Buffett/Berkshire - general news

[Liberty]

Its about time. He should've done this years ago.

 

Agreed. What a wonderful archive of videos it would be if they had started in the early Youtube days..

[Parsad]

Its about time. He should've done this years ago.

 

Agreed. What a wonderful archive of videos it would be if they had started in the early Youtube days..

 

Probably no choice at this point...crowds are just too big.  There is no other venue big enough if the crowd gets significantly larger.  People are renting cars after flying into Lincoln, Nebraska or Iowa, because you can't get rental cars in Omaha.  Hotels in Omaha and Council Bluffs are fully booked...many a year ahead of time. 

 

Also, a lot of the old-time BRK shareholders are approaching their 70's, 80's and 90's, so many might prefer to just watch it online now instead of dealing with the crowds...and only going to get worse.  Cheers!

[Guest longinvestor]

Its about time. He should've done this years ago.

 

Agreed. What a wonderful archive of videos it would be if they had started in the early Youtube days..

 

Probably no choice at this point...crowds are just too big.  There is no other venue big enough if the crowd gets significantly larger.  People are renting cars after flying into Lincoln, Nebraska or Iowa, because you can't get rental cars in Omaha.  Hotels in Omaha and Council Bluffs are fully booked...many a year ahead of time. 

 

Also, a lot of the old-time BRK shareholders are approaching their 70's, 80's and 90's, so many might prefer to just watch it online now instead of dealing with the crowds...and only going to get worse.  Cheers!

I suppose this was inevitable. I'm committed to going this year, it's a ritual that I perhaps will continue at least as long as "the current management" sits up front. There's no other such event that has shaped my thinking as much in recent times. In a sense, it helps in uncluttering my mind from crap that builds between Mays. I go there in gratitude.

 

Won't miss the standing in line part. Hotels will become more reasonable too. Value!

[Guest longinvestor]

Facebook and BRK at the same market cap

[Mephistopheles]

 

Well, I guess that running a highly regulated business just means that lobbying is part of managing and running the business.

 

Mr. Buffett has several times in his shareholder letters written about a "social contract" with society in which the company operates.

 

BRK has so far commited about USD 25B to wind power and solar power.

 

Just take a look at the german energy companies E.ON and RWE to see what happens "when a social contract is not any longer needed". [it's about nuclear power in the first place [after the Japaneese TEPCO incident], and now also coal powered plants].

 

Clearly they're great lobbyists. And not just of politicians and regulators.

 

Lol

[John Hjorth]

The PCP aquisition expected to close on January 29^th 2016 :

 

 

www.berkshirehathaway.com/news/JAN2516.pdf .

 

The deal announced completed on January 29^th 2016:

 

http://www.berkshirehathaway.com/news/JAN2916.pdf .

[Guest longinvestor]

The letter should be in the final stages of editing, readied to go to press.

 

Coming in the heels of the 50th, would this be underwhelming?

 

As a shareholder I'd like to hear more about,

 

- Where's the insurance business going? Specifically float growth expectations

- More on the place of subsidiaries within BRK over the coming 2 decades - role of the Omaha Chairperson at the subs

- A progress report / table showing how much capital deployed across the 5 allocation priorities in per-share terms - hope they go back retroactive to 2009 and make this a standard going forward.

 

On the parable side, would like more commentary on the "ignore the macro" theme.

 

Looking forward to March 1

 

 

 

 

 

[John Hjorth]

Here's What Buffett Wouldn't Do, and Maybe You Shouldn't Either

 

http://www.bloomberg.com/news/articles/2016-02-24/here-s-what-buffett-wouldn-t-do-and-maybe-you-shouldn-t-either

[Charlie]

"Here's What Buffett Wouldn't Do, and Maybe You Shouldn't Either

 

http://www.bloomberg.com/news/articles/2016-02-24/here-s-what-buffett-wouldn-t-do-and-maybe-you-shouldn-t-either"

 

Thanks for posting. I like this quote:

 

Don’t be distracted by macroeconomic forecasts: “The cemetery for seers has a huge section set aside for macro forecasters. We have in fact made few macro forecasts at Berkshire, and we have seldom seen others make them with sustained success.” (2004)

[Guest longinvestor]

http://www.bloomberg.com/news/articles/2016-03-08/buffett-s-berkshire-plans-bond-sale-to-repay-10-billion-loan?cmpid=yhoo.headline

 

So, cash balance post-PCP is $39b (61 minus 23). What's the next elephant look like? Depending on when it happens, they could be bumping against the $20B cash cushion. OTOH, roughly $100B of cash gushers into Omaha over the next five years! What a problem to have.

