gfp
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Posts posted by gfp
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14 minutes ago, Xerxes said:
And the likely equity-accounting of Occidental (I think)
It’s tough to equity account for OXY when they report their quarter later than you do. If BRK decides to use that method they may need to do it on a one quarter delay.
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2 minutes ago, Saluki said:
And maybe the new share buyback tax will encourage FFH to do another tender before the window closes.
Proposed share repurchase tax in Canada wouldn't go into effect until 2024, right?
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I couldn't listen in on the conference call - anyone who was on the call have any notes to share? Thanks
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BHE has sold another 10.375 million BYD shares (HK:1211) since the last filing in September ->
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I didn't realize David Sokol had recently co-authored a book as well - here's the link (I haven't read it yet obviously)
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6 minutes ago, Canalyst said:
Anyone know if any longer form article about Trott or BDT?
There have been a few over the years but I don't have any links handy. Here is an introduction from Horatio Alger association that covers the basics. (there is also a video) -
https://horatioalger.org/members/member-detail/byron-d-trott/
Interesting that BDT is proposing to take Weber private again at $6.25/sh. shortly after IPO-ing it at the height of the home grilling bubble at $14/sh.
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Reuters released an article on BHE’s salton sea lithium extraction project -
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1 hour ago, yesman182 said:
I was wondering if WEB would sell his ATVI shares and buy back more BRK shares. At most he stands to make ~25% before taxes with ATVI. But since the ATVI deal isn't certain to close, why "risk it" when you have the buyback as an option. When they were buying ATVI in Q1 is seems like the BRK shares were near the all time high. It seems to me that the BRK shares are around 20% below intrinsic value and it seems like they are a better buy than ATVI.
I doubt he is capital constrained to the point where it's a 'one or the other' situation. But, yes, that's why arb spreads tend to widen out when stocks are hitting new lows. People sell what they can to raise funds.
Warren has the Alleghany check to write some time soon, then a Pilot Corp. check to write in January and has moved some of the cash into slightly longer dated treasuries.
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These articles ignore the fact that the implementation of the minimum tax law hasn't been written yet. There is no indication they intend to negate renewable energy tax credits, accelerated depreciation for investments in US PPE, or introduce a new tax on unrealized gains on securities inside insurance company investment portfolios.
I wouldn't expect Berkshire to have a huge change to their cash tax rates when this thing is finally implemented.
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5 minutes ago, james22 said:
OXY below $60, should we assume BRK is buying again?
We should find out Tuesday night if they started buying again on Friday. I wouldn't assume they are equally as eager but it wouldn't surprise me either.
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This article goes a little bit into the history of the West Virginia BHE/PCP deal. Letter to Buffett, Buffett forwards it to BHE. Bill Furman goes out to West Virginia to tour sites. Sounds like the other tenants of the microgid industrial park will be feeding into or taking off from the Timet plant.
https://www.sfgate.com/news/article/A-letter-to-a-billionaire-sparked-a-W-Va-17464001.php
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Bear market Friday! Buying EQT, longer dated BRK in the money calls, CLF, Covering some SPY short, Fairfax at $614cad.
Looks like a good day to pick up some of Gregmal's EPSN as well
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12 minutes ago, whatstheofficerproblem said:
Thank you guys!, that explains why they are so cheap relative to the $90 strike. But then if I buy $90 strike for 3.35 per option expiring in Jan 2024, and the deal closes 2023 July for $95, wouldn't I make like 140%, I'm trying to make an arb play with max profits as opposed to the standard 25% I'll get for just owning the stock outright. Will this work?
In your example, if you pay $3.35 per contract for the 90-strike and the deal closes at $95 you would have a profit of $1.65/per share (x100 per contract). This would be a return of about 49%. No idea where you are getting 140% from.
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The "option profit calculator" doesn't know the security ceases to trade after the deal closes or that there is a cash merger deal on the table. If the scenario you lay out occurs you lose 100% of your money buying a $95 call.
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Just one data point, but I filled my tank up yesterday at $2.89 / gallon in New Orleans East. Ghetto as hell but hadn't seen that price in a while.
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30 minutes ago, Libs said:
Good topic, and it hits close to home.
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Anyway, that's my story. The whole PA VS OPA thing is very complex.
Thanks for sharing your experience Libs. So should I avoid concentrating other people's life savings into Biglari Holdings at these prices? Asking for a friend
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On 9/13/2022 at 9:34 AM, gfp said:
Who says there are no synergies between Berkshire subs - Greg Abel will probably be better at keeping his ears open to opportunities to collaborate -
This announcement is pretty interesting because it is something totally new for BHE. BHE Renewables will be the owner/developer of this 2000 acre industrial park and Precision Castparts / Timet will be the first tenant to locate there. But PCP doesn't need 2000 acres. So this is actually a bigger development than just BHE buying PCP's factory site. The park will apparently be marketed to additional tenants - kind of like the parks that the Iscar founder Steph Wertheimer developed after selling his company to BRK.
