gfp
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Posts posted by gfp
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Yes -
¥108,500,000,000 0.170% Senior Notes due 2024
¥61,000,000,000 0.270% Senior Notes due 2026
¥146,500,000,000 0.440% Senior Notes due 2029
¥19,000,000,000 0.787% Senior Notes due 2034
¥59,000,000,000 0.965% Senior Notes due 2039
¥36,000,000,000 1.108% Senior Notes due 2049
Berkshire Yen notes offering (~$4 Billion USD)
https://www.sec.gov/Archives/edgar/data/1067983/000119312519239290/d779071dfwp.htm
Am I reading that right; they'll pay less than 1% on average annually for those notes?
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Applied Underwriters sale information -
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/53946178
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Happy 89th Birthday to Warren
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That was great - right on cue. I would cover now
I must say, Trump is such a moron sometimes... just shut up
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Thanks Dynamic. Good job with the formatting!
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Berkshire looks about to borrow in Japanese Yen -
https://www.sec.gov/Archives/edgar/data/1067983/000119312519223905/d783972d424b5.htm
https://asia.nikkei.com/Business/Markets/Buffett-s-Berkshire-to-issue-first-ever-yen-bonds
A team!
Investment decisions and all other capital allocation decisions are made for us and our subsidiaries by our senior management team which is led by Warren E. Buffett, in consultation with Charles T. Munger. Mr. Buffett is Chairman and Mr. Munger is Vice Chairman of Berkshire’s Board of Directors.And a new "conflict of interest" disclosure:
We own more than 10% of the outstanding common stock of Bank of America Corporation, the parent company of Merrill Lynch International. Accordingly, this offering is being made in compliance with the requirements of Rule 5121 of the Financial Industry Regulatory Authority. Because the notes to be offered will be rated investment grade, pursuant to Rule 5121, the appointment of a qualified independent underwriter is not necessary. -
Enjoyed that. Warren seems to talk a lot faster and be a little more opinionated than these days. You see more of the "genius" and a bit less of the "nice sensible guy from the mid west". I wonder if that is a function of age or a function of fame.
Both age and fame of course. If you really want to hear him talk quick the CNBC video archive of his annual meetings from the early years shows a very different Buffett than today's canned responses. He didn't have to worry about every single thing he muttered being plastered on the news and moving markets back then. Remember when there was confusion over whether he had said the US dollar would be "worth less" or "worthless?"
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Various media is reporting snippets from Ackman's shareholder letter - outlining his views on the Berkshire purchase:
https://finance.yahoo.com/news/1-ackman-eyes-more-gains-000843746.html
I suppose a letter will be posted to PSH's website sometime soon, but I don't think Q2 is up yet.
** Nevermind, here is the Q2 report:
https://assets.pershingsquareholdings.com/2019/08/15175158/PSH-2019-Interim-Financial-Statements.pdf
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We once had a 'subject to renovations' commercial loan appraisal come back too low. These appraisals are total guesses based on what they think the property will be worth after it is completely renovated. The banker had no issue just ordering a new one to get the higher number. Maybe that's not the norm. I'm sure we paid the $400-500 again though.
We closed a different refinance yesterday - a 30 year conforming loan (check 30 year rates in the US if you haven't lately - they are really attractive) - where the appraisal came in at what I would estimate is 25% over the market value of the property. It actually caused the lender to require we purchase additional insurance on the property so it didn't really do us any favors.
We all want the lowest value possible for tax purposes and a fair to high value for banking purposes... My wife has succeeded in getting our properties assessed at the lowest in the neighborhood for tax purposes. I think the assessor just doesn't want her showing up in the office again at this point...
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wsj has an article highlighting Berkshire's $100 Billion investment in Banking / financial services. Whats the earnings yield on that $100 Billion?
In February, Mr. Buffett told CNBC that financial companies are “very good investments at sensible prices, based on my thinking. And they’re cheaper than other businesses that are also good businesses, by some margin.”He added that banks benefited from the 2018 changes to U.S. tax law and that even in a low-interest-rate environment, some large banks continue to generate outsize returns.
** in other Berkshire related news, the OXY-APC merger closed on August 8th, so $10 Billion has left Berkshire and commenced earning 8%.
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Well they are not in negotiations to buyout GE at the moment, or Larry probably would refrain from buying his own stock -
https://www.sec.gov/Archives/edgar/data/40545/000123120519000160/xslF345X03/edgar.xml
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The Berkshire A & B shares - bought back since the implementation of "structured" buyback programmes [first max. 1.1 x BV, next max. 1.2 X BV, then [& now] "Mr. Buffett & Mr. Munger decide"] - are they retired? [or are they held in treasury, and thereby constituting potential acquisition capacity [dry powder]]? [Not that I think this would take place at the recent market price levels.]
Treasury stock, at cost
(5,242)
They are treasury shares at the moment. No big difference as mentioned above
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Well he has continued to add Bank of NY Mellon shares for several years. Isn't that similar? Either way, he's not going to own a too-big-to-fail bank outright.
State Street, Continental Building Products or the "Holy Grail"... Starbucks!
He bought a lot of bank stocks, but hasn’t touched the trust banks. I don’t think he has got much love for them.
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Well that ended quickly...
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Yeah I agree on chemicals and aerospace. Berkshire's preference has been for large business to business type industries for a while now. It's hard to do well with consumer products and its hard to get consumer products companies of meaningful size. Berkshire has probably learned its lessons with business to consumer stuff but we'll see. I do think he would take Mars's call and he was willing to do a leveraged buyout of Unilever a few short years ago.
Likely sectors are chemicals (maybe DuPont, or LYB) or aerospace. They have already toeholds in both, so there would be a knowledge base in the company about what to buy. Both are durable business that will not go away.
