longterminvestor

CovePoint was part of the Dominion purchase. I see Pipelines as "Axes, Picks, and Shovels" of the oil/nat gas biz - great way to get exposure to the sector without taking on the commodity risk. The shut down is probably Greg Abel investing some capital into the pipeline to make it run better - my guess.

Why buy bonds? Berkshire does not buy bonds for cash flow, they buy for store of value. and interest rates can only go up which means the price of the bond goes down. Agree, doesnt make any sense.

I have been thinking about Disney and Berkshire. Here is an investment that came into his world not once but twice. The first time he salivated the purchase was when DIS was selling at a "Multiple of Rides" - great line in one of his letters - getting too old to look in my files for the exact year and quote it word for word. Then he got a second bite of the apple when CapCities merged with Disney and he was able to extract more value from the transaction with some warrants if I remember correctly. Sold it both times! I have gotten better at letting go of my errors of omission/commission and there's shred of doubt in my mind Mr. Buffett sleeps soundly but to think of what could have been.... Any lessons from the wise CornerCrew on why he sold or lessons learned from the Disney error? An allegory or two would be appreciated.

Mr. Buffett and Mr. Munger have always been quoted as saying "No company ever went out of business having too much cash", however they forgot to mention what to do in an inflationary environment.....Schiller P/E at these heights scares me for sure. Where do you put money?? I just keep saying to myself, trust quality and invest in great businesses - things will be good over the long term. LASTLY - I stopped looking at the P/E ratio on BRK a long time ago. The websites/algorithms crawling the data can not seem to get the Class A/Class B share distribution correct so the algo takes financial data reported and divides by share count of the A or B and mis-reports a P/E ratio and any other per share ratio. I stopped worrying about P/E ratio on BRK so I don't even know of a website/source that does the math correctly. wish I could recommend one to you.

I didnt see this until now however the post says it was uploaded on Wednesday. seems like there was a delay on my end. Feedback for Parsad.

My math is a little different: Count as of Dec 31 Class A equivalent: 1,543,960 Count as of March 31 Class A equivalent: 1,525,655 (Count reduced by 18,305 shares or 1.2%) Count as of April 22 Class A equivalent: 1,522,371 (Count reduced by 3,284 shares or 0.2%) TOTAL BUY FROM DEC 31 TO APRIL 22 21,589 Class A equivalent shares or 1.4%

I listened, and your sentiments are correct. Same old stories, nothing new. Seemed like he took an outline from The Snowball.

3 hour podcast about Berkshire - Titled Part I. I haven't listened start to finish but wanted to share: https://overcast.fm/+Faxl9ffQE

Understood on Gates Foundation being gifted B shares. I knew that. But to circle back, wouldn’t Gates Foundation, under mandate to dispose of shares in 12 years, naturally give BRK first right of refusal on the shares gifted by Mr. Buffett ? My point is 30% of the entire firm will be sold 12 years postmortem. That’s a certainty. So we already know the volume will be there - just hoping the price is right. And wouldn’t Mr. Buffett anticipate this and provide a rough plan to execute. I always have thought about this - interesting. Hope he loves to 100!

Barron's article is interesting - fact is volume is up to 2000 shares a day since Mid Feb. Whether Mr. Buffett is the buyer is not where my mind goes (obviously I hope its BRK buying). My question is more who is selling into that kind of volume on the A? Longtime A owners or flippers, I guess we wait and see. I have long thought about the 12 years post Mr. Buffett. Why would Gates Foundation sell back into open market - wouldn't it be so easy for Gates Foundation to sell out to BRK.A. Is there regulatory issue perhaps. Some gifting law I don't know. I have not been so much concerned with price as much as I have been concerned with lack of liquidity (2020 was not slouch at $24B). Anyone else thought of this?

I was poking around last night and found this link: https://www.nextlevelinvesting.org/mungerstories/ It is from Daily Journal Annual. Text shows dialog and has timestamps for corresponding video. Pretty neat. Mr. Munger is laughing so hard. That guy is just bigger than life.

Anyone have some good/great stories about the above to share? Some may not hit the news tape due to the lewd commentary, quirky nature of history, or unflattering result. I mean, a financial genius and a hero of mine (ours) signed his Christmas cards "Sincerely - Susie, Astrid, and Warren". The guy is the richest guy on earth, he can do what he wants I guess. The few that got me thinking were when Jack Ringwalt went to headquarters to pick up his check for selling National Indemnity, the seller was 10 mins late because he was trying to find a parking spot with time left on the meter. The other was Mrs. B basically unhappy with the fact that she sold her furniture business for substantially less than it was worth so she left the business and started a competitor which was ultimately bought by Berkshire and Buffett made her sign a life time non-compete. (I recently read this on twitter - is this true?) The Munger story about him setting his date's dress on fire because he was trying to impress her by smoking was incredible. You can't make this up. Anyway - spend time trying to figure out where the business is going. Just thought some fun stories about the past would be interesting to read about. I can dig up some others if no one has fun, obscure, interesting stories to share. Cheers!

