Dynamic

Yeah, but the questioner called them Gene Therapy, which is not factual, a red flag that he was a pseudoscientific antivax proponent. Anyway Charlie immediately said he completely stood by his previous remark and in seconds moved on to the next serious question from Becky. Suffice to say, many conspiratorial talking points that the Gates Foundation evilly indoctrinates Kids with Critical Race Theory and other idea on the evil "Woke Agenda" (with scare quotes), the defamatory accusation that having met Epstein at some times in the past means Bill is an evil something or other. Don't think he went full David Icke and accused him of being a shape shifting lizard person, but perhaps with another minute at the microphone he might have. I'm doubtless being unfair but extrapolating what he might have said next, which is deliberate and simply a way to show my frustration at the idiotic and defamatory rant he embarked on before being rightfully cut off.

I was at the meeting (my first in person) and did attend the formal meeting where all shareholder proposals were defeated based on votes submitted in advance alone. Results will be filed with the State of Delaware and SEC in due course including those votes from the floor which won't change the outcome just the numbers. There were problems with the microphone at the initial station they used which delayed things in that section and they limited proposers to about 3 minutes rather than letting them go on and on with their soapbox. I think only one of the proposers came across really well with her two sets of remarks. I think they'd stand a better chance next year if they proposed something less far-reaching that would be simple and convenient to implement and perhaps seek to expand from there in future years. A very brief, clearly written proposal with very limited scope on one of the topics chosen might actually stand a modest chance. Perhaps the Board or CNBC even, realised that one of the guys was planning to use the platform to promote his Conspiracy Theories and ended up saying some pretty nasty and defamatory things mostly aimed at Bill Gates. He ended up being removed from the meeting after being given a second opportunity to continue at the microphone in a sensible manner. I'm quite relieved that only the in person audience was exposed to his soapbox rant, rather than exposing more people online to misinformation and political tribalism/extremism that feeds from it. Free speech may have its place, but hijacking a business meeting is not it. I would defend the right to free speech, even of that sort, in public places, but not allow them to hijack a platform such as Berkshire's AM.

Thanks, @lemsip. That's reassuring as we were concerned the queues could be enormous. We're arriving on Thursday and we're heading for that area of Omaha on Friday anyway for much of the day. We're thinking we'll try to hit the NFM picnic on Saturday, probably via the shuttle bus, assuming we're OK to leave our hire car at the arena parking. Thanks again.

Thanks for this thread and the information included so far. I have a question about obtaining meeting credentials when outside the USA and also away from our home address overseas. We're having an extended stay with relatives in Mexico until late April then we'll start a two week US roadtrip to Omaha to attend our first Annual Meeting then fly back to our home country. I just went to our broker's online proxy materials and chose the option to attend the meeting and vote in person, which gave us a one page PDF called 'Legal Proxy' stating our joint names and our residential address and the number and class of shares as of the record date that we can vote at the meeting. I presume this is not our meeting credential, as that sounds like a different item, given that each shareholder can obtain up to 4 credentials. I also generated a brokerage statement that we can print out and present along with our proof of ID as stated with the Legal Proxy. Will we need to queue up on the Friday to obtain our meeting credentials and lanyards (just 2 needed for the two joint shareholders), is there another way to obtain them, or should we apply to have them mailed directly to us hoping that they'll send them to us in Mexico, rather than our home address, and that they'll actually get here via the Mexican postal service and in good time? Any advice from other foreign attendees would be appreciated. Just want to avoid unnecessary delays or complications for us and the team from Berkshire. Thanks in advance

Although we may never know, I suspect that Ted may well have initiated the original Apple position in 2016 at around $25 (split adjusted) with earnings yield in the region of 9-10.5% (depending if you back out cash), some of which was held by various Employee Pensions. Once Warren understood the franchise. I suspect that he increased it dramatically to the enormous position it has grown into today. You don't need many home runs like that to be more than worth your salt.

I also noticed a minor discrepancy when checking yesterday's SC 13G/A filings. According to the Berkshire SC 13G/A filed Feb 14, 2023 in respect of Bank of New York Mellon https://www.sec.gov/Archives/edgar/data/1067983/000119312523038287/d435660dsc13ga.htm Berkshire Hathaway Consolidated Pension Plan Master Trust is no longer displayed as an "EP" Employee Pension holding of BK, yet it's still mentioned in "Item 3" on "Page 27 of 30 Pages", defining it as an Employee Benefit Plan. I'd assume that either: they sold all those 6,748,092 shares from last year's filing and simply didn't remove Berkshire Hathaway Consolidated Pension Plan Master Trust from Item 3 (most likely), or they failed to include that page in the SC 13G/A filing this time and will need to re-file to correct it. I've gone with the former for now.

I've analysed the 13F filings for Berkshire and New England Asset Management and also looking at the SC 13G filings made yesterday to check on the "EP" Employee Pension holdings that aren't attributable to Berkshire shareholders. Here's my summary of the positions attributable to shareholders and approximate change from last quarter (sometimes not quite the correct percentage change thanks to a change in the pension position at the same time): As noted above, Apple increase results from the Allegheny acquisition. AAPL________ Apple Inc._______________ ___0.04% _____915,560,382 ALLY________ Ally Financial, Inc._____ __-1.21% ______16,280,325 AMZN________ Amazon Com Inc___________ ____unch _unchanged count AON_________ Aon PLC__________________ ____unch _unchanged count ATVI________ Activision Blizzard Inc__ _-12.35% ______52,717,075 AXP_________ American Express Co______ ____unch _unchanged count BAC_________ Bank of America…rporation ____unch _unchanged count BK__________ Bank of New Yor…llon Corp _-60.50% ______24,446,925 C___________ Citigroup, Inc.__________ ____unch _unchanged count CE__________ Celanese Corp.,…mon Stock ____unch _unchanged count CHTR________ Charter Communi…tions Inc ____unch _unchanged count CVX_________ Chevron Corp_____________ __-1.40% _____167,353,771 DEO_________ Diageo P L C Spon ADR New ____unch _unchanged count DVA_________ DaVita HealthCa…tners Inc ____unch _unchanged count FND_________ FLOOR & DECOR HLDGS INC__ ____unch _unchanged count FWONK_______ Liberty Media, … Series C ____unch _unchanged count GL__________ Globe Life Inc.__________ ____unch _unchanged count GM__________ General Motors Co________ ____unch _unchanged count HPQ_________ HP, Inc._________________ ____unch _unchanged count JEF_________ Jefferies Finan…roup Inc. ____unch _unchanged count JNJ_________ Johnson & Johnson________ ____unch _unchanged count KHC_________ Kraft Heinz Co___________ ____unch _unchanged count KO__________ Coca-Cola Co_____________ ____unch _unchanged count KR__________ Kroger Co._______________ __-0.80% ______33,392,910 LILA________ Liberty Global …C Class A ____unch _unchanged count LILAK_______ Liberty Global …C Class C ____unch _unchanged count LPX_________ Louisiana-Pacific Corp.__ __40.34% _______4,344,909 LSXMA_______ Liberty Sirius … Series A ____unch _unchanged count LSXMK_______ Liberty Sirius … Series C ____unch _unchanged count MA__________ MasterCard Inc___________ ____unch _unchanged count MCK_________ McKesson Corp.___________ _-10.72% _______2,855,514 MCO_________ Moody's Corporation______ ____unch _unchanged count MDLZ________ Mondelez Intern…ional Inc ____unch _unchanged count MKL_________ Markel Corp._____________ ____unch _unchanged count MMC_________ Marsh & McLenna…anies Inc ____unch _unchanged count NU__________ Nu Holdings Ltd__________ ____unch _unchanged count OXY_________ Occidental Petr…eum Corp. ____unch _unchanged count PARA________ Paramount Global Cl B____ ___2.65% ______93,637,189 PG__________ Proctor and Gamble_______ ____unch _unchanged count RH__________ Restoration Har…ings, Inc ____unch _unchanged count SNOW________ Snowflake Inc____________ ____unch _unchanged count SSP_________ E. W. Scripps Company____ ____unch _unchanged count STNE________ StoneCo Ltd._____________ ____unch _unchanged count TMUS________ T-MOBILE US INC__________ ____unch _unchanged count TSM_________ Taiwan Semicond…. Ltd ADR _-86.19% _______8,292,724 UPS_________ United Parcel S…Inc (UPS) ____unch _unchanged count USB_________ U.S. Bancorp_____________ _-91.98% _______7,507,903 V___________ Visa Inc_________________ ____unch _unchanged count VRSN________ VeriSign Inc_____________ ____unch _unchanged count

