gfp

A few more details from Bloomberg - "In Asia, Warren Buffett’s Berkshire Hathaway Inc. is set to join the record bonanza of corporate debt sales with a multi-tranche sale of yen-denominated bonds maturing in as long as 40 years later this week. The conglomerate is offering 10-year notes with a spread of 100-110 basis points, about double the 50 basis points it paid to sell similar-maturity notes in September."

re: how do we know when its over - Ubiquitous antibody tests - cheap online through amazon and the like, and then a widely distributed and adopted vaccine. Fully back to normal may never happen. Some behaviors will change permanently. But back to normal-ish could be scalable vaccine availability and adoption

6 mile daily dog walks through New Orleans have been pleasant. Plus the city closed the golf course in Audubon Park so its been taken over by the people. The dog is certainly happy. Another positive (or negative depending on your industry) is that it is very easy to get a good price on a car if you want to buy one right now. It's a ghost town out at the dealerships. They'll take just about any offer to get some inventory off their lot.

love the head shots - suit, suit, suit, suit - guy spier looking like a just rolled out of bed

The prime rate is still 3.25% Still plenty of room to earn a spread

So I just got a letter in the mail from my commercial bank - not a national bank - that the next 3 loan payments are being deferred for everybody. This is without discussing it with us first to see if we wanted to not pay for 3 months. Seems strange to force it on all clients so I assume it was at the very least strongly suggested by the Feds. Will have to ask around and do some research on why they did it this way. The interest will be added to principal and they get to pretend all of their loans are performing in New Orleans right now - which sounds preferable to their reality. Certainly leads to a bing swing in cash flow for the next 3 months. Are other multifamily investors being told similar / same? Yes, the SALT deduction changes definitely impacts RE values in high tax states - NY, NJ, CT and MA. NY probably the worst. LOL. That's likely a reason a friend lost a bid on a house against 5 cash offers two weeks ago. Not. My cousin is not backing away from 900k house in SF Bay Area suburbs. It will be her primary residence. She is not worry about a downturn and said she will buy more as investments if she see "deals." RE investors better have DEEP pocket and good relationships with their banks. I've been hearing from people about investors and flippers about to get caught with their shorts down in a big way soon.

Interesting information guys - thanks. There is certainly some stress at the banks. In about a week's time I saw a friend get a 30 year Jumbo(!) loan at 2.5% and then watch local 30 year conforming rates hit 5% briefly in a liquidity / capacity crunch. In reading articles about the airbnb hosts, I had no idea so many people had built up huge "arbitrage" airbnb businesses where they rent a bunch of units - sometimes hundreds - and host them on airbnb. I knew about the big corporate players doing it like Sonder - but I didn't realize there were so many people trying to build their little arbitrage business with no capital. Makes sense in this YouTube 'learn how to be an airbnb millionaire with no capital ' world.. Those guys are scrambling and their landlords will get hit I'm sure. We have one airbnb and several long term rentals. The airbnb went to zero on march 20th and we have a lot of nurses and teachers as tenants so we will probably fare ok. But I noticed commercial banks dragging their feet on loans / terms / lines of credit this past week. We'll see what this week brings. I'm still expecting to borrow 5/20 at no more than prime plus one, which is 4.25% right now, so perhaps the bankers will not see it that way. (these are 75% ltv multifamily commercial 5 year term, 20 year am rates - the standard for my market) Certainly happy to have the single family house we recently renovated to sell closed in February. Wouldn't want to be trying o sell something right now. We tried to buy a 7 unit last week that fell out of contract over COVID fears but couldn't make the numbers work at anything close to asking price (mostly because of condition of the apartments, location was phenomenal) - but those 7 tenants had "I'm not paying a dime in rent for several months" written all over them! And their landlord was paying utilities for 5 of the units... Yikes

I agree Precision hasn't been a great acquisition so far - but how are you not impressed with BNSF results compared to purchase price? He's been upstreaming huge amounts of cash out of it every year - tax free - vs a purchase price of a bit over $34 Billion if I am remembering correctly. Plus I think he borrowed like $8 billion of the cash for purchase. He's basically taken the entire purchase price out in tax free cash dividends and has a sub worth $80 billion or something like that. And still takes the cash out every year. The only part I could criticize is the equity issuance but that was the price to do the deal. Better to issue the equity and make the deal vs miss out on such an important acquisition.

