gfp

Great book and great source material website link - thanks for the heads up on both. One correction to my earlier posts in this thread about share count - The share count of Berkshire went from 1.6 million down to about 1 million in the early years of Warren's control. Then there were various mergers to clean up the structure, including Blue Chip, Diversified Retailing, and eventually Wesco much later. But Warren has returned BRK to the 1961 share count of 1.6 million A share equivalents. Another 600k A shares to get us back to a million!

So BRK issuance of shares for acquisitions was totally covered by 1961 repurchase? I'm only on the first chapter! But yes - basically the 1961 repurchase of 18,139 shares (which would be called A-shares today) and the 44,351 A-share equivalents that have been repurchased since 2018 or whenever he started this modern repurchase activity. Not bad Warren. You can tell this is a guy who remembers what the share count was when he started this endeavor. ** edit - plus the shares bought since 2012, which didn't show up on my free ycharts graph. He started with that $1.2 B deal from the estate of the guy who sold him flight safety or one of those acquisitions. Its the dexter folks that really made out though... So I guess the high for share count was about 1.651 million A-share equivalents in 2011 and since then he has brought it down to 1.6006 million A-share equivalents. Or maybe a bit less if he has continued purchasing

Thanks for the recommendation - just getting started on this book today. First thing that I noticed is that Berkshire has essentially the same number of shares in 2020 as it did in 1960 - 60 years of net-zero issuance (thankfully for that 1961 share repurchase of 18,139 A-shares: worth $5.3 Billion today)

The OXY shares are issued at 90% of the VWAP for some number of days preceding the dividend declaration. So they are issued at different prices each quarter. Berkshire appears to be selling them - perhaps even before they are delivered as they have sometimes done in the past. I would not be surprised, if OXY has it right in this registration filing, to learn that Berkshire was pre-selling the dividend shares and ending up with a zero share position upon delivery. (not counting the warrants of course, which are at a very high strike)

If Berkshire were actually like a mutual fund, as it is sometimes misrepresented, the C-corp would obviously be a bad choice - as Charlie has pointed out over the years. But Berkshire is an insurance-focused conglomerate, one of the largest enterprises in the world - not an investment partnership or fund. There are a lot of great sections to that 1986 letter, I enjoyed re-reading it as Buffett was a lot more talkative about important things back then. (you can skip the section on selling encyclopedias to keep it interesting. "5 cents per page!") As for the "why does Berkshire hold all these stocks inside a corporation?" question and the currently popular "why does Berkshire hold so much excess capital in cash equivalents?" question - he addresses them in 1986 pretty clearly:

There are a few funny lines, as usual, in the 1986 Chairman's Letter (which discusses the change to the current tax rate on investments inside insurance companies). This one seemed almost timely: (source - https://berkshirehathaway.com/letters/1986.html )

https://www.businesswire.com/news/home/20110830006354/en/Berkshire-Hathaway-News-Release

Interesting - thanks for the clarification. If that is correct, Berkshire has sold something like 19 million OXY shares that they previously owned, plus at least one batch of 11 million that they had previously been paid as pref. dividends.

If Berkshire doesn't start selling OXY common shares, they will be at 10% with this recent (stock) dividend payment on the preferred. This prospectus sounds like they are selling, but really it is just a registration statement for the new shares OXY is issuing Berkshire. If Berkshire doesn't stay below 10% (which they are basically at right now absent some quick sales), they will have to disclose share sales within a few days of each trade - which they tend to avoid when possible. Maybe they will let it build up. https://www.sec.gov/Archives/edgar/data/797468/000114036120016019/nt10013471x1_424b7.htm

I was just commenting that I haven't seen any mention of it on the CNBCs or Bloombergs (that doesn't mean they didn't mention it but I didn't see it) and in the not too distant past they used to cover every disclosed or rumored move Buffett made. Sign of the times was just referencing that nobody cares what stock Warren Buffett likes these days - after all, he's washed up as a stock picker. But yes - it is also true that $800 million of incremental purchases of an already large equity position is not big news for Berkshire. It could also be the case that they didn't stop buying after the 1st three days. We'll know soon enough if he has continued since he has to report promptly on this one. gfp, sorry, trying to parse your sarcasm. Which one of these did you mean? (a) $800 million purchase is such a big news that Mainstream press should be making a bigger deal about it. In current times, only some of the press is reporting it and not making a huge deal they would have been making in the past. (b) $800 million is such a tiny amount given Buffett's portfolio. Sign of times that press has to even report it.

