Buffett/Berkshire - general news

[DooDiligence]

 

www.pbs.org/newshour/science/biggest-u-s-solar-project-approved-in-nevada-despite-critics

[gfp]

Berkshire director Meryl Witmer buying shares in the market -

 

 

https://www.sec.gov/Archives/edgar/data/1067983/000091957420003765/xslF345X03/ownership.xml

 

( ~ $2.2 million worth )

[buffetteer1984]

Pershing Square sold out of their berkshire position as per conference call.  Likely due to the disappointment in the lack of capital deployment

[Guest longinvestor]

Pershing Square sold out of their berkshire position as per conference call.  Likely due to the disappointment in the lack of capital deployment

 

Sure. Buffett didn’t listen to Ackman, ha!

 

Good riddance.

[DooDiligence]

Pershing Square sold out of their berkshire position as per conference call.  Likely due to the disappointment in the lack of capital deployment

 

Icahn must be shorting Berkshire.

 

;D

[Foreign Tuffett]

Pershing Square sold out of their berkshire position as per conference call.  Likely due to the disappointment in the lack of capital deployment

 

Sure. Buffett didn’t listen to Ackman, ha!

 

Good riddance.

 

I'm sure Buffett is really disappointed that guy who blew up his own hedge fund twice no longer owns Berkshire stock

[Xerxes]

I think Ackman did the right thing.

A hedge fund should be actively looking for opportunities rather than invest into a long-term hold.

Folks don't pay Ackman his fees so that he parks money into Berkshire.

[kab60]

I think Ackman did the right thing.

A hedge fund should be actively looking for opportunities rather than invest into a long-term hold.

Folks don't pay Ackman his fees so that he parks money into Berkshire.

I understand why one would've sold some in March, since upside was better elsewhere, but since everything rallied and Berkshire stayed in the gutter during April and May - like 170-175/share last week - I don't quiet get it. Risk/reward seems as good if not better than in early 2016. Would be great if Buffett bought back shares when he realized things probably would not turn out as bad as feared.

[Gregmal]

I think Ackman did the right thing.

A hedge fund should be actively looking for opportunities rather than invest into a long-term hold.

Folks don't pay Ackman his fees so that he parks money into Berkshire.

 

Basically this.

 

You can rationalize holding it for personal accounts or accounts with certain risk profiles. But as an active manager who charges fees it is very hard to justify holding this. Its amazing that folks would criticize Ackman here, when Buffett is the one who's approach and performance, is if anything, the thing to look at and question.

[kab60]

I think Ackman did the right thing.

A hedge fund should be actively looking for opportunities rather than invest into a long-term hold.

Folks don't pay Ackman his fees so that he parks money into Berkshire.

 

Basically this.

 

You can rationalize holding it for personal accounts or accounts with certain risk profiles. But as an active manager who charges fees it is very hard to justify holding this. Its amazing that folks would criticize Ackman here, when Buffett is the one who's approach and performance, is if anything, the thing to look at and question.

I'm not critizising Ackman here. He played it well so far, obviously. I am just surprised he didn't sell Berkshire in March but apparently after the initial strong rally in the broader market if I read this right.

 

Judging by the results it might have given him a better outcome, I just think the risk/reward is pretty unique now - more so than in March.

[Gregmal]

I think Ackman did the right thing.

A hedge fund should be actively looking for opportunities rather than invest into a long-term hold.

Folks don't pay Ackman his fees so that he parks money into Berkshire.

 

Basically this.

 

You can rationalize holding it for personal accounts or accounts with certain risk profiles. But as an active manager who charges fees it is very hard to justify holding this. Its amazing that folks would criticize Ackman here, when Buffett is the one who's approach and performance, is if anything, the thing to look at and question.

I'm not critizising Ackman here. He played it well so far, obviously. I am just surprised he didn't sell Berkshire in March but apparently after the initial strong rally in the broader market if I read this right.

 

Judging by the results it might have given him a better outcome, I just think the risk/reward is pretty unique now - more so than in March.

 

I agree, and still own BRK. Its an interesting way to play a rebound in some of the hardest hit stuff, while having less risk than just outright buying banks and insurance stocks. I just think as a fund manager, you're getting paid to know how to navigate the rubbish and buy directly into those rebound names, which is exactly what Ackman did, almost perfectly, while Buffett was at first chasing his tail with the airlines, and then peeing in his pants. Buffett gets so many free passes though, its crazy. If you had the ability to trade back in time, you still couldn't have done a better job handling Feb/March/April than Bill Ackman.

