Munger_Disciple

Yes that's true because govt debt/GDP is way too high (~100% or so) and that probably dominates the offsetting effect from private sector activity from higher/lower rates. But things like entitlements (SS, Medicare & Medicaid) where growth rate is much higher than inflation, would be much harder to control. I don't think lower ST rates will have much effect on the entitlement spending which seems to be on auto-pilot.

This is a terrific table @wabuffo! Makes the point that govt deficit = private sector savings very well. However there has got to be a limit to how big govt deficits can get (as a % of GDP). Clearly, that limit is higher for the US govt than for other govts because USD is the reserve currency of the world, but still one would think there is a limit somewhere. And if the inflation is the result of such too high govt deficits, how can it be controlled?

I am (slowly) coming around to this point of view. But how we tell if inflation is becoming an issue? Would rising LT treasury bond yield (or a lower USD) act as a signal of the problem?

FWIW, op-ed piece by Bill Dudley, former NY Fed President: https://archive.ph/941to

Take it easy @Gamecock-YT! I take it you are not a tennis fan. But if you are, and can't appreciate & admire the career of one of the greatest tennis players ever to set foot on the court, then no one can help you. I know many sports fans that aren't even tennis fans and they admire Rafa, so he even transcends tennis.

I agree. Buffett actually commented about it at this year's annual meeting when he answered the question about BHE equity valuation discrepancy (per share) between what Berkshire paid Scott's estate in 2024 and for Abel's stake in 2022. It is clear that Buffett very negative on regulated utility businesses, and his view changed in the last 2-3 years. I would be very surprised if Able & Buffett double down on utilities unless something drastically changes in the regulatory environment.

In addition to being one of all time greats in tennis, Rafa is the best behaved of all during his career. He never broke a racquet ever during his playing career! He clearly won the game of life in addition to tennis. Fantastic role model for any athlete or human being for that matter. I was privileged to watch him play live many times, and the atmosphere in the stadium when he was playing was always amazing. I am glad that the French honored him with a permanent plaque on the center court at Roland Garros. Well deserved!!

I am a huge tennis & Rafa fan. The farewell ceremony for the legend is very beautiful & moving. https://www.youtube.com/watch?v=LjDONWrr46I

In the case of Berkshire, I think Buffett & Abel not only like the safety and zero counter-party risk of T-bills, they like the optionality they provide to acquire practically any asset in the world at any time of their choosing if the opportunity presents itself. Any yield is just icing on the cake. In fact Buffett said at the 2024 annual meeting that they would keep their cash equivalents in treasury bills even if they yield nothing. The optionality of cash/T-bills is very undervalued IMO.

Even the fixed income portion of BRK ($15 Billion) balance sheet has very short duration ($9B under one year maturity, 4.4B in 1-5 year maturities) in addition to large T-bill holding. Buffett is very negative on LT bonds.

I sure hope not

It's called Shitty Group for a reason

None. This last AGM was the most useless in terms of anything I learned about BRK business. Becky's questions were ok, not great (but 1000 times better than audience questions); that may not be her fault perhaps. I can recall just one question that was excellent from her about Greg's capital allocation philosophy and he kind of made a mess out of it. Generally her insurance questions were good as well.

Fair enough. I also put oil services companies into my too hard pile; too many variables outside a passive investor's control.

I don't know why people care so much about what Pabrai buys. I guess he got off the coal wagon & jumped onto the drilling wagon.

Even Warren soured on Grinnell College, whose endowment he helped manage for many years. He said despite the excellent growth in the endowment, the college did nothing to reduce student fees, instead used the money to build palaces for themselves (I am paraphrasing). This is true at almost all universities. Most of them don't give a crap about affordability and effectiveness of education.

https://finance.yahoo.com/news/nrg-energy-acquire-ls-power-160819382.html This could be the $10B deal Warren & Greg referred to in the annual meeting that they presumably were outbid.

I agree it must have been a very emotional moment for Ron. He contributed enormously to Berkshire in his role as the lead independent director for several years (prior to Sue Decker) and I would like to express my gratitude to Ron as a shareholder and wish him all the best.

Excellent article. Thanks for sharing!

I will take the other side of this bet. I agree that the forward 10-year returns of Berkshire won't match that of its last 10 years but it's a lot less over-valued (only by about 10% per my math) than the S&P 500 index, which is grossly overvalued IMO. So, Berkshire will out-perform the index with a very high probability.

I agree. It's far more likely to be related to Greg's wheelhouse, the energy business, so the Canadian company makes a lot more sense.

The only thing I can imagine is that Wally doesn't manage the large cap equity fund that sold BRK stock? I know he runs the whole firm, so it seems there is a conflict here.

This is a very perceptive comment.

Yes Becky & Mike Santoli interviewed Ron Olson after the meeting ended. You can watch it here starting from the 5:47:00 mark: