gfp

I've had quite a few newer investors ask me about Berkshire's "big buyback" policy and it seems like folks expect this to be ongoing. Looking at Page 47 of the 10-Q, it is very clear that this level of buyback was extremely price sensitive. Look at these average prices and the average prices likely achieved during the month following quarter end. Berkshire is likely back to their dribs and drabs at $215/share. I had folks extrapolating $30 Billion annual buybacks to me...

You definitely could be right on the stock moves - but I don't think Berkshire would have to file a 13D. I've been surprised before when I thought Berkshire needed to file at 5% and never did. Apple - as a recent example - BRK never filed anything when it crossed above 5%. I've read the 13d and 13f rules in the past and thought they indicated Berkshire had to file at 5% and yet BRK doesn't. Maybe the quarterly disclosures of holdings are enough for BRK unless they intend to go activist or something. Or maybe there is a carve out for Insurance companies. I don't know the reason. He would show a loss on JPM, so selling it would fit the tax loss selling narrative. He could have also dumped BK. We'll find out in a week I guess If Berkshire had sold out of WFC, surely they would have had to file a 13D to indicate that their stake is below 5%? I think he probably sold quite a bit of WFC, but I wouldn't be surprised if he blew out JPM entirely. Out of all Berkshire's financials, JPM are probably the most exposed to unsecured consumer lending, which is probably not a place where you want to be in this environment.

I put it in the very first post in this thread. No material change in Berkshire's Apple position. You take $91.5 Billion and divide by AAPL quarter end closing price, $364.80. This spits out the number of shares owned by Berkshire - approximately 250.8 million shares. Which is unchanged. Dataroma is not going to show an accurate share count for some Berkshire portfolio positions, but the Annual Report does, and the thread on this site on Berkshire Holdings also shows accurate holdings. Heck, here we go : AAPL closing price EOP 2020Q2 : 364.80 [source : Yahoo! Finance] AAPL shares held EOP 2020Q1 by Berkshire : 245,155,566 [source : Dataroma] AAPL shares reported by NEAM EOP 2020Q1 :1,452,250 + 3,578 [= 1,455,828] [source : NEAM 13-F/HR EOP 2020Q1] Total : 246,611,394 Calculated market value EOP 2020Q2 : 246,611,394 * 364.80 = 89,963,836,531. "Big Four" comment states "$ 91.5 billion". So there was added to the position during 2020Q2?? [ 0_0 ] -Did I get it right?

Berkshire's cost basis on the WFC shares it still held in 2020 was/is $20.365 / share. There won't be a loss if they have in fact been sold.

He literally placed an ad in the annual letter with a phone number to call and specific times of day to call with your offer of stock. Its been years of repurchases now and the main complaint has been that he didn't buy enough volume. Then the price went down for more than a couple days.

Be sure to back out the GEICO windfall and look at operating businesses that way - there is definitely some carnage but Berkshire has plenty of income streams that are unrelated to one another. PCC is particularly bad, but many were down 20-30%. I assume thats the worst of it. We'll see. If they did sell mostly out of Wells, the dividend cut becomes a non issue. Seems like they are selling the OXY dividend shares as they come in. It will be very interesting to see if there were new purchases in the 13F when they release it.

This interview at 25:15 in the timeline through about 26:51 has Buffett looking awfully coy on selling Wells https://buffett.cnbc.com/video/2020/02/25/buffett-coronavirus-threat-shouldnt-change-how-you-invest.html

It is certainly possible - but the way he was talking to Becky or whoever it was earlier this year made it sound like he wasn't pleased with their pick for CEO and he went out of his way to clarify that when he starts selling something he usually finishes - he doesn't trim and rebalance was the gist of it. I can try to find the quote but it was probably a CNBC interview earlier this year when asked about selling WFC beyond what was necessary to stay below 10%. He got that cagey look and was like, "I must like what I am buying better than what I am selling..."

Not to mention double counting "Insurance" in a major way. But the point stands - if you start subtracting full valuations for big parts of Berkshire from the market cap you are going to get to zero and still have a bunch of businesses left. But conglomerates run by 90 year old one-in-a-generation types probably get a discount in the market. It really is a fine situation to be in - to have repurchases available as an accretive option for Berkshire and to have Berkshire available at a reasonable price for those of us that prefer it to the index at current relative valuations. ValueMaven, How the heck does that math add up? - You seem - at least to me - to be cherry-picking on the asset side & liabilities side of the group balance sheet here.

If you are asking what book value was at the end of Q2, it is $393.495 Billion. On 6/30/2020 that was 163.89 per B share. It is higher currently, if that is what you are inquiring about. There are quite a few moving parts to estimating real-time BVPS, but I would assume it is over $170 per B-share.

It seems fairly accurate. Berkshire's cost basis on the 345 million shares it still had this year was $7.04 Billion - an average of $20.365 / WFC share. We know this from the latest annual report. Berkshire is very careful in selecting which lots it sells, so had likely sold the highest basis lots up until this recent quarter to maximize the tax deferral.

The more you look, the more it seems he must have sold all or almost all of the Wells Fargo position in the 2nd quarter. Berkshire held 345.689 million WFC shares at the end of the year at a cost basis of $7.04 Billion (avg CB 20.365 / WFC share). Berkshire did not sell much, if any, WFC in the 1st quarter (reported Wells as $9.9 Billion at market at end of 1st Q). This note in the section on realized gains/losses shows how the losses recorded in the 1st quarter (as unrealized pass through the income statement) became realized in the 2nd quarter. - from page 11 of the most recent 10-Q: "The losses on securities sold in the first six months of 2020 ($11.2 billion) include losses of $10.7 billion from market value changes in the first quarter on securities that were sold in the second quarter." And as John noted above, the Cost Basis for the equities category Banks, Insurance and Finance declined by $9.681 Billion during Q2. No wonder WFC share price has been so weak! There was a 345 million share seller in the market

More detail on the carnage at Precision CastParts -

One would assume the price dropping back towards $250k / A share got his attention. And of course the economic outcomes seemed to narrow and become more clear. Fed was going to lock BRK out of any type of financing deals, BRK stock went down for more than a couple days, big increase in cash from stock sales in the investment portfolio, etc.