[buffetteer1984]

Pershing also has no leverage to make any recommendations or changes to berkshire.  They can buy a qsr at 20x + and still seek margin expansions, buybacks, acquisitions etc and still do better than keeping berkshire which is basically tied to the economic recovery with no alpha so long as buffet is resistant to buying dips or buying back stock.  You really need to ask the question, what is berkshire really worth if buffett isn't buying back a languish stock in the 170s if he was willing to do so at 220.  How much instrinic value does warren think was impaired? I'd imagine in feb he probably thought it was worth 250/260 at least? What is it now if he isn't pressing the buy button here.  No excuses for it moving too fast either considering it was in the 170s for a good 2 weeks

[Xerxes]

As an investor, would one rather pay high performance/mgmt fee to Ackman to buy BRK on one’s behalf or does one directly buys Berk, and implicitly pays $100K salary to Buffet as CEO.

 

Ackman thesis was that Berk will deploy its cash. That didn’t happen. He can buy it later. and keep in mind that as Fed ramps down its support there will be distress opportunities both for Berkshire and Howard Marks from Oaktree.

 

Us, the individual BRK shareholders, are just doing time arbitrage while the above takes place (real distress opportunities)

.

Ackman, the hunter, will be going for a few kills before coming back to BRK. He is paid to hunt. That is his job. 

[Xerxes]

Pershing also has no leverage to make any recommendations or changes to berkshire.  They can buy a qsr at 20x + and still seek margin expansions, buybacks, acquisitions etc and still do better than keeping berkshire which is basically tied to the economic recovery with no alpha so long as buffet is resistant to buying dips or buying back stock.  You really need to ask the question, what is berkshire really worth if buffett isn't buying back a languish stock in the 170s if he was willing to do so at 220.  How much instrinic value does warren think was impaired? I'd imagine in feb he probably thought it was worth 250/260 at least? What is it now if he isn't pressing the buy button here.  No excuses for it moving too fast either considering it was in the 170s for a good 2 weeks

 

Buffet is probably waiting for Fed to pull the rug out so that he can go to work. Fine by me.

[Gregmal]

Pershing also has no leverage to make any recommendations or changes to berkshire.  They can buy a qsr at 20x + and still seek margin expansions, buybacks, acquisitions etc and still do better than keeping berkshire which is basically tied to the economic recovery with no alpha so long as buffet is resistant to buying dips or buying back stock.  You really need to ask the question, what is berkshire really worth if buffett isn't buying back a languish stock in the 170s if he was willing to do so at 220.  How much instrinic value does warren think was impaired? I'd imagine in feb he probably thought it was worth 250/260 at least? What is it now if he isn't pressing the buy button here.  No excuses for it moving too fast either considering it was in the 170s for a good 2 weeks

 

Buffet is probably waiting for Fed to pull the rug out so that he can go to work. Fine by me.

 

And what leads him or anyone else to believe that they will? People having been saying these same things about the Fed, and the music stopping, and the "stock market doesnt match the economy" for the past decade. For a 90+ year old dude, Im not sure thats a great game to be playing. Or, as we've seen from time to time in the markets, the Fed may in fact do that, and the story doesnt play out the way the pundits think it will.

 

Ive become more and more convinced that the rallying cry of "the markets are overvalued" is just a convenient and pride saving way of admitting "I missed the opportunity".

[buffetteer1984]

Seems more like the feds pulled the rug out beneath Warren and he's seeing stars instead of value.

 

Pershing also has no leverage to make any recommendations or changes to berkshire.  They can buy a qsr at 20x + and still seek margin expansions, buybacks, acquisitions etc and still do better than keeping berkshire which is basically tied to the economic recovery with no alpha so long as buffet is resistant to buying dips or buying back stock.  You really need to ask the question, what is berkshire really worth if buffett isn't buying back a languish stock in the 170s if he was willing to do so at 220.  How much instrinic value does warren think was impaired? I'd imagine in feb he probably thought it was worth 250/260 at least? What is it now if he isn't pressing the buy button here.  No excuses for it moving too fast either considering it was in the 170s for a good 2 weeks

 

Buffet is probably waiting for Fed to pull the rug out so that he can go to work. Fine by me.

 

And what leads him or anyone else to believe that they will? People having been saying these same things about the Fed, and the music stopping, and the "stock market doesnt match the economy" for the past decade. For a 90+ year old dude, Im not sure thats a great game to be playing. Or, as we've seen from time to time in the markets, the Fed may in fact do that, and the story doesnt play out the way the pundits think it will.

 

Ive become more and more convinced that the rallying cry of "the markets are overvalued" is just a convenient and pride saving way of admitting "I missed the opportunity".

