gfp

Yeah. They consolidate it so there is a lot of minority interest. Think of it this way, the market value of all of Fairfax India currently is $1.76 Billion, and Fairfax India's market price is way below book value.

I don't understand what you are saying here. You think Fairfax India represents 15% of the NAV of Fairfax Financial or Fairfax Financial's total investment portfolio? *edit to point out that Fairfax's ownership in Fairfax India shares is something like $625 million inside a $57 Billion investment portfolio (1%) or a $16 Billion market cap company (3.9%).

Yes, this has been very explicit from the beginning - Fairfax India will not compete with Fairfax in the Insurance space. Pure insurance companies would go to Fairfax parent company. I own both securities but I will say the main reason to own Fairfax India and not just participate through Fairfax Financial is that FIH.U is tiny inside Fairfax's investment portfolio. You aren't really getting much exposure to Fairfax India by owning Fairfax parent. So if you like the assets and the prospects of the India operation, you can size it how you want by owning Fairfax India additionally. And when you own both the fee structure won't bother you the same - or at least it doesn't bother me (but I own Biglari Holdings so obviously I have made peace with this type of incentive payment when it is based primarily on performance).

I think Ajit said at worst they would "take a loss of $15 Billion" and if no major storm hits Florida they could make "several billion dollars." The $15 B number would be across all exposures, up to their limits, including GEICO, boats, etc..

Yeah, I hope you are OK no_free_lunch, but if it's open ended like you describe it can't really be in a two year note or something so I would put it in government securities money market or Berkshire or some combo of the two. Berkshire is tax efficient as well.

Great conference call. Prem pointed out that the $2.4 Billion adjustment from the new accounting rules that discount liabilities would have been offset by approx. $2.4 Billion and cancelled out if they had been running a matched book as far as their insurance liabilities (over 4 years) and their bond portfolio (1.6 years in 2022). So they recorded this big benefit because of how they were positioned. 803.49 bvps + 19 pretax for unmarked fair value + 24 pretax for announced deal gains that closed post quarter end.

So they mentioned that the forward purchase of 3yr treasuries they entered into is locking in the purchase of 3-yr treasuries at a 3.75% rate. So they didn't top tick the US 3-year rate during the quarter by any means. I still like the move.

It was the company that bought this block! Subsequent to March 31, 2023, the company purchased for cancellation 826,321 subordinate voting shares for a net cost of $10.7 million ($13.00 per subordinate voting share) under the terms of an automatic share purchase plan.

Thanks @Saluki that was a good answer

If you aren't able to trade CDS on US Sovereign credit (who is? Why would you ever trust a counter-party on CDS for USA??) you are sort of limited to picking up some extra interest on t-bills like Berkshire is. But that's for a month or two and that isn't big money. It's important to not get your signals crossed when looking at moves that are short-term debt-ceiling related and inferring what that would mean in normal times. But not a lot of opportunity for big trades related to the debt ceiling. You would think there will be a big "catch-up" issuance of treasury paper once they are allowed to again. The TGA will have been depleted and they are running large deficits. So presently there is a shortage of government paper which creates shortages of "good stuff" used as collateral.

Yeah this is an important point. There are two types of "Inflation" and two types of "Deflation." Type 1 Inflation, call it "temporary inflation," is the type caused by Covid-era supply shocks. In a free market system these work themselves out in due time. This type of inflation cannot be helped much by Fed action and raising rates may make it worse. Type 2 Inflation, call it "real monetary inflation," is caused primarily by increases in the amount of "money" circulating in the system, primarily because of fiscal policy deficit spending (but also for many years pre-2008 to the enormous and very fast growing eurodollar market for offshore dollar assets - they don't even try to calculate M3 anymore!). Fed changes to overnight rates are not the best way to handle this type of inflation and might not work at all. Moderating the size of fiscal deficits can work here but do not directly control the entire supply. Type 1 Deflation, call it "wonderful deflation," is a wonderful byproduct of economic efficiency. My microprocessor gets better and cheaper every year, offshore labor reduced prices on consumer goods at Walmart, etc. Nobody complains about this type of deflation most of the time. It's great. Type 2 Deflation, call it "deflationary monetary conditions," is the worst of the worst. This is what causes severe recessions and depressions. This is when money tightens up and if it isn't temporary (in order to rein in a too-hot economy or soak up some over-done monetary inflation of the recent past) it will cause a lot of problems in a modern monetary economy. 2008 was a good example. There are reasons to worry that we are going into a deflationary monetary conditions period now, despite 7% of GDP deficit spending in the US pouring stimulus on the US economy.

