SwedishValue

I added up the number of traded shares for each day from the 6th of august until the 28th of september. These numbers probably do not reflect transactions off-market, as I've seen people in here report significantly higher numbers for specific days compared with the numbers my broker gives me. 109 127 485 B-shares have been traded. 9 080 A-shares have been traded. If Buffett bought back 25% of this amount, he would have bough back approximately USD 5.7 Billion of B-shares and USD 0.7 Billion of A-shares. Do I understand it correctly that Buffett is not allowed to purchase more than 25% of average trading volume per day? If anyone can provide the correct numbers of shares traded including off-market transactions I would be delighted.

Yea that was what brought it to my mind. He did it kind of massively for BNSF, and the way he structured it (issuing puts at prices much higher than the market value), made it likely he would actually get the shares delivered.

Is Buffett (through Berkshire), under US securities law and regulation, allowed to write put options on Berkshire? I would guess not, right?

So the discount for the B-shares compared with the A-shares has been closed. Two months ago the discount was 4%. Isn’t this an argument for there being heavy, committed buying in the B-share?

I know very little of dark pools etc., but just had this thought and wanted to ask whether it would be possible to determine whether there is any non-public trading of Berkshire in any way. Does anyone know? No matter what it will be interesting to know the total amount of trading in Berkshire for the next couple of months, combining this number with the proportion that Buffett bought back will give some valuable indications of times to come during similar circumstances.

Why would it be pre-taped?

I have recently had suspicions that a few more AAPL may have been purchased by Berkshire in the $162-$165 range at the end of April, but the run-up to $183-$194 ballpark since then may have curtailed their buying. Roughly 200 milion shares of AAPL traded in that April low period, so I would not have been shocked to find they've added another 50-60 million shares. On the latest Apple 10-Q we have the figure: , which remains the latest published figure for outstanding shares. Now it appears that 5% reporting threshold would currently be 245,756,900 shares. Berkshire's 13-F holdings (Berkshire and New England Asset Management combined) as of 31st March including pension fund holdings are: 245,278,633 (4.990% of last known shares outstanding). This is remarkably close to a threshold that wouldn't have been precisely known to Berkshire prior to 20th April. Can that be coincidence? We believe that 2,837,753 shares are owned by pension schemes within Berkshire (per 10-K annual report). (0.058% of AAPL) From the financial-benefit definition of beneficially owned, Berkshire has 242,440,880 (4.933% of AAPL), excluding the pension scheme holdings that are not for the financial benefit of Berkshire's owners. But from the voting power definition of beneficially owned, it's the 4.990% known directly from the two 13-F filings that counts. I assume from the 4.990% being just below 5.000% that it may be the latter that would trigger the 13D and that this threshold is what curtailed Berkshire's buying in the first quarter to avoid reporting responsibilities. It is even possible, perhaps likely, that Berkshire may engage in slight trimming this quarter at the $180+ range to avoid 13D filing responsibilities that might arise the moment that Apple next makes a filing that discloses a reduced number of shares outstanding. In this way, Apple, like Wells Fargo, may well then remain at about this size, with Berkshire estimating the extent of Apple buybacks and trimming slightly from quarter to quarter, unless the SEC is willing to grant them an exemption from public filing within 10 days until they hit a higher limit such as 10%. I imagine such an exemption is possible, because I don't recall 13D filings about the 0.4% Wells Fargo position trimming appearing prior to the release of the 13-F this quarter, and this trimming ws to keep Berkshire just below the 10% level to avoid being considered a Bank Holding Company, which is, of course, well above the 5% 13D threshold. If they are allowed exemption from public filing of 13D while they build their position. From the Berkshire 2018Q2 quarterly report, they beneficially hold $47.2bn as of 30th June 2018. The pension scheme holdings wouldn't be included there but will appear in the 13-F later this month. The lowest number that would round up to that figure is $47.15bn. The Apple share price at the close on 29th June - the last trading day - was $185.11 So the smallest share count that fits would be 254,713,414 shares of Apple held by Berkshire, an increase of at minimum 9,434,781 shares over 31/03/2018. As a percentage of Apple's then published 4,915,138,000 shares outstanding (as of their May 10Q), this is 5.18% at a minimum based on the known share count at the time (which has since decreased, increasing Berkshire's percentage ownership of Apple). So this exceeds the 5% threshold where Berkshire must file a Schedule 13D filing with the SEC. From this I think we can assume that Berkshire has been granted confidential filing status for Schedule 13D at this point while they continue to add to their position, so their public holdings will only be released in their 13-F filing later this month and there will be less indication of the price range they've bought at than during a 10-day period. Otherwise, had the 13D filing been made public we'd have known within 10 days of any increase above 5% during the quarter, meaning at latest 10th July if they'd bought off market on 30th June. This confidential status seems entirely fair given Berkshire's proprietary view of Apple's valuation which is a competitive advantage. Berkshire clearly doesn't wish to conduct a takeover of Apple or exercise control over it, and the SEC's requirement relates to monitoring of voting power, not publicly disclosing the prices and quantities traded by those they regulate and giving away such proprietary judgement clues to the investment community at large. Perhaps we can then envisage that Berkshire could continue to buy beyond 5% when Apple is priced attractively, and could probably get close to 10% before hitting the requirements that caused them to trim their Phillips 66 (PSX) stake, even though, like Apple it's not a bank, so wouldn't cause Berkshire to be considered a bank holding company as a 10% holding in Wells Fargo would. Possibly even over 10%, it might be worth whatever those requirements are, given that Apple is one of the few investees that can really move the needle given Berkshire's size. That potentially could mean that in future, rather than the Apple stake representing about 9-10% of Berkshire's market cap, it could rise a lot further. I haven't yet updated my public Look Through Google Sheet, as we only have an estimated Apple holding and the share count has only risen by 2% last quarter. It won't be too long until the 13-F is released and I will update it more fully. This is extremely interesting to me. Living a couple of thousand miles away and with approximately zero knowledge on US reporting requirements and exceptions, your argument seems to make a lot of sense. Any other takers?

