gfp

Thanks for the link - that is some seriously good reporting work

There is a detailed investor presentation for MidAmerican (BRK Energy) at this link. There is a slide that shows ROE of each of the energy subsidiaries and some discussion of capital expenditures vs cash flows. You can also see MidAmerican's tax rate declining to 7% or so from closer to 20% earlier as the tax credits come online. I think there is a substantial lag between investments and the resulting cash flows. They are also earning below the allowed ROEs at all the subs (obviously not over). A lot of the behavior is to show the regulators what a great owner BRK energy is for regulated assets so they will be able to buy whatever they want going forward. http://www.sec.gov/Archives/edgar/data/1081316/000108131614000014/ic2014.htm (side note - I tried to find some Topaz Solar Farms LLC bonds to see the yields since they are BBB, but could not find any available. Anyone know the yields on those?)

Gates Foundation is required to sell BRK shares by law - excess business holdings of a foundation or something like that - they have to steadily sell shares regardless of the dividend under current law. Same reason Pabst Brewing had to be sold.

http://www.ebay.com/itm/2013-Berkshire-Hathaway-Annual-Meeting-Ticket-Credential-Lanyard-Warren-Buffett-/121131175608?pt=LH_DefaultDomain_0&hash=item1c33fb0eb8

When you are logged in, try clicking the little "plus" sign + next to the text "Unread Posts". That should display the categories that you are used to seeing. It should stay that way unless you click the "minus". Hope that works for you - I had the same issue a while ago.

The main point of Harney is to hide the US equity positions that are being accumulated and have received confidential treatment from the SEC. Once they are done buying something, and no longer get confidential treatment on their 13-F, everyone can see them. If they weren't in Harney, I would be able to pull the quarterly NAIC filings and find out the 'secret' stock they were accumulating. The other big benefit of Harney is Berkshire's investments in individual corporate bonds. The bonds disclosed in NAIC filings are all highly liquid mortgages and government bonds. The individual high yield and corporate bonds are all hidden inside Harney. He's used it for years. It's only real purpose is confidentiality.

c'mon man, this is a value investor forum - a lot of us do this for a living and almost every other waking hour of the day. Aviation enthusiasts are often into simulators. Investment enthusiasts spend the weekend devouring annual reports. To each their own. Even rookie F1 drivers use simulators/games to learn tracks they've never driven.

Doesn't depressurizing the cabin release the oxygen masks throughout the plane? Would everyone still pass out immediately with oxygen masks on?

http://www.sec.gov/Archives/edgar/data/104889/000119312514094955/d692131dex991.htm

what's the story with the price move in the common shares today?

How do you know that FFH bought into PWT? http://www.dataroma.com/m/holdings.php?m=FFH

Verisk was owned by insurance companies before it became a public company. Berkshire's shares 'showed-up' in filings when VRSK started to trade publicly. BRK didn't sell shares in the IPO like the other owners. I believe they've sold some VRSK since, but I don't follow it closely. The extra PSX was indeed a very large position for the junior managers.

Verisk is a legacy holding that BRK received before they were hired. Looks like you have it mostly right. I would add PSX as a company that BRK got through the COP spin but then one of the junior managers added to (and now will be swapped for the chemical business in a nice tax efficient swap) USG was Buffett

A 13-f will always indicate to the public that confidential information has been omitted if it has. So at least you know when something is omitted, and it can't be confidential for very long usually.

Graham Holdings' pension fund has the BRK shares you are describing, but don't forget that Graham Holdings directly owns about $423 million (at current price) in additional BRK.A & B shares as an investment. There is an opportunity for a great stock swap here. Is it saying pension plan held investment which increased from $223mn to $389mn in 9 months? I wonder which one that would be. Mostly some large cap. Also structure of this transaction will point to Buffett's valuation of Berkshire. I think it was good bargain below 109 and still not very far from it.

Not sure you're right here -- where are you getting $11m? My apologies - I don't know anything about this company, I was just directing the poster to a link and page number for Net Operating Loss Carry forwards for the US.