Late to this thread, but I totally agree. Berkshire pays a lot of attention to correlated risks. I think Charlie Munger is another strong influence on this matter and I also get the impression that Todd Combs had this deeply ingrained. I believe the attitude to risk management was actually one of Warren's key criteria in assessing his perspective investment manager hires, and I always interpreted it to include understanding and avoiding excessive correlated risks. By that token it is probably also very true of Ted Weschler, but I just haven't read or heard things from Ted to be able to assess it yet. I'm certain that Warren Buffett and Ajit Jain have a keen focus on limiting correlated risks in insurance and reinsurance policy exclusions and contact terms, though they're willing to underwrite substantial well defined risks that don't endanger Berkshire's financial strength and independence if they're adequately compensated. I try to take the same approach to my portfolio, not avoiding positions with large upside but a real potential of total loss, but ensuring they are limited in size and uncorrelated and cannot cause our ruin.

Cal Year USD gain outperf vs SP500 TR pre tax GBP gain Lowball value USD gain 2016 24.2% 12.2% 54.2% 19.1% 2017 24.8% 3.0% 14.1% 12.7% 2018 25.3% 29.7% 33.0% 47.1% 2019 18.0% -13.5% 13.6% 3.8% 2020 -3.4% -21.8% -6.0% 32.4% 2021 79.6% 50.9% 81.4% 34.2% 2022 24.1% 42.2% 39.8% 38.4% cagr 25.6% 14.1% 30.2% 26.0% Started the year fully invested. Realised some early gains and ended up with a lot of cash. Also did OK with some merger arbitrage, especially compared to a falling market. Took some cash out too to have enough cash to pay living expenses and some taxes on last year's realised gains. Went fully invested in Q3 and made some more gains realised in late November. Ended the year with almost 29% cash. A lot of my pricing-based decisions, turned out to look like good market timing.

A new 8-K was released by Berkshire stating in essence that the Board will be seeking a new independent director to replace David Gottesman. On September 28, 2022, David S. Gottesman, a Berkshire director died. Prior to Mr. Gottesman’s death, the Board of Directors was comprised of eight independent directors and seven non-independent directors. Mr. Gottesman was an independent director and as a result of Mr. Gottesman’s death, the Board of Directors is not currently comprised of a majority of independent directors as required by Section 303A.01 of the NYSE Listed Company Manual. On September 30, 2022, as required by Section 303A.12 of the NYSE Listed Company Manual, Berkshire Hathaway submitted an interim written affirmation to the NYSE as a notice of noncompliance with Section 303A.01 of the NYSE Listed Company Manual. On October 3, 2022, the Company received an official notice of noncompliance from the NYSE. The NYSE notice stated that the Company will need to correct the noncompliance as promptly as practicable. It is the intention of the Berkshire Hathaway Board of Directors to appoint a new independent director as soon as practicable.

To me it seems there was plenty of liquidity to buy all he wanted in Class A and there's the modest bonus of greater voting rights.

Looks like Greg's Trust now owns 173 BRK.A shares, 5 shares already, plus 168 shares of new purchases shown in the four Form 4 fillings of October 3, 2022, purchased for around $405,000 to $408,000 per share. Total market value would be about $70 million. This strikes me as a very sound price compared to Intrinsic value. ($270-272 is the equivalent price range for BRK.B shares) I think that price range gives prospects for solid compounding in the medium to long term (say inflation plus 6-9% cagr) plus a likely short term re-rating boost that might well add as much as 15% one-off (not compound) boost to the total returns after the next year or two if more typical market valuations then prevail for Berkshire and it's common stock holdings. If prices then happen to be somewhat depressed at that future time, like today, I'd still expect most of the 6-9% cagr real growth rate to be reflected in the return, and only an extreme low valuation such as in May 2020 is likely to result in the position being underwater at prevailing market prices.

I hold some ATVI myself in a tax free account and have considered adding to Berkshire or Markel using the proceeds. It has held up pretty nicely against a declining market as merger arbs tend to, but I've been on the fence about whether to switch or not. A central estimate of a Berkshire's 1 year return might well be close to the possible 6-9 month returns offered by ATVI if the merger proceeds but I quite like the market neutrality of the position in case Berkshire gets even a little cheaper and I decide to really load up, to lock in not only the 1 year returns but the subsequent long term compound returns of inflation+7-9% that we might expect after that. I think my hysteresis would like the return of the alternative to be just a little more juicy before I switch.

Thanks gfp, that's a nuance I hadn't picked up on.