I agree with both John Hjorth and longinvestor.

A preference for buying back A-shares? It definitely would be easier to spot the volume increase if that's what he targets. wabuffo B-shares trades at a discount to A-shares and are much more liquid, so my guess would be he buys B-shares.

Is there anything we should expect in terms of volume patterns if Buffett is buying back significant amounts of stock? I've never thought about these things before, and I'm not sure whether to expect increased trading due to having an active buyer in the market or gradually decreased trading as Buffett would soak up free float?

I listened to the clip and respectfully disagree as the relevance of BV. WEB clearly says that BV is very poorly correlated with IBV, across the investing universe; not just at Berkshire. At 1.2x BV they were rather willing to buy back because they are cheapskates. They do have mixed feelings about buying partners out, but wouldn't hesitate if buying stock back compares favorably with buying other businesses. Now, this is from the 2013 meeting. WEB has repeatedly telegraphed that IBV is diverging (up) away from BV; most notably, BV has actually been dropped from the performance table on the first page of the chairman's letter! I must have been unclear. I agree with you that Buffett here - and on other occassions - clearly hints at IV is significantly above the previous treshold. I also agree to your pointing out the fact of Buffett saying IV increasingly diverging over BV over time. I think buybacks are likely.

33:00 in, about the 1,2x floor (when it was still there). Still relevant. https://youtu.be/2yMeIdheIS0

Thanks John Hjorth, really helpful post for perspective. CNBC posted this. Guess we will know soon. I checked precious releases bad they have been both fridays and saturdays, so if there is anything to read into the postponement it should be that it might be a postponement for a reason? :) https://www.cnbc.com/2018/08/03/buffetts-berkshire-could-reveal-share-buy-back-plan-saturday.html

Thanks! I very much appreciate his comments on bitcoin, it's about time people get to hear it from someone with unquestionable integrity and intelligence.

Any profession which gives a hourly wage of a couple of hundred dollars with minimal thought required will obviously attract more people to it, driving competition up and expected hourly wage down. Also, it's very similar to any other ecosystem - the weakest players will lose their money first, and then there will be weaker players with higher skill compared with the precious weak players etc. I really don't understand what there is to disagree with in my first paragraph.