[marazul]

Think Deere might be a candidate in a year or so.

[LC]

With 100B he could buy Nike, Starbucks, or 3M.

 

I mean, wow.

[doughishere]

Base Hit Investing.

 

http://basehitinvesting.com/berkshire-hathaway-is-safe-and-cheap/

 

For $140 per share, we are getting $98 of cash and investments, and roughly $9 per share of pretax earning power. So backing out the investments per share, we are paying roughly 4.5 times pretax earnings for Berkshire’s businesses.

 

At Berkshire’s tax rate of around 30%, this is a P/E of around 6.5 for a diversified group of quality businesses that produce above average returns on equity and—as a group—are growing their earning power. Seems like a good bet.

 

Buffett once said he likes to pay 10 times pretax earnings for good businesses. I think this is because he thinks the businesses he buys can a) grow their earning power over time, and b) are probably worth somewhat more than 10 times pretax earnings.

 

At the current price, we’re getting these businesses for half of this general rule of thumb.

[Guest longinvestor]

http://finance.yahoo.com/news/ubs-love-berkshire-hathaway-because-135520572.html

 

Online media headlines are usually click-and-bait for eyeballs and ads, but the message behind this headline is correct. Berkshire's capital has increasingly been allocated by others for several years now. The reason for a Buffett premium does not exist anymore. One could argue that a Buffett discount prevails, with concern over his age. The longer this continues the better, on many fronts; the most important reason for me would be the mentoring opportunities other allocators would have with Buffett. Or Munger, that'd be potent medicine. I can picture one of them running an idea by Munger and looking stupid, ooh! More than Buffett, it would be Munger's role that Berkshire would need the most in the next 50 years. I highly doubt that other Mungers exist. Hope the successors are absorbing his lessons well. 

[Guest longinvestor]

http://finance.yahoo.com/news/berkshire-hathaway-upside-whitney-tilson-book-value-intrinsic-value-buyback-floor-174045742.html

 

Tilson has the current IV at $283k and EOY 16 at $308k.

 

using the simple math of per share Investments + pre-tax earnings x 10.

[fareastwarriors]

A Potential Warren Buffett Successor Gets More Duties at Berkshire

 

Ajit Jain to assume oversight of Gen Re insurance business as unit CEO Tad Montross retires

 

http://www.wsj.com/articles/gen-re-ceo-tad-montross-to-retire-by-year-end-1460475844

[Guest longinvestor]

More wind power ($3.6B) in Iowa. Now stating a 100% wind goal for the state!

 

https://www.berkshirehathawayenergyco.com/news/midamerican-energy-announces-3-6-billion-investment-in-renewable-energy

[Guest longinvestor]

http://news.morningstar.com/articlenet/article.aspx?id=749007&SR=Yahoo

 

Montross retirement and speculation over Jain's evolving role at Berkshire.

 

IMO, given his mastery over "risk" across all kinds of businesses, Jain would be the only candidate to replace Munger. I can see all big deals made by others coming to Jain for the last word. Given how well it has worked for the last 50 years, having two people look at each deal makes a lot of sense. One for circle of competence and the other for assessing risk and more importantly making the decision if the price is right for risks that may happen down the road. In some ways, spreading the capital allocation across people with deep domain knowledge could be better than trying to find another prodigy who's mastered the method of learning across a swath of life. Now, there's not two of that kind. 

[Kiltacular]

http://news.morningstar.com/articlenet/article.aspx?id=749007&SR=Yahoo

 

Montross retirement and speculation over Jain's evolving role at Berkshire.

