nickenumbers

All, This is a finance question in a roundabout sort of way. We know that the Giving Pledge is a movement by billionaires to give 50-100% of their wealth to charity before or after they die. Is the Giving Pledge a restart of the game of real world Monopoly? Said differently, WEB and Bill Gates and others have played the game of life so well, and they have rolled up enormous snowballs of wealth and influence derived from wealth, rather than pass it along to future generations though a family dynasty, lets give it away. They recognize the principle of "winner take all", how much amazing good that can potentially be done in the present with the capital they have amassed, and that there is an enormous gap between the few billionaires vs. the rest of society. Is it a recognition that ultra rich should give it back, or fear revolutionaries come and take it from them? It seems that WEB is amazingly humble [i don't know if Bill Gates is humble or not], so I think WEB is happy to give all the money away, end the game of monopoly at his death, clean up everything and put it back in the box for the next set of players to show up and enjoy the game. [i think that is pretty badass decision, compared to giving it to a pack of snobby potentially selfish children and relatives 2-3-4 generations down. Family that might not be able to find capital allocation if you gave them a map and a footpath.] I know Bill and Melinda are ultra focused on getting good value and effectiveness for the specific initiatives that they have chosen in the Gates Foundation, and capital may help. But, what do you guys think about the 20-40-60 year prospects of it all? [i have a couple other questions regarding this line of thought, but I will ask them in a couple days.] Thanks.

Great article UGADAWG, thanks for sharing it. I just started to read thru it.

I just want to make sure that we all agree with each other on this “soft upper/lower limit” that I have read in the last couple of days regarding the BRK repurchase prices.. I appreciate the concept and the arithmetic that others have performed to derive it. Thank you. I think any discussion of such limits is moot, and too much time spent on it could be academic masturbation. If the IV and BV of BRK is constantly changing and most likely increasing, the price at which BRK repurchased shares tells us something but not much at all as time passes. If the IV is increasing BRK will do well to continue to purchase as the price vs value math is expanding. I think trying to spend any exact precision on the purchase numbers and times/days, is probably a waste of time. Rather, I would argue, a 10K foot view of the events.. BRK is repurchasing shares, and BRK doesn’t make many mistakes in the pursuit of their own wealth accumulation. The current prices resemble the prices that BRK paid, therefore we should all purchase the shares if we have a desire. If prices continue to go up, that doesn’t necessarily make them a bad value, one must just continue to do the math on the IV. What did I miss? What do you guys think?

Now that make the most sense, rationally of all to me XO. I don't know why WEB doesn't/didn't repurchase more of his own stock, but he might in the coming months. If he doesn't, and if he has a view that he wants to have a HOG PILE of cash ready to move, your perspective still makes sense. As Howard Marks says, we are in the 7, 8 or 9th inning of the game in our economy and a down turn WILL happen [who knows when].. Having cash on hand might be handy. I personally think that he should repurchase as much as he can while still maintaining a HOG PILE of cash.

How does the SEC corporate buyback blackout period work relative to BRK in the situation. Would BRK not be able to buyback it's own shares from 9/15/2018 thru 11/2/18 earning release date? I like SwedishValue's math a couple posts back regarding how much of the monthly trading volume BRK could be buying back theoretically, but I am wondering if we need to modify it a bit for the buyback blackout. PS- I don't know much about this particular nuance, and I am trying to learn.

SwedishValue, I follow all of your points and I appreciate the math regarding the max cash that BRK could buyback [pittance] relative to their GIGANTIC pile of cash. Your ultimate conclusion is unclear to me? What does the share buy back, cash reserves and stock price mean to you? Thanks for the clarity!

Elon Musk is planning to open a super amazing bar/club on the moon. I heard the design of the bar is incredible, but that the place has no ATMOSPHERE....!!!!!! :) ;) :D ;D :P

Genius Folks of CoBF, What happened to make the airline industry something that made WEB, CM, Todd and Ted want to invest in it? And they didn't just invest in 1 carrier, they invested across the industry in like 5 carriers. [i know that this is someone old news, but I have been turning it over in my head.] A determination was made by the 4 of them that this was now a strong industry with a moat deep and wide and stable enough that they wanted to go long in it. I can make crap up myself as to what might have happened, but I am a 40+ yr old pup value investor. I would like to sit at the feet of the wiser, smarter value investors with gray hair and a rocking chair that can give me thoughts and opinion on what changed. Economics of the industry Competitive environment Cost Structure Relative price and value Regulation Something else, or all of the above Buffet talks and talks about why this industry is horrible for investors, and now they are long in a big way across multiple airline stocks. School up the young punks on what is going on here?? Thanks in advance.

RB- Wow. That thing is amazing! Very well done, and I/we appreciate you sharing it. I am going to dive into it. I honestly find this CoBF group to be a huge value add to my thinking and my journey. Of course no group is ever perfect, but what is?! Generally like minded, smart, witty, rational, deep specialists and wide generalists [polymaths]. You CoBF folks are my TRIBE! Thanks RB!

Does anyone have an Excel valuation model that you would be willing to share? A model that you could plug a series of future cash flows for a company, and run a DCF. Maybe add assets, subtract debt, etc. I have a couple basic no frills ones that work, and I have access to a lot of excessively complicated business school ones. If anyone has something that they use when they want to 10K view or get into the weeds on a company's financial statements, I would enjoy seeing your approach. Perhaps the world will repay you with high future returns for your contribution to fellow CoBF members. ;)

Right on SwedishValue for going on record, and that is where you money is invested too. I think WEB and CM will continue to purchase with available cash if the share price continue to rise as long as the IV is well above the share price. So, if BRK in a year is at $250, and BRK has grown IV by another 15%, the margin between the IV and share repurchase price is still good potentially. This is our current reality, and numbers as SwedishValue has outlined. Fingers Crossed. Also, we have new variables entering the share price calculus, that we have never had before. That is real cash/share buybacks and fewer shares outstanding for BRK. How long does BRK purchase, how much do they purchase, at what prices do they purchase? What happens to the share price when the rate of repurchase becomes public? What does WEB say publicly about the repurchase? What does WEB and CM say at the SH meeting 5/2019? Great time to be a Brk shareholder.

