gfp
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Posts posted by gfp
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Good interviews on both CNBC and Bloomberg, although Bloomberg seemed to have lost their feed in the middle. Current value of 255 million Apple shares, of which Berkshire apparently has even more than 255: over $58 Billion.
Seems the Gen Re New England shares are the Ted or Todd position, since he mentioned about 6 million shares was one of the other fellows in the office. Didn't seem like he was about to bid for Campbells through KHC. Apparently we were wrong about the need for a 13G filing on Apple, as he is clearly over 5% and has added more. Perhaps the other disclosures are enough, since the number of shares is out there on different filings with the SEC. He's certainly not selling any...
He seemed his same old self, not declining or more tired. I thought that was encouraging after hearing of him ending the student visits and other responsibilities. I'm just glad all those students with whatever Flu and Cold symptoms they have aren't flocking in to get the old man sick.
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Thanks for the links. It does seem that the interviews took place in May at the Annual Meeting, or at least that is what she mentioned in her intro.
Looks like a new interview with Li Lu and Munger in China (although I am surprised Munger is still flying around the globe!)
Part 1 -
Part 2 -
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If Apple keeps at its recent behavior there will be a decent impact on book and that income statement pass through. Hit 222 today.
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They don't have to tell the public they are buying. It will be disclosed as either treasury shares or reduced share count once cancelled - in the regular quarterly and annual filings. They won't 'build a position' of a certain size - they will periodically cancel the treasury shares they accumulate, reducing shares outstanding
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Interview in the Economic Times, mentions that Todd Combs will join Paytm board. Warren not involved at all, but did know enough about it to tell Masa at Sun Valley. Tiny investment of course, but over time it does help to raise the profile internationally.
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https://www.wsj.com/articles/buffetts-berkshire-hathaway-eyes-india-mobile-payments-firm-1535372330
https://money.cnn.com/2018/08/27/technology/paytm-warren-buffett/index.html
Berkshire taking a stake in an Indian mobile payments company - Todd Combs deal
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Etsy is not even close to an exclusively female customer base. I have purchased around 10 items from Etsy in the past year. Address numbers, antique signs, several antique rugs from overseas, leather "poufs" from morocco, black walnut picture frames, paintings, prints etc... There is also a fair bit of semi custom furniture sold on Etsy to both sexes.
(I should add that Men also buy products at Victoria's Secret, primarily as gifts - although it has been years since I have bought anything at that particular retailer)
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Not all men, of course. Just the men on value investing message boards like this one
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I asked my wife at lunch today why, in her opinion, there weren't very many women on this message board. She said that most women she knows are too busy to spend hours every day shooting the shit and trolling around online discussion forums.
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Discretionary is different for everyone hence the varied responses. Tires for a new car. Well is the car necessary? Well do I live in a mass-transit city? Well do I live here out of necessary or choice? Etc. etc hence the topic of economic theory.
Yeah I wondered if a consumer durable was correct, but the kid already had a car (a shittier one) and still mostly rides his bike everywhere (New Orleans is very small and flat) so it certainly felt discretionary. My wife certainly thought it was discretionary, as in - 'you spoil that kid'... Lest folks think I'm not into value, it was a 2009 Honda Fit for $3700, so I think I paid a sensible price.
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I bought a Honda Fit for my son yesterday. Today I bought 4 tires. Is that discretionary? In a few weeks I will buy a new iPhone. I also bought some shoes from a company called Xero.
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The only real surprise for me was that he continued to sell down PSX following last quarter's big sale back to the company. PSX shares continued to rise, in part because of the share retirement Buffett contributed to. He had said in the press release for the big sale back to the company that he intended to remain a large shareholder.
Maybe he just wanted to give them some room to do more big repurchases before he hits 10% again.
The airline and bank moves were telegraphed a couple days ago. I guess the Goldman addition is a bit of a surprise since he hasn't added to the position from net-settling the warrants until now as far as I can remember.
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Fox position is really pretty big when you add the two classes of stock together (I know it's not his entire portfolio that is disclosed, so it's really just a large percentage of his disclosed equities).
I'm going to go out on a limb and guess that he didn't actually sell out of Time Warner, since AT&T stock appeared in his fund the same quarter.
Baupost's Q2 13-F is out. Still a small position in the context of the whole portfolio, but Klarman continues to pile into Tesla debt, buying another $200 million worth. Could be a sign they're shorting the stock, but unfortunately they aren't obligated to disclose short positions. Also continued adding to Fox and sold out of Time Warner.
http://www.rocketfinancial.com/Holdings.aspx?id=376&fC=1
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Didn't ask me, but its a selling thread
CAH - that wasn't a pretty quarter.
Why CAH and not the better managed MCK or ABC? Valuation is a bit less for CAH, but I think the better management at MCK or ABC more than compensates for the valuation difference.
