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gfp

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Posts posted by gfp

    What are you buying today?

    in General Discussion

    Posted

    Yes, several brokers allow this in an IRA, but the puts are required to be “cash covered” or whatever you call it - so not really “naked” like a naked call sale would be. In reality it is basically identical to a limit buy order on the underlying- not too exotic for a retirement account

    Fairfax2019

    in Fairfax Financial

    Posted

    I’m confused by the AGT transaction. Have they lent money to management for an MBO, or bought it themselves, or both?

     

    Both.  They are both a lender and shareholder (controlling shareholder actually, 59.6% currently plus warrants that would bring it to 80%)

    Buffett/Berkshire - general news

    in Berkshire Hathaway

    Posted

    https://seekingalpha.com/article/4258511-berkshire-violated-board-independence-rules

     

    The writer claims Berkshire has violated board independence rules due to related party transactions between Walter Scott and subsidiary Berkshire Hathaway Energy.  Walter Scott's governance committee was taken off the task of reviewing related party transactions.  The Audit Committee now handles this job.

     

    Writer does not appear to understand the math involved in repurchases and equates them to Berkshire Hathaway buying Scott's BHE shares directly as opposed to BHE repurchasing the shares, increasing all remaining shares' pro rata stake.

     

    Board member Greg Abel is also a significant BHE shareholder, with his shares able to be converted into over $400 million worth of Berkshire Hathaway stock.

     

    I believe the formulas for BHE valuation under these transfers is long set in writing.

     

    Personally, I don't care about Walter Scott selling shares back to BHE while serving as a BRK.A board member.  I doubt the NYSE cares either

    Buffett/Berkshire - general news

    in Berkshire Hathaway

    Posted

    Did they say how long the warrants are good for?

     

    "The preferred stock to be issued to Berkshire Hathaway will be redeemable for cash (in whole or in part) at the option of Occidental commencing on the tenth anniversary of issuance at a redemption price equal to 105% of the liquidation preference plus accumulated and unpaid dividends, if any. The preferred stock will also be mandatorily redeemable for cash (in whole or in part) upon certain specified capital return events. Dividends will be paid in cash or, at Occidental’s option, in shares of Occidental common stock. The warrant to be issued with the preferred stock may be exercised in whole or in part and from time to time, until one year after the redemption of the preferred stock.

    "

     

    - obviously this is all moot if Oxy can't close the deal for Anadarko, so Berkshire may still be disappointed.  But this is a very good deal.  The accounting for this type of thing usually has to value the 11 year (minimum) duration warrants for $5 billion worth of OXY stock at 62.50 according to Black Scholes, and then assign the balance of the $10 Billion commitment to the preferred shares.  The warrant is extremely valuable, so the income security is very attractive.  Standard Buffett deal - our customer gets to count the financing as "equity" and we get the income hurdle Warren requires to step off the sidelines.  Sure, OXY can skip dividends (which accrue at 9% then) or pay in OXY stock - but this is a very attractive deal.

     

    Here's hoping it actually closes

    Buffett/Berkshire - general news

    in Berkshire Hathaway

    Posted

    Cigarbutt, I saw this blurb from Insurance Insider and thought I would share with you.  Who knows if its worth anything -

     

    E&S stress points to hardening US P&C market

     

    Gavin Davis, Laura Sanicola, Adam McNestrie

     

    After close to half a decade of weakness it seems the soft market in P&C may be finally breaking.

     

    Although it is too early to make a definitive call, there are clear signs of momentum building for a broader improving US market, albeit with continuing uncertainty around magnitude and duration.

     

    The clearest indicator is the current stress in excess and surplus lines (E&S) markets.

     

    Widely viewed as the industry’s “safety valve”, the market serves as the leading indicator of a hardening market due to its role in absorbing business from admitted markets when risk appetite among admitted carriers contracts.

     

    Multiple conversations with executives across the specialty admitted and E&S market in recent weeks have made clear the E&S market is in rapid expansion-mode, with each passing month showing an acceleration of momentum.

