gfp
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Posts posted by gfp
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17 minutes ago, woodstove said:
gfp... Ok, thanks for clarifying. I did not know that. My main source of BYD news is Mazor's Edge website. BYD seems a company that keeps making good moves, getting market share, etc. I can understand reducing exposure to political risks, if any, but as a valuation call on the business, it seems inconsistent. However, that's why WEB et al are driving this bus!
That's a cool website, I had never heard of Mazor's website. Reminds me of the old Brk News email feed that used to come out of France years ago.
As for a valuation call being inconsistent - selling stock doesn't mean you are going to be correct on the future stock price moves, but Warren has a lot of experience looking at $100 Billion USD market cap companies. Call him old-fashioned but he likes them to earn more than $1 Billion USD per year. He wasn't thrilled about paying 100x earnings for treasury bonds either. He wouldn't have made the initial BYD investment without heavy prodding from others in the first place. He wouldn't even let the Costco position ride.
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1 hour ago, woodstove said:
I'm no expert on BYD, etc, but here's my simplistic take on why a BYD partial sale:
-- When originally investing in BYD, WEB/CTM wanted to buy 25 pct position, founder wanted them to limit to 10 pct.
-- Over time, due to BYD buybacks I presume, position crept from 10 pct to 20+ pct. Likely WEB/CTM were asked to reduce position to below 20 pct -- their role is to be silent partner. So they sold 1 pct as a courtesy. I do not expect a big further reduction in BYD position, except to keep below some threshold (something between 10 and 20 pct) as a fraction.
-- Still a great business, and getting better all the time. Why not continue to hold as big an economic interest as BYD is comfortable with?
Interested in others' takes on the business logic, as distinct from tax implications, etc.
Unfortunate that had to telegraph the possibility of selling, but I imagine the securities laws in China require a partner who wants to register a holding as available for sale, to register all shares held?
Thanks!
Berkshire was only 20% of the Hong Kong listed share class, not the entire company. Berkshire's ownership percentage has gone down over the years, not up. Berkshire originally bought 10% of BYD and it became 7.7% over time with dilution. After the first two batches of disclosed sales, Berkshire holds 7.1% of BYD.
I would bet that this sale is a valuation call and that it is more than a courtesy trim. Over time I would expect more shares to be sold.
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2 hours ago, Dynamic said:
Do we think BHE will have to pay tax on their realized capital gains in BYD Co Ltd (HKG:1211)?
I'm wondering whether their accumulated wind and solar tax credits might reduce or even eliminate the tax liability on the realized gains. I have only the most basic understanding of US corporate taxation so I'd appreciate any better informed thoughts from the hivemind.
BHE has an extremely negative tax rate and consolidates taxes with Berkshire. So ultimately the capital gains tax gets paid by BHE. It will have the effect of reducing or eliminating the tax benefit that Berkshire receives from BHE for a bit. It may be material to the Scott family minority shareholders, but those shareholders selling back shares to the company may also be one of the reasons for liquidating some BYD shares. We'll find out later.
No state capital gains taxes will be due because BHE holds the BYD shares in a Nevada LLC called Western Capital Group.
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Yeah they always used to say that hot blond girls in red cars got pulled over most often. Not sure if that is still a thing. Do people still get pulled over in 2022?
I remember many years ago it cost me a bunch more to insure a Land Rover defender because of the damage they felt it would do to the other vehicle in a crash. Or at least that's what someone at USAA told me. Now everyone in the U.S. is driving around in huge full size trucks and SUVs so it probably isn't a factor.
My elderly mother has had more accidents with grey and charcoal colored cars so she stopped buying that color.
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There is a reason the school bus is the color it is. This is not groundbreaking research
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5 minutes ago, NeverLoseMoney said:
I think they only have to report the individual trade that puts them below a reporting threshold, not all the trades that happened before that final trade. That's why the trades that put Berkshire slightly below 20% and slightly below 19% were reported. Not sure what those thresholds are exactly in Hong Kong, but I think that's how it works. If you go below 5%, you don't have to report any further sales IIRC.
Yeah It's something like that. That's why there were no further filings from Li Liu after he crossed below 5%
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BHE is down to 207.14 million BYD shares (HK:1211). For whatever reason the number of shares sold being reported by the press are consistently understated because of the way the filing form rules work for the HK exchange.
