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http://www.businesswire.com/news/home/20170706006280/en/Oncor-Join-Warren-Buffett’s-Berkshire-Hathaway-Energy

News says Berkshire is about to buy Oncor https://www.wsj.com/articles/warren-buffetts-berkshire-nears-a-deal-to-buy-oncor-1499363036

Clayton bought another traditional homebuilder- this one in Denver: http://www.9news.com/mb/money/business/denvers-oakwood-homes-sold-to-berkshire-hathaway-affiliate/454619228 http://www.itbusinessnet.com/article/Colorados-Largest-Private-Homebuilder-Joins-Clayton-Properties-Group-5035290

They won't owe cash taxes on the BAC shares until they are sold. It is possible that something may pass through the income statement on it, I don't know. Also, $5 billion will not come out of cash, as it is a cashless transaction inasmuch as the BAC preferred shares are being swapped and cancelled to exercise the warrants. $5 billion will come out of "other investments". There may be a redemption premium that gets booked as a profit on the pref shares, I haven't looked at the purchase agreement in a long time. All the others had kickers on redemption. I wonder why warren wouldn't continue to hold the 6% preferred with so much excess capital earning 1%. I guess it would be counted at over 10% ownership since the pref is technically equity. Also, there may be some small step up in the book carrying value of BAC if they were using an illiquidity discount in addition to black scholes to mark the warrants to "market". They will now be a level one asset vs an un-traded derivative asset.

Seems like you should take taxes into account if you are going to adjust book value for estimated gains

Fairfax announced they sold all their Tembec https://www.reuters.com/article/brief-fairfax-sells-its-remaining-positi-idUSASA09UD5

Fox Business is running a story that has some interesting detail about Ted Weschler's activity in Germany working with Berkshire's German "scout", the banker that brought them the online motorcycle accessory retailer - http://www.foxbusiness.com/features/2017/06/20/warren-buffetts-scout-inside-europes-biggest-economy.html edit: I see it is actually a wall street journal story, with pictures for those that subscribe - https://www.wsj.com/articles/warren-buffetts-scout-inside-europes-biggest-economy-1497951001

That looks like the correct volume for the pink sheet ADR shares. There was a lot of volume into the close on the pink sheet shares. The actual Canadian shares had a more normal total volume of 75,445 shares, but a lot of those trades were also into the close.

http://www.businesswire.com/news/home/20170614005701/en/MiTek®-Acquires-Mezzanine-International MiTek continues to chug along with their second recent acquisition in the mezzanine structure space. Cubic systems was a domestic operator and this one today is a European leader. Remember, buy your metal connectors from USP at Lowe's, not that Simpson Strong tie stuff from Home Depot ;-)

I knew someone who worked for Rick Perry a few years ago in Texas Government. I was surprised to learn from him that being a Texas legislator is not a full time job. This article mentions that it is not much of a paying gig either, kind of like serving on the Berkshire board of directors. I think Berkshire will be fine in Texas - Buffett met with the governor and the Berkshire bill was fast tracked into the legislature, where it just stalled out and disappeared. I would expect that the investigation will find that Berkshire is not in violation of the Texas law (more of an anti-Tesla model law) because they don't find that manufacturing RVs is an issue for an owner of auto dealers. If they were going to have an issue with it, they would have taken care of the 'Berkshire bill' that was specifically intended to carve out an exception for Berkshire's situation. Buffett has a bit of pull in Texas, and he isn't hurting anyone. https://www.dallasnews.com/news/local-politics/2015/02/16/texas-every-two-year-legislature-isnt-so-part-time

This has been a huge gift the few times BRK has traded right around the buyback threshold, both 1.1x and 1.2x. I tend to gravitate towards in-the-money, extremely low premium, longer dated call options - but practically all the calls on BRK.B were so damn cheap because of whatever malaise led to BRK.B trading at the buyback threshold in the first place. Options are still relatively new on BRK - I guess since the BNSF deal/split? - I've seen people get into trouble thinking they should sell covered calls against low basis BRK. They end up causing a sort of short squeeze in the stock as it passes strike prices and they have to scramble to repurchase the calls because they can't stomach the tax bill. I forget which year, but I remember getting a lot of ribbing from my Wife's parents around Christmas one year because I couldn't stop buying call options on BRK. "why do you constantly have to be on that laptop" Wife's parents were more than reimbursed for their daughter's college education in the months that followed (on their piece of the position).

