DooDiligence

Quite an impressive inventory of properties. The management internalization expense makes things look horrible until you look at the potential savings going forward. I put green arrows next to the lines that I assume represent the savings (see attachment). I'm also assuming the $180m expense closed the deal. Thanks, I'm in.

i don't have complete access to the link and the official NY Supreme Court judgement doesn't seem to be immediately available. This seems to be a conclusion of an extended process related to aggressive forms of marketing by the previously owned sub about a reinsurance (RPA) product with an embedded profit sharing (EquityComp) scheme that was too complicated for the regulators to endurably maintain but not opaque enough to reach the burden of proof necessary to be condemned in civil courts. The employers who became captive in more ways than one were often left in disbelief when adverse development occurred over the course of many years (these were typical small business owners). The business is fascinating and involves sharing some the costs saved. (From relevant personal experience on a smaller scale), it may work very well but partners need to understand and maintain trust and greed has to be kept under control. If interested, see the following (headlines suffice with no need to go into details): https://www.wcexec.com/investigations/applied/ This shows how Applied interacts with the California regulator and it's not elegant; and so un-Buffettesque. No wonder they're on their own now. Thanks for the link. Browsing through the various investigations outlines pretty well why WEB wanted to be shut of these guys.

NEW YORK — A New York appellate court has upheld dismissal of claims accusing Berkshire Hathaway Inc. of participating in a fraudulent workers’ compensation scheme involving a reinsurance participation agreement (RPA), finding the plaintiffs failed to allege jurisdiction over the holding company. On March 16, the New York Appellate Division, 1st Department, said plaintiffs presented no evidence that BHI collected workers’ compensation premiums from the policyholders or exercised control over its Applied Underwriters subsidiaries. www.harrismartin.com/publications/14/reinsurance/articles/27133/ny-court-upholds-dismissal-of-berkshire-hathaway-from-applied-underwriters-action/

One of our members who does this a lot on Twitter.

Roaring Kitty (turn the sound on before playing)

Another sweet buying opportunity coming, for WEB & for us?!?

Anecdotally, I was in both Lowes & Home Depot yesterday and they were packed. Paid $51.98 per board for 3 pieces of 7.989 x 3.989 x 0.438 treated plywood.

I love how reading a BRK proxy only takes 5 minutes, because there's no long and drawn out explanation / obfuscation of management compensation. Also: Chris Bloomstran on Buffett and Berkshire $BRK.B with Tobias on The Acquirers Podcast --- edit: OK, so I posted that link about 5 minutes into watching. Basically, if you're having a bad day & need a pick me up, watch this. Bloomstran spends the majority of the interview outlining BRKs' recent and historical capital allocation, most of which has been discussed at length here. I'll go out on a limb and say he's a permabull. Notably, he makes a quick statement about being a deflationist at minute 24:30, and then proceeds to talk a lot about hyper-inflation :o He pivots to macro around 30:00 and talks about public & private debt, his ideas on the results of federal spending policies, and the effects of digital federal currency. At about 40:00 he says "circling back to Berkshire. The last thing you'd want to own in a hyper inflation is cash or bonds. You want to own long duration, durable assets", and he starts relating his comments about macro back to BRK. Carlisle steered the conversation to world markets and Japan at 47:00

Don't get me wrong, my shares are earmarked for a hold into 2039, and I'm fine with things staying just as they are. Why this couldn't or shouldn't happen has been explained to me before (multiple times) and I get it. I'm just spitballing & every time I do it, the discussion is illuminating (to me at least).

People here are pretty used to me throwing up crazy ideas, so here goes. Why shouldn't loyal shareholders be explosively rewarded, post Buffett? What would be wrong with a scenario where activists take control & start spinning divisions for significantly higher multiples? So what, if we're all burdened with the resulting capital gains tax bills and have to find new places to deploy the cash? Personally, I don't see these as problems. I think it'd be hilarious if the Oracle himself saw this coming & produced a set of congratulatory videos, to be shown in the event that the beloved hostages were finally released. Greg, Ajit, Ted and Todd would be framed as "fighting the good fight" against the activists, and could offer loyalists the option of rolling into a new vehicle which would operate with the same philosophies that brought us the beauty that we now own, but with new millennium ideas and investments. This is all, of course, just speculative heresy.

They switched to managed payments and will be taking PayPals cut now. Haven’t looked at reports so don’t know if they’ve been doing well since courting volume sellers & starting to push BIN listings. They’ve proven their stickiness over the years by pissing me off multiple times and yet, where else can I & other casual sellers go to sell our garage sale junk for significantly more money?

