Buffett/Berkshire - general news

[scorpioncapital]

Seems Buffett has sold out almost the entire IBM position. Did he find something better than 11x earnings or better prospects and is loading his cash reserves?

 

 

[gfp]

He's been liquidating it for a while now, and mentioned he was still selling in a fairly recent CNBC interview.  I'm surprised he sold almost all of it before December 31st, since he had mentioned having high basis and low basis shares and choosing the shares he was selling before and after the new year.  I guess he didn't really have many low-basis shares left.  I don't think it is about finding something "better" - but rather moving on from a position that did not work out as he originally saw it going.  I do like to see the mental flexibility to change his mind, even with the cover of his whole "ideal holding period is forever" and a 4% dividend yield to justify holding.  It's amazing how much confidence he has in Apple - that position is getting really big.  Far bigger, at cost, than any other stock purchases in his life.

 

Seems Buffett has sold out almost the entire IBM position. Did he find something better than 11x earnings or better prospects and is loading his cash reserves?

[Sharad]

A pretty negative article on Buffett was recently published. I'm only going to read Market Watch's analysis of said publication. Here is Market Watch's take:

 

https://www.marketwatch.com/story/why-warren-buffett-is-a-prime-example-of-the-failure-of-american-capitalism-2018-02-15

[scorpioncapital]

"“Companies in Buffett’s portfolio have extorted windfall profits, ripped off taxpayers, and abused customers,” he says, adding that Buffett “makes no secret of his fondness for monopoly. He repeatedly highlights the key to his personal fortune: finding businesses surrounded by a monopoly moat, keeping competitors at bay.”"

 

Hmmm, same as governments I would say - another side of the coin. Government is the ultimate monopoly.

 

 

[gfp]

Interesting that "moat" is now equal to "monopoly"...  Apparently the United States is not supposed to allow any competitive advantage, brand name or otherwise

 

additionally, the author of the article in "the nation" appears to think Buffett is an investor in TransDigm.  News to me....

 

"Buffett takes full advantage of tax loopholes. He uses Berkshire Hathaway, a valuable tax shelter, for his investments."  We should all stash our investments in a C-corp.  Way to stick it to the government warren

[Dynamic]

The excerpts were full of non sequiturs. But the guy doesn't need sound arguments to sell books. He just has to find an appealing narrative for a receptive niche audience. His moat is in being different not in writing cogent arguments.

 

Buffett frequently refers to moats like Geico's made from passing on savings by being the low cost operator in a highly competitive industry thereby winning more business and restraining loyal customers.

 

Likewise BH Energy wins favor from customers and regulators by keeping costs low and investing in infrastructure. In return it is permitted a decent return.

 

He either hasn't paid attention or has conveniently ignored and misinterpreted the idea of moats.

[sleepydragon]

ever since Murdoch bought WSJ, I found the articles by WSJ (marketwatch is owned by WSJ) are very biased. Definitely very pro-trump. Sometimes you will see FT and WSj have totally opposite headline on some trump-related news on the front page.  I called WSJ and unsubscribed.

 

[RichardGibbons]

That article was total drivel.

 

Moat doesn't equal monopoly. Free competition doesn't mean no competitive advantages, it means trying to gain competitive advantages and overcome others' competitive advantages.  What does the guy envision, a USA where every product has completely generic packaging, no brand name, and the exact same ingredients and recipe as every other item?

 

The innovation he wants comes about because people are striving to gain competitive advantages. If you make competitive advantages illegal, you'll also eliminate most of the innovation.

 

I don't think I've ever seen an investment-related article that's so wrong in so many ways.

[rb]

Yea the guy who wrote that article is an idiot. But you drop some names and you get you idiot piece picked up by the likes of Marketwatch and drive traffic.

 

Some members made some very good points here that competitive advantages are not the same as monopoly power, etc, so I won't delve into those things. The truth is that if there's one thing that Buffett understands is competitive dynamics and he probably understands that better than anyone else. Berkshire invested in companies with monopolistic, near monopolistic, or oligopolistic attributes (I'll call them monopolistic here for short).

 

But what the idiot writer misses is that Berkshire didn't make money because of these monopolistic dynamics of these companies. Berkshire made money because they've bought them at a discount to intrinsic value. Furthermore they made money because some other idiot agreed to sell it to Berkshire below IV. I don't really understand what the author expected Buffett to do. Some guy comes to him and says I want to sell you this very profitable company with a great competitive position for half of what it's worth. Then Buffett should say no, I don't want that, I want to go out there and buy some piece of shit for a lot of money? That has nothing to do with capitalism, or any other economic system for that matter, it has to do with whether you're smart or stupid.

