Dynamic

Interesting. I imagine it's possible that some additional small investments are being made in Japan with currency effects largely offset by this cheap debt, but the interest rate is certainly favorable. Last year we did discover the exact holding in Itochu Corp as it came within the top 15 common stock holdings shown on page 7 of the Chairman's Letter portion of the 2020 Annual Report. I suspect this year that Mitsubishi Corp might just make the cut too at around the 14th or 15th largest, while Mitsui & Co Ltd is likely to miss the cut at around 16th-18th largest. Making no assumptions of buys or sells, here's my approximate top 15 list: Probable Top 15 common stock investments to be shown in 2021 Annual Report, approx page 7 of Chairman's Letter. 01 Apple, Inc. $161.2 bn 02 Bank of America $46.0 bn (not inc pref <$0.1bn) 03 American Express $24.8 bn 04 Coca Cola $23.7 bn 05 Moody's Corporatio $9.6 bn 06 Verizon Communicat $8.3 bn 07 U.S. Bancorp $8.1 bn 08 BYD Corp HKG:1211 $7.7 bn (but ~9.1% owned by minority interest in BHE) 09 Bank of NY Mellon $3.9 bn 10 Chevron $3.4 bn 11 Kroger $2.8 bn 12 Charter Communicat $2.7 bn 13 Itochu Corp $2.5 bn (see p7 of 2020AR) 14 Mitsubishi Corp ~$2.4 bn ~ estimated as not in top 15 in 2020 15 General Motors $2.4 bn ============================= Likely to be included in Others ***: 16 DaVita $2.1 bn 17 Mitsui & Co Ltd ~$2.1 bn ~ estimated. Unlikely to make top 15 in 2021. 18 Snowflake $2.1 bn 19 Verisign $2.0 bn 20 Visa $2.0 bn 21 AbbVie $1.9 bn Not including: Kraft Heinz not inc [$11.7 bn] - not part of Equity Investments Carried at Market Occidental 8% pref/warr ~$9.0 bn ~ incl. warrants - part of Others *** - this might be revalued in 2021AR given rise in oil prices in 2021.

While there's still a minority interest in BH Energy I think it will remain there as part of that 'Grove'. The BYD Co HK:1211 stock is technically part of BHE too, so only about 91% owned by Berkshire Hathaway shareholders. I don't think the difference is particularly material in the grand scheme of Berkshire as a whole.

I'm broadly in agreement. Something like $227 to $229 book value per B share depending on earnings and insurance reserve adjustments and similar annual accounting decisions that affect things (and the premium to BV spent on stock repurchases) The portfolio (excluding KHC) gained about 40.2 billion USD before 21% taxes, principally deferred, assuming no undisclosed changes were significant and no dramatic readjustment of preferred stock and warrant valuations, which beat the SP500 capital index by 2.1% for the quarter, and probably with a higher dividend yield too.

Pre-tax market-price return CY 2021: +79.61% in USD, +81.44% in GBP. Annualised returns since 31 Dec 2015: +27.41% in USD, +29.91% in GBP (10.05% annualised outperformance vs SP500TR, 22.98% annualised outperf vs FTSE100TRI) Intrinsic Value return CY 2021: +34.16% in USD, +39.57% in GBP. Annualised IV increase since 31 Dec 2015: 24.48% in USD, 27.41% in GBP using consistent methodology. My actual more nuanced IV estimate at present is higher than my old methodology which seemed OK before, in which case IV increase looks like: New method IV return CY 2021: +53.77% in USD, +59.98% in GBP. Annualised new method IV increase since 31 Dec 2015: +27.55% in USD, +29.99% in GBP - close to the annualised market-value returns over those 6 years. I suspect the S&P500 outperformance will lower to single digits soon. My spouse and I gave up our jobs towards the end of this year, and will soon be taking money out of our portfolio each year. We actually did cease our usual investment rate (about 50% of combined income after tax) and then withdrew a little cash from the portfolio to pay for some pretty extensive home remodelling. We also moved some of our profits into tax-sheltered accounts to the maximum extent possible after realising some gains. We are on track to have our largest ever tax bill to pay in Jan 2023 thanks to capital gains realised this summer, less refunds from pay-as-you-earn from quitting our jobs in the middle of the year. While I do now calculate IRR, I model annual rate of return as the mean average of these two calculations: (Year End Valuation / Previous Year End Valuation) - 1 (Year End Valuation / (Previous Year End Valuation + Cash Added During Year)) - 1 then display this as a percentage. For the first time the second figure is higher the the first as Cash Added was negative. As anticipated in last year's thread, our portfolio was positioned well going into 2021 after actually losing market value slightly and I took some gains by 5th April (UK tax year end) to use tax-free Capital Gains and got a modest tax rebate. Realised some very large gains in the summer which will incur between 10 and 20% effective capital gains tax rate payable Jan 2023.

