marazul
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Posts posted by marazul
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Apple is now a huge position as we all know. I don’t see how Berkshire can liquidate Apple as it would add another large amount to the cash pile and take it above $200bn. I was thinking, is handing out the Apple shares to brk shareholders a possibility. This would be a return of capital in form of Apple shares. Makes sense to me and would reduce the pressure on brk. I know brk has said that there is value in keeping it all together. ut not sure if an outsized position like apple can be the exception. Just a crazy idea, who knows.
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Cash is fastly approaching the $150bn mark which Buffett has referred in the past as "unjustifiable". If there are no major investments in the next 2 years, Berkshire will just have too much cash. Is there a way for Berkshire to return capital in a tax efficient way for investors? If it is a regular dividend, most investors would get 70 cents on the dollar. Is there a solution for this problem? obviously, besides repurchases. In the past, Buffett has been creative in deferring taxes (e.g. PG-Duracell transaction). I see it unlikely he would just pay the dividend and return 70 cents on the dollar to investors.
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Yes, +$50bn is a reasonable estimate. It is one of the best assets in the Berkshire umbrella. Geico is larger than Progressive with 13% share of the US auto insurance market compared to 10%.
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I think this overestimates the amount of excess liquidity or net cash Berkshire holds. Important to understand that float is also a type of leverage. So Berkshire has (rough numbers) $120bn of float and $100bn of cash. So +100% of the equity is in wholly owned businesses and public equities. Also, Buffett has mentioned he planes to keep $20bn in cash at all times.
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Is there a 25% of daily volume limit on buybacks? Sorry for my ignorance.
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If you don´t have any budget constraints would reccomend the new Marriott by the Centurylink stadium.
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Difficult to see float growing $8bn per year going forward...
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Buffett said that even in a "so-so" economy he expects IV to grow at +8%...that is probably conservative...he has also said that in the last 10 years IV grew by 10% per year and he thinks he can do that in the next 10 years if rates rise a bit...Buffett has always been conservative so maybe 9-11% IV growth for the next decade is a good target
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That is correct, there are mistakes on that slide.
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Someone here knows how rate regulation works in a case like Oncor, allowed returns, methodology, etc?
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Couldn´t agree more with the previous comment. Access to valuablñe info and exposure to so many businesses provides a huge but fair edge/advatange.
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PriceSmart & Ambev-Latin America
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Hi,
As you know, buybacks below BV generally increase IV per share. Some companies have managed to take advantage of Mr. Market´s behavior by buying back a significant amount of shares below tangible book value. I think it would be nice if we come up with a list of these names.
-Some of the TBTF banks (i.e. C, BAC, GS) have bought back some stock but they haven´t been as effective because of limits by regulators.
-KCG has been buying back stock below TBV of ~$15 AND this is without taking into account the FV of its ownership (17%) in BATS which IPOd today.
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In this new ZIRP/NIRP world opportunities are scarce. One area I have been looking at is companies that have the ability to take advantage of this low interest rate environment. These type of companies usually have stable revenues that permits them to lever to 3-5x EBITDA. We are left with a capital structure similar to a PE owned company. The pros of this strategy is that debt is very cheap and good results can amplify returns. On the other hand, leverage works both ways. However, this seems to be an area of opportunity in this environment. Any thoughts on this? Any good names you would like to share? A good example might be Liberty Global or SCI.
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NI-CO-This is a great point. Companies that employ debt and have stable cash flows will definitely benefit. Specially, those that debt is a significant portion of the EV.
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Think Deere might be a candidate in a year or so.
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Classic tax efficiency play. PG shares had unrealized gains, so exchanged the shares for Duracell. No tax leakage in the process. At BRK it will be a cash cow. Cash flows will be tax efficiently redeployed into other ventures.
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CFO left around 6 months ago, possibly means zero but would take it into consideration.
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think post-deal approval, LBRDK will be the most attractive.
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Can someone post the copy of the text, the blog is protected. Thanks in advance.
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Everyone says the US economy is a mess and this will have a huge effect on earnings, we will enter a bear market bla bla bla... I believe the US economy is well insulated from the emerging market turmoil (that is a disaster, I agree). Until now, a big portion of the US economy growth was driven by fracking, etc and that will be a ST negative. I believe that the US economy is and will be OK... 2% growth in this environment is not terrible. US equities are attractive with earnings yield of 6% and 10yr treasuries at 2%. Doubt the spread has been this wide many times before. All in all, i think US is fine while everyone thinks the whole world is a mess and we are doomed.
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MCO BRK LBTYK
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I would think something close to 7% total return in nominal terms.
Buffett/Berkshire - general news
in Berkshire Hathaway
Posted
Thank you for the information. In a case like this, how does the recovery work. I guess they already distributed the cash to the shareholders at the time of the acquisition. Not sure how it works, my guess is this will be pretty difficult to recover but I have no experience in the field.