Berkshire going about their regular business - with a Yen note offering, size unknown - probably small, routine refinancing https://www.sec.gov/Archives/edgar/data/1067983/000119312520084148/d861445d424b5.htm

Robin Raina over at Ebix has been buying shares and issuing press releases noting they are not aware of anything specific going wrong with their company (other than market related COVID fears). I traded it a bit today, apparently selling out way too early - as it is currently up 66% on the day. Just remarkable volatility lately. I bought at 9.15 and 9.19 this morning. Sold out before this, but currently sitting at 14.50. Bonkers

Yeah he really only addressed the issue with buying Delta and Delta seems like his favorite. Nothing to stop him from buying Southwest if he wanted it and they agreed. He would then likely sell all the other positions similar to how the train deal went down.

I believe it to be true. It was a Berkshire Hathaway Energy deal. "The investment giant was going to provide C$4 billion ($3 billion) for GNL Quebec’s proposed liquefied natural gas plant 290 miles northeast of Montreal, according to Michel Potvin, a city councilor who heads the promotion agency in Saguenay, where the project is based." Bloomberg journalists are usually pretty good at confirming a story with at least one source with direct knowledge of their subject - https://www.bloomberg.com/news/articles/2020-03-05/buffett-drops-3-billion-lng-investment-in-quebec-reports-say The "why" is probably guessing. And of course BHE could come back to the table at any point.

Warren is probably aware of how many Annual Reports the company prints each year. There would be much higher numbers of "look through" shareholders through funds but I would imagine Berkshire and the transfer agent have a good handle on the number of direct individual holders, including the large number held in street name. The BNSF deal and associated 50-1 share split probably added a huge number of individual holders.

1 Billion Euro 0% notes - https://www.sec.gov/Archives/edgar/data/1067983/000119312520062545/d876702dfwp.htm $500 million 1.85% notes - https://www.sec.gov/Archives/edgar/data/1067983/000119312520062590/d876771dfwp.htm

Delta has a presentation out today fwiw - https://www.sec.gov/Archives/edgar/data/27904/000119312520061029/d887033dfwp.htm

An unusual denial by Berkshire - they must really not want people thinking they are blessing this investment - https://www.berkshirehathaway.com/news/mar0420.pdf In other news, the annual meeting will go ahead as scheduled - possibly with curtailed events. Lets keep the old folks away from the germs though please... And - Berkshire is about to sell bonds in Dollars and Euros again. Preliminary prospectus-es (prospecti?) filed. Could just be refinance of maturing debt but will be interesting to watch size.

I also prefer Rum and have been a loyal Fleur De Cana (nica) drinker for many years. I usually drink the 7, 12 or 18 year bottles. As you probably know, 23 year old rum is not actually 23 years old, but blended from rums of different ages. Its like the adjusted EBIDTA of the spirits industry. Zacapa Centenario is 6-23 years old, but even that is probably a fishy statistic.

I thought it was interesting when he was talking about apple - a $75-80 Billion position for Berkshire - that he characterized it as their 3rd biggest commitment after Insurance and the Railroad. Which indicates roughly how he values those two businesses within Berkshire.

Working properly again for me

Yes - several on twitter as well. Zero Balance for all!

When shares vest as part of a compensation plan it is common for the company to keep some of the shares to help satisfy the employee's tax liability because it looks a lot better than that insider employee being forced to sell stock in the open market to satisfy the income tax on their share based compensation. Did that make sense?

Wells is the transfer agent for Berkshire's common stock. Wells also handles a lot of the cash management type stuff for billions of dollars worth of cash and cash equivalents. Wells is an underwriter (part of a group) on most Berkshire and Berkshire subsidiary bond offerings. https://www.berkshirehathaway.com/2001ar/commonstock.html

This finally happened - https://www.wsj.com/articles/warren-buffett-finally-sits-down-for-4-6-million-charity-meal-11581014466?mod=hp_featst_pos2

Just curious - when you say covered put are you short those stocks or are you just planning to keep the cash available through expiry?

I don't blame warren for preferring $576 million of long term financing at 9%. Lee was already running the papers