 

[DanielGMask]

That article was total drivel.

 

Moat doesn't equal monopoly. Free competition doesn't mean no competitive advantages, it means trying to gain competitive advantages and overcome others' competitive advantages.  What does the guy envision, a USA where every product has completely generic packaging, no brand name, and the exact same ingredients and recipe as every other item?

 

The innovation he wants comes about because people are striving to gain competitive advantages. If you make competitive advantages illegal, you'll also eliminate most of the innovation.

 

I don't think I've ever seen an investment-related article that's so wrong in so many ways.

 

Exactly! It’s incredible that this kind of article gets so much attention precisely due to the high reputation of the person which the article is clearly trying to damage.

[rb]

Exactly! It’s incredible that this kind of article gets so much attention precisely due to the high reputation of the person which the article is clearly trying to damage.

It's the world we live in... where clicks are all that matters. Some members here may hate pretty hard on the article, but they still clicked on it to read it. That's all good in the eyes of the author. Mission accomplished.

[Jurgis]

Exactly! It’s incredible that this kind of article gets so much attention precisely due to the high reputation of the person which the article is clearly trying to damage.

It's the world we live in... where clicks are all that matters. Some members here may hate pretty hard on the article, but they still clicked on it to read it. That's all good in the eyes of the author. Mission accomplished.

 

The funny part is that likely most of the people here (who presumably do the real-value-investing-DD ) did not even bother to click another link to the real (long) article (on thenation website) and just posted their opinion based on Marketwatch summary click bait.  ;D

 

Not that I endorse thenation full article.  8)

[Cardboard]

"ever since Murdoch bought WSJ, I found the articles by WSJ (marketwatch is owned by WSJ) are very biased. Definitely very pro-trump. Sometimes you will see FT and WSj have totally opposite headline on some trump-related news on the front page.  I called WSJ and unsubscribed."

 

You should subscribe instead to the Communist News Network. Definitely very anti-Trump.

 

Cardboard

[gfp]

The article was in The Nation, and had nothing to do with Rupert Murdoch or the Wall Street Journal / Marketwatch.  The article in The Nation was pretty bad.  I did not read the other articles summarizing the primary article.

 

Cardboard, it's OK to be anti-Trump.  At least half the nation feels that way.  For many Americans, he is a national embarrassment - with potentially dangerous ignorance.  It's also OK to be anti-Buffett.  Not as many Americans feel that Warren Buffett is a national embarrassment, but he's not perfect - as is well understood by people on a board like this one, who follow his statements quite closely.

[Cardboard]

Sure. What is not ok in my view is to not even want to read/know what the other side is thinking. Confirmation bias is that how they call it?

 

I have noticed a huge change in what ABC, CBS, NBC and CNN present information since Trump. Has not prevented me from listening to what they say and to then form my own opinion.

 

Cardboard

[Spekulatius]

Article is BS. Their utility companies have some of the lowest rates and lowest increases in then ountry. Geico has the lowest rates in many states. I am insured with Geico  in NY and couldn’t get a competitive quote within 15% of Geicos, even with homeowners discount thrown in by some competitors. It was aneifernde story in CA, but here on thrneast coast, it seems that Geico is hard to beat. In any case, their market share isn’t high enough to exert monopoly power, they growth through lower pricing, which is exactly what should happen in capitalism

[sleepydragon]

"ever since Murdoch bought WSJ, I found the articles by WSJ (marketwatch is owned by WSJ) are very biased. Definitely very pro-trump. Sometimes you will see FT and WSj have totally opposite headline on some trump-related news on the front page.  I called WSJ and unsubscribed."

 

You should subscribe instead to the Communist News Network. Definitely very anti-Trump. This way you can continue living quietly in your echo chamber.

 

Cardboard

 

are you kidding. the Chinese govt (and Russia too!) is actively supporting trump and promote him in their country's official news. Murdoch's ex-wife is a Chinese spy and have close relationship with Trump's daughter. in PA, one of the biggest financial backer behind Chinese churches who supported trump is the owner of a coal mine in Guizhou China. Why? because china want to import their coal to America and they believed Trump will increase coal usage in America.