"Aside note: Why do you guys have social security offices?" Most people are applying to receive benefits, either retirement or disability benefits. It is a mix of homeless people, disabled people and the elderly. I was there with an adopted child who obtained U.S. citizenship last week and is required to appear in person to receive a social security number/card for the first time. Two days in a row, the answer was "no". Today's gem from the supervisor was, "a US passport is not proof of US citizenship." Oy.

I noticed something today for the first time while re-reading Berkshire's most recent 10Q (while stuck at the Social Security office waiting room for 2 hours..) On page 39 of the PDF 10-Q from Berkshire's own website, the company notes that starting in 2018 they will adopt a new accounting standard that will reclassify the net unrealized gains for investments (presently reflected in accumulated other comprehensive income) to retained earnings instead. The important part of this, as I understand it, is that going forward the changes in both realized AND unrealized gains in equity securities and certain other investments will be included in the periodic Consolidated Statements of Earnings. Berkshire notes, "We do not expect the adoption of this standard will affect our total consolidated shareholders' equity. However, it will likely produce a very significant increase in the volatility our periodic net earnings given the magnitude of our existing equity securities portfolio and the inherent volatility of equity securities prices." So - economically, zero change. But the headline earnings reporting is going to be a mess some quarters. Too bad.

"What is the point of stating the threshold for Berkshire share repurchase? Has it ever been stated? And has other companies done so?" Yes it has been stated. It was first announced at 1.1x book value and later raised to 1.2x book value. Buffett wants a policy that is clear to all shareholders, even though it makes it much more difficult for the company to make meaningful repurchases when the market knows the threshold. At 1.2x book value, he believes the shares are undervalued enough so that repurchases at that level are clearly and instantly beneficial to continuing shareholders. His big point he is trying to institutionalize is that "what makes a lot of sense at one price does not make sense at another." Other companies don't make the distinction.

It's funny - Berkshire was required to run a tiny ad in a newspaper in NYC to publicly announce this - https://www.bloombergquint.com/markets/2017/05/22/buffett-plan-revealed-amid-ads-for-co-op-strippers-old-honda

Berkshire applying to the Federal Reserve to continue to hold an ever-increasing percentage of Amex, due to AXP's share repurchases. Same deal as Well's, hopefully with a better outcome for BRK -> https://www.bloomberg.com/news/articles/2017-05-19/berkshire-asks-fed-to-boost-cap-on-amex-ownership-to-almost-25 oops - I see this was already mentioned on the AXP thread - my apologies

Yeah, It's hard to get any more hated and scorned than Biglari Holdings at 376 / share. Trading for less than cash and securities net of tax liabilities and it owns a couple businesses outright.

Higher interest rates would bring down negotiated prices for whole businesses and reduce the competitiveness of leveraged buyout firms competing against him for acquisitions of whole companies. Berkshire is a buyer of assets and businesses over time, higher interest rates are better for the buyer. On the former, above, it could mean the difference between making big deals or not being able to - which is ultimately what will determine his ability to compound at 10% over time. The machine doesn't work if he can't buy large businesses, unless he is able to use that capital to aggressively retire BRK shares in the market, which hasn't been offered to him yet - but is possible in the future. I am just speculating but: - his bank holdings will make higher net income as long as rates rise gradually - his operating companies are very lightly leveraged relative to peers. So interest rates will hurt the profitability of peers which should provide some competitive advantage.

that's a pretty aggressive way to value Berkshire. Backing out all of the cash and investments and then pretending like quite a bit of that capital isn't required to operate several of the companies in the 'operating' side. The subs need some cash (obviously there is excess on a consolidated basis), the insurance co's need statutory capital - it's certainly not all free excess capital that can be separated and backed out of the valuation. - there is also a blending of "pre-tax" earnings, which quickly becomes "earnings" and then mentions that BRK's businesses should trade at 20x "earnings", which are stated pre-tax. - didn't see how you treaded investment income in your analysis, was it eliminated or included in the Insurance division earnings?

