Buffett/Berkshire - general news

[longterminvestor]

Understood on Gates Foundation being gifted B shares. I knew that. But to circle back, wouldn’t Gates Foundation, under mandate to dispose of shares in 12 years, naturally give BRK first right of refusal on the shares gifted by Mr. Buffett ? 

 

My point is 30% of the entire firm will be sold 12 years postmortem. That’s a certainty. So we already know the volume will be there - just hoping the price is right. And wouldn’t Mr. Buffett anticipate this and provide a rough plan to execute. I always have thought about this - interesting. Hope he loves to 100!

[John Hjorth]

Understood on Gates Foundation being gifted B shares. I knew that. But to circle back, wouldn’t Gates Foundation, under mandate to dispose of shares in 12 years, naturally give BRK first right of refusal on the shares gifted by Mr. Buffett ? 

 

My point is 30% of the entire firm will be sold 12 years postmortem. That’s a certainty. So we already know the volume will be there - just hoping the price is right. And wouldn’t Mr. Buffett anticipate this and provide a rough plan to execute. I always have thought about this - interesting. Hope he loves to 100!

 

It's an interesting discussion, thank you to all contributers!,

 

The Bill & Melinda Gates Foundation has the option to call Berkshire HQ at the phone number in the stated time frame [, ref. one of gfp's latest posts in this topic], or sell the B shares in the market.

 

It's not that complicated.

[boilermaker75]

Understood on Gates Foundation being gifted B shares. I knew that. But to circle back, wouldn’t Gates Foundation, under mandate to dispose of shares in 12 years, naturally give BRK first right of refusal on the shares gifted by Mr. Buffett ? 

 

My point is 30% of the entire firm will be sold 12 years postmortem. That’s a certainty. So we already know the volume will be there - just hoping the price is right. And wouldn’t Mr. Buffett anticipate this and provide a rough plan to execute. I always have thought about this - interesting. Hope he loves to 100!

 

Loving to 100 sounds great. And what a way to go!

[ValueMaven]

4,200 A shares traded today.  Something is up...

[sleepydragon]

And A share up more than B shares

 

[sleepydragon]

The A share volumes are spiking in March.

I think it can’t be buffett cuz he will only do x% of the daily volume.

And A is trading at a premium than B.

So it seems someone is buying, perhaps trying to gain controls?

 

 

[John Hjorth]

The A share volumes are spiking in March.

I think it can’t be buffett cuz he will only do x% of the daily volume.

And A is trading at a premium than B.

So it seems someone is buying, perhaps trying to gain controls?

 

I wonder if sleepydragon's basis for reasoning is correct here? -I mean does selling BRK.A shares [or BRK.B shares for that matter] calling Mr. Millard and doing a privately negotiated deal count as a part of daily volume for the date of the deal?, ref. Berkshire 2019 Annual report, p. 14 :

 

... Shareholders having at least $20 million in value of A or B shares and an inclination to sell shares to Berkshire may wish to have their broker contact Berkshire’s Mark Millard at 402-346-1400. We request that you phone Mark between 8:00-8:30 a.m. or 3:00-3:30 p.m. Central Time, calling only if you are ready to sell. ...

[DooDiligence]

I love how reading a BRK proxy only takes 5 minutes, because there's no long and drawn out explanation / obfuscation of management compensation.

 

Also: Chris Bloomstran on Buffett and Berkshire $BRK.B with Tobias on The Acquirers Podcast

 

 

---

 

edit: OK, so I posted that link about 5 minutes into watching. Basically, if you're having a bad day & need a pick me up, watch this. Bloomstran spends the majority of the interview outlining BRKs' recent and historical capital allocation, most of which has been discussed at length here. I'll go out on a limb and say he's a permabull.

 

Notably, he makes a quick statement about being a deflationist at minute 24:30, and then proceeds to talk a lot about hyper-inflation  :o

 

He pivots to macro around 30:00 and talks about public & private debt, his ideas on the results of federal spending policies, and the effects of digital federal currency.

 

At about 40:00 he says "circling back to Berkshire. The last thing you'd want to own in a hyper inflation is cash or bonds. You want to own long duration, durable assets", and he starts relating his comments about macro back to BRK.

 

Carlisle steered the conversation to world markets and Japan at 47:00

[wabuffo]

BRK Proxy Statement provides updated share count of A and B-shares as at March 3rd. 

https://www.sec.gov/Archives/edgar/data/0001067983/000119312521080418/d938053ddef14a.htm

 

In 15 days since the 10-K on Feb. 16th, Buffett has repurchased a further 839 A-shares and 1,274,254 B-shares.