I have been thinking about sleepydragon's observation from a couple different angles. And I think there is a very high probability that he is right.. Do you guys think there is any flight/movement to "value"? One of the economists that I like from Prudential thinks that it is coming in the market cycle. But, I haven't really seen it yet.. Except BRK is rising. But the increase in BRK could also be directly caused by BRK share repurchase. "When we hear hoof sounds we should think horses [bRK buy backs], we should not think zebras [illuminati secret buyers.]"

I can't wait to see how much they have repurchased. If they repurchased something more than a pittance, do you guys think it serves as a catalyst to increase the share price to higher levels? Does anyone want to guesstimate what price the stock increases to under that scenario? Are there any significant detractors from the share price in the near term? [PS- I get the Ben Graham Stock Market voting machine-shorter them weighing machine-long term.

All, I am about 80% confident that the NYSE Trading Floor that we all see at the open and close of the market, and that CNBC has set up in during the the trading day, IT IS JUST A SET, right? I am not going conspiracy theory here. No. But, there is little to no Open Outcry Trading done, all of the trading is done thru the electronic trading systems. You guys are all smart and well connected. Is all that I have said thus far, correct? If it is, then we must ask, what is the NYSE building, floor with all the monitors and people walking around? It is a TV production set, it is a museum, and it is a funny human psychology experiment. What purpose does it serve? I think it gives the world a place to focus, even through very little wall street, and trading action is happening there. What did I get right, and what did I get wrong in that? PS- I CoBF are some of the smartest and best looking people. :-*

Did you guys notice the trading volume on the BRK.B shares today. Normal B share trading volume is 4M. Today 13M shares changed hands. That is $3B in one day... I wonder who the buyers and sellers are..... humm..... Gates Foundation BRK share repurchase hummmm....

And that fact that GlobalFinancialPartners is pointing out.. that the stock didn't move.. despite there being high probability of making money... is a scary comment on group herd psychology... And it is a beautiful thing for all those that listen to the words of Ben Graham- Short term stock market is a voting machine. Long term stock market is a weighing machine. It confounds me how complicated and how simple stock market investing can be!

Great Barron's article on Berkshire. They value the total company at around $700-730B. https://www.barrons.com/articles/berkshire-hathaway-stock-record-high-1537481057

Swedish_Compounder, as the self appointed reviewer of your numbers, I bestow you 3 green apples, and 5 thumbs up. Apples and Thumbs are not convertible into anything. Seriously,, Thanks for sharing your math and taking a smart stab at the value!!! :) ;D :D I like it!

Why would Bill Gates want to perform the role? What would his motivation be? It is not adding to Bill's Wealth [he has enough], and it is not computers and software [some of his favorite subjects.]. I think Bill is a super guy, and he could totally do very well at the task, but I don't think running BRK on a week to week basis would motivate Bill. Bill seems to be more interested in educating and advancing public health, emerging countries, etc. My wild ass guess- I think Ajit Jain and Greg Abel [maybe with Todd and Ted] are going to be answering questions at the BRK annual SH meetings in the next 10 years. Bill Gates will still be in the audience. We are all in the land of the blind on this one, me included.

Guys, I subscribe to Bloomberg Businessweek. I was thinking about checking out Barron's weekly magazine. Do you all have opinions? Are you fans? I wanted to get some of your thoughts before I jumped in. Thanks.

I would like to hear people's opinions. Independent of the drag on performance due to the size of the organization, what pace will BRK have without Buffett/Munger? Things to consider- ajit jain and greg abel Todd and Ted Does the US gov extend goodwill to WEB and Brk, and does that stop upon his death? Do business owners continue to sell to Friendly BRK without WEB?

Manassas, VA [About 30 min south of Washington D.C.]

I can see a 1M share trade at the closing bell for $208.72. The Volume all day long was not even close to that. The other trades were all 3-6K lot sizes during the day. I know that a disproportionate volume happens at the open and close of the market bells, but this is 25% of the volume at the end of the day in 1 minute. It might have been even 1 single trade. If it was all BRK purchasing back stock that would be about $208MM.

My reasoned speculation is the BRK is buying as much as they are able, but stopping short of driving up the daily price significantly. A little bit is a totally subjective measure/term. I think it is a WEB calibrated term. BRK owns a little bit of Costco, $1B, and a little bit of VISA $1.5B. They own $16B of AMEX, but maybe that is a little bit too.. WEB and CM like to go scoop up $10 and $20 bills when they are laying in the middle of the floor with a dump truck. They are not going to go with a little bucket and leave some easy money for their friends on Wall Street. I think they are playing their cards as perfect as they can, as quiet as they can... But this is a very significant development.

AlwaysInvert. Roger that and I concur. I have been watching and the share volume has been at or below average. The price has been up, but so has the general market been up. It could be that they are looking to purchase a large block direct from the position owner. They could also be nibbling on the B shares starting to build a position. Is there a requirement to disclose if they are buying, or only when their position size goes above a certain threshold? I would guess it would be binary requirement [if they buy, they have to tell the public, period.] I don't know that, but that is my best guess.