Charlie Munger (along with Tim Harford, Undercover Economist and author) are in discussion with Stephen Pinker in the latest episode of the new BBC Radio 4 podcast Think With Pinker (direct MP3 link, 28MB) entitled Methinks It Is A Weasel.

Almost start to wonder if two parties are coordinating to realize capital gains and losses or something.

Welcome to the CoBF, @etai. I took delivery of some BRK.B that was put to me after the close on Friday. I'm expecting more this Friday unless it closes over $280 - the strike price of the puts I wrote. I estimate about $272.05 effective price with all the puts I've written in the last 2 months (ignoring capital gains tax on the puts that expired worthless where I kept the premium).

Also wrote some $280.00 BRK.B puts SEP 24 2021 for $3.80 fully cash covered.

Wrote some $282.50 BRK.B puts SEP 17 2021 for $2.90

I quite agree. We have successors in important roles who are made of the right stuff and the selection criteria for the instrument managers was based on far more than great records of returns. Perhaps Sokol-gate may have contributed to ensuring high standards of probity asking all the future top personnel which will be of benefit to all partners in the business. I would not be surprised if future leaders of Berkshire will have a majority of their wealth in Berkshire stock and eat the cooking like the rest of us they partner with.

Thanks, @gfp, the Google link worked a treat and was fascinating to read.

Just wrote some more BRK.B Puts, $280 strike, 27th Aug and 3rd Sep expiries. Still have a bit more unexposed cash, so might take another bite today.

The upshot is, if you retire a certain fraction R of shares outstanding, such as 0.05 (i.e. 5%) at a share price of P the formula is: BVPSafter = (BVPSbefore - (P * R)) (1 - R) So setting R = 0.05, P = $277.92 closing price on 30th June and BVPSbefore = $207.517 that comes to $203.812 To see the full working and a worked example, click to reveal the 'spoiler' below:

Wrote more BRK.B Puts - this time 13 Aug 21 at $270 strike.

Love these responses guys. Turns out on checking my account I wrote 30th July options by mistake -fat fingers, eh! -so I'm missing out on the time travel arbitrage after all. But I think it's still a heads I win, tails I win situation so I got lucky!

Wrote some puts on BRK.B dated 30 Jun 2021 and 06 Aug 2021 all at $275 strike in Boilermaker75 style.

I would agree that it appears to be Mitsubishi Corp. (8058) which seems to match OTCMKTS:MSBHF and to be the general trading company, while the other parts of the Mitsubishi Keiretsu seem to be more specialist. I found some OTC Markets listings for all 5, which, while not as good as tracking via the Tokyo tickers, is at least something I can track on Google Sheets using GoogleFinance. OTCMKTS ITOCF Itochu Corp OTCMKTS MARUF Marubeni Corp OTCMKTS MSBHF Mitsubishi Corp OTCMKTS MITSF Mitsui & Co Ltd OTCMKTS SSUMF Sumitomo Corp My guess it that the holdings were worth about $8.3 billion at end of Q2 and about $8.1 billion today, but it's certainly imprecise.

Great post, Sanjeev. Very inspiring, and huge thanks again for creating what became this great community which is of huge value to all of us.