 

FWIW,

 

wabuffo

[gfp]

So it would seem that Warren cut back his purchase volume significantly in response to higher prices.  Not surprising but good data point on what price level he cools at.

[wabuffo]

So it would seem that Warren cut back his purchase volume significantly in response to higher prices.  Not surprising but good data point on what price level he cools at.

 

Yes - his buying cooled over a period where the B's were trading in the low $240s. 

 

BRK's is getting hit today by a one-two punch:

- market is triangulating this new buyback info and processing Buffett's buy-price limit.

- increased talk about the new administration's tax plans which include raising the Federal corporate tax rate from 21% to 28% (this impacts BRK both on operating earnings as well as an increase in its capital gains deferred tax liabilities).

 

wabuffo

[cubsfan]

^ Brilliant. Particularly point 2.

[DooDiligence]

So it would seem that Warren cut back his purchase volume significantly in response to higher prices.  Not surprising but good data point on what price level he cools at.

 

Yes - his buying cooled over a period where the B's were trading in the low $240s. 

 

BRK's is getting hit today by a one-two punch:

- market is triangulating this new buyback info and processing Buffett's buy-price limit.

- increased talk about the new administration's tax plans which include raising the Federal corporate tax rate from 21% to 28% (this impacts BRK both on operating earnings as well as an increase in its capital gains deferred tax liabilities).

 

wabuffo

 

Another sweet buying opportunity coming, for WEB & for us?!?

[Thelilyinvestor]

Hi everyone,

 

Does any one have a rough idea of total share buybacks of WEB in the entire 1st quarter?

 

Thank you very much in advance.

[aceskc]

      Mar 3rd         26-Feb           31-Dec         Feb 26 to Mar 3   Jan1 to Feb 26    Q1 TD

Class A 639747         640,586           643,931         839                           3,345                 4,184

Class B 1,335,074,355 1,336,348,609 1,340,043,471 1,274,254           3,694,862         4,969,116

Class B Eq 2,294,694,855 2,297,227,609 2,305,939,971 2,532,754           8,712,362         11,245,116

 

thats roughly ~2.5B-2.7B through March 3, assuming 230-240 average Class B eq. buying price

 

 

[Lemsip]

Roughly $5b quarter to March 3 reducing share count by a further 0.92% since Dec 31.

[Lemsip]

      Mar 3rd         26-Feb           31-Dec         Feb 26 to Mar 3   Jan1 to Feb 26    Q1 TD

Class A 639747         640,586           643,931         839                           3,345                 4,184

Class B 1,335,074,355 1,336,348,609 1,340,043,471 1,274,254           3,694,862         4,969,116

Class B Eq 2,294,694,855 2,297,227,609 2,305,939,971 2,532,754           8,712,362         11,245,116

 

thats roughly ~2.5B-2.7B through March 3, assuming 230-240 average Class B eq. buying price

I don't think your calculations are correct as your share equivalents correspond to mine but your dollar amount calculations seem too low. They had already purchased $4.4b worth by 17th Feb if you use 233 as the avg price per b share till then

[wabuffo]

So it would seem that Warren cut back his purchase volume significantly in response to higher prices.  Not surprising but good data point on what price level he cools at.

 

I'm going to withdraw my point that buybacks have slowed - assuming, that BRK is under a blackout until the 10-K is released.  In 2020, the AR/10-K was released on Feb. 24, 2020.  But in 2021, it was released on March 1st, 2021.  I'm going to use the difference in share counts between the 10-K and the proxy.

 

In 2020, from 2/24/20 to 3/4/20, BRK repurchased 5,552,089 B-share equivalents over 8 trading days or 694,011 B-share equivalents per day.

 

In 2021, from 3/1/21 to 3/3/21, BRK repurchased 2,532,754 B-share equivalents over just 3 trading days or 844,251 B-share equivalents per day.

 

Its hard to know what Buffett is really doing here but assuming Buffett is adhering to a blackout period until the 10-K/AR comes out, then its possible he is still buying at the same pace as before.