It's on page 13 of the most recent 10K for Special Diversified - approximately 11 million http://www.sec.gov/Archives/edgar/data/911649/000118811213001093/t76199_10k.htm

It's a fine thesis to use deep in the money LEAP calls to add some leverage to a safe equity position. Just a heads up to others that might consider this as a swap for Berkshire shares they already own in an IRA - I attempted to swap BRK.B shares for calls in a "margin-type" interactive brokers IRA a couple years ago. The margin-type IRA at IB allows to you immediately use the proceeds of a sale, rather than waiting the 3 days for settlement like a regular IRA. The way this works without violating the IRA rules is that the second trade settles after the first trade, so no temporary loan is ever present. Stock options settle the next business day, so you have to wait 2 days to do the swap - risking a price change in the underlying. I remember sweating it out for two days hoping the price didn't rise. If it falls, you benefit of course...

I think it's mainly a non-issue because it will be near impossible for any entity to get a controlling position in BRK in the future. The A-shares are the way to do it, but they have very low volume that will only shrink as they can only be converted in one direction. As BRK's market cap continues to grow, an entity seeking control would need $70 billion plus worth of illiquid A-shares to take control the "cheap way". The board owns 33,000 A-shares outside of Buffett (+undisclosed Munger children). BRK may also repurchase A-shares in blocks further reducing outstanding shares and potential volumes. Another part-stock deal like BNI would further increase the number of B-shares, etc etc… Berkshire will be a Trillion dollar market cap company at some point in the not too distant future. Difficult to take over, even with a potent share class. And with a strong board led by lead director Bill Gates who will still control one hell of a lot of votes... You don't see Icahn getting a seat on the Apple board. Hell, Sardar can't even get on the CBRL board with 20%.

At least for the B-shares, ycharts' numbers appear to be incorrect. Backing out the implied book value from their number shows them using a book value of $219.385 billion for BRK, when the actual Q3 book value is $208.382 Billion Not sure what their error is, maybe share count like most finance websites. -- I checked their A-share number and it's much closer to reality (off by $1B). The fact that the two were different is a tip off, although the B shares closed at a 1% discount to the A shares on Monday. Last reported book value per share is $84.509 on the B-shares, for a buyback number of $101.41 on the B's and a P/B of 1.29x

I think the end of year buyback threshold will end up somewhere between 106-107 on the B shares. Buffett will buy back the stock every day it is below 1.2x book, but not a single share above that. You can't really fault him - he was active buying the stock in the open market towards the end of December 2012 on the few days it traded below 1.2x book (in addition to the large reported block trade that prompted the change from 1.1x to 1.2x). It hasn't traded below 1.2x a reported book value a single time since then. The jury is still out on whether he will use a more real-time book value, but I wouldn't be surprised if he only uses the last-reported publicly available book value per share to instruct the broker.

If it was a triple net lease the tax billing address could have been in Hoffman Estates and the Owner elsewhere, like Fort Dodge for instance. this might be them: http://sos.iowa.gov/search/business/(S(2as2buey3xfqjouzxhx11zm4))/summary.aspx?c=jkiNixQz_1oyzk97yeULyPJNWeF5ep3twnfcA5SRJ1w1

I do this type of client portfolio all the time. Individual corporate bonds can be a real help - The SHLD bond maturing in 2018 that Berkowitz owns is secured by inventory and yields around 9.8% right now. We own a bunch of Radiation Therapy bonds maturing in 2017 that were purchased with yields of 17-19%, currently yielding around 12%. I would probably buy ATAX on this morning's drop for a client like that. We've owned EMES in these types of accounts, still yields 8.7% but used to be a much better value. Lots of KMR ~7.4% yield at current price. KMI like you said is also a good initial yield and dividend grower. BP, Royal Dutch Shell and Lukoil for the high yielding oil portion. TWO harbors below book value for a small portion, maybe a small amount of PSEC. The key is to be very diversified and add opportunistically to the most attractive income securities as they become available. I would put JPM in an income account at todays price as well. In Canada, small positions in the energy income plays and Glacier media, just not too much in any one name. For emerging markets there are many dividend weighted WisdomTree ETFs - DEM is a high yielder with the underlying index yielding something like 5%. There are also some high quality pref. shares worth looking at. DSL pays monthly and might be worth a look on a drop - keep an eye on the NAV discount and try to add on extremes.

I assume you are talking about a macbook pro not a mac pro desktop, right? If its a newer Macbook pro I recommend using parallels to run Windows and the windows version of Microsoft Office. You should install windows using the Boot Camp method and then set parallels to use the Boot Camp partition so that you can start your computer up as a windows only machine or access the same install of windows through a virtualization window from Mac OS. Best of all worlds. You can have 100% Windows, Mac with Windows in a box, or 100% Mac anytime you wish.

Good interview - thanks for posting!