gfp

https://static.ew.wbm.infomaker.io/wp-content/uploads/sites/4/2023/10/Baden_Baden_Daily_One.pdf?utm_source=listrak&utm_medium=email&utm_term=Download+issue+one%3a+22+October&utm_campaign=Welcome+to+our+Baden-Baden+2023+Day+One+edition%3a+Sunday%2c+22+October link to a free insurance industry publication with several interviews and recent color on industry expectations (from Baden Baden conference)

That storm ain't headed TO the US! It is currently heading towards the US but that ain't the same thing.

And, cough, Berkshire. Shorter than them all.

Yeah, same deal with Berkshire - stock is down and hurricane season and their several billion dollar profit are pretty much locked in - plus a huge amount of cash earning 5.5% vs negative cost funding. Sometimes it takes an earnings release to wake people up

I don't think Sokol is as problematic as many seem to. I don't even think Warren and Charlie were that upset with him. The Holmes letter was just because he is very active in the Horatio Alger society and had gotten to know her through that group. Personally I think the relationship between Fairfax and Sokol will be a big positive for Fairfax. Aviation Gin already worked out well for them together.

I think there is a lot of demand across the curve for treasury securities with a 5 handle. This year's bond market (and maybe the stock market as well) is shaping up to rhyme with 2018.

He got the Korean book from his brokers at Citi. I don't think anybody has ever shared a pdf of the book but I don't think it is a regularly published manual. If someone here works at Citi maybe they can ask around and track down an old version.

And check out the price at my gas fill up this afternoon

Just curious as this relates to the job openings figures vs. actual hires - are these non-responses listed job openings that make it look like they are interested in filling an open position?

I wonder why he says he hasn't sold a single share and then at the end says "I and/or others I advise do not hold a material investment in the issuer's securities."

It doesn't get much better than that! Hope you like your house and want to stay for a long time

Sort of annoying that Charlie can't be bothered to convert the A shares to B's before he donates them but I'm not in a position to advise Charlie LOL.. Maybe he told the Huntington to convert them to B's before they sell any.

Anecdotally, I have noticed more than a couple of our tenants taking on second jobs in the last month or so. I get the sense that savings are depleted for our tenants. Slight increase in bounced rent payments from timing issues with the bank suggests there wasn't much padding in that account before the paycheck cleared. I certainly don't feel like I can put through rent increases at the moment, despite the increases in insurance and property taxes. I think inflation has settled around 2.5% and that should be fine. There is no reason to set off an unpredictable domino effect of economic weakness just to tick off (and likely blow right through) that last 50 basis points.

I don't know why they decided to do it, but it would be a good question to ask at the next AGM. As far as insurance capital goes, it wasn't a very efficient use - they only received regulatory capital credit for book value for an asset that was worth substantially more than book value. But it didn't matter since NiCo is so overcapitalized for the level of business they write. It may have been inside NiCo as an accident of history since that is where they started buying BNSF common stock and writing the naked puts. If I had to guess I would say it has more to do with where the substantial cash distributions go each quarter. If NiCo is overcapitalized he may prefer the dividends go to the holding company and build up there for some future acquisition. Or maybe there was a disagreement with a regulator on owning such a unique operating subsidiary with insurance capital and it complicated things unnecessarily. I don't think there are any tax consequences involved here. The easy line is that this makes it easier to break up Berkshire in the future by spinning off BNSF since "the pickle is now out of the jar" but I don't think that is the reason or at all likely to occur. Could be as simple as building a stronger ship by properly bulk heading each major element of value from each other.

It still feels like you are getting this backwards. Tell me what accounting treatment other than "available for sale" you think is more transparent? Surely not held to maturity??

The book value is like ~$48 Billion. I have no idea where the $82 Billion came from but it certainly isn't a crazy value. UNP is still at around $120B market cap. I don't think there is any way this gets re-marked on Brk's books.

no tax on dividends within Berkshire but the BNSF dividends did go into Nat. indemnity previously so now they will go to BHI parent.

hat tip to rational walk - Berkshire now owns BNSF directly at the holding company and it is no longer a subsidiary of National Indemnity. Doesn't mean much at the moment, except that National Indemnity didn't need the capital (they were only being credited with something less than $50B anyway) and National Indemnity probably also doesn't need the dividends. Either way, the Railroad is no longer owned by the Insurance subsidiary. https://www.sec.gov/Archives/edgar/data/934612/000095015723001029/ex3-1.htm I failed to notice this in the 2nd quarter NAIC filing for National Indemnity, but it was there under subsequent events. Interesting color on what BNSF counted for inside Nat. Ind. as insurance capital vs. what Berkshire is saying its' "deemed fair value" is on the date of transfer.