Some old timers of COBF may have discussed this and I know Chris Bloomstran discusses a little in his letter; I have been thinking quite a lot about Differed Taxes (21% - maybe going to 35%) on the stocks - specifically Apple. Relevant to the 2030 Berkshire equation. Apple goes from $35B to $135B - that's a gain of $100B. Pause....we are talking about $100,000,000,000....incredible value creation in 5years. Just to put that in perspective, that's the entire value of: IBM ($106B), Caterpillar ($104B), American Express ($102B), Goldman Sachs ($100B), GE ($97B). OK, back to the post, $100B Gain in Assets and the offset on Liabilities is 21% Tax Differed on Gain for eventual sale at $21B. My point, if we are valuing Berk on Price/Book - can we "adjust" the differed tax liability amount essentially boasting the book value on basis that there will not be a sale in these holdings? Here are some positions that I would consider perma-holds: American Express...Cost:$1.287B.........Market Val:$19.124B.........UNREALIZED GAIN:$17.837B Apple....................Cost:$35.287B.......Market Val:$134.163B.......UNREALIZED GAIN:$98.876B Bank of America.....Cost:$12.560B.......Market Val:$32,586B.........UNREALIZED GAIN:$20.026B Coca Cola..............Cost:$1.299B.........Market Val:$19.396B.........UNREALIZED GAIN:$18.097B Moody's.................Cost:$248M...........Market Val:$6.579B...........UNREALIZED GAIN:$6.331B Visa.......................Cost:$349M..........Market Val:$2.017B...........UNREALIZED GAIN:$1.668B TOTAL UNREALIZED GAIN:$162.835B @ 21% = $34.195B Differed Tax With differed tax at $67B as of Q3, we could call the gains in the above 6 names 50% of the differed tax....that hopefully never gets paid. Isnt there an adjustment for this? At very least cant we allocated the $35B and call it "Float"? I could be missing something here - and I am sure someone has thought about this. Just wanted to share something I was noodling on. Hope all is well - looking forward to new site layout.

Agree the Elephant in Omaha Zoo needs to be tagged, bagged, and put in the freezer. But why do anything to cause a stir and raise ticket prices to shoot the beast? Prefer to lull the market to sleep while accumulating shares.....just gonna cost more in the end. Prefer actually the price of the enterprise go down in value so the buy backs are more accretive. Understood, my "stock portfolio balance" will be depressed and my "returns" will lag the market however that is the signal of an undervalued business I want to own over the long term - 25yrs or more. As a believer in true cash flow and multiples of such rather than adjusted EBITDA - Berkshire is well positioned for the future as a wonderful business, not a stock. So to your point, I'll take to $500M/week and sleep soundly...waiting for opportunity to find value. Remember both Mr. Buffett and Mr. Munger during an annual meeting 2 years ago (2019 meeting quotes below). If we listen, they tell us what they are gonna do, we just gotta listen. Its all there. Merry Christmas Eve Eve to all!! 2019 Meeting: Mr. Buffett: “Whether we had $100 billon or $200 billion would not make a difference in our approach to the repurchase of shares. The real thing is to buy back…repurchase shares…only when you think you’re doing it at a price where the remaining shareholders have had…are worth more the moment after you repurchased it than they were the moment before. But we want to be sure, when we repurchase shares, that those people who have not sold shares are better off than they were before we repurchased them. And it’s very simple.” Mr. Munger: “Well, I predict that we’ll get a little more liberal in purchasing shares.”

I liked the format - kept the questions focused on the business rather than on dreamy life questions - "what would you do if you were 24 and had no money?". The revenue from shareholders buying products at meeting will be missed. https://www.berkshirehathaway.com/news/dec0320.pdf dec0320.pdf

If the address in top left corner said Omaha NE I would read more into it however the address says Tokyo, Japan so I think we are safe, no "investor relations" in Omaha!

When I think about Berkshire selling Apple, a few things comes to mind: #1 - Compare to KO position in in late 90's #2 - Apple was trimmed in 2019 #3 - Mr. Buffett does not look at Apple as a stock, its his 3rd largest business #4 (and what I think about mostly) - if Mr. Buffett sells Apple....what is he gonna buy? Where does he redeploy $120B in Capital?

what amazes me is BERK got a pass from CNBC/news outlets. Clinton sends a few emails and its a feeding frenzy, BERK negotiates with Iranian business and you dont hear a sound. I feel like I am back in High School when the teachers pet gets away with sending spit balls to the chalk board and when teacher questions class, everyone looked at me (haha). Seriously though, I don't know implications of this settlement and from limited research OFAC is willing to allow trade with Iran - you just need permission. Small blemish on the record of a great company however not the end of the world. The operating sub was out of Turkey so doubt the sales guy doing the deal cared about trade sanctions, probably just wanted his commission. Act was self reported so that is a saving grace.

Looking forward to reviewing marketing documents for a newly created $500MM Venture fund aptly named "The Brachistochrone Fund". thanks for sharing.

