gfp
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what's the story with the price move in the common shares today?
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Nice to see China Investment Corp raise their stake to just under 10% Also, that Fairfax started a small position in PWT. We've got good company, while we wait. LOL.
LL
How do you know that FFH bought into PWT?
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Verisk was owned by insurance companies before it became a public company. Berkshire's shares 'showed-up' in filings when VRSK started to trade publicly. BRK didn't sell shares in the IPO like the other owners. I believe they've sold some VRSK since, but I don't follow it closely.
The extra PSX was indeed a very large position for the junior managers.
Thank you for your response.
I thought they bought Verisk in Q2 2011, after Todd was hired, but before Ted.
PSX was indeed acquired as a spin off from COP.
USG was Buffett, but in Q4 2013, about $250m extra was invested, not really a Buffett kind of investment.
The same goes for USBancorp and Bank of New York.
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Verisk is a legacy holding that BRK received before they were hired. Looks like you have it mostly right. I would add PSX as a company that BRK got through the COP spin but then one of the junior managers added to (and now will be swapped for the chemical business in a nice tax efficient swap)
USG was Buffett
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A 13-f will always indicate to the public that confidential information has been omitted if it has. So at least you know when something is omitted, and it can't be confidential for very long usually.
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Graham Holdings' pension fund has the BRK shares you are describing, but don't forget that Graham Holdings directly owns about $423 million (at current price) in additional BRK.A & B shares as an investment. There is an opportunity for a great stock swap here.
It looks like Graham holding pension plan hold around $228mn of Berkshire stock. Buffett may swap these pension plan assets for stake in Graham holding. It might involve entire portfolio of the pension plan.
Here is excerpt from SEC filing of Graham holding.
Essentially all of the assets are actively managed by two investment companies. The goal of the investment managers is to produce moderate long-term growth in the value of these assets, while protecting them against large decreases in value. Both of these managers may invest in a combination of equity and fixed-income securities and cash. The managers are not permitted to invest in securities of the Company or in alternative investments. The investment managers cannot invest more than 20% of the assets at the time of purchase in the stock of Berkshire Hathaway or more than 10% of the assets in the securities of any other single issuer, except for obligations of the U.S. Government, without receiving prior approval by the Plan administrator. As of September 30, 2013, the managers can invest no more than 24% of the assets in international stocks at the time the investment is made, and no less than 10% of the assets could be invested in fixed-income securities. None of the assets is managed internally by the Company.
In determining the expected rate of return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance. In addition, the Company may consult with and consider the input of financial and other professionals in developing appropriate return benchmarks.
The Company evaluated its defined benefit pension plan asset portfolio for the existence of significant concentrations (defined as greater than 10% of plan assets) of credit risk as of September 30, 2013. Types of concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, type of industry, foreign country and individual fund. At September 30, 2013 and December 31, 2012, the pension plan held common stock in one investment that exceeded 10% of total plan assets. This investment was valued at $389.3 million and $223.1 million at September 30, 2013 and December 31, 2012, respectively, or approximately 16% and 11%, respectively, of total plan assets. Assets also included $228.6 million and $179.9 million of Berkshire Hathaway common stock at September 30, 2013 and December 31, 2012, respectively. At September 30, 2013 and December 31, 2012, the pension plan held investments in one foreign country that exceeded 10% of total plan assets. These investments were valued at $406.4 million and $240.4 million at September 30, 2013 and December 31, 2012, respectively, or approximately 16% and 12%, respectively, of total plan assets.
Is it saying pension plan held investment which increased from $223mn to $389mn in 9 months? I wonder which one that would be. Mostly some large cap.
Also structure of this transaction will point to Buffett's valuation of Berkshire. I think it was good bargain below 109 and still not very far from it.
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It's on page 13 of the most recent 10K for Special Diversified - approximately 11 million
http://www.sec.gov/Archives/edgar/data/911649/000118811213001093/t76199_10k.htm
Not sure you're right here -- where are you getting $11m?