In a decade defined by the nation's need to invest in infrastructure, Berkshire Hathaway is uniquely positioned to help. www.bloomberg.com/opinion/articles/2021-03-03/warren-buffett-s-berkshire-hathaway-is-just-what-the-u-s-needs-now --- Greg Abel makes a cameo appearance to speak about BHE in 2019.

Thanks for all the contributions. My takeaway is that growth & value are joined at the hip, but markets can cause dislocations. I prefer a proven track record and tend to look at historical performance & then make a guess as to whether the business can continue doing what it does, better than the competition. I do this at an amateur level and rely a lot on luck. I don't do cash flow projections because GIGO. Does it look like a value based on historical metrics? Am I looking at the correct metrics based on the type of business & the capital structure? I've lucked up and found growth in Edwards Lifesciences (owned since 2013), Novo Nordisk (2016), Fresenius (2021), Dominos (2021), Roper (2021) Historical growth at least, and with EW, NVO & DPZ, it's been mostly organic. I realize this may or may not continue with any or all of these, and whether or not I've paid too much for the latest purchases remains to be seen. Grow or no grow? Will Roper have to compete with CSU for acquisitions now? Will purchase premiums continue to rise for enterprise level software businesses? Will people stop eating pizza? These are the questions that don't keep me up at night, for now. and then there's Berkshire (owned since 2017). I know, I know, Berkshire's not a growth stock but hey, they went from: 2010 total revenues $136B, earnings $13B, EV $215B to TTM total revenues $279B, earnings $35B, EV $623B if that ain't growth, I don't know what is, and the markets yawn.

Sold a chunk of VDE for a meager gain. Whew! :D

I agree. Price is what you pay & value is what you get. Being frugal saves on expenses and helps avoid unnecessary purchases, but can lead to the habit of waiting for a deal on everything. Fire sales rarely come with quality investments. Berkshire excluded ;) That's why I bought Roper & Dominos this week & Fresenius a few weeks ago. They're not bargain basement cheap but they look affordable when viewed with a decade long telescope.

I spend all day in it, and have for a couple years. I also use other stuff here and there to augment it, but it's my main one. I finally started using it about a month ago. Thanks for the tip(s)!

koyfin :)

When looking at the following, what comes to mind? Performance art. A quick search on youtube shows some ridiculous examples by Yoko Ono. This was undoubtedly not intended as performance art, but I'm searching for ideas that would stand out on a stage, and this one ain't bad. It's pretty outlandish and topical. Back to disease control...

I started thinking about this after reading a recent post in the Berkshire section: --- When deciding on a possible investment, he recommends, “If you need a computer or a calculator to decide whether to invest, then don’t do it – invest in something that shouts at you – if it is not obvious, walk away . . . If you don’t know the business, the financials won’t help at all.” Our brains, equipped with millions of sensory inputs, create interpretive mental “frames” or filters to make sense of data. These mental filters help us understand and respond to the events around us. Framing is a heuristic – a mental shortcut – that provides a quick, easy way to process information. Unfortunately, framing can also provide a limited, simplistic view of reality that can lead to flawed decisions. Financial data is especially susceptible to framing. Companies always express earnings and losses positively, either as an increase compared to past results or a smaller loss than previous periods. Trends can be manipulated based upon the comparison point and time interval. Framing can lead rational people to make irrational decisions based upon their projections of the outcome. This accounts for the difference between economics’ rational man and psychology’s natural man. Mr. Buffett’s investment style has been criticized by many over the decades. Trend followers and traders are especially critical of his record and philosophy, claiming that his results are the result of “luck, given the relatively few trades that made him so wealthy.” www.moneycrashers.com/warren-buffett-decisions-secret-investing-success/ --- Buffett has stuck to what he knows (yes/no) and lately he's delegated authority to experts who have complementary competencies that he lacks. --- Throughout my life, things have worked out very well. Any time I've ever gone on a job search, the prospects seemed bleak, and yet I'd always find something great. Every time I got hired, I'd become intimidated by the magnitude of what I was expected to do, but once I got onboard everything would come together. Similarly, I start writing words and a tune, and it takes on a natural direction that simply works out. It may take a bit of editing, but the end result is usually pretty satisfying. How much of this success is a result of intuitive decision making (in fields where I have deeply learned skill sets that seem natural to me)? Back to investing: I believe I do a deeper dive on investments than most people, but to call what I do a "deep dive" is laughable. More like stomping around in mud puddles. I can reject an idea in less than a minute (right or wrong), and if something gets past my nebulous filters, I have a self imposed 7 day cooling off period, during which I'll do varying degrees of puddle jumping. If I'm still excited after a week of splashing around, I buy. Recent wet spots include Fresenius, Dominos & Roper. Whether in work or investing, jumping around in intuitively understandable puddles is much better than dropping off into unfathomable holes. Heartfelt thanks to all the really smart people who've graciously pointed out where to splash around. Not everything turns out how I expect or intend, but if going with my gut works, am I just lucky? How much of what WEB does, is based on intuitive competence (coupled with industry, of course)? Conditions-for-Intuitive-Expertise.pdf

It gets really quiet here right after the SEC alert to the 10K drops.

