Buffett/Berkshire - general news

[rb]

They're hauling ass on Delta too. No joke!

 

Edit:

Maybe Buffett found that 1-800 number from years ago.

[DooDiligence]

If I hear one single Republican mouthing off about socialism, I'm going to scream.

Pace yourself young padawan. The road is long.

 

;D

 

I have great lung capacity.

[Gamecock-YT]

That's going to crash the airlines even more. They both are the stronger out of the 4 big airlines.

 

Yeah, that's what I was going to say. That'd be the two you'd want to keep. Maybe they're just treating United and American as call options at this point.

[jeffsreng]

The problem with 13F or any sec filings or press releases is it's not real-time.  What if they sold it and brought some more.  That's why you have to do your own research.

[rb]

It's not a 13-f it's a 4. The trades were April 1st and 2nd. They're selling now.

[peluche]

https://finance.yahoo.com/news/warren-buffett-i-wont-be-selling-airline-stocks-142849303.html

 

Warren Buffett: ‘I won’t be selling airline stocks’

[Munger_Disciple]

It's not a 13-f it's a 4. The trades were April 1st and 2nd. They're selling now.

 

+1

 

Berkshire owned >10% of both the airlines, so they had to report transactions immediately. Now that they are below 10% of each, they no longer have to. For all we know, Buffett could keep selling and be out completely in the coming days. We wouldn't know if that is the case until Aug 15th when the Q2-2020 13-F comes out.

[Munger_Disciple]

https://www.bloomberg.com/news/articles/2020-04-03/u-s-airlines-apply-for-government-aid-with-sales-in-freefall?srnd=premium

 

U.S. airlines are rushing to apply for federal aid as their revenue plummets amid an unprecedented collapse in travel demand caused by the coronavirus pandemic.

 

Second-quarter sales will plunge 90%, Delta Air Lines Inc. said, and the carrier is burning through $60 million a day.

[Spekulatius]

https://finance.yahoo.com/news/warren-buffett-i-wont-be-selling-airline-stocks-142849303.html

 

Warren Buffett: ‘I won’t be selling airline stocks’

 

When facts change, You have got to change your opinion. These airlines are are likely zeros. They don’t last longer than few month without meaningful revenues and will go into prepackaged bankruptcy before thy run out of cash. By fall, they are done, imo.

[rb]

https://finance.yahoo.com/news/warren-buffett-i-wont-be-selling-airline-stocks-142849303.html

 

Warren Buffett: ‘I won’t be selling airline stocks’

 

When facts change, You have got to change your opinion. These airlines are are likely zeros. They don’t last longer than few month without meaningful revenues and will go into prepackaged bankruptcy before thy run out of cash. By fall, they are done, imo.

You're right. It's a pretty good value trade. The companies are bankrupt so why not take the money?

 

At $20 a share Delta is worth about as much as it was around 2013-2014 and it was actually flying back then. What changed since then? I don't see why these are not all zeros. Does the US taxpayer owe airline shareholders a duty of care, or airline bondholders for that matter? These companies have been bankrupt before and everybody lived. No reason why it can't happen again.

[spartansaver]

I wonder if this means his American and United stakes are completely gone. I've also been wondering if this means he may be in discussions with United or American.

[dpetrescu]

Berkshires annual meeting is on May 2. What does everyone think? Will Warren announce something similar to BNSF? Or will he say something he has said in the past, that sometimes you have to admit you’re wrong, change your mind, and move on?

 

There is no doubt that after this is over the fewer airlines that do survive will be even stronger over the long term after potentially even more consolidation. Warren has also said that he periodically sells to stay under the 10%. However, I’m now leaning more towards the latter. Airlines WILL be losing a lot of money over many months to more than a year.

 

I bought a few long 2 year out of the money call options for a few airlines. I realize there’s a good chance they could be worth zero.

[Gregmal]

The problem with airlines and oil companies is that filing bankruptcy and starting over is like asking for a piece of chewing gum or bumming a smoke. Routine, no shame, just normal course business. Competition doesn’t really go away.

[dpetrescu]

The initial deadline for airlines to apply for cash grants from the government is today.

[Guest cherzeca]

looks to me like the tide is rolling out and warren is wearing a speedo.  happens to the best of us...

[jasonchin]

Wonder whether the 10% rule applies to the convertibles? If yes, he may anticipate the convertibles and actually planning in advance. Pure speculation.