It's really not measured that way and it is not relevant. It's sort of like asking "what is your hourly rate from investments?". In that case it would depend on your capital base, and in the poker example it depends on your edge per hand against the other player/-s, and how many hands you play. You could look at the money you had within your poker account and compare it at the start of the year with what you had at the end of the year I guess, but it's really not relevant as a good player could turn 1 000$ into 100 000$ with extremely low risk/volatility during 2007 (I don't think this is possible today). Keeping all that money in your account was not needed to continue playing, so most good players (including me) withdrew a lot during the "boom years". You can think of poker as a "time arbitrage", like Pabrai discusses in his Dhando Investing book. This arbitrage has been closing for a long time now. But I guess I'm wildly off-topic now.

I think I'm at the top ten percentiles when it comes to coping with emotional pressure, but after a couple of years poker got emotionally very tiring. It certainly didn't help that the variance of my win rate increased at the same time as the win rate itself decreased. It's funny, because during the big financial meltdown of 2008 I was extremely calm. I had a very high disposable income and felt very fortunate to be able to buy shares (although I did a lot of second guessing and looked over the numbers of my purchases all the time just to make sure the intrinsic >25% fcf yields were still around from the day before). From time to time I think of playing a bit for the extra income, but games have gotten incredibly tough.

Sweden is special when it comes to investment gains, and I believe Sweden is the best country I have heard of when it comes to tax on capital income for privately managed accounts. What we have, is a special form of account where you get taxed 30% of the Swedish government yield for the year. Last year this corresponded to a 0,62% tax on the aggregate capital (this tax is also deductible by interest expense, which means that I will pay very little of it as I have a mortgage on my home). If you invest in this type of account, there is no withdrawal tax and no tax on capital gains or dividends. Also included is government sponsored "free" college and healthcare for any Swedish citizen and a lot of other privileges... Oh, and did I mention that the women are hot? Edit: Also, I think the concerns that ukvalueinvestment brings up are very valid. For me, I would consider my college degree and personal expenditures of less than 3% of my investment portfolio yearly to be some margin of safety - but I am running scared of becoming "the turkey" that Taleb talks about.

I have had thoughts around this subject matter for a long time now, and am currently only working with my investments. I used to play poker for a living, but couldn't cope with it for several reasons and quit several years ago. I have a Master's degree in accounting from a top University and around 1.4 Million USD in my investment portfolio. I have averaged > 40% yearly the last five years with very little leverage, and feel pretty confident in my abilities. I'm in my mid-twenties and do not have a partner. What I really would like to do is to form a partnership Buffett style and manage other people's money along with my own, but Swedish legislation doesn't allow that. I am an introvert person, but at times I feel that the lack of human contact gets to me. I like the thought of doing philantropy at a big scale, so for me it has become sort of a moral obligation to continue investing and focusing on it full time seeing that there is so much money to be made from compounding 50 years down the road. I get a lot of questions from people around regarding what I actually do, and I feel like I get a lot of disapprovement. I would much appreciate thoughts from fellow investors how to cope with this, and also how to cope with the potential for procastrination when you got all this time to do whatever you like. Also. Does anyone here know how hard it would be for someone from a socialist country such as Sweden to move to the states and set up an investment partnership? ;)

Was a good read as always, but when you have read all his previous letters at least two times, there was not much new in there. I also dislike that Berkshire doesn't disclose all positions above $1 BN anymore, but rather disclose their 15 biggest in the letter (I really wanna know if he changed his Posco holding).

Thanks! Good letter. I think some of the "cyclical inefficiency" may actually have increased or at least stayed on a similar level as before. I'm mainly thinking of liquidity issues, which can be related to anything from the unwinding of hedge funds (looking at the price spreads prior to the LTCM rewinding e.g.) or just generally less liquidity within the system. One other thing. I might misunderstand or misinterpret what Marks is saying, but I don't agree with his notion that markets in general are efficient today (do I misinterpret his view here?). When looking at prices for micro caps and small caps in Sweden, I can just say that at times prices can be very much out of sync with reality. The introduction of more computational power and more readily available information has not eliminated price inefficiencies, although they might have made them more efficient than before.

I'm at 36% at this moment. Was happy, then I saw your returns and got jealous :) have averaged around 20% cash troughout the year.

Webcast from capital markets day: http://edge.media-server.com/m/p/7jrvikcz/lan/en

Cool, might buy more today.

I bought some stock today. I think it is interesting that Weschler bought a lot of stock at prices somewhat higher than these, and I don't think the dialysis business is going anywhere. The announced rate cuts will obviously hurt their profitability in the short term, but I don't see how it influences their long term economics significantly.