Buffet sold of PSX, so I don’t think he will venture in the refinery sector.
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AXP; especially if there’s a swoon again similar to the Salad Oil scandal.
I suppose if they were willing to give up their Bank charter. And if they weren't a bank, it would free up Berkshire to acquire Delta without worrying about the Fed fretting over a very material commercial relationship...
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Not sure if there is already a thread discussing what the next material BRK acquisition will be (not including realtor offices and tiny crane operators here, just Billion dollar plus deals).
I'll posit a few whole company buyouts that Warren might consider -
CarMax, KMX
Philips 66, PSX
Home Depot, HD - although it is quite possible that he is completely done with retail
Coca-Cola, KO
DaVita, DVA - although he would probably rather steer clear of the healthcare industry entirely
Honeywell, HON
Boeing, BA
General Electric, GE - in whole or in parts
Mars, Inc - not likely that they would sell
Progressive, PGR - would this deal even be allowed by regulators?
Reyes Holdings - private company
Costco, COST - seriously doubt it at this price and above
Anyone know of some really large European private companies that would fit the bill?
Interested to hear other idea speculation. Helps to pass the time between acquisitions - they are usually not the ones we speculate
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Yeah, I agree - its a strong correlation with float growth but I really think its more of a reflection of the "problem" that money has always been flowing in faster than they can find intelligent places to put it. Float growth has been a material component of incoming cash, and both cash from operations and float increases have to be invested. Mungofitch over at the motely fool board showed how the overall allocation of cash to the entire investment portfolio isn't all that out of whack (I forget, but it's in the 30's % I think).
Warren will probably borrow money as a component of any decently sized acquisition. So, with other assets to sell, Berkshire can realistically afford an acquisition up to, say, $200 billion, if the opportunity presents itself. Maybe he's holding out for Coke. Charlie certainly seemed to indicate it was Warren's dream sub. Realistically, Warren could probably spend more than $200 Billion for the right deal.
In the last few decades, Berkshire has never really been valued based on the potential energy of its buying power until a deal is announced and that potential becomes "kenetic" earnings. No real value is given to the roller coaster chugging up the hill, and then the market suddenly thinks the company is worth more as it coasts down the other side.
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Thanks cigarbutt - hope your daughter is doing well. I think I should add your first sentence to my posts going forward lol
I'll gladly share this info but you'll have to endure the following personal anecdote. -
SU.TO
I was wondering if Suncor was one Berkshire would consider acquiring (in its entirety, they already own a small position). I had noticed a bunch of private jet traffic between Omaha and Kelowna, but since Suncor is not located there I suppose it is unrelated... Only other frequent/recent NetJets trips to Omaha were from Van Nuys.
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Occidental had a big response to their debt offering - "senior to Warren Buffett" is always a strong marketing tactic -
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Are you including the bond portfolio in "cash and equivalents" ? Just curious how you figure $139 Billion as the cash balance
I have taken a good look at the situation reported in the 10-Q now.
It seems that although Float has risen to about $125 billion, the cash and equivalents have increased further to $139 billion.
It seems that with regard to the portfolio, if I take my quarter end value (excluding KHC) and add the 31,081,000 shares of BAC that were added at $29.00 closing price, then subtract the -43,387,980 USG holding at $43.50 Knauf takeover price, I get a portfolio valuation of $200,597 million versus Berkshire's 10-Q $200,516 million based around the previous 13F filings.
I'm usually a little bit out, but it doesn't look as though Berkshire has been buying a lot of stocks net in the quarter.
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Added to BRK.B
Started a position in WFC, pretty much because of the last half dozen or so posts by koshigoe.
http://www.cornerofberkshireandfairfax.ca/forum/profile/?area=showposts;u=9320
Saw this posted on another board today as well
Wells looks good to me. I hope it's correct that Berkshire can stop selling.
Buffett/Berkshire - general news
in Berkshire Hathaway
Posted
Warren is not the type to borrow in advance of a hoped-for acquisition in a particular country. If he wants to borrow to fund a portion of any future deal in any country, there is plenty of time between signing and closing a deal to do so. He has commented on several occasions that he evaluates acquisitions on an un-levered basis, since any debt he would employ to juice the potential returns on a prospective deal is really just using the general leverage available to Berkshire and not logical to mentally assign to a particular acquisition. Despite this, he did chose to borrow a portion of the BNSF cash consideration.
When looking for an explanation for the Euro, UK and Japanese debt offerings I really do think you only need to look at the interest rates on those bonds and what he perceives as a low risk of large adverse currency losses over the life of the notes. Unless he wants to generally inch up Berkshire's general leverage (which he very well may wish to do - or just keep it more or less constant over time with retained earnings factored in), he may elect to have some of the USD notes mature without being rolled over.
None of it is really material to Berkshire at these numbers and I have long said that a big part of his motivation to dabble in these offerings is his desire to raise Berkshire's profile in the business communities in these countries he would be thrilled to be offered more wholly owned businesses in. That and his life-long fascination with negative cost leverage (or capital with a reasonable expectation of near-zero cost). Did he have to offer the SQUARZ? No, it was Warren messing around. Did he have to sell billions in premium of index puts and deal with the mark to market fluctuations? No, it was Warren dabbling and proving a point (that he looks to have proven with a combined ratio of near zero on the billions in premiums).
Apple, Proctor & Gamble and others borrowed in Yen recently and nobody speculates that they are imminently announcing a deal for a Japanese acquisition. Investment Bankers are out there actively pitching this idea and the cost of borrowing is the primary attraction. BRK just put out 5 year paper at 17 basis points before the tax deduction. 10 year paper at 44 basis points. Interesting times