 

IMO, given his mastery over "risk" across all kinds of businesses, Jain would be the only candidate to replace Munger. I can see all big deals made by others coming to Jain for the last word. Given how well it has worked for the last 50 years, having two people look at each deal makes a lot of sense. One for circle of competence and the other for assessing risk and more importantly making the decision if the price is right for risks that may happen down the road. In some ways, spreading the capital allocation across people with deep domain knowledge could be better than trying to find another prodigy who's mastered the method of learning across a swath of life. Now, there's not two of that kind.

 

+1

[Charlie]

http://www.gurufocus.com/news/407278/david-rolfes-lengthy-analysis-of-berkshire-hathaway

 

 

Cheers!  :)

[Guest longinvestor]

http://www.gurufocus.com/news/407278/david-rolfes-lengthy-analysis-of-berkshire-hathaway

 

 

Cheers!  :)

 

This...

But since outstanding shares do not grow, per-share growth explodes. Per-share earnings have compounded at 28% for the past five years and 24% for the past ten years...their 2004 commentary

 

.....just follow the cash. $101B since 2011.  And earnings remain understated to GAAP, as the Semper analysis had it, by about $ 5B currently. It doesn't get better than this.

[Palantir]

Surprising. Tad is pretty young by BRK standards no? I still don't think Jain will inherit the Iron Throne, I doubt a nearly 70 year old Indian guy is moving to Nebraska.

[fareastwarriors]

Warren Buffett’s protégés flex investment muscle

http://www.ft.com/intl/cms/s/0/7a6937c4-16cc-11e6-b197-a4af20d5575e.html#axzz4929E5pJi

[Mephistopheles]

I think the CEO job goes to Ted or Todd but probably Ted. Managing the investment portfolio and acquiring businesses are tied at the hip as one provides the source of capital for the other.

 

Wouldn't it be awkward if the CEO firmly believes in a certain acquisition but requires the portfolio manager to sell down shares he believes in? Obv the CEO makes the final call but it's clearly a better process if it's one person. In this case perhaps the two of them as a team.

 

Also capital allocation is a broad talent which can be used in both functions. Whereas say, Matt Rose and Greg Abel have very focused skills.

 

Furthermore we've already seen greater involvement from them, esp Ted, in operations/acquisitions. And they're young, and both work in Omaha.

[gfp]

Raiguel to succeed Montross as Gen Re CEO

Adam McNestrie

 

Kara Raiguel, a senior executive from Berkshire Hathaway's reinsurance division, is to replace Tad Montross as CEO of Gen Re, according to an internal memo seen by The Insurance Insider.

 

In the memo Berkshire Hathaway reinsurance chief Ajit Jain, who now has overall oversight of Gen Re, described Raiguel as his "secret weapon".

 

Raiguel, an actuary by background, has worked with Jain in the reinsurance division for 15 years, according to the memo.

 

Jain said that the executive had been involved in establishing Berkshire's workers' comp business in California, overseeing its expansion into the Indian reinsurance market and setting up its municipal bond insurer.

 

In the note Jain said discussions in recent weeks with insiders and outsiders had led him to judge that there was a feeling that Gen Re had become "less relevant".

 

"That concern, together with the serious headwinds that the reinsurance business is facing and will continue to face, requires us all to consider whether and what actions might be taken to best position Gen Re for the next chapter," Jain said.

 

He continued: "So, for the next 90 days or so, I have asked Kara to have as her first priority and chief objective to determine how best to grow Gen Re's book of business without sacrificing the underwriting discipline and integrity that has been the hallmark of the past few years, as well as how best to broaden business relationships without doing damage to the platform."

 

Last month The Insurance Insider revealed that Montross was to step down as Gen Re CEO.

 

Jain paid tribute to the executive, saying that he had done "an unbelievable job" and that his decision to step down was "the most unwelcome news".

 

Some observers have suggested that the decision to have Raiguel report directly to Jain - whereas Montross had reported directly to Buffett - may suggest that he is in pole position to succeed the Sage of Omaha as Berkshire group CEO.