     

    Executives describe the market as among the most stressed observed in recent history – well beyond the modest incremental rate movements in late 2017 and throughout 2018.

     

    Buffett/Berkshire - general news

    in Berkshire Hathaway

    Posted

    They have a voting agreement with DVA as well.  It's common enough.  I think the Fed's demands for a restriction in commercial relationships with WFC was one of the bargaining points that wasn't agreeable to Buffett when he last gave up on seeking permission to allow WFC to push his position above 10%.

     

    FT has an article with Warren this morning -

    https://www.ft.com/content/40b9b356-661e-11e9-a79d-04f350474d62

     

    If you can't read it, try using incognito mode, going through google news and searching google news for "FT Buffett" - it should work

    Buffett/Berkshire - general news

    in Berkshire Hathaway

    Posted

    Yahoo finance has been releasing dribs and drabs of an interview that Andy Serwer did recently with Warren in anticipation of the annual meeting.  The first one was him commenting on negative interest rates and the lack of historical precedent for current conditions.  The most recent release (so far) has his comments on Elon Musk's conduct.

     

    https://finance.yahoo.com/news/warren-buffett-on-negative-interest-rates-and-low-inflation-144529579.html

     

    https://finance.yahoo.com/video/warren-buffett-says-elon-musks-110000649.html

     

    https://www.bloomberg.com/news/articles/2019-04-23/warren-buffett-sees-most-newspapers-as-toast-after-ad-decline?srnd=premium

    Form ADV and a managers ownership in a fund

    in General Discussion

    Posted

    Your link shows them managing $ 1,256,354,000

     

    They own 3% of 257.57 million AVM Ranger USNT BVI ($7.7 million)

     

    They own 20% of 159.667 million AVM Ranger ($31.9 million)

     

    They own 2% of 352.735 million AVM Ranger Qualified ($7 million)

     

    They own 1% of 203 million AVC BJMP ($2 million)

     

     

     

    all approximate.  that's just a few of their vehicles.  Its all in your linked filing

     

    Outstanding Investor Digest

    in General Discussion

    Posted

    Basically no, the business is finished.  But there are various excerpts available online if you search around.  Old stuff. 

     

    https://www.scribd.com/document/136379211/Seth-Klarman-Oid-Interview-March-2009

     

    http://basehitinvesting.com/wp-content/uploads/2013/12/Bruce-Berkowitz-WFC-1992-OID-Interview.pdf

     

    Probably more stuff on Scribd, or filetype:pdf searches through google

     

    The website seems down. Is it possible to access previous editions of Outstanding Investor Digest?

    Buffett buybacks: Could Berkshire tender stock?

    in Berkshire Hathaway

    Posted

    This has been a good continued discussion and I have enjoyed it.

     

    I do not assume anything nefarious with the BRK potential purchases from The Gates Foundation.  Nothing of the kind.  I am confident it would be on the up and up.

     

     

    BUT, CAN SOMEONE PLEASE TELL ME WHEN ANY PRIVATE PARTY SHARE PURCHASE WOULD BE REPORTED?  WOULD IT BE AT THE END OF THE TRADING DAY AS SOME SUPPLEMENTAL REPORTING Date OR SOMETHING ELSE.

     

    How would any above board purchase of a large block of shares directly from another be made known to the public?

     

    Thanks.