Berkshire Hathaway Energy has realized at least $615 million USD in proceeds from selling BYD shares as of 9/1. They have sold 17.86 million HK:1211 shares.
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Yep, Berkshire Hathaway Energy has started selling some BYD.
1.33 million HK shares so far.Not terribly surprising and possibly a Greg Abel decision. Maybe some of the capital could be used to repurchase BHE minority interest.Happy Birthday Warren! Seems like there is a hurricane and no electricity every year, so it's nice to have power for a change on 8/30 lol
Here is the filing:
So it looks like they have sold about 6.3 million shares in total. 225m shares held for years, now showing 218.719 million held as a of a few days ago. Could be lower today.
Interestingly, it looks like Berkshire Hathaway Energy has sold at least $220 million USD worth of BYD as of this filing date. A bit more if the realized prices were higher.
By the way, BHE's BYD shares are held at a Nevada LLC called Western Investment Group. Nevada has no state corporate income tax, which is why Apple holds substantially all of their investment dollars in a Nevada subsidiary.
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18 minutes ago, petec said:
To an FFH shareholder there’s no difference assuming the price paid is the same.Not exactly. You can see this dynamic with Berkshire's BHE subsidiary. So far, each of the BHE share purchases have been BHE repurchasing their own shares - including the recent cash deal with Greg Abel.
If the subsidiary repurchases *all* of the minority interest in a repurchase, there is no difference. But if a subsidiary only repurchases some of the minority interest, all remaining shareholders get an increase in their interest, not just Fairfax.
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Pilot made an investment in Kodiak Robotics (driverless truck start-up) and got a seat on the board -
https://www.ttnews.com/articles/pilot-kodiak-partner-autonomous-truck-services
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1 minute ago, Parsad said:
With $300B of new liquidity being provided by the student debt relief program, I can't imagine consumer spending not being great through Q3, Q4 and into next year.
If you've piled on a ton of student debt, you probably aren't averse to piling into more debt on your line of credit, HELOC, credit cards or refinanced mortgage.
I can see retail, car sales, travel, etc all doing well for the next year...since you've got to reward yourself for knocking off $10K of student loan debt from your $50K or $100K of student loan debt outstanding!
I would imagine less than 25% will actually use this as an opportunity to get ahead and pay down more debt...the rest will spend an equivalent amount elsewhere. Cheers!
All that matters to a lot of these people is the monthly payment amount. For a lot of people the monthly payment will barely change from a $10k reduction to total loan balance. I don't think it will have a huge effect.
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2 hours ago, Munger_Disciple said:
I am willing to take the other side of this bet: there is no way Berkshire or other companies are going to pay tax on unrealized gains. The "book" income (of unrealized gains) already includes deferred taxes payable. So, govt will get its cut when the gains are realized.
I agree. First thing I thought when I saw that Barron's article everyone was freaking out about was, "not gonna happen." Same with green energy production tax credits that result in a massively negative tax rate for BHE (not in jeopardy from this law).
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Noticed this bit of news, no idea if it’s a big deal or not:
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On Friday we revealed a major data breach at Fairfax-owned specialty carrier Crum & Forster.
Hacking group RansomHouse is understood to have exposed sensitive financial and medical data including detailed information relating to customers, trading partners, and employees.”
-insurance insider weekend recap
I wonder if an insurer who writes cyber coverage also buys cyber coverage for themselves
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Yeah, weekly options have really juiced up Fridays since they were invented
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You can read the document I attached in the post above yours. It is just an approval for going up to 50% ownership of OXY through secondary market transactions (open market purchases). It keeps him from being capped at 25%, which is what he had prior FERC approval for.
It does not mean Warren is suddenly going to bid for a bunch of OXY stock or pay much more than $60 / share but you never know.
It specifically is not an approval to purchase the entire company, although I'm sure they could get approval for something like that if given enough time.
I don't think Warren is in any hurry to exercise OXY warrants unless Occidental was going to pay some crazy high dividend on their common shares.
(I took advantage of this opportunity to sell most of my OXY warrants (the 22 strike 2027s) over $48/warrant.)
