ValueMaven

A lot of rumors that Buffett will acquire OXY. I dont know how I feel about this - given how cyclical this business is, and board-line distress this was just 18 months ago. That said OXY produces 1% of the worlds oil. Yes they are rapidly deleveraging and seem to have gotten some common sense. I dunno - could BHE acquire OXY and merge both...possibly. OXY has a 20% current FCF yield using current 2022 EPS estimates - so who knows.

Everyone is saying how inactive Buffett has been and focusing on the cash pile. I totally disagree. Over the last 6 years you've had: PCP deal ($30B), D pipeline transaction ($10B), Buybacks ($50B), OXY loan/equity stake ($10B preferred plus another $7 in equity), and the pending Y transaction ($12B).

Equity warrants from the preferred deal are now in the money! Berkshire effectively controls 23.5% of the company plus another $10B in that hybrid preferred

Finally had a chance to read through the 10K and the 2021 annual letter. This is a really nice acquisition for Berkshire on several fronts.

The deal isnt pricey at all imho. Not sure what he is looking at?!

fair point!

How about the timing of their hedges and massive macro calls @Parsad ?? The valuation difference you correctly note is the difference between Quality and Deep Value. It is what it is - and doesnt tend to revert imho!!!

I read the barrons article. They suggested Markel could bid with stock. I highly, highly doubt that happens. The article is a very interesting read.

I'm a big fan of the deal and the price paid. Glad it finally happened

reading the press release - looks like Buffett still loves Brandon: 'I am particularly delighted that I will once again work together with my long-time friend, Joe Brandon'

Weston Hicks was an AWESOME CEO. I'd also pointout that John Burns back in the day helped to create BNSF - with the merger of Burlington Northern and the Santa Fa railroad ... a lot of history here.

I like the deal. Y has a bunch of really boring businesses, but is very profitable and strong underwriters from the Insurance side. Diversifies Berkshire insurance exposure. I know Buffett loved Brandon at one point - but wasnt he forced out of Gen Re due to a weird AIG transaction back in the day? Obviously Buffett/Jain knows a lot more about this when we do. Good use of capital and a fair price. Let's hope this closes.

What do others think about these PE-to-PE deals? Just today Blackstone bought a stake in One Manhattan West from BAM. While BAM is in talks to acquire Blackstone's La Trobe Australian based non-bank lender.

really dump question - but why didnt Warren buy aggressively when prices where in the $10 - $15 range and the company was in serious trouble?? Have things changed THAT much vs. the price apperication to buy aggressively in the mid-$50s. Which is a better risk-reward, OXY at $14 when oil was $40, or OXY at $55 when oil is $110????

Is this a good level to get into DJCO given the BABA blow-up??

Thanks Bill!! @wabuffo

https://tipswatch.com/2022/03/10/u-s-inflation-soared-0-8-in-february-hitting-annual-rate-of-7-9-highest-in-41-years/ For I Bonds. The February report is the fifth of a six-month string that will determine the I Bond’s new inflation-adjusted variable rate, which will be reset on May 1 for all I Bonds. So far, inflation from September 2021 to February 2022 has been running at 3.43%, which translates to a variable rate of 6.86%. One month remains, and March inflation is likely to be quite high. It’s easy to see the possibility of a variable rate approaching or exceeding 8% at the May reset, higher than the current rate of 7.12%.

You are at 5% already with 2 more reports left. Gas prices are up huge m/m so that is going to add to the next inflation print for sure ...Figure 6-7% at a minimum ... https://tipswatch.com/tracking-inflation-and-i-bonds/

I was unaware and didnt see her this AM

Prem's letter was great!!!!!!

I wouldnt touch IEP with a 10-foot pole ...

Wow. Right near the $60 strike Berkshire has...plus another 8 years to go. At one point 18 months ago these warrents were 90% OTM I see the preferred is now carried at $10.7B. 8% coupon plus the warrents struck at $60 per share. OXY up about 17% right now on huge volume. This is turning into a classic Warren investment & looks to be a very solid energy related deal for Berkshire!

wow - the OXY 8% preferred plus 10yr warrents @ $60 is turning into one hell of a deal for Berkshire!

Thank you @gfp !!

That is a great point actually. I highly doubt they sold out given Ted's conviction in the stock - he also personally owns 2M shares. I've also wondered why DaVita isnt accounted for using the Equity Method given that Berkshire now owns close to 40% of the shares outstanding