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Ah yes I see your point. If I had to guess I would say they are selling a small number of shares to keep it under the reporting requirements. I don't believe they have any confidential treatment for the 13G and they didn't seek confidential treatment on the 13F. We'll see if Marc gets back to me but I doubt he will be able to answer if they are indeed selling shares.
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Thats a lot to read on a phone, but I think you guys got the gist of it. The most recent published share count of Apple (found at the very top of every 10Q) is the number they have to use, not quarter-end or average share counts. Apple published this:
"4,829,926,000 shares of common stock, par value $0.00001 per share, issued and outstanding as of July 20, 2018"
less than 10 business days ago, which I believe is the Berkshire deadline for publishing a "13G" with the SEC. If Berkshire doesn't file within 10 business days of Apple's updated share count, they either made a mistake and will update later with a 'sorry, we should have done this earlier' or they have elected to sell down their stake to stay just under what they project to be the 5% share count - for the sake of privacy one would assume. It's not very important in valuing Berkshire obviously. Hell, Berkshire could even enter into one of those deals like Advance/Newhouse did with Charter where they sell blocks back to the company to maintain their exact same % ownership level over time. Would probably save both parties a little bit on trading costs. But I don't expect that
I will ask Marc Hamburg, but I seriously doubt he will answer me about this question since it involved an individual security Warren might be buying or selling.
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Remember that American Express wasn't a bank until the financial crisis, so it wasn't an issue for Berkshire to be considered a bank holding company through their Amex holdings. WFC always had to be kept below 10% but Berkshire sought permission to let it drift higher through repurchases only. The Fed didn't grant it.
PSX wasn't the same issue and Buffett chose to take it much higher than 10% before changing his mind about the regulatory burden. I suspect it had more to do with Energy regulators than SEC reporting requirement for 10% owners, as Buffett really likes PSX management and has taken quite a few other positions over 10%.
I certainly wish he hadn't sold the most recent big block of PSX back to the company in the low 90's.
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So $200 - $150/share BV = $50/share for $10/share of real operating earnings...
Seems like you are pretending that operating businesses aren't included in book value at all. Just because some of them are held at figures much lower than their current value doesn't mean you should pretend that book value doesn't include huge sums for operating businesses that produce those earnings.
Sure, though if you just look at the liquid assets like cash, stocks, and bonds, they alone are $130/share.
I get it, but it seemed an odd approach to just subtract book value. Additionally, operating income includes investment income on those assets, which is double counting even if you use the 130/share number.
I do understand the two column method of valuing Berkshire though
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You've got to love an investment/insurance company with $712 Billion in assets that has their Fixed Maturity (bonds) portfolio at $18.5 Billion. Hmmm. Does Warren like long term bonds right now?
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Not sure where to put the BRK - AAPL comments but in the 10Q they show Apple at 47.2 Billion dollars, where it's closing price was 185.11. So we can derive that Berkshire held approximately 254.98 million shares of Apple stock at the end of the quarter, much higher than most people were assuming - and consistent with something Warren muttered under his breath in one of the Becky Quick interviews that it was 'something like 250 million' at that point. Current value of 254.98 million Apple shares: 53 Billion dollars.
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So $200 - $150/share BV = $50/share for $10/share of real operating earnings...
Seems like you are pretending that operating businesses aren't included in book value at all. Just because some of them are held at figures much lower than their current value doesn't mean you should pretend that book value doesn't include huge sums for operating businesses that produce those earnings.
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I hadn't read that far but now I have. It's not a lot of daily volume, but there are several selling shareholders also constrained by the low turnover, so there is a lot of room for average daily volume to increase. Whether or not there are direct block transfers between the Gates Foundation and Berkshire, both can increase the ADV over time. You are right though - it will be very difficult to make a material dent in either share count or cash levels without a tender (and a tender seems unlikely).
But I suspect Berkshire will primarily just repurchase shares in the open market - they do have a half trillion dollar market cap and the B's are fairly liquid.
Did you read my basic calculations about an open market buyback? The B shares don't seem all that liquid for their purposes from what I can tell, but I could be wrong.
it would not allow them to buy well over $100 B worth which’s what they need to do over the next decade.
They'd need way, way more than that over the next decade, barring any mega-merger. It's not hard to see them earning north of $300b with already $100b+ in cash.
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The Gates foundation and various Buffett family foundations are more likely sources of large blocks than S&P index funds. But I suspect Berkshire will primarily just repurchase shares in the open market - they do have a half trillion dollar market cap and the B's are fairly liquid. Occasionally a large shareholder will die or otherwise make a large block available - similar to the only large repurchase accomplished so far. If other companies can do it through open market purchases, so can BRK.
We've seen the daily liquidity increase from Gates foundation selling in their filing.
I doubt Berkshire cash levels will ever get below $40 billion again.
Buffett buybacks: Could Berkshire tender stock?
in Berkshire Hathaway
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I hear ya Mike. I used to never get sick. Now I have a high school student who wants to hug all the time. I think I feel my glands swelling up just talking about it!