CoBF about these - then 'new' [<- ?] Berkshire Yen borrowings tapping into the capital markets at low interest rates, just thinking 'what the h**k is the man up to?'. Well, we got our questions answered. He is indeed a true multi-disciplinary, tool in the tool box chosen and carefully matched to the situation he's investing into.

I have for now more than a decade here on CoBF been thinking that the in general transactional nature of the described investment approach by a large part of the CoBF members posting here [many living in USA and Canada, perhaps UK can be added here], can be directly related to national tax regimes and systems, where realized gains and losses on finished and completed chains of transactions in tax deferred accounts aren't taxed, and nor are similar unrealized gains and losses on unfisnished chains of transactions].

Thanks, @73 Reds, - great observation, - great post. Berkshire Hathaway 2023 Letter, p. 7, top of page paragraph : Thank you for sharing it here.

Yes, combine that with the stongly gender biased [male] crash in the total population within certain age brackets [young , but adult age] caused by the casualties of the ongoing war. On the long perspective, the flee of the youth to a better life elsewhere with better living conditions and opportunities will be Putins absolutely worst adversary long term forward. He is pretty much without any real kind of counter measures, based on what he himself has decided - limited himself to - to keep in his toolbox. It's really depressing to think about.

New Ukrainian hardware ready for implementation :

I did some reading today about Mr. Putin, purposed to refresh my own memory on factual basic data about him and other stuff that I thought of relevance. Putin is born on October 7th 1952, so he can be around and de facto lead and rule Russia for a long time still, depending on his health development over time, unless somebody succeeds in overturning and or removing him, one way or another. - - - o 0 o - - - As it has been touched above by @Luke somewhere, it appears as the Russian population does not care for, or are interested in the affairs and the well being of its country, being disengaged and without real interest, so in a way the Russian people has got what they have asked for, by 'friendly self-service' from an enterprising autocrat. A change in the Russian people policical minds and attitudes towards politics and own democratic responsibilities are imperative for a change to the better. - - - o 0 o - - - Today, I also stumbled on this, wich I consider great informative and casual reading / listening, for those who may be interested : Website : Дворец для Путина. История самой большой взятки [<- English : 'Palace for Putin. The history of the biggest bribe']. palace.navalny.com. Hint : Fire up under Google Earth, search for "Praskoveevka, Krasnodar kraj, Russia", look towards the coast southbound from there [It's so big, that you really can't miss it, if you do not zoom in too much for starters]. The damn thing is real, and is actually there. - - - o 0 o - - - The man is an anachronism.

For those interested in what @Spekulatius is alluding to : United Nations - Stories from the UN achive : Did Khrushchev bang his shoe at the UN?.

I have now owned Sandvik indirectly for about a decade via positions in Industrivärden AB and L.E. Lundbergföretagen AB, but never done any real work on Sandvik as such, other than just with satisfaction to recoginize by market values, that Sandvik has been a very successful investment for both, in a material way contributing to creation of value. What did - in short - make you buy it?

This is - to me - an academic discussion [and frigg**' old news, to be honest, in short, today a 'nothing thingy']. What prohibits anyone or anybody from doing like Berskhire has done in its reporting [separate line reporting on the matter] - since implementing ASU-2016-01 ? - Market participants understand the matter. If this ASU-2016-01 thing causes you to pause investing your capital productively in the actual environment and to stay in cash, I hereby give up explaining it further in this topic. Here on CoBF, we are stock pickers, we really do not care much if some P/E market measure has changed because of some accounting convention was implemented changed years back. The root to all evil in all external accounting is the use [or abuse] of cost accounting, as the alternative to accounting based on a valuation hierarcy, starting with market values, when available.

Weeding out all kinds of transactions between taxable and tax deferred accounts - done for taxation purposes - so far, the last 3 months : Added to Swedish Investor AB [the A share - INVE.A-STO], Investor AB topic here on CoBF, Added to Swedish real estate company Wallenstam AB [WALL_B.STO], both discretionary dividend reinvestments of total portfolio dividends received [pretty much what I do regularly, immaterial by value in the whole picture of things]. - - - o 0 o - - - Thank you for asking.

This ASU 2016-01 talk makes absolutely no sense to me. What is Berkshires earnings on its part ownership of Coca Cola?, i.e. its earnings on its 400 million shares of Coca Cola? Is it the received dividends from the shares owned, or is it [received dividends plus market value changes]? That forced change in Berkshires accounting has never mattered one whit before or after 2016/17 for how I value Berkshire. I strongly disagree with Mr. Buffett on this matter, and I have always done so. To me, it's like alleging that Forbes should calculate the value of Mr. Buffetts Berkshire A shares at his historical cost, which would dump him to swim in the waters of toilets where the most of others are paddling around. Value is value. And changes in values are earnings, - negative or positive -, if one is an investment outfit. Now somebody has to convince me that Berkshire isen't an investment outfit. ... I.e., the progress in value of the Coca Cola position owned by Berkshire is indeed very real. It does not matter to me, if it gradually - measured year by year - hit the Berkshire group income statement, or not [with provision of deferred taxes]. Nor does it to Mr. Buffett, no matter what he has written in his shareholder letters - you can count on that.

Thank you, very good post and points, @Libs , And with regard to values, what does Russia actually by now 'offer' to it's 'acquisition candidates' ? Personally, I do not see anything but eternal exploitation, not even with a long lense.