Also odd / interesting because it isn't very sunny in West Virginia. I think it's like 48th in the states for sun so it's an odd choice for a solar powered industrial park. Maybe the solar won't actually be generated on site? Or maybe that's why they need so much land LOL
One thing is for sure, there must be some hefty tax incentives on the table.
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1 hour ago, yesman182 said:
I think Geico is doing exactly what they said they would do. They said they feel they can have a leading underwriting profits just by asking questions at the time of application. They also said they would pay close attention to telematics and integrate them into their business if they prove to be better over time. I don't think its a big deal if they are a few years late to the party. Its the same story with precision railroading.
Yeah, I think you are right broadly speaking. I do think they started to notice some adverse selection by letting the competition run with telematics for as long as they did. Safe drivers want telematics to save money, crazy drivers avoid telematics. Also, a lot of the items they liked to base their rates on - like credit score - are somewhat frowned upon as a rate-setting tool lately. Despite being just fine as a predictor of claims.
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Who says there are no synergies between Berkshire subs - Greg Abel will probably be better at keeping his ears open to opportunities to collaborate -
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Barron's ran a piece about GEICO falling behind on Telematics - nothing new that I saw, but here it is:
https://www.barrons.com/articles/berkshire-hathaway-warren-buffett-geico-51663013589
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If you take his advice and install the fumoto valves when you do your oil change you will be much happier every subsequent time. I put a fumoto valve on the main oil drain and in my filter housing. Most of you won't have a filter housing, just a screw in filter. No drips!
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20 minutes ago, Gregmal said:
Idk man. There are few things in life worse than messing up a boat launch. Hard pass for me.
Ha! Yeah especially with the crowds waiting to launch at most boat launches these days. Lots of eyes on you! My mother couldn't back up a vehicle to save her life (without a trailer), so I've been the one to launch boats since I was 11 years old. Got US Power squadron boat license at 12. I may be better in reverse with a trailer than I am headed forward by this point - but you definitely want to be in a vehicle that can handle the size of boat you're dealing with or it can go real bad real fast!
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Good summary Dynamic. Yes, Berkshire still holds over 5% of each of Marubeni, Mitsui, Mitsubishi, Itochu and Sumitomo. But it is important to remember that Berkshire has paired that Yen currency risk by issuing Yen denominated bonds to fully fund the investments in these high dividend paying, international commodity-exposed investments. It was one of those clever float-like things that Warren does from time to time that won't move the needle but keep his brain active. Hopefully this one goes better than the SQUARZ lol. So far it has gone very well for Berkshire.
Berkshire is at 92% ownership of BHE because Berkshire didn't buy out Greg Abel, BHE did (as a share repurchase that also benefits the Scott family shareholders).
I don't think Berkshire has to disclose the Japanese investments in official holding reports unless it goes to 10% under a blanket disclosure exemption for 'foreign investment firms' as long as it doesn't go on the board of directors or get too involved. They did write letters to each of the 5 companies offering cooperation on energy JVs and such. I wonder if Abel has anything in the works on that kind of stuff.
Buffett/Berkshire - general news
in Berkshire Hathaway
Posted · Edited by gfp
Q3 results are out. Another quarter with only $1B in repurchases will disappoint some. Insurance float up $3B to $150 Billion (will rise by $13.5 Billion to $163.5 with Alleghany included). GEICO had $600 million of losses from Hurricane Ian but the biggest problem for GEICO is that customers are leaving when it increases rates, and it isn't even increasing rates as much as it needs to. GEICO has now been putting up underwriting losses steadily and has slashed advertising and expense ratio. Berkshire Reinsurance only had $1.9 Billion in Ian losses - a very good result showing that Berkshire has really pulled back from Cat reinsurance. Companywide, Ian was a $3.4 Billion pretax, $2.7 Billion after tax loss. BRK's Q3 effective tax rate is over 37% - a short term blip but I guess they can stop writing articles about how BRK will be the biggest loser from the 15% minimum tax on book profit bill.
OXY will be equity method accounted but with a one quarter lag, so Q4 will include a partial Q3's worth of OXY earnings. No OXY earnings included in this release. Gains on OXY stock are not going to increase our book value going forward, similar to Kraft (if Kraft ever had gains..). The OXY warrants will still be marked to market (or more accurately 'marked to model') each quarter, so those gains will show up.
Looks like Berkshire didn't change the Apple holdings and purchased an additional $880m-ish worth of Chevron stock. Berkshire sold $4.7 Billion of cost basis holdings from the Banks, Insurance & Finance category in the quarter. It wasn't BAC or AXP obviously.
Berkshire's equity put derivatives are almost completely behind us. Berkshire's corporate borrowings are a thing of beauty with the foreign currency borrowings all looking like yet another version of negative cost float over their lifetimes.
$11.6 Billion in cash flow from operations for Q3.