They are mostly online these days. ValueLine, Morningstar, GuruFocus has a product. Walker's Manual of Unlisted Stocks if it is still around - a slightly out of date copy should do you fine I should add that Walker's manual is way out of print, but oddball has a shorter list of unlisted stocks that is kept online here - it is a subscription product. There is also a separate product for the small banks. http://unlistedstocks.net an example report - http://unlistedstocks.net/company_detail.php?company_id=1

Going by the guidelines of the nytimes article, Facebook and Microsoft were my first choices to drop and also the most popular first choices to drop of the five. Really tells you something about moats but not perhaps investment merit. Facebook can decline in popularity, especially among the younger users and still increase the relatively new monetization of their platforms. All the advertisers I know are doing more on Facebook, not less. Poor Mr. Softie doesn't get much love. The only MSFT products I use are Excel and Word, but I'm sure a lot of what I interact with on a daily basis runs on MSFT products without me knowing it. Our 17 yr old is on his xbox one a lot. It's a tough call between the other 3. I would give up Google before Apple and Apple before Amazon.

Well Charlie is 93 and he will continue to decline. His back was hurting him sufficiently that he was in a wheel chair for the remainder of the weekend, through the CNBC interview, solo Yahoo interview and the final event, an all-day Berkshire Hathaway board meeting. His responsibilities to Berkshire the company are basically non-existent. Tom Murphy was also in a wheel chair. I don't think he will retire unless he has a stroke or something. His role is more as spiritual guide than business executive. He has never really participated in running Berkshire - he has primarily served as a devils-advocate / foil to Buffett on major decisions, acquisitions, big stock purchases, etc.. I don't think Buffett thinks he can predict interest rates out 1 year, 5 years or 10 years. He was just stating the truth of interest rates effect on values. They mentioned Japan as an example of how long rates can stay "low" and surprise everybody. Nobody knows where rates will go.

Nice that he disclosed the prospective deal structure on the Unilever bid. In what certainly would have been at least a $150 Billion cash offer ultimately, BRK and 3G were going to put in $30 Billion cash and borrow the rest. Gotta love the economics of that. ($15 B from each). There was no talk of issuing KHC shares.

CNBC has posted a copy of a short letter Elliott Management sent out to investors announcing their 7th capital commitment - they got commitments for $5 Billion in new capital in 24 hrs according to CNBC. The letter is somewhat interesting - they are expecting a volatility spike at some point and would like to have the capital commitment in place to act on short-lived opportunities: http://www.cnbc.com/2017/05/05/paul-singers-elliott-management-raises-5-billion-in-24-hours-letter.html

As telegraphed by Warren earlier this year, GEICO is absolutely killing it on gaining new business. They are being very aggressive on pricing, sacrificing a lot of short-term profitability to get these new customers. They believe in their ability to keep them over time as they adjust their rates to earn a suitable profit. I have insured all of our vehicles except motorcycles through USAA since I was 15 years old (motos are insured at GEICO). USAA is of course a wonderful company and in many ways it is the company GEICO was originally modeled after - it is a direct, mutual company. We receive multi-policy discounts on other property business with USAA that keep me from switching, but I recently got a quote from GEICO on an apples-to-apples comparison of coverages on just our cars and trucks. GEICO was significantly less expensive than USAA for our Louisiana auto policies, and USAA knows our complete claims history through my learning permit (not a single claim). Ultimately we won't switch because of thousands of dollars of discounts elsewhere through USAA, but I do believe GEICO is purposefully raising rates much less than they believe their competitors will, sacrificing near-term profit, and buying that big growth we saw this quarter. I think it's a good strategy. [as an aside, in addition to all these large screen smartphones everyone seems to be holding while they drive, one of the biggest factors in auto claims lately has been all these sensors and cameras in the body panels that tend to be damaged in even minor accidents - mirrors, bumpers, fenders - there are sensors and cameras all over new vehicles and the cost of those replacement body panels is multiples higher than a simple stamped fender or bumper and a quick re-spray. That trend will only continue until AI keeps our vehicles from ever touching - in the distant future]