Second attempt - PDF screen shot below of BH Energy's huge and growing negative tax rate. The windmills doing their thing. BHE_tax_rate.pdf

I wouldn't be surprised. We'll find out in the 13-F. He has made several statements in CNBC interviews and the like that he doesn't typically "trim" positions. Once he starts selling he usually finishes. I thought that perhaps WFC was an exception to this since he seemed to be price-sensitive in his sales (he stopped selling earlier this year). But if he blew it out in Q2 that would say a lot.

Yeah - Berkshire actually included it in the Earnings press release for the first time (I believe)

On the resiliency of the operating earnings figure - operating earnings for the quarter is propped up by GEICO's underwriting gain ($2 Billion pre-tax for the quarter) in a major way. They mention that because they handle the COVID "give back" differently than many carriers (they give you a discount for the length of your policy vs. many carriers taking it month-by-month on a wait and see basis), this will result in higher reported profitability at the beginning (Q2) and potentially lower profitability or even underwriting losses towards the end of the period (12 months out from the start of the give-back, since 6 month auto policies will be renewing throughout the 2nd half of this year)

https://berkshirehathaway.com/qtrly/2ndqtr20.pdf At first glance, my impression is that operating earnings as a whole held up remarkably well. $10 Billion goodwill write-down at PCP. No Apple shares were sold during the quarter. Berkshire's share count at the end of the quarter was 1.60064 million A share eq. Berkshire's share count on 7/30/2020 was 1.59214 million A share eq. So he continued something like $2.3-2.45 Billion worth of additional share repurchase in the month following quarter end, before most of the recent run up in price. Year to date share repurchase is somewhere around $9.8 Billion worth (didn't figure this at cost, just ball park using $300k/sh)

We sort of already know it is less than that through quarter end since the filing that telegraphed the ~$5.3-5.4 Billion in buybacks was in July. But maybe analysts are looking for a to-date and not quarter-end figure.

Maybe I should have posted it in the BOMN thread? https://www.sunshinelady.org/sunshine-ladys-charitable-work-for-warren-buffett-clouded-over/

RIP Doris Buffett - Warren's older sister has died at 92 https://www.nytimes.com/2020/08/05/business/doris-buffett-the-familys-retail-philanthropist-dies-at-92.html https://omaha.com/news/local/doris-buffett-philanthropist-and-sister-to-warren-buffett-dies/article_0c8e10a9-b750-5636-96d3-2119e0d0c8c4.html#tracking-source=home-top-story-1

I assume by "W's" you are referring to the junior investment managers Ted and Todd? We don't know what they did after 3/31 so far except for limited cases where disclosure was required. One of them bought more Liberty Sirius for example - https://www.sec.gov/Archives/edgar/data/315090/000120919120032183/xslF345X03/doc4.xml https://www.sec.gov/Archives/edgar/data/315090/000120919120033068/xslF345X03/doc4.xml https://www.sec.gov/Archives/edgar/data/315090/000120919120034157/xslF345X03/doc4.xml and then exercised their rights in the rights offering - https://www.sec.gov/Archives/edgar/data/315090/000120919120035265/xslF345X03/doc4.xml We'll know more later.

I suppose by Americans you are referencing North Americans. I would assume from the handle that the poster was living in Canada - although I am sure there are Raptors fans in the USA. As for the advice - this is exactly the advice I used to always give the type of people that would ask a question like Muscleman did. For most of my friends with more money than sense - it was always the right advice. Fly first class to a wonderful private villa or the 4 Seasons and you will still be ahead of what your beach house fantasy was going to end up costing you and you have zero stress and can change it up every time you feel like it. If you find yourself gravitating to vacationing in the exact same spot every year - by then you will know the market and exactly where you want to buy and you won't be asking vague questions about what might cash flow on a message board. For some people flying private to a rental home was still going to be cheaper than what they were wanting to buy and how much free time they actually had available to "vacation." Since Covid, that has changed and now people appreciate owning a spot they can take over and escape to. There are a lot more arguments lately for owning your 2nd home even though for some markets the rental rates for the rest of the year are depressed by the tourism decline. Still, for the newly wealthy people that I know it is almost never a good idea to own the vacation properties. They just seem to change their minds too often and gravitate towards the most overvalued spots. Muscleman's family is Chinese from his previous posts. This is why the Chinese wind up owning most of the real estate. Because we have had 5,000 years of dealing with land scarcity. Americans has this wide open land mass that allow them to continue to build outward. So Americans tend to think of renting. Either that or Americans are lazy people who spent all their money. They make fun of the Chinese people for speaking bad English and working in the Chinese take outs. The kids winds up saving money and buying the RE who they rent to the Americans. I'm half joking and half serious. But I have seen enough of these stories play out that it's got an ounce of truth to it. Ask any Asian parents for $50k to start a hedge fund and they will scold you for gambling. Ask them for a $250k down payment and they will re-mortgage their primary residence to help you out. Muscleman's quest to look to buy a vacation rental and your response are very telling of the different philosophical approaches to real asset ownership. My $0.02

Yes, of course. Just don't overpay ;)