[Spekulatius]

looks to me like the tide is rolling out and warren is wearing a speedo.  happens to the best of us...

 

It’s just a flesh wound, as are his huge bank positions, which are also impaired. Anyways, my guess is that BRK hasn’t really bought anything substantial yet. He is likely waiting for much better bargains. He probably bought back a little stock, but that’s is most likely it.

[movys]

It's not a 13-f it's a 4. The trades were April 1st and 2nd. They're selling now.

 

+1

 

Berkshire owned >10% of both the airlines, so they had to report transactions immediately. Now that they are below 10% of each, they no longer have to. For all we know, Buffett could keep selling and be out completely in the coming days. We wouldn't know if that is the case until Aug 15th when the Q2-2020 13-F comes out.

 

As a 13G filer, doesn't BRK have to amend his 13G to disclose all transactions until he falls below 5%?

[Dynamic]

Yeah, I was thinking about that. I seem to remember that 13G rules are different when under 10% and give much longer before filing, but in one of the cases it seemed to indicate that every time the ownership stake moves by a whole percent, I think a further filing is triggered, with the specified deadline so many days after the event that triggered it. Need to look into those rules.

 

At the actual close on Tuesday March 31st, prices were a little on the higher end in recent times, and at Dec 31st they closed rather lower than the prices reached in mid February. I think that if it remained relatively unchanged the portfolio would have lost about $63 billion in market value over Q1, with a $13 billion deferred tax reduction, resulting in $50 billion of market value losses.

 

The WFC position, if unchanged from Dec 31st at $18.6 bn at $53.80/share would have declined in market value by 46.7%, but they may well have continued selling through Jan and Feb and saved some of the $8.6 billion in losses they would otherwise have recorded. They might even have reversed course and started buying it again at around $25 per share during March. Again, the rules on filing about changes in sub 10% positions would be relevant. I think they got rid of IBM before such filings were made public, but they might have to notify the SEC alone, without such reports being public.

[Munger_Disciple]

 

As a 13G filer, doesn't BRK have to amend his 13G to disclose all transactions until he falls below 5%?

 

No. An amended 13G is only filed once a year. Berkshire filed the 2020 amendment in Feb and they are not required file another until 2021.

[bizaro86]

 

As a 13G filer, doesn't BRK have to amend his 13G to disclose all transactions until he falls below 5%?

 

No. An amended 13G is only filed once a year. Berkshire filed the 2020 amendment in Feb and they are not required file another until 2021.

 

Would they need to file an amended 13g if they went below 5%?

[Munger_Disciple]

 

Would they need to file an amended 13g if they went below 5%?

 

I think they are not required to until 2021.

[gfp]

Berkshire going about their regular business - with a Yen note offering, size unknown - probably small, routine refinancing

 

https://www.sec.gov/Archives/edgar/data/1067983/000119312520084148/d861445d424b5.htm

 

A few more details from Bloomberg -

"In Asia, Warren Buffett’s Berkshire Hathaway Inc. is set to join the record bonanza of corporate debt sales with a multi-tranche sale of yen-denominated bonds maturing in as long as 40 years later this week. The conglomerate is offering 10-year notes with a spread of 100-110 basis points, about double the 50 basis points it paid to sell similar-maturity notes in September."

[indythinker85]

Many questionable labor practices at this plant of theirs https://www.valuewalk.com/2020/04/sps-technologies-precision-castparts/ - its a pretty big one it seems as well, 5000 plus employees https://www.dnb.com/business-directory/company-profiles.sps_technologies_llc.d298457fd640833efc3d80a968ab5532.html

 

 

Curious if this is true, would Buffett know about stuff like this?

[Dynamic]

I doubt this would have reached Buffett until this report.

 

I am aware of another manufacturer and distributor of fastenings in another country who have issued letters to relevant employees so they can show them if stopped when traveling to work, stating that they manufacture and supply fastenings to medical equipment manufacturers and are thus essential workers. Nonetheless they recognise that it's a modest fraction of their business and seem to be taking a responsible attitude to the lockdown in furloughing many staff and having all vital admin staff work from home where possible to support the reduced level of business they are conducting and administer the furloughing etc.

 

Hard to guess how much is legitimate from the outside of the firm and how much is playing fast and loose with the lockdown orders. Also hard to guess if the employee source has legitimate concerns or is for example petrified of going to work or home a grudge.