I believe Mr. Buffett's genius is the ability to continue to mature and grow his sense of place in the Berkshire System. For example, in his early years, he focused on pricing discipline - buying businesses at his price. Lesson has been learned and now he is above the notion to have the pricing discipline - it has become a learned behavior. Most managers spend their entire life just focused on that one lesson - price discipline. However as Berkshire has grown, Mr. Buffett discovers more important issues to tackle. A serious problem for Berkshire and Mr. Buffett is sustaining a normalized return above market average over long period of time as organization grows shareholder equity to a size unmatched in the history of the capitalism. For example, as headline says - "Buffett blasted for not buying". My opinion is Mr. Buffett is playing a COMPLETLY different game than everyone else. My hope is Berkshire shareholders are not saying, "man you idiot, you didn't buy", rather there was a complete calamity of unseen/unthinkable proportions with outcomes too difficult to predict and having dry powder was of utmost importance. Mr. Buffett's gut was to "buy when everyone else is selling", and anyone who doesn't know that, doesn't know the man. Despite his gut telling him to buy, Mr. Buffett paused....in my opinion, this pause was in part to a cardinal rule at Berkshire "No big mistakes". Monday quarterback shows buying in March lows was the right thing to do...for money managers/individual portfolio managers/stock jockeys...however Mr. Buffett is not in that game, he is playing the long game where 10yr returns are minimum to be measured. My own disappointments were mostly in the lack of share repurchase, not because the price was right, more so because the volume of shares available were enormous. Buying in bulk is Mr. Buffett's tool today. And he knows that, so again, when he reviews the volume of shares available during that period of time does he regret not buying...I doubt it....there were other "things" he was considering that the mere mortals and pundits would never understand or comprehend. These thoughts are all predicated upon the idea that Mr. Buffett still has his wits and is a learner everyday. If he is losing his marbles, then its the boards discretion to execute on a change. I trust the board, I trust Mr. Buffett ergo I am believing in something bigger than "he's washed up". There was a reason why he didn't buy and we as shareholders may never know. I do hope he shared that reason with Ted/Todd/Gregg. Then the lesson will endure and as shareholders we will benefit from the lesson for the next 50 years.

London has written sloppy contracts. They accepted risk without charging a rate for the exposure. This reflects overall change of Lloyds from "names" to corporations looking to juice return. And it shows. Do not fear, Lloyds will be fine long term. They are also struggling with a transition from paper to tech platforms. Lots of deals are still done today without email (can you believe that?). Think of the same issues surrounding Lloyds of London (management/future - not underwriting) to the transition at NYSE and "specialists firms", trading commissions, computerized trading, dark pools, ect. Today's tech world took out alot of dinosaurs at NYSE and Lloyds is filled with them. But everyone still says "insurance is different, you cant put commercial insurance online"......we will see. With regards to Cal Fire exposure. Over the past 18-24-36 months carriers have been reducing exposure to Cal Fire BIG TIME! And price has increased 200-300-400%. There are 2 very distinct and separate markets: residential (homes) and commercial. State fund is taking much of the residential risk. And names you know are still writing commercial accounts with large rate increases. I have seen where a bunch of homogeneous enterprising corps (think a bunch of Hotel Operators, or guys who own 30+ chain restaurants) pool together and buy something called "Shared Limit Program". If that sounds sketchy, don't worry, IT IS. Its the insurance industry's version of the Synthetic CDO linked to a Mortgage Backed Security. Banks (and I bet a lot of brokers who sell it) dont even know what it is but they accept it. and its "cheaper". Here's the tell tale sign things are getting weird in that market, when you call a broker you have to specifically ask for "traditional risk transfer insurance" because they will assume you want the cheapest thing available - shared limit program.

My understanding, and Pupil alluded to this early in thread, Mr. Buffett and Berkshire ARE NOT required by any regulatory body to disclose publicly their "internationally held positions/businesses that trade in open market outside USA". Does seem a little like an advertisement. Think this through, so Berkshire Japan (didn't know we had an office in Japan BTW) went out of their way to write this press release stating to the business community around the world: #1 - it took us 12 months to build this position, #2 - we may go to 9.9% ownership (and we don't have to tell you if/when we do that) and #3 we may go higher if the investee companies allow us to. This is unprecedented in my opinion. I know nothing of these companies or Japan as a country for investment however $6B is a rounding error in Omaha so I ain't losing any sleep. No thought on if this was good/bad or unch on longterm outlook on Berkshire however it is interesting the manner in which this was all "disclosed". There is intent in everything they do - more so when a press release is drawn up with Berkshire letterhead. Time will tell on this one.

Mr. Buffett loves his business. He doesn't love money.....because he has enough.

Hopefully the ad is for GEICO. OK, OK Agree "exploit" is a harsh word. After reading Foley's summary of the case, put more appropriately: Mr. Buffett understands the rules of the game and his loss reserves are "fair and reasonable" for the benefit of the shareholders of Berkshire...I'm sorry...I mean benefit the ultimate client of Berkshire's insurance subsidiary - the first named insured client. I have come to understand behind the grandpa glasses and white hair is a shark who bites hard leaving a mark. Charlie might even bite harder than Mr. Buffett, especially in the early years.