[sleepydragon]

Article is BS. Their utility companies have some of the lowest rates and lowest increases in then ountry. Geico has the lowest rates in many states. I am insured with Geico  in NY and couldn’t get a competitive quote within 15% of Geicos, even with homeowners discount thrown in by some competitors. It was aneifernde story in CA, but here on thrneast coast, it seems that Geico is hard to beat. In any case, their market share isn’t high enough to exert monopoly power, they growth through lower pricing, which is exactly what should happen in capitalism

 

I am with Geico for decades now since I graduated from college. I also use Geico for my house insurance (they don't underwrite, just refer and handle billing). I was shopping for house insurance a few months ago and was able to find a lower price else where. But everywhere I asked I couldn't get a lower auto insurance than geico.

[Cardboard]

"Why? because china want to import their coal to America and they believed Trump will increase coal usage in America."

 

LOL! America does not have a clue what to do with its own coal and now they would import some from China!

 

I find the Left to be a farce since they lost the election. Prior to also but, now it is worst. The arguments simply make zero sense anymore.

 

I also find this whole "get Trump" on the Russian potential interference to be a total joke. I mean, Russia makes a few posts on Facebook and the world is falling. They are interfering in our election process!

 

The U.S. on the other hand eliminates head of states. Just a few examples: Panama, Iraq, Libya under both parties. You even have an ex-President who makes a video to support the election of Macron. Do you imagine Putin going on TV and stating that he wants so and so to be elected somewhere?

 

Cardboard

 

 

[sleepydragon]

I find the Left to be a farce since they lost the election. Prior to also but, now it is worst. The arguments simply make zero sense anymore.

 

Cardboard

 

I have never considered myself as "left" or "right". Nor I judged people this way. I go by decency vs. indecency. 

[bizaro86]

Decency vs indecency is a good metric, but so is logic.

 

And it would be farcical to expect the US to import coal from China, so the idea that anyone with it enough to become rich would spend money promoting that idea seems pretty unlikely to me.

[John Hjorth]

..."ever since Murdoch bought WSJ, I found the articles by WSJ (marketwatch is owned by WSJ) are very biased. Definitely very pro-trump. Sometimes you will see FT and WSj have totally opposite headline on some trump-related news on the front page.  I called WSJ and unsubscribed."

 

You should subscribe instead to the Communist News Network. Definitely very anti-Trump.

 

Cardboard

 

Sure. What is not ok in my view is to not even want to read/know what the other side is thinking. Confirmation bias is that how they call it?

 

I have noticed a huge change in what ABC, CBS, NBC and CNN present information since Trump. Has not prevented me from listening to what they say and to then form my own opinion.

 

Cardboard

 

Why not just post the second expression first, and then we all get along?

 

- - - o 0 o - - -

 

I hope we can now get back to "Buffett/Berkshire - general news".

[Charlie]

http://www.berkshirehathaway.com/news/feb2218.pdf

 

OMAHA, NE—Berkshire Hathaway Inc.’s 2017 Annual Report to the shareholders will be posted on the Internet on Saturday, February 24, 2018, at approximately 8:00 a.m. eastern time where it can be accessed at www.berkshirehathaway.com. The Annual Report will include Warren Buffett’s annual letter to shareholders as well as information about Berkshire’s financial position and results of operations. Concurrent with the posting of the Annual Report, Berkshire will also issue an earnings release.

 

 

Cheers!  :)

[Guest longinvestor]

Charlie, Could I request that you post this under a new topic dedicated to the 2017 letter? The General topic is getting bigger and discussion on the letter would get buried. I am happy to start the thread but you started the discussion first.

 

 

http://www.berkshirehathaway.com/news/feb2218.pdf

 

OMAHA, NE—Berkshire Hathaway Inc.’s 2017 Annual Report to the shareholders will be posted on the Internet on Saturday, February 24, 2018, at approximately 8:00 a.m. eastern time where it can be accessed at www.berkshirehathaway.com. The Annual Report will include Warren Buffett’s annual letter to shareholders as well as information about Berkshire’s financial position and results of operations. Concurrent with the posting of the Annual Report, Berkshire will also issue an earnings release.

 

 

Cheers!  :)

[Charlie]

OK,  :)

 

longinvestor, I hope you bought enough Berkshire shares, the letter could be a catalyst for a stock price movement upward, because of increased earning power etc....

 

Thank you, Donald.  ;)