Well that didn't take long... Founder and CEO steps down as bankruptcy looms https://www.cnbc.com/2023/05/09/wheels-up-founder-abruptly-steps-down-as-losses-mount-bankruptcy-looms.html

Well the preferred shares in OXY isn't really offering "oil exposure" except in a bankruptcy. If Buffett sells more CVX than he buys in OXY common he will be lightening his exposure to oil. CVX is very large and liquid. The price of oil was already lower in Q1 and CVX had a few moments of price strength early in the quarter. We'll probably be able to tell when and at what price he sold CVX shares at once the NAIC filings are released for Q1.

Well the obvious two are Chevron ($6 Billion) and BYD. The rest will be disclosed in the 13F and insurance filings.

Ajit mentioned them in passing - that TransRe would be run independently the same way they have been successfully run for many years. Warren mentioned in passing that Allegheny's subsidiary was building the big chip plants in Arizona for Taiwan Semiconductor (as they did the Sphere and many other large building projects). There were a bunch of Squishmallows (jazzwares) on the convention floor. I had personally missed that Berkshire acquired Squishmallows in this deal.

https://di.hkex.com.hk/di/NSAllFormList.aspx?sa2=an&sid=2508&corpn=BYD+Co.+Ltd.++-+H+Shares&sd=08/05/2022&ed=08/05/2023&cid=2&sa1=cl&scsd=08%2f05%2f2022&sced=08%2f05%2f2023&sc=1211&src=MAIN&lang=EN&g_lang=en& Berkshire Hathaway Energy sold out another 11.3895 million BYD shares as of May 2nd (around $334 million dollars)

I agree those are all huge assets to Berkshire, although I don't know if we are overlooking that fact here on this forum. I have heard quite a few people here and elsewhere refer to Todd Combs as "a joke" which I found amusing but everyone is entitled to their opinion. If you think Todd is "a joke" at least listen to his NFM podcast interview to introduce yourself to the guy. Berkshire is absolutely filled with extremely talented people at headquarters. Marc Hamburg's team (and Marc himself) are very very good. What struck me at the annual meeting was Warren coming right out and saying that if something were to happen to Greg (like Warren and Greg go down in a plane), there is no next in line identified and the board would be in a tough place. Greg is that good and it isn't super easy to identify the next person. I am comforted that Ted Weschler, Ajit, and Todd would be there and the home office team can run the place just fine but maybe "swim to Greg" is the new "swim to Ajit."

yeah that is about the best part of it. No castle drama, no power struggle - Ajit wants the job he has, which is one of extraordinary esteem in his industry. I hope Ajit wants to work for us for decades more but it is a huge advantage that he does not want the job Greg is doing/will do. I will take lucky over good any day

I don't know if Charlie has told the story before or not, but it was great when he said he used to always fly coach to the Berkshire annual meeting each year and the plane from LA would be full of all these rich Berkshire shareholders headed to the meeting and they would all applaud and cheer when he took his seat in coach. "I miss that." he said Now he flys on net jets. I was also surprised how ruthless Buffett was on "Wheels Up," basically implying that people that gave them money for their jet cards ($1 Billion) would basically lose out (unsecured creditors in line at BK)... He doesn't want to cause bank runs by naming any firm specifically but went straight for the jugular on Wheels Up. I don't know anything about them but it sounded like a SPAC deal from context.

Always tough to know if the kids are just reading stuff their parents wrote, but he shut down her "de-dollarization" question in about 2 seconds. "I don't see an alternative reserve currency available." I was happy to hear Warren clarify several times that it was the size of the fiscal deficits that were risking inflation and not anything from the Federal Reserve. He was not concerned with the size of the Fed's balance sheet. Also interesting that he has been tracking the number of hundred dollar bills in circulation. He was like, "I wonder where they are" and I was hollering "Abroad!" It would be interesting to know how much US currency is physically stored by drug cartels.

The specific mention was Warren reminding us that it was Warren who asked for the deal to buy into BAC on those special terms and he felt honor bound essentially to stay in it. And he likes the management. I’m sure he doesn’t love the securities book but this too shall pass

One important bit of breaking news from the meeting was that Warren came right out and said he would not be bidding for control of Occidental. He may buy more and obviously still has the warrants to exercise but he isn't going to buy Occidental entirely. Someone else might eventually, of course. The other big news was that Jan. 1st renewals were disappointing for Ajit but that they got lucky when April 1st came around and prices had zoomed up and they quickly wrote $15 Billion of Florida Cat risk where they can lose a maximum of $15B this year and could make $7 Billion if no major storm hits Florida.

Pretty funny that Warren called out this exact auction and said Berkshire bought $3 Billion of this 5.9% t-bill

Definitely over the phone and then just crossed on the exchange

Highly recommend this live feed of Hugh Hendry at this hedgeye conference going on right now. Hopefully they post the video from the beginning because it's been great from the start. Love this wacko https://app.hedgeye.com/insights/132814-free-access-a-macro-reality-check-with-hugh-hendry-keith-mcculloug?type=macro%2Cmarket-insights