gfp

what is "max allocation"? Is that a treasury direct thing or what?

Lex is on a role recently - Tucker Carlson today https://www.youtube.com/@lexfridman

Yes SMAs but no website, not a registered investment advisor and only have 10 clients and that's all I will ever have (edit: could definitely have fewer!)

The only accounts I manage that still have Berkshire in them are fully taxable accounts with very large positions in Berkshire shares at very low cost basis. The type of position those account owners intend to transfer to their heirs and chosen causes on death. I can't do much with it without causing them a bunch of problems but it counts towards my investment performance so I do what I can around the edges and borrow against it in reasonable amounts.

I believe this was his last update. Hopefully he ended up with enough to pay the tax bill

Thanks for posting @netcash1 - sounds like this deal would be more relevant to Fairfax Financial than to Fairfax India but an interesting data point nonetheless. Seems like Fairfax should be allowed to take majority ownership of Digit. I wonder what is holding it up behind the scenes.

I sold just about 10% of the total shares for accounts that still own Berkshire. Even after selecting the highest basis shares possible (~$71.85 / b-share in these accounts) there is still a significant tax consequence to selling shares. But 10% is a lot of money and still a lot of tax will be owed. I don't personally own a lot of Berkshire anymore.

I don't think anybody had to pay back in 2009. It was free to join this forum for many years. But how do you remember a username and password from 2009....

I believe the consensus is Jimmy Haslam #3

I didn't notice any new posters - at least not on this thread? Seems like the usual suspects.

Let's let him cover first

For those that like to read BHE's own 10-K it is here: https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/71180/000108131624000003/bhe-20231231.htm

Well I would just like to say thanks for the post nwoodman! I had just woken up, let out the puppy, and saw your post and said "What the fuck is the market doing??" and ran upstairs to start dumping BRK shares pre-market. Sold from 430 all the way down to 424. No clue what that market reaction was but I was like, "did they read the same report as me???"

You didn't ask me, but here's a hint - just think of all those building code books around the world that require the purchase and use of hundreds of little pieces of bent metal - it's better than auto insurance!

He has received his entire cost basis back in dividends and retains an extremely profitable, durable enterprise that has comparable valuations (UNP = $155 Billion, replacement cost ~$500 Billion ??) that are favorable and the "capital eating enterprise" continues to pay out several billions of cash every year in tax free dividends to the owner. I think it was a once in a lifetime opportunity to buy an irreplaceable productive asset that is almost impossible to buy out of the public markets. He was pretty psyched.

I think it would be a good question to ask at the annual meeting and I think Warren would answer it. If I had to guess I would guess that it was a combination of the railroad not counting for very much in terms of insurance regulatory capital (something like $40 billion) vs. various valuations in the real world between Berkshire's stated $85 Billion and UNP's $155 Billion market cap currently. You combine that with National Indemnity's absurd overcapitalization and it wasn't important to have BNSF in there, but also that is where the billions of dollars in annual dividends would end up (and have been landing). BNSF pays a lot of cash out to their owner every quarter - in stark contrast to Berkshire Hathaway Energy. (I don't know what all this talk about BNSF consuming capital at Berkshire is about - they have paid out the entire purchase price and more in cash dividends) But since it wasn't important to National Indemnity's capital (Nat. Indemnity's capital barely changed after BNSF was removed because of stock market fluctuations and the fact BNSF was only counting for like $40B.), the decision probably was about bulkheads and fortifying the structure of the enterprise. Every time you can add bulkheads and non-recourse walls below the holding company level you increase the resilience / bulletproof-ness of the whole enterprise. There aren't any tax consequences so no real downside. National Indemnity is in no way capital constrained on the business they can write. I think National Indemnity is where the original stock position in BNI was accumulated and National Indemnity is where there was plenty of money to come up with the cash portion of the merger consideration. So it's kind of an accident of history that BNSF was always a wholly owned subsidiary of National Indemnity. I don't think it was some master plan that the railroad should be in the insurance company.

Don't hold your breath on Berkshire exiting BHE. He specifically alluded to the bulkheads within Berkshire Hathaway Energy in the letter. It's just a message to regulators not to count on multi-decade capital projects in the tens of billions absent a predictable regulatory framework. PG&E might not have been in a good position to negotiate, but Berkshire isn't a helpless patsy here. These are decisions for the communities. Berkshire will be fine no matter what. I highly doubt it will ever happen, but if pacificorp were to disappear to creditors 10 years from now I don't think it will be a big deal for 2034 Berkshire Hathaway. But I would bet that someone figures out you can't treat the utility this way and expect what you got in the past.

For the US holdings this is the shortcut I use for the 13F holdings. https://www.dataroma.com/m/holdings.php?m=FFH For the Canadian, International and OTC type holdings I use the company reports and Viking puts out some nice summaries.

For those that didn't feel the letter was a little dour or whatever - consider the juxtaposition between prior years' "our managers are all star hall of famers" with this year's "we've had our share of disappointments." Buffett's well-well worn, "tap dancing to work" with this year's "managing Berkshire is mostly fun and always interesting." Mostly fun??? I believe him but that is a change in his public tune. I had to throw some italics in my post to honor the hundreds of italics Buffett used in the annual letter this year. The man likes italicized words almost as much as Prem likes exclamation points!

It's not every Berkshire annual letter that goes into graphic descriptions of suicide.

An additional $2.376 Billion increase in the reported cost basis for equity holdings in the "Banks, insurance and finance" category since end of Q3 - for those handicapping what the confidential security (or securities) could be.

Berkshire paid the Haslams $2.6 Billion for the final 20% of Pilot Flying J in January - that was the result of the settlement that we didn't know previously. Maybe now that PTC is a wholly owned subsidiary they can see about refinancing or eliminating that $5.8 Billion in bank loans costing 7.2% currently. Sticks out like a sore thumb in Berkshire's schedules of borrowings (which are otherwise a thing of beauty, a masterclass really).

It has to be disclosed on the 13F date where they do not ask for and receive confidential treatment because they are no longer actively conducting a "buying program." (on the date of the 13F filing, not just the quarter end) If they go above 5% voting control I believe they have to file a 13g regardless of the above.

This is dollars worth at current valuation or shares?

Well if he plays his cards right there could be $3,000 to $7,000 in it for him - annually! Boom