[rb]

Pershing also has no leverage to make any recommendations or changes to berkshire.  They can buy a qsr at 20x + and still seek margin expansions, buybacks, acquisitions etc and still do better than keeping berkshire which is basically tied to the economic recovery with no alpha so long as buffet is resistant to buying dips or buying back stock.  You really need to ask the question, what is berkshire really worth if buffett isn't buying back a languish stock in the 170s if he was willing to do so at 220.  How much instrinic value does warren think was impaired? I'd imagine in feb he probably thought it was worth 250/260 at least? What is it now if he isn't pressing the buy button here.  No excuses for it moving too fast either considering it was in the 170s for a good 2 weeks

 

Buffet is probably waiting for Fed to pull the rug out so that he can go to work. Fine by me.

 

And what leads him or anyone else to believe that they will? People having been saying these same things about the Fed, and the music stopping, and the "stock market doesnt match the economy" for the past decade. For a 90+ year old dude, Im not sure thats a great game to be playing. Or, as we've seen from time to time in the markets, the Fed may in fact do that, and the story doesnt play out the way the pundits think it will.

 

Ive become more and more convinced that the rallying cry of "the markets are overvalued" is just a convenient and pride saving way of admitting "I missed the opportunity".

From what I've seen generally the bunch that point that "ABC" has missed the opportunity just because the markets went up tend to correlate well with the bunch that claim that nobody could have seen "XYZ" event coming when asked why they don't have any money anymore.

 

Also, pretty sure Buffett doesn't give a shit about "the game" or how he should play it.

[Gregmal]

Pershing also has no leverage to make any recommendations or changes to berkshire.  They can buy a qsr at 20x + and still seek margin expansions, buybacks, acquisitions etc and still do better than keeping berkshire which is basically tied to the economic recovery with no alpha so long as buffet is resistant to buying dips or buying back stock.  You really need to ask the question, what is berkshire really worth if buffett isn't buying back a languish stock in the 170s if he was willing to do so at 220.  How much instrinic value does warren think was impaired? I'd imagine in feb he probably thought it was worth 250/260 at least? What is it now if he isn't pressing the buy button here.  No excuses for it moving too fast either considering it was in the 170s for a good 2 weeks

 

Buffet is probably waiting for Fed to pull the rug out so that he can go to work. Fine by me.

 

And what leads him or anyone else to believe that they will? People having been saying these same things about the Fed, and the music stopping, and the "stock market doesnt match the economy" for the past decade. For a 90+ year old dude, Im not sure thats a great game to be playing. Or, as we've seen from time to time in the markets, the Fed may in fact do that, and the story doesnt play out the way the pundits think it will.

 

Ive become more and more convinced that the rallying cry of "the markets are overvalued" is just a convenient and pride saving way of admitting "I missed the opportunity".

From what I've seen generally the bunch that point that "ABC" has missed the opportunity just because the markets went up tend to correlate well with the bunch that claim that nobody could have seen "XYZ" event coming when asked why they don't have any money anymore.

 

Also, pretty sure Buffett doesn't give a shit about "the game" or how he should play it.

 

Like who? Can you name any?

 

Because once again, we saw most of the guys on top of their game, even some of the more prominent bears buying stocks in March. We saw BX and BAM buying RE hand over fist. We saw the Saudi Wealth fund buying hotels and entertainment companies. And we saw the guy who invented "the game" who "doesnt give a shit" about it now, capitulate at the bottom....

[rb]

You generally don't hear much from them as they don't have any more money so nobody gives a shit anymore. Do you know how Chuck Prince is doing these days?

[Xerxes]

Pershing also has no leverage to make any recommendations or changes to berkshire.  They can buy a qsr at 20x + and still seek margin expansions, buybacks, acquisitions etc and still do better than keeping berkshire which is basically tied to the economic recovery with no alpha so long as buffet is resistant to buying dips or buying back stock.  You really need to ask the question, what is berkshire really worth if buffett isn't buying back a languish stock in the 170s if he was willing to do so at 220.  How much instrinic value does warren think was impaired? I'd imagine in feb he probably thought it was worth 250/260 at least? What is it now if he isn't pressing the buy button here.  No excuses for it moving too fast either considering it was in the 170s for a good 2 weeks

 

Buffet is probably waiting for Fed to pull the rug out so that he can go to work. Fine by me.

 

And what leads him or anyone else to believe that they will? People having been saying these same things about the Fed, and the music stopping, and the "stock market doesnt match the economy" for the past decade. For a 90+ year old dude, Im not sure thats a great game to be playing. Or, as we've seen from time to time in the markets, the Fed may in fact do that, and the story doesnt play out the way the pundits think it will.