     

    Yeah, John answered you but I would add that it is not reportable unless the selling shareholder is a reporting insider.  So if First Manhattan sells a block of stock back to Berkshire, they would have to file a Form 4 within 3 business days because Sandy Gottesman is on the board of directors.  If Charlie personally sold a block back to BRK, same deal.  If Charlie's kids sell a block back to BRK, no filing.  We find out the total repurchase in the 10Q.  Any more detail is at the discretion of management

     

    (correction - Sandy is no longer required to report sales from First Manhattan, only his personal shares which are far fewer as seen in his recent Form 4 gifts of A shares)

    Buffett buybacks: Could Berkshire tender stock?

    in Berkshire Hathaway

    Posted

    Hey John-

     

    The Gates foundation only files periodically, when they rise above or below the 5% threshold.  The most recent filing was when they fell back below the 5% threshold and the link you referenced was an exhibit to that filing -

     

    https://www.sec.gov/Archives/edgar/data/902012/000110465918059501/a18-36147_1sc13da.htm

     

     

    Basically, they are required to sell shares to "facilitate compliance with federal excise tax rules limiting excess business holdings by private foundations" - and when Warren gives them a big block of stock they cross above the 5% level, then as they sell they have been falling back below.

    ----------

     

    A little bit of detail on why the Gates Foundation is required to sell BRK.B shares:  A private foundation is not permitted to control a business.  It is also not permitted to own over 20% of a business (in most cases, including this one).  Seems like no problem, but you are required to add to the Foundation's stake the stakes of any "disqualified persons," which includes both Warren and Bill Gates.  And Warren currently controls 31.4% of the vote and 16.5% of the economic interest of Berkshire.  And Bill owns some personally through Cascade as well.  So they are required to sell to "facilitate compliance" and they are allowed to violate the rules as long as they are selling to work towards compliance.

     

    -------------

     

    One last thing John - that filing you referenced was the most recent filing (when they passed below 5% of the class of B shares, not the company as a whole).  But the proxy statement has an update.  On September 28, 2018, the date of the linked filing, the foundation held 62 million shares of BRK.B.  On 3/6/2019, the foundation held 55,277,174 shares of BRK.B.

     

     

    Thank you very much, gfp,

     

    I have a specific question for you, related to the matter just discussed in this topic. July 24th 2018 you posted the following in the "Buffett/Berkshire - general news" topic [link to post]:

     

    This list shows the gist of how much the Gates foundation sells on a daily basis, for those who are curious -

     

    https://www.sec.gov/Archives/edgar/data/902012/000110465918046338/a18-17436_1ex99d1.htm

     

    I have tried to reverse engineer the URL to find those filings for later periods, unfortunately so far to no avail for me.

     

    So, how do I look them up at the SEC website? - Thank you in advance.

    Buffett buybacks: Could Berkshire tender stock?

    in Berkshire Hathaway

    Posted

    I think that the Gates Foundation has an interest in selling BRK.B shares as slowly as they are allowed to.  They have special permission to sell BRK.B shares as slowly as they are currently. 

     

    And remember, Warren can't really make use of the tax deduction from donating his shares - so it's hard to spin the whole 'Billionaire transfers controlling stake to foundation, takes multi-billion dollar tax deduction, then repurchases the foundation shares with corporate money' angle as untoward.

     

    When he decides to repurchase material amounts of BRK shares, daily purchases in the open market should be enough over time.  I assume he has started doing that after the annual letter came out.  But who knows, maybe he wants to drill it down one more time at the annual meeting to clear his conscience.  Or maybe they buy something enormous this Sunday..

    Getting started as an investor

    in General Discussion

    Posted

    Good advice all around to not blow your inheritance on 'stock market tuition.'  A small portion should be enough to learn with.  If your goal is to slowly move towards a Warren Buffett type approach with the individual companies you invest in, you could do worse than parking a portion in Berkshire at 200/share to take some of the 'index is at the end of a really long bull market run" risk out of your strategy.

     

    Since you mentioned that everything seems fully priced, and you are interested in the types of companies selected by Warren Buffett - take a look at the financials / presentations of BAC and DAL - both look "not overpriced" and are companies that caught WEB's eye for being attractively priced currently.  I'm sick as a dog, so apologies if this post reads weird.  Not sure what I got!

     

    ---------------------

    to benchmark this advice against the index, or -god forbid- "value funds":

    3/29 closing prices

    BRK.B - 200.89

    BAC - 27.59

    DAL - 51.65

    SPY - 282.48

     

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