I had lightened up some positions recently and had a temporarily large cash balance, some of which I transferred to max out our tax free accounts for this tax year. Like a few above, I bought a bit of BRK.B yesterday around $273-274 equivalent in those accounts. I'm considering today writing/selling some 1 to 4 week BRK.B puts in boilermaker75 fashion around the $270-$275 strikes in my taxable account where I can trade options. Hopefully, I'll get a bit of premium income and then fill at some decent effective prices.

https://www.cnbc.com/2021/06/29/buffett-reflects-on-his-first-meeting-with-munger-im-not-going-to-find-another-guy-like-this.html KEY POINTS Warren Buffett and Charlie Munger first met over dinner in 1959, Buffett recalled in CNBC's special, "Buffett & Munger: A Wealth of Wisdom." The now-iconic business partners were introduced to each other through the family of a well-known doctor in Omaha. "I just knew instantly Charlie was the kind of guy that I was going to like, and I was going to learn from," Buffett said.

Exactly what gfp said. For both the Berkshire and NEAM 13F filings the front page includes important detail and is ignored by almost every site that scrapes their 13F. The Berkshire 13F-HR filing refers you to New England Asset Management and the NEAM filing describes the owner code in column 7. This changed one quarter in about 2019 where it was 1 2 instead of 01 02 so it's worth reading the cover page to make sure nothing changed since last quarter.

The SEC publishes a list on their website every quarter of securities to be included in 13F filings. That does include a number of ADRs for primarily foreign listings, e.g. Diageo ADRs which are still reported as Berkshire Holdings under New England Asset Management's 13F-HR and a few years ago, Sanofi ADRs were in Berkshire's own 13F-HR (and the 2017 10-K disclosed that they then also held the main Paris listing of Sanofi which is not disclosable as it's not US). If the mystery holding was in about the top 15 holdings at year end (e.g. over about 1.5 to 2 billion) I'd suspect it might need to be disclosed in the Investments in Equity Securities part of the Annual Report/10-K, unless there is also permission to withhold the name.

I've got to agree with you, bizarro. 80+% potential gain over a decade isn't that much considering the risk, especially having started with much less cash and having most of it offset by float liability. The counterfactual situation of rising rates remained a big possibility, and if it happened, large acquisition opportunities might have arisen at the exact moment the funds were depleted by too heavy a weighting on long dated T billls. That could have been a major error of commission potentially costing many decades of compound growth from the acquisition missed. Only with perfect hindsight can we know that rates fell further and prices of potential acquisition targets remained high, though it sounds like we came close to something big in 2017.

I answered with my -6.03% native currency GBP return (-3.42% in USD) underperforming SP500 Total Return index by -21.82% in 2020. My downside estimate (which long-term tracks IV rather than price - hence labelling it USD_IV below) shows a +32.39% increase in USD at year end in USD. 2019's value was depressed thanks to a merger arb still in play in 2019 with high exposure and substantial low-likelihood downside if held to the merger date. I've rated 2020 YE downside as very low. The geometric averages over 5 years show my total compound return is in the ballpark of my compound change in IV/downside - about 14% less downside now than at 2015 YE. YEAR GBPret USDret SP500TR Outperf GBP_IV USD_IV 2020 -6.03% -3.42% 18.40% -21.82% 27.67% 32.39% 2019 13.59% 18.02% 31.49% -13.46% 1.81% 8.36% 2018 32.95% 25.30% -4.38% 29.69% 43.74% 40.88% 2017 14.14% 24.83% 21.83% 2.99% -2.19% 12.72% 2016 54.19% 24.16% 11.96% 12.20% 48.90% 19.09% ================================================ 5yAv 19.58% 17.23% 15.21% 2.02% 22.74% 20.39% ================================================

I wasn't assigned, even though WFC closed at 29.01! Wow, that's quite a surprise, but I guess it can be a useful bonus that you can probably replace that exposure either with a higher premium or a lower strike at a good IRR. I don't do this as much as you, but I've never had that happen. The most unusual thing for me was to have a few contracts assigned to me a good number of days before expiry.