Only securities traded in the US (including ADRs) are included in the SEC's list of securities and CUSIP Numbers that are to be shown on 13F filings. Foreign holdings such as BYD Co. Ltd. (1211.HKG) may show up periodically in local filings instead according to local rules (such as changing their holding by a whole percentage point), as you'll have seen recently on these forums. The last filing where I saw some of the Japanese Trading Companies was on page 7 of the Chairman's Letter in the 10-K for year end Dec 31, 2021, published this February. They show up in the largest 15 equity holdings table. Those large enough at year end to be shown there were (with Over the Counter Markets equivalent listings tickers and share count): OTC:ITOCF 89,241,000 2021 10K portfolio, p7 of Chairman's Letter, an increase from 2020 10K holding OTC:MSBHF 81,714,800 2021 10K portfolio, p7 of Chairman's Letter. OTC:MITSF 93,776,200 2021 10K portfolio, p7 of Chairman's Letter. which were slightly greater holdings than I had estimated until the report came out. Of these, only Itochi had made the 2020 top-15 holdings list, IIRC. Those not large enough to be disclosed in the top 15 positions with my very approximate best guess holdings sizes are: OTC:MARUF 88,600,000 Approximately 5.1% stake - my own guess based on press release. OTC:SSUMF 63,800,000 Approximately 5.1% stake - my own guess based on press release. There are some other foreign holdings such as Societa Cattolica, an Italian insurer that has been bought out recently, so I imagine Berkshire pocketed cash proceeds from the acquisition and will show a realized gain in Q3's 10-Q. This exact position has never been reported, though a press release about Berkshire's investment gave an indication of the holding's size. Most websites purporting to show the Berkshire portfolio completely ignore the New England Asset Management portfolio (read cover page of Berkshire's 13F-HR filing and NEAM's filing to understand this). NEAM, for example, shows a small position in the UK listed firm Diageo plc, but they're shown because they're held via ADRs and thus reported in the 13F. The other thing done on the table on page 7 of the Chairman's letter is to remove holdings by Berkshire's pension funds which aren't beneficially owned by Berkshire shareholders. I have been able to confirm these using 13D and 13G filings, where code EP refers to Employee Pension funds. BYD however, is shown in full even though Berkshire only owned 91.1% of Berkshire Hathaway Energy which holds that position. The portion applicable to Shareholders' Equity would have been 91.1% of the BYD holding shown, and would now be about 92.1% of the amount shown since Berkshire bought out Greg Abel's 1% stake in BHE. The same 92.1% applies to Berkshire Shareholders' share of BHE's earnings.

Thanks, @gfp very helpful

Do we think BHE will have to pay tax on their realized capital gains in BYD Co Ltd (HKG:1211)? I'm wondering whether their accumulated wind and solar tax credits might reduce or even eliminate the tax liability on the realized gains. I have only the most basic understanding of US corporate taxation so I'd appreciate any better informed thoughts from the hivemind.

The same article for those without a subscription to Barrons. https://jnews.uk/berkshire-hathaways-utility-business-highlights-the-warren-buffett-magic/

Incidentally, my crude Black-Scholes warrant model estimates that with OXY trading at $62.86 per share (was $57.44 at June 30th, 2022), the warrants, thanks to their time value, would be worth something around $33.37 per warrant (was $29.38 at June 30th, 2022). That's now around $2.8bn for the whole OXY warrants position, up from $2.5bn at June 30th. These are only ballpark accurate, and differ by maybe 10-20% from Berkshire's own modelled valuation for the 10-K, where there are significant unobserved inputs. In any case, Black-Scholes tends to ignore a lot of fundamental factors that will be important to the eventual worth of the warrants when they're finally exercised. So called 'Intrinsic Value' in options/warrants terminology is just how much in-the-money they are right now, ignoring time-value, rather different from Buffett's meaning of Intrinsic Value.

I really found a lot of good content in his whole thread about the Q2 report which starts from this post on Twitter.

Actually as a sanity check, I just ran the calculation for year end 2021 using the following inputs: $28.99 Closing Price of OXY on 31st December 2021 $59.624 Strike Price (unchanged) 0.01512 Interest Rate (1.512% risk-free rate = 10 year T-bill rate at year end 2021) 0.37 Volatility (37% per Berkshire's 10-K) 7.003 years to expiry (31st Dec 2021 to 1st Jan 2029 expressed in years) The resulting Call Price valuation, which I hope is a reasonably close proxy for a warrant valuation is: $5.83 per underlying share. With warrants against 83,858,848.81 shares, Berkshire's holding of OXY warrants should be worth: $489 million at 31st December 2021 according to that model. This is a lower figure than Berkshire's $616 million but is at least in the ball-park. Using 7th August 2030 expiry, i.e. 8.600 years to expiry, it's closer: $7.22 per underlying share, $605 million holding valuation, which is fairly close. I guess this sanity check gives you some idea how this is only a rough model and I probably won't match Berkshire's model very precisely.