 

wabuffo

[Lemsip]

      Mar 3rd         26-Feb           31-Dec         Feb 26 to Mar 3   Jan1 to Feb 26    Q1 TD

Class A 639747         640,586           643,931         839                           3,345                 4,184

Class B 1,335,074,355 1,336,348,609 1,340,043,471 1,274,254           3,694,862         4,969,116

Class B Eq 2,294,694,855 2,297,227,609 2,305,939,971 2,532,754           8,712,362         11,245,116

 

thats roughly ~2.5B-2.7B through March 3, assuming 230-240 average Class B eq. buying price

 

I thinks the error is due to the wrong B share equivalent as of Dec 31 used in your table. Per the 10-K it should be 1,543,960 A share or 2,315,940,000 B share equivalents ( page K-107 of 10-K). The B share number for Dec 31 in your table should be 1,350,043,471 rather than the one used. That will help get to the correct figure as your A share number for Dec 31 is correct from the 10-K.

 

 

[aceskc]

Thanks Lemsip...you are correct on the classB Dec 31th number.  Updated figures do map to ~5B QTD. Thx.

 

Mar 3rd 26-Feb 31-Dec Feb 26 to Mar 3 Jan1 to Feb 26 Q1 TD

Class A 639747 640,586 643,931 839 3,345 4,184

Class B 1,335,074,355 1,336,348,609 1,350,043,471 1,274,254 13,694,862 14,969,116

Class B Eq 2,294,694,855 2,297,227,609 2,315,939,971 2,532,754 18,712,362 21,245,116

 

$$ Amount 4,992,602,260

 

[ValueMaven]

I'll take about $5B in buybacks for 1Q2021.  It's about $30B over the TTM timeframe.  Not bad!!!

 

This isnt your typical buy at any price corporate buyback - its a buy at THE RIGHT price type of buyback

 

Think about it - in the FT article Buffett said it was highly likely Berkshire would return $100B or so to shareholders over the coming 10 years -- something to that effect.  $30B over the TTM's is fairly aggressive way to do this.  Bravo Warren!

[aceskc]

Yup. The old man is dollar cost averaging, started buying at $7 in 1965 and is still buying at $400,000

:D

[ValueMaven]

good summary of 1Q21 buybacks

 

Warren Buffett’s Berkshire Hathaway Appears to Have Bought Back $5 Billion of Stock in 2021

 

https://www.barrons.com/articles/warren-buffetts-berkshire-hathaway-appears-to-have-bought-back-5-billion-of-stock-in-2021-51615826952?siteid=yhoof2

[DooDiligence]

NEW YORK — A New York appellate court has upheld dismissal of claims accusing Berkshire Hathaway Inc. of participating in a fraudulent workers’ compensation scheme involving a reinsurance participation agreement (RPA), finding the plaintiffs failed to allege jurisdiction over the holding company.

 

On March 16, the New York Appellate Division, 1st Department, said plaintiffs presented no evidence that BHI collected workers’ compensation premiums from the policyholders or exercised control over its Applied Underwriters subsidiaries.

 

www.harrismartin.com/publications/14/reinsurance/articles/27133/ny-court-upholds-dismissal-of-berkshire-hathaway-from-applied-underwriters-action/

[Cigarbutt]

NEW YORK — A New York appellate court has upheld dismissal of claims accusing Berkshire Hathaway Inc. of participating in a fraudulent workers’ compensation scheme involving a reinsurance participation agreement (RPA), finding the plaintiffs failed to allege jurisdiction over the holding company.

On March 16, the New York Appellate Division, 1st Department, said plaintiffs presented no evidence that BHI collected workers’ compensation premiums from the policyholders or exercised control over its Applied Underwriters subsidiaries.

www.harrismartin.com/publications/14/reinsurance/articles/27133/ny-court-upholds-dismissal-of-berkshire-hathaway-from-applied-underwriters-action/

i don't have complete access to the link and the official NY Supreme Court judgement doesn't seem to be immediately available.

This seems to be a conclusion of an extended process related to aggressive forms of marketing by the previously owned sub about a reinsurance (RPA) product with an embedded profit sharing (EquityComp) scheme that was too complicated for the regulators to endurably maintain but not opaque enough to reach the burden of proof necessary to be condemned in civil courts. The employers who became captive in more ways than one were often left in disbelief when adverse development occurred over the course of many years (these were typical small business owners). The business is fascinating and involves sharing some the costs saved. (From relevant personal experience on a smaller scale), it may work very well but partners need to understand and maintain trust and greed has to be kept under control.

If interested, see the following (headlines suffice with no need to go into details):

https://www.wcexec.com/investigations/applied/

This shows how Applied interacts with the California regulator and it's not elegant; and so un-Buffettesque. No wonder they're on their own now.