This is already known by most people here, but I thought Buffett's explanation was excellent, as well as entertaining. If you're like me, you also don't mind hearing something you already know, just to reinforce the idea(s). www.reddit.com/r/brkb/comments/lugji6/warren_buffett_recites_a_600_bc_investment/?utm_source=share&utm_medium=web2x&context=3 or you can go directly to the youtube video --- P.S. I posted this here because I didn't want to detract from the recent BRK letter discussion by posting in the BRK section. God knows I derail enough discussions.

I like the letter. WEB is candid re: overpaying for PCP. He could've ignored it, as many CEO's do, but nobody here expected him to. I'm probably being short sighted thinking he should trim Apple, but he did a good job of outlining the case for holding. He might also be thinking about the mistake of not keeping a long term ownership stake in Disney. On another note, I'd prefer he reflect on the past rather than fluff me up for a hump that may never happen. I can see for myself that the bases are loaded. It's like he's built a power bat that swings itself. The occasional bunt will bring in runs too. As Spek & Cigarbutt pointed out, BHE has opportunities in next generation transmission. --- Considerable investments in the nation’s grid infrastructure are needed to adapt to new challenges and maintain system resiliency and reliability. The utility industry is accelerating investments in electricity infrastructure. For transmission lines, investment increased from $2 billion–$4 billion per year between 1995 and 2005 to $10 billion– $16 billion per year between 2010 and 2015. Investment in distribution infrastructure — including advanced distribution management systems, smart meters and inverters, new poles, and buried power lines — grew from $15.5 billion in 2006 to nearly $22.0 billion in 2015. Investment needs for grid modernization projects — which drive reductions in electricity bills, improve system reliability, and increase fuel and system efficiency — are estimated to range from $350 billion to $500 billion. An estimated $25 billion–$40 billion in additional transmission infrastructure investment is needed through 2025 just to comply with requirements associated with existing state-level renewable portfolio standards. www.businessroundtable.org/electricity-infrastructure --- Integrating high levels of variable renewable energy into electric power systems https://link.springer.com/article/10.1007%2Fs40565-017-0339-3 --- www.brkenergy.com/energy/transmission This is an industry that can address a number of issues, clean energy and job creation. Might manage to make a buck or two along the way. --- edit: Forgot to add, super happy about the buybacks ;D

Reddit isn't all WSB "Yesterday's market dump appears to have been triggered by one or more whales forcefully selling $50B of bonds into a reluctant buyer's market. The below is a good article from Bloomberg but it's premium content so I'll summarize it below because it answers the question, Why are bond yields spiking despite the Federal Reserve setting its interest rates to banks so low and WTF is going on in the bond market?" www.reddit.com/r/stocks/comments/lsyfcs/what_caused_stocks_to_dump_yesterday_the/?utm_source=share&utm_medium=web2x&context=3

“Warren got disenchanted with Wells Fargo,” “I don’t think it’s required we be the same on everything,” “We have different tax considerations.” “There’s no question about the fact Wells Fargo has disappointed long-term investors like Berkshire,” said Munger. The 97-year-old billionaire blamed the “old management,” but said they were not “consciously malevolent or thieving but had terrible judgment in creating a culture of cross-selling.” “I think I’m a little more lenient,” Munger said, comparing himself to Buffett. “I expect less out of bankers than he does.”

Entitlement is big business: Statistics on Title II Direct Payments to Claimant Representatives www.ssa.gov/representation/statistics.htm#2019 https://secure.ssa.gov/apps10/poms.nsf/lnx/0203920017 --- I couldn't find anything on ad spend by disability attorneys but I found plenty of marketing info describing expected returns vs. spend. This ATRA page shows some older statistics for trial attorney spend. Trial Lawyer Ad Spend Coast to Coast July to Sep 2018: www.atra.org/2019/01/10/study-226-million-spent-trial-lawyers-advertising-quarter-3-2018/ --- Who says trickle down economics doesn't work? The most entitled segment of our society is creating a well lit path for the rest of us. Tort reform? Pfffft...