My apologies - I don't know anything about this company, I was just directing the poster to a link and page number for Net Operating Loss Carry forwards for the US.
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It's on page 13 of the most recent 10K for Special Diversified - approximately 11 million
http://www.sec.gov/Archives/edgar/data/911649/000118811213001093/t76199_10k.htm
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It's a fine thesis to use deep in the money LEAP calls to add some leverage to a safe equity position. Just a heads up to others that might consider this as a swap for Berkshire shares they already own in an IRA - I attempted to swap BRK.B shares for calls in a "margin-type" interactive brokers IRA a couple years ago. The margin-type IRA at IB allows to you immediately use the proceeds of a sale, rather than waiting the 3 days for settlement like a regular IRA. The way this works without violating the IRA rules is that the second trade settles after the first trade, so no temporary loan is ever present. Stock options settle the next business day, so you have to wait 2 days to do the swap - risking a price change in the underlying. I remember sweating it out for two days hoping the price didn't rise. If it falls, you benefit of course...
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I think it's mainly a non-issue because it will be near impossible for any entity to get a controlling position in BRK in the future. The A-shares are the way to do it, but they have very low volume that will only shrink as they can only be converted in one direction. As BRK's market cap continues to grow, an entity seeking control would need $70 billion plus worth of illiquid A-shares to take control the "cheap way". The board owns 33,000 A-shares outside of Buffett (+undisclosed Munger children). BRK may also repurchase A-shares in blocks further reducing outstanding shares and potential volumes. Another part-stock deal like BNI would further increase the number of B-shares, etc etc…
Berkshire will be a Trillion dollar market cap company at some point in the not too distant future. Difficult to take over, even with a potent share class. And with a strong board led by lead director Bill Gates who will still control one hell of a lot of votes...
You don't see Icahn getting a seat on the Apple board. Hell, Sardar can't even get on the CBRL board with 20%.
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At least for the B-shares, ycharts' numbers appear to be incorrect. Backing out the implied book value from their number shows them using a book value of $219.385 billion for BRK, when the actual Q3 book value is $208.382 Billion Not sure what their error is, maybe share count like most finance websites.
-- I checked their A-share number and it's much closer to reality (off by $1B). The fact that the two were different is a tip off, although the B shares closed at a 1% discount to the A shares on Monday.
Last reported book value per share is $84.509 on the B-shares, for a buyback number of $101.41 on the B's and a P/B of 1.29x
Not sure if their calcs are accurate but here are two interesting links:
http://ycharts.com/companies/BRK.A/price_to_book_value
http://ycharts.com/companies/BRK.B/price_to_book_value
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I think the end of year buyback threshold will end up somewhere between 106-107 on the B shares. Buffett will buy back the stock every day it is below 1.2x book, but not a single share above that. You can't really fault him - he was active buying the stock in the open market towards the end of December 2012 on the few days it traded below 1.2x book (in addition to the large reported block trade that prompted the change from 1.1x to 1.2x).
It hasn't traded below 1.2x a reported book value a single time since then. The jury is still out on whether he will use a more real-time book value, but I wouldn't be surprised if he only uses the last-reported publicly available book value per share to instruct the broker.
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If it was a triple net lease the tax billing address could have been in Hoffman Estates and the Owner elsewhere, like Fort Dodge for instance.
this might be them:
http://sos.iowa.gov/search/business/(S(2as2buey3xfqjouzxhx11zm4))/summary.aspx?c=jkiNixQz_1oyzk97yeULyPJNWeF5ep3twnfcA5SRJ1w1
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I do this type of client portfolio all the time.
Individual corporate bonds can be a real help - The SHLD bond maturing in 2018 that Berkowitz owns is secured by inventory and yields around 9.8% right now. We own a bunch of Radiation Therapy bonds maturing in 2017 that were purchased with yields of 17-19%, currently yielding around 12%.
I would probably buy ATAX on this morning's drop for a client like that.
We've owned EMES in these types of accounts, still yields 8.7% but used to be a much better value.
Lots of KMR ~7.4% yield at current price. KMI like you said is also a good initial yield and dividend grower.