I've been thinking about the modelled carrying value of the OXY warrants, which do count as part of Berkshire's equity portfolio. The OXY 8% preferred stock issued on 8th August 2019 is carried at $10.0 billion redemption value and Occidental can redeem it after 10 years (2029) at their option, for a 5% premium (i.e. $10.5 billion total) plus any unpaid dividends. The warrants expire 1 year after the redemption of the preferred. Berkshire 10-K page K-103 (p118 of the PDF) states that the warrants are valued based on a warrant pricing model at $616 million at year end 2021, with the inputs being: Expected duration: 7 years Volatility: 37% I'm a bit surprised at 7 years expected duration, thinking that maybe the warrants would expire on 7th August 2030, which is more like 8.6 years, so I'm instead thinking of 1st Jan 2029 as the effective expiry date. From 31st March 2022 that would be about 6.75 years. I would assume a Black Scholes Call Option pricing model is basically the approach they'd use, so I'm offering up something for those knowledgeable about this to critique and suggest modifications. I can do the math behind Black Scholes, but I'm not a finance professional. I ran a Black Scholes Call Option pricing model calculation using the following inputs to get some idea of the potential increase in modelled carrying value at the end of Q1: $56.74 Closing Price of OXY on 31st March 2022 $59.624 Strike Price 0.0251 Interest Rate (2.51% risk-free rate = something like the 2 year T-bill rate, but should I use 1 year or try to match duration to the expiry of around 6.75 years instead by reading off the yield curve?) 0.557 Volatility (55.7% from a simple Google search of OXY stock volatility, but a few sites gave similar volatility or implied vol figures, though I don't really know where I should obtain this input and over what period it should be measured) 6.757 years to expiry (31st March 2022 to 1st Jan 2029 expressed in years) The resulting Call Price valuation, which I hope is a reasonably close proxy for a warrant valuation is: $31.71 per underlying share. With warrants against 83,858,848.81 shares, Berkshire's holding of OXY warrants should be worth: $2,659 million at 31st March 2022 according to that model. The $2,043 million modelled value gain this quarter seems reasonable as they finished Q1 very nearly in the money and with an increased volatility input compared to year end 2021. That additional gain in the portfolio might actually be almost enough to make the Berkshire Equity portfolio break even this quarter (versus a 5% decline in S&P500). Without it, I'd say it's likely to have lost about 1%, which is about 4% outperformance vs the index in Q1. Does anyone think I should change some of the inputs in the model, or does this seem reasonable as the sort of GAAP-compatible valuation model? Obviously, Berkshire's internal thinking is probably more based on fundamentals and various likelihoods of different oil prices and the necessarily sound financial position of the company when Occidental is in a position to sensibly redeem the preferred stock and will completely ignore volatility, but they have to use "industry standard" models like Black Scholes to estimate the fair value of this non-traded warrant on their financial statements. I'd appreciate any input you can provide and I'm happy to recalculate with different inputs as I have the Black Scholes model programmed in, making it easy to change the variables and recalculate.

Thanks, I'm not planning to attend this year, but might do so next year especially now I'm retired/a personal investor with no other job. I hold a lot of my Berkshire in an ISA (as does my spouse) with iDealing.com which has never sent me any voting forms. I also hold some Berkshire in Interactive Brokers (UK) which lets me vote my shares online, but I've not seen anything from them about meeting credentials. Good to know that a brokerage statement from either is probably sufficient for the Will Call area.

I concur, 4thed. This site is a great resource and I greatly appreciate Parsad's efforts over a seriously long time. I quickly learned how to navigate round the mobile version, which does seem more ad-heavy than desktop, and to ignore all the google ads for products I've already bought! I had been a little absent around the time of the vote and the change of domain name, and I had actually thought I'd like to contribute financially to the site now I can afford it, but I'm at least happy to see ad revenue providing some recompense to Parsad for keeping it running and all the work migrating over to a generally more usable platform.

This Twitter thread is a very interesting story I hadn't heard before about Merchants National Properties $MNPP This reference to a footnote is amazing