Berkshire has been over 10% on BAC for a while now. These buys put them at 11.3%. They have been given permission by the Fed. It is possible that later this year they will be given permission to go as high as 25% under certain conditions. The decision to further loosen bank holdings company rules was delayed to the fall or winter sometime. May be further delayed. Remember when Buffett buying $800 million worth of stock in the open market used to get reported on by the press? Sign of the times

Some backstory on MultiPlan - which Berkshire apparently looked at (or was at least pitched) back in 2013 - https://www.businessinsider.in/stock-market/news/warren-buffetts-dealmaker-closed-the-biggest-blank-check-takeover-ever-this-month-heres-why-he-may-owe-the-berkshire-hathaway-chief-for-the-deal-/articleshow/77085637.cms MultiPlan ended up being sold in 2016 for $7.5 B. https://realmoney.thestreet.com/articles/05/13/2016/multiplan-roll-out-3.3b-loan-back-hellman-friedman-takeover

Thanks for tracking that down. It is no wonder that Warren was so confident that his reserving was still accurate and conservative when speaking at the annual meeting. Warren and Ajit (and Gates) have been thinking about this possibility for many years and made sure they were not covering that risk without being separately compensated for it. It is likely that even the insurers without the virus exclusions will come out OK on the 'no physical damage to property' bit, but Berkshire's subsidiaries seem to have a belt and suspenders situation built into their contracts. I would expect event cancellation type policies to pay out for the most part. And workers compensation could get tricky as people are asked to return to work and feel their employer has not done enough to make it safe for employees.

I don't have more information than this on Ajit's first federal lawsuit testing Berkshire's virus exclusions in federal court - but Insurance Insider's Sunday Recap had this blurb so somebody may be able to find the case in PA federal court. I don't know what district or who is suing. "Turning to the legal disputes over claims arising from the Covid-19 outbreak, Berkshire Hathaway subsidiary National Fire & Marine Insurance Company has stressed to the judge in a Pennsylvania-based business interruption case the importance of his decision as it may be the first to address the enforcement of a virus exclusion for Covid-19 in federal court."

FT has a good article on the Dominion deal / Berkshire / leveraged buyers, etc. Plus I hadn't seen that Brookfield had paid $2B for a 25% stake in the same LNG project Berkshire will now run https://www.ft.com/content/aa05c8fb-7daf-46f1-bfff-fce58cf5c77f

Funny CNBC article that implies that Apple Inc wasn't a "value stock" at the time Warren bought it. Who knows https://www.cnbc.com/2020/07/16/warren-buffett-reaps-40-billion-from-giant-apple-stake-since-march-bottom.html

Haven't read the article but the shareholders were a few family LLCs which have since filed for bankruptcy so I doubt any cash will be headed back. But you never know

If I understand the trade you are describing correctly, it should not need margin. Option-specialist brokers allow this type of trading in IRA accounts. You would only need to claim experience or whatever gets you the trading permissions / authority. Do you mind sharing which brokerage this occurred at? They should just honor the trade, even if their own IRA offering does not allow spread trading at this time. ** Nevermind I see Merrill Edge in thread title now

He did not. His foundation, the Jain Foundation, sold the shares. Presumably to make donations, fund research, be charitable, meet minimum requirements to remain a tax exempt foundation, etc... https://www.sec.gov/Archives/edgar/data/1067983/000172845120000003/xslF345X03/primary_doc.xml

I wonder if Warren set himself a little alert on his new iPhone to let him know when Apple hits $398.62 per share. I would not be disappointed if he sold some here. Tax rate could be changing next year after all * edit - and there we have Berkshire's first 12 figure stock position. not too many investments available where that is possible

Sorry didn't see your question. Yes, it is basically 19,374 divided by 1,620,023. So approximately 1.2% if we have it right. I am assuming by float you mean all the shares outstanding and not the free float that trades.

They are not putting $10 Billion cash into buying the D assets. And it won't happen until the end of the year. They also sold all their airline stocks, raising cash. Plus whatever rolled in through typical business operations and investment income. Cash could be $145 Billion at quarter end I suppose. I was thinking $150-ish before knowing the repurchase figures.

My math for July 7th implied share count is the same as your math a few posts above. If 248,740.792 is 15.54% economic interest, then 100% of economic interest is going to be 1,600,648.597 A-share equivalents. I think you had the July share count correct a few posts ago. Not sure what changed your mind.

Yes, 19,374.65 A-share equivalents this quarter - actually since 4/23/2020 because there were virtually zero repurchases between quarter end and 4/23.

WSJ has an article about the OXY warrants that Icahn hatched up. I'm not sure they have it 100% correct as it relates to the Berkshire security's protections against dilution. They also seem to miss that OXY has to pay Berkshire 9%, not 8%, when paying the dividend in stock. Will have to take a peek at the filings for the OXY Berkshire preferred after I walk the dog https://www.wsj.com/articles/oxys-sweetener-a-bitter-pill-for-warren-buffett-11594378801