BP, Royal Dutch Shell and Lukoil for the high yielding oil portion.
TWO harbors below book value for a small portion, maybe a small amount of PSEC.
The key is to be very diversified and add opportunistically to the most attractive income securities as they become available.
I would put JPM in an income account at todays price as well.
In Canada, small positions in the energy income plays and Glacier media, just not too much in any one name.
For emerging markets there are many dividend weighted WisdomTree ETFs - DEM is a high yielder with the underlying index yielding something like 5%.
There are also some high quality pref. shares worth looking at.
DSL pays monthly and might be worth a look on a drop - keep an eye on the NAV discount and try to add on extremes.
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I assume you are talking about a macbook pro not a mac pro desktop, right? If its a newer Macbook pro I recommend using parallels to run Windows and the windows version of Microsoft Office. You should install windows using the Boot Camp method and then set parallels to use the Boot Camp partition so that you can start your computer up as a windows only machine or access the same install of windows through a virtualization window from Mac OS. Best of all worlds. You can have 100% Windows, Mac with Windows in a box, or 100% Mac anytime you wish.
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Good interview - thanks for posting!
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So...if I believed in India story, what are some effective ways to play this ?
This index of Indian small caps does not appear overvalued at less than book value and around 10x earnings according to their end of year fact sheet. This market has already had a decline..
The ETF is by VanEck and is ticker SCIF
http://www.vaneck.com/funds/scif.aspx
http://www.vaneck.com/library/market-vectors-etfs/scif-fact-sheet-pdf
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according to 'the warren buffett way' on google books - In the late 1960s Blue Chip stamps had a float of more than $60 million in unredeemed stamps. Berkshire began buying Blue Chip stock in the late 60s. Buffett also owned Blue Chip shares personally and inside a bunch of other entities (Charlie owned it as well). They ultimately bought the rest of Blue Chip in 1983. Blue Chip purchased See's in 1972.
edit: 'Damn Right' also has a good passage on Blue Chip - float went up to $100 million according to this: http://tinyurl.com/mbtxfkb
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KMR is pretty tax efficient.
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Bought TWGP today as a merger arbitrage trade
I've been looking at Tower as well today, since I received a note from Insurance Insider about the large discount today. I guess with so many material adverse changes already under Tower's belt, there are some that don't believe there won't be at least one more material 'oops'… Big spread if it goes through at $3 cash by 'summer' though…
(8-k on merger)
http://www.sec.gov/Archives/edgar/data/1289592/000119312514003005/d653094d8k.htm
http://www.sec.gov/Archives/edgar/data/1289592/000119312514003005/0001193125-14-003005-index.htm
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Remember that the $77 Billion in float is not all from super-cat policies, and the fairly small portion that is is not concentrated in any one region. Most of the float is long-term in nature, such as workers comp, asbestos, life, etc… It is very stable year to year.
It is not possible for the float to come due all at once. It is a very diversified, long-lived and uniquely attractive pool of float.
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The float wouldn't be wiped out by a large super cat. BRK's policies can be very large, but all of them are capped. BRK holds tens of billions of dollars in cash and much more in liquid securities to pay any large claims event easily. But because of the way BRK is set up, BRK would have a near break-even year if hit by a super-cat that would wipe out a big portion of the catastrophe insurance industry. This becomes safer every year, as it is virtually impossible to grow the insurance business inside BRK as fast as the rest of BRK - making Insurance a smaller and smaller part of BRK over time.
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I second the above suggestion by valueInv - the application that checks system resource usage is "Activity Monitor" - you will likely find that Flash is the culprit. Running the newest version of Safari (in Mavericks) and not other browser brands will help performance on a mac with lots of tabs open.
For some reason, Adobe Flash has never worked well on Macs, hence Apple's all out war on Flash. I don't use the Mac version of MS Office, so I have no idea if that is part of the problem.
missing plane
in General Discussion
Posted
Doesn't depressurizing the cabin release the oxygen masks throughout the plane? Would everyone still pass out immediately with oxygen masks on?