nickenumbers

I think you nailed the best ones LongInvestor. BNSF prospects, the RE Brokerage rollups, the Clayton Rollups, more prospects in China [with/with out partners]. Mostly, I want to hear about Capital Deployment. He has created an amazing tool to collect capital/Cash with the ownership of business, amazing, super stupendous... be careful what you wish for, now he has all this Cash Raining In and he has to put all that cash to work, year, after year after year... He is like El Chapo 10 with all that cash. I think he should repurchase BRK shares as much as he can and as much as he is legally able, as long as the price/value difference makes sense, because, I suspect he might top out at $10B per year due to regulatory limits. [He doesn't even need to tell me/us his plan/tip his hand, just DO IT. We can all watch and fill in the blanks as time goes by.] But this business of waiting and waiting and waiting, as the cash accumulates, is unsustainable. He has more cash than he will need for any deal or set of deals, and he can get access to more short term cash if he needed it. Macro- I would like to hear him talk about the national debt and what he thinks. Spin us some Omaha wisdom to put it in perspective.

Longinvestor, I have nothing to add. Thanks for the clear summarization. I am interested to see what turns up.

How do you calculate excess working capital when performing a FCF DCF, to add back? What about Cash, AR, AP, ST Debt and LT Debt? I am trying to tighten up my thinking around DCF with different balance sheet structures. Thank you!

I agree with GFP. Thanks DD and CigarButt on your inputs. BHE does seem to have a virtuous snowball going with its ability to reinvest the FCF that others [DUK, NextEra] have to send out as dividends. I continue to be the grasshopper sitting at the feet of the Masters.

JRM, Thanks for the background. I was guessing at some of the things that you described and confirmed, but even your brief background is very helpful. I have never analyzed electric utility financials before. Your original question of "why are you even interested in them, Nick?" I figured out that I was not interested in them, but I know enough to suspect when I don't know, and perhaps don't know that I don't know. So, I was asking to make sure that I wasn't missing the boat here. For me, they look like low return highly regulated business. I am going to pass and put them in the too hard pile at the same time. Thanks for the background!

All, I have been nosing around in a couple public electric company like Duke and NextEra. Their FCF just sucks, but I suspect that they are playing by a different set of rules in their industry. Their CapEx is enormous relative to their Operating Cash. They fund it all with Debt and Equity. What is going on here? Can someone give me the basics of FCF for this industry. Thanks.

WOW. John Hjorth, and SlowAppreciation those are amazing and valuable resources. Thank you very much for sharing them. I think I have my reading list set for 2019!! 27 GOLD STARS!!!!!!!

Wabuffo, You gave me a perfect solution to my question, and your instructions were easy to follow. I am happier than a bird with a french fry!! I would like to crown you KING of CoBF for the day, with all the duties and rewards a pertaining there unto. Feel free to post all the jokes and opinions that you please, and if you receive any chin music from the members, remind them of your KING Status!

Is anyone aware of a TEXT website or collection of all of the Q&A's from the various BRK annual shareholder meetings. Perhaps organized by year? I love to listen to the meetings, but I would love to be able to read the text, or even skip questions, or scan for one that I want to read. It could be sorted by year, by topic, by WEB or CM, on and on, etc. You CoBF folks are a technical tribe, I am sure you could think of some impressive use cases and ways to organize. I have Googled for it, but I haven't had any success. Thanks.

Right on! I don't have to salt your cooking. I have heard Charlie Munger correct WEB a couple of time in the annual meetings where WEB makes the whole concept of investing sound simple and WEB ties it up with a pretty little bow. Munger will chime in "but not everyone can do it." It is WEB forgetting his genius and assumption of shared understanding, and Mungers recognition and reprisal to WEB that not everyone is a genius, or even rarer a RATIONAL GENIUS like WEB. [The 2 are also different.]

WayWardCloud, I love your thoughts and perspective. Plus, I am going to shamelessly take your concept of "human body finity meets math infinity". I have heard, learned and understood it previously but your description and word selection was precise and elegant [easy to understand]. Well done! I don't know if I know enough to agree or disagree with your concept of passing generational wealth, but I do know that concentration of wealth at the top and loop holes to pass wealth thru the trust-fund-kid lottery needs to be improved/changed. Plus you get credit for proposing a straw man alternative to the present. [everyone likes to complain, but almost no-one has a constructive solution.] If we had 4-5 potential solutions and a collection of open minded people, that would be productive. I look forward to hearing what the folks on CoBF think. Thanks WayWardCloud!

longinvestor, I see where you are coming from. If we view the Annual Meeting as a teaching/coaching 4 hour session where the masters [WEB + CM] are happy to answer questions as their gift and personal duty to society. You are in a way INVERTING the exercise as it relates to Abel and Jain playing high stakes capital allocation on behalf of the shareholder/partners of BRK. Better to NOT have them on the stage answering questions and giving away their ideas and positional/knowledge advantage. Better to have them sequestered on a desert island allocating capital on behalf of the wealth of BRK. Okay- I can see your position. We as student investors are not learning directly from Abel +Jain, but as investors in BRK we get growth in shareholder value from them. If WEB + CM are following your strategy, they are as positively shrewd as ever..