It's not a new article - it is from 10 years ago. Here it is: Stewart Horejsi’s business was in a funk. It was 1980, and Brown Welding Supply, his family’s third-generation distributor of hydrogen and oxygen tanks, was battling competitors intent on expanding into its corner of Kansas. While “it was a profitable business,” says Horejsi, 75, who lives in Paradise Valley, Ariz., “the competition just grew.” Frustrated, he bought 40 shares of Berkshire Hathaway for $265 each with the company’s cash after friends told him about Warren Buffett, the company’s then-little-known chairman. He bought another 60 shares two weeks later at $295 and 200 more at $330 a month after that. 5,800 Horejsi’s peak holding of Berkshire shares Today, he’s a billionaire. The 4,300 Class A Berkshire shares Horejsi says he acquired over the years are now worth $745 million; combined with other holdings, that gives him a net worth of at least $1.1 billion, according to the Bloomberg Billionaires Index. In addition to Buffett, the world’s fourth-richest person, at least six current or former billionaires derive their fortunes from the stock. They include Charles Munger, the company’s vice chairman, and David Gottesman, a Berkshire board member and founder of asset-management firm First Manhattan. Until now, Horejsi (pronounced “Horish”) had never appeared on such a ranking, and there are probably other Berkshire billionaires to be uncovered. In a June 2010 Fortune magazine article, Buffett said he knew of two shareholders who qualified for the Forbes 400 list of the wealthiest Americans but weren’t on it. These lost billionaires probably fall into one of two categories: investors in the early partnerships Buffett managed, the first of which was started in 1956; or business owners smart or lucky enough to sell their companies to Berkshire for stock instead of cash. Other shareholders would be billionaires today if they hadn’t given so much to charity, according to Debra Bosanek, Buffett’s assistant. “There are a lot of them out there,” she wrote in an e-mail. Buffett declined to comment. Horejsi got in early and held. He recalls some long-ago gatherings conducted in the cafeteria of Berkshire insurance subsidiary National Indemnity in downtown Omaha. “There were 12 of us on folding chairs,” he says. He enjoyed the meeting so much that “I took friends and planted questions with them to keep” them going longer. Horejsi built his Berkshire stake to 5,800 Class A shares and, beginning in 1998, sold 1,500 of them. A year later he sold the family welding-supply company to Airgas, a distributor of industrial gases, welding supplies, and safety products. He accumulated control of four closed-end stock funds and now co-manages them through Boulder Investment Advisers, his money-management firm. After trailing global markets in the aftermath of the financial crisis that began in 2008, Berkshire stock has surged 29 percent this year as of Sept. 17, outpacing the 21 percent return of the Standard & Poor’s 500-stock index. Buffett has added $11 billion to his fortune this year, more than any other billionaire, according to the Bloomberg ranking. Horejsi shares some habits with Buffett, such as drinking Coca-Colaand eating fudge from See’s Candies, a Berkshire company. He says he’s partial to Costco polo shirts and shorts. He travels on planes operated by NetJets—another Berkshire company—to his other homes, in Mt. Hood, Ore., and Barbados, where he lives in a beachside estate called Bellerive that once belonged to Claudette Colbert. “He’s a believer in Warren Buffett,” says Richard Barr, Horejsi’s fraternity brother at the University of Kansas. “And he’s a firm believer in buy-and-hold.”

But the up-listing fixed everything!?

Is there any actual news for the company or this is just one of those things?

I think Berkshire has a much bigger "bond" portfolio than people realize. It's just that most of it is 6 month paper. That choice was and is available to Fairfax and actually pays better. It's just a choice. Berkshire doesn't care about locking in a certain rate of income for an arbitrary period of time. Fairfax has indicated that they do.

"A couple of insurers do not use ‘available for sale’ accounting. Fairfax Financial and Berkshire Hathaway. " Thanks for generously sharing your work on Fairfax again Viking. I'm not sure I follow your reasoning on Berkshire completely. You state that Berkshire doesn't use "available for sale" accounting but then quote Berkshire has saying "substantially all of our investments in fixed maturity securities are classified as available-for-sale." Anyway, if the choice is between available for sale and held to maturity, it seems like AFS is the more honest accounting treatment of the two. Also for Berkshire's average duration, I believe large portions of the treasury bill position should be included with the 1 and 2 year paper that gets classified as investments in fixed maturities. There is no question that from a bond investment point of view Berkshire has managed the current environment better than Fairfax. What we don't know is if we will feel the same 2 or 3 years from now since Berkshire is unlikely to attempt to lock in current rates for 3 years and Fairfax seems eager to do so. Fairfax is my second largest position and I am (mostly) happy with how they handled the recent rate environment. But while Fairfax was locking up 3.75% reinvestment rates on this year's future maturities, Berkshire was buying 5.5% bills and taking no losses.

good article on the Sogo Shosha from nikkei h/t "BreckHutHigh" https://asia.nikkei.com/Opinion/Warren-Buffett-is-right-to-be-proud-of-Japan-s-trading-companies

It’s one thing to call Verisign a monopoly, but I don’t think anybody intelligent is blaming Warren Buffett for it. 99% of that article is garbage. Berkshire Hathaway, “valuable tax shelter” LOL Bond rating firms are oligopolies with pricing power. Warren repeatedly pointing that out (as a customer who has no choice but to pay their price) is a public service. It’s not his job to decide if it is allowed in our country or not. At least he understands it well enough to point it out.