 

Ive become more and more convinced that the rallying cry of "the markets are overvalued" is just a convenient and pride saving way of admitting "I missed the opportunity".

From what I've seen generally the bunch that point that "ABC" has missed the opportunity just because the markets went up tend to correlate well with the bunch that claim that nobody could have seen "XYZ" event coming when asked why they don't have any money anymore.

 

Also, pretty sure Buffett doesn't give a shit about "the game" or how he should play it.

 

Like who? Can you name any?

 

Because once again, we saw most of the guys on top of their game, even some of the more prominent bears buying stocks in March. We saw BX and BAM buying RE hand over fist. We saw the Saudi Wealth fund buying hotels and entertainment companies. And we saw the guy who invented "the game" who "doesnt give a shit" about it now, capitulate at the bottom....

 

Gregmal

 

Saudi wealth fund invested less than $10B at bargain price, while they got hoodwinked into investing $45B to SoftBank vision fund. That $45B is now value trapped.

 

The game is about doing less stupid things and knowing the downside risk over the long term.

It doesn’t help that they did one right thing after one large stupid thing.

[Gregmal]

You generally don't hear much from them as they don't have any more money so nobody gives a shit anymore. Do you know how Chuck Prince is doing these days?

 

Ok but you stated:

 

"From what I've seen generally the bunch that point that "ABC" has missed the opportunity just because the markets went up tend to correlate well with the bunch that claim that nobody could have seen "XYZ" event coming when asked why they don't have any money anymore."

"

 

So I was just wondering what examples the correlation was based off.

[Guest cherzeca]

my thoughts on WEB:  I recall he exited muni monoline insurance because he thought local politicians  would care more about public employees than muni bondholders.  dont invest where some political bureaucrat can ruin your model.  I am beginning to think that WEB thinks this whole shutdown is a game that is controlled by these same politicians...I mean if you are invested in a business predominantly in NY, Cuomo is the most important risk factor you have to concern yourself with.  now how do you model Cuomo?...so I can see WEB saying give this time to let this play out and for the politicians to exit stage left, and then reconsider.  I also think Gates scared him.

[LearningMachine]

I think Buffett will have the last laugh.

 

He is spot on that some workers won't come back to offices.  Tech companies are already making decisions for the long term which will result in at least 25% reduction in office sqft, retail and even residential real estate in expensive cities.

 

Folks might be under-estimating how much 25% increase in incremental real estate supply can impact prices drastically in office, retail, and maybe even residential housing in expensive cities.

 

25% reduction in space needed can result in over 50% drop in prices because prices are based on incremental/marginal supply/demand.  Imagine you own 100,000 sqft of office space, which was all rented pre-Covid and could cover your mortgage payments. Imagine, post-Covid only 75% is rented. What will you do with the remaining 25,000 sqft? Will you sell/rent it for whatever price you could get if you couldn’t cover mortgage payments with the remaining 75%? Does anyone know what percentage of Detroit housing had to be on sale for prices to plummet? My guess is it didn’t even need to be as high as 15%.

 

50% drop in real estate prices will be deadly for banks and in turn, several industries.

[Guest]

I think Buffett will have the last laugh.

 

He is spot on that some workers won't come back to offices.  Tech companies are already making decisions for the long term which will result in at least 25% reduction in office sqft, retail and even residential real estate in expensive cities.

 

Folks might be under-estimating how much 25% increase in incremental real estate supply can impact prices drastically in office, retail, and maybe even residential housing in expensive cities.

 

25% reduction in space needed can result in over 50% drop in prices because prices are based on incremental/marginal supply/demand.  Imagine you own 100,000 sqft of office space, which was all rented pre-Covid and could cover your mortgage payments. Imagine, post-Covid only 75% is rented. What will you do with the remaining 25,000 sqft? Will you sell/rent it for whatever price you could get if you couldn’t cover mortgage payments with the remaining 75%? Does anyone know what percentage of Detroit housing had to be on sale for prices to plummet? My guess is it didn’t even need to be as high as 15%.

 

50% drop in real estate prices will be deadly for banks and in turn, several industries.

 

Hmmm...this isn't something I've thought a lot about (how values can drop dramatically even if demand doesn't fluctuate by the same amount). Interesting thought.

[alpha]

 

BYD to supply ford with batteries.

 

https://www.reuters.com/article/us-ford-byd-electric/buffett-backed-byd-to-supply-ev-batteries-to-ford-idUSKBN2381VJ