Longinvestor, why? Wouldn't it be more harmonious to have them join now in some capacity? The investors and stakeholders could start to see their faces more and hear their voices. Even if it is only 10% of the time. I understand that we can't have too many cooks in the kitchen, but waiting too much longer seems strange to me as WEB is 88, and CM is 95. PS- I love your word selection and mental picture of Greg and Ajit on distant islands. ;-]

When do you all think Greg Abel and Ajit Jain join WEB and CM on the BRK annual shareholder meeting Q&A stage? My vote is NOW/ASAP. Thoughts?

Good information in the attachment on mobility within geography and within generations. I skimmed it and I need to go back and review it in detail. I agree that there are forces working behind the curtain of the general population, and it is hard to determine who really is wearing a White or Black hat. 1st, 2nd and 3rd order consequences are hard to think thru, and not always obvious. It makes me think of the Winston Churchill quote: "The best argument against democracy is a five-minute conversation with the average voter." And, yet, we are morally obligated to our less advantaged brothers and sisters of our countries and of the larger world.

I always enjoy Howard Marks thoughts and opinion. This just came out this week. Enjoy! political-reality-meets-economic-reality.pdf

All, I have a beginner/intermediate understanding of Class 1 railways. It seems that UNP is doing a very good job of running its company. I would like to hear what the opinions are on UNP vs. BNSF strategy and capital deployment? It seems that UNP has a higher focus on driving down the Operating Ratio than BNSF. But that is just one difference. It might be that BRK had some remediation to do with BNSF that I am not aware of to get it up to par with UNP.. [i dunno.] What do you guys think? Feel free to Monday Morning Quarterback your opinion and analysis. Thanks.

Great quote from his letter- "In October...stocks plunged indiscriminately... We did what we usually do amidst market turmoil, which is to re-check our analysis, prioritize our opportunities, and buy. Tide Market... When the tide goes out, it takes everything with it, and an investor must adjust in real time to the rapidly changing prices while considering the possibility of a deterioration in fundamentals. [price declines unrelated to fundamentals vs. price declines anticipatory of fundamental erosion].. " AMEN SETH

Shit just GOAT serious up in here. I feel baaaaaad... Rkbabang, can you please upload some videos of these goats..?? [i am peeing myself imagining all this fence business..]

Why do you all think that BRK has not enjoyed a bit of a pop in 2019 like the S&P and other indexes have? Is it that there has not been enough news flow specific to BRK, or do you think everyone is still worried about the investment holdings of AAPL going down in the portfolio?

Muscleman, I think that you shared something that most of us have thought/feared/wondered ourselves.. [Even if only for a short while.] C. Munger often retells the story of the musician that came to Mozart and asked how he may also become a composer like Mozart. Mozart had been creating amazing work even in his teens. Mozart and Munger both conclude that not everyone has the same gifts. In Virginia we say "Ya can't push a square block into a round hole." And, THAT IS OKAY. Enjoyment with your family, your friends and yourself is the most important. How you finance your lifestyle is secondary. Muscleman, I bestow you an A+ for self-awareness and honesty! The jury is still out on the rest of us, either we are going to create Alpha, or we are pissing into the wind!

All, I have a growing awareness of Cannibals, Public Companies with share repurchase programs. I am not talking about token, Micky Mouse share repurchase. We are talking about large meaningful share repurchase. I have always known what they are, but with CoBF input regarding Henry Singleton/Teledyne, and after reading the book Outsiders, I have a far better appreciation for this technique. If a company properly executes a share repurchase capital allocation move, at the right time and at the right price, relative to their other alternatives. Lets say that the best chess move for the company was to repurchase their own shares. And lets say that they perform that to the tune of 5-10% of share outstanding. And year after year, they continue to shrink the shares outstanding, and reduce the market cap. At some point the Sr. Managers would have a choice to either take the company private, or something else.. Is there a minimum market cap so that the Sr. Managers can adequately extract maximum value from potential future investors. What would be an end game strategy when the Sr. Managers know that they are sitting on a rocket-ship of a company that the larger market is overlooking or has not yet discovered? What usually happens in these situations?

Excellent discussion and info. After an investor adjusts for Deprecation and CapEx, there is practically no cash leftover. So, the PEs might be low, but if the earnings don't become cash, the adjusted PE is much higher, maybe infinity. Plus, for the auto manufactures, it is a commodity business in the mind of the customer, and there are lot of technology changes coming on the horizon. Who knows how much more CAPEX will be needed to adapt to the technology. I am going to either put it in the "Hell No" pile or the "Too Hard" pile. PS- I love the discussion around vehicle, passenger, technology and autonomy vs Uber.

All, Does anyone have some good research or background on the auto industry and auto company valuations? I have been noticing that Honda, GM, Nissan, etc have PEs that are down in the 4, 5 and 6. I get that it is low growth, changing technology and there is the Tesla narrative, but I wanted to learn a bit more about the industry and the economic/business headwinds and tailwinds. Does anyone have a good resource or some thoughts or idea of direction? I can go noodle/Google on my own, but being that we are a like minded group, I figured I would start with you brothers and sisters of the CoBF. Thanks in advance!

Ajit Jain purchasing $20M at $296,000 A share price... Bless you SEC public reporting of insider activity. Its a Christmas Miracle! When a hands down Genius-Ajit who has made more money for Berkshire than a printing press, buys at $296K, and today that same security is trading at $292K, I continue to buy BRK, and I purchase LEAPs on BRK. Anything short of purchasing at this point if you have the cash is risking THUMB SUCKING!!