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26 minutes ago, BiggieCheese said:
I don't have the original FERC documentbut there is thisedit - this is the file (attached)
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1 hour ago, ValueMaven said:
FERC document shows Berkshire requested and was approved to accumulate up to 50% stake in OXY (from current 18.72% stake) (Occidental Petroleum Corporation)
This is interesting because Berkshire already had received FERC approval to go up to 25% ownership in OXY (they are a hair above 20% currently unless there is a filing tonight). In case folks are wondering why FERC would even be involved, Occidental owns a company called Occidental Power Marketing LP that provides power to the Texas market and since Berkshire owns utilities it had to get various clearances from FERC (Federal Energy Regulatory Commission)
edit: also OXY owns a power plant and an intrastate pipeline:
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Occidental Chemical Corporation (OxyChem), an indirect, wholly owned subsidiary of Occidental, owns and operates the 894 megawatt (MW) Taft cogeneration QF (Taft Facility) located in the Midcontinent Independent System Operator, Inc. (MISO) market. OxyChem has executed a power purchase agreement (PPA) with Entergy Louisiana, LLC (Entergy Louisiana) for the sale of capacity and associated energy from the Taft Facility for a term expiring May 31, 2028, and the remaining capacity of the Taft Facility serves host load at the company’s adjacent chemical complex with any excess available for sale at wholesale. OxyChem has been granted market-based rate authorization. Oxy Salt Creek Pipeline LLC, an affiliate of Occidental, owns approximately 38.6 miles of intrastate natural gas transportation pipeline located in Kent and Scurry counties, Texas."
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tickers alone don't work for search, so I always type something like "CLF Cliffs" or "ATCO Atlas" and that works for me. Search has always been kind of bad on this forum.
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Since the site makeover I have just used this link and looked at the most recent posts chronologically (similar to your link but not just unread)
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1 minute ago, yesman182 said:
Are you saying that if I want to know the total ownership Berkshire has in a stock I need to combine the holding in the Berkshire 13F and General Re 13F?
The second 13F is called New England Asset Management and you only count the securities with the "01, 02" designation in Column 7. But yes, it is part of General Re and it is disclosed in the main Berkshire 13F as containing additional securities owned. The rest of the NEAM 13F (those that don't have "01, 02" next to them) are not Berkshire corporate holdings.
https://www.sec.gov/edgar/browse/?CIK=1004244
https://www.sec.gov/Archives/edgar/data/1004244/000108514622003133/xslForm13F_X01/infotable.xml
That's how you get to the correct ownership of stocks like Apple, Chevron, BAC, HPQ, etc etc
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As usual, every major media outlet misses half the Chevron share adds and 100% of the additional HPQ purchases that Berkshire just reported because they happened inside General Re. Even though the HPQ purchases were publicly disclosed in April and they all wrote articles about it.
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If you include multifamily residential real estate in your definition of 'living off your investments' then yes, I have been doing that for over 20 years. My last job with an actual paycheck was in the year 2000. I don't run investment portfolios with much, or any, idle cash but you certainly want to have cash in your actual bank accounts. I like to keep a year's worth of expenses in the checking account. It is very difficult to behave as you should in a weak stock market if you have nothing else to live off of and no income coming in. Having cash in the bank and rents arriving promptly each first of the month is very helpful in bear markets. Like Gregmal mentioned, real estate investments also complement exchange traded investments because they are very easy to access liquidity from. We keep undrawn lines of credit on valuable under leveraged properties and we pay to renew them over and over even though we haven't drawn anything. This ensures you can seize time sensitive all-cash opportunities and also deal with any occasional disasters that come up. On paper it looks like we are wasting the money we pay to banks to keep these lines open, but having the liquidity is very valuable.
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Did you or anyone else here end up attending the Boston Omaha annual meeting? Would love to hear anything you learned at the meeting.
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1 minute ago, aws said:
They own about 9% of Ally now, that's a pretty large purchase. I wonder why they didn't have to report it earlier when they crossed the 5% threshold.
You don't have to report 5% in a hurry like you do with 10%. Maybe once a year or something like that.
Buffett/Berkshire - general news
in Berkshire Hathaway
Posted
Poor Susie had to sell an A-share just to have some folding cash for the bills.
https://www.sec.gov/Archives/edgar/data/0001891497/000089924322030098/xslF345X03/doc4.xml