Buffett/Berkshire - general news

[DooDiligence]

7 hours ago, John Hjorth said:

CorpRaider & longterminvestor,

I started listening to that podcast, too, trying to take it in, in bites. I got derailed when I heard about the site Berkshire Nerds , and I got a good laugh of the FAQ on the website! [  : - )  ]

What is a Charlie Munger? Sounds like a legitimate existential question.

I dug into the footer link & found this.

www.tinycapital.com/companies

[Charlie]

https://www.morningstar.com/articles/1035882/whats-berkshire-hathaway-worth-today

The gift that still keeps giving. 

[aws]

The Berkshire 10-Q is out, which shows repurchases of 4606 A shares during the quarter, and the share count dropped by another 400 or so between 3/31 and the date of the filing.  So call it about 5000 A shares repurchased between 1/1 - 4/22.  A much larger repurchase program than in years past, but not an exceptionally high amount of A shares to result in the much increased volume of that class, so that mystery is still outstanding.

For a somewhat striking comparison, I've been reading old annual reports again recently, and I noticed in 1975 they repurchased 6,647 A shares for a total price of $432,055 during the year. Today that amount of money can get you just over 1 share, or looked at another way they spent 1.52 billion on the just 4606 A shares they repurchased in Q1. Good thing he did at least some of the buyback back then.

[longterminvestor]

19 minutes ago, aws said:

The Berkshire 10-Q is out, which shows repurchases of 4606 A shares during the quarter, and the share count dropped by another 400 or so between 3/31 and the date of the filing.  So call it about 5000 A shares repurchased between 1/1 - 4/22.  A much larger repurchase program than in years past, but not an exceptionally high amount of A shares to result in the much increased volume of that class, so that mystery is still outstanding.

For a somewhat striking comparison, I've been reading old annual reports again recently, and I noticed in 1975 they repurchased 6,647 A shares for a total price of $432,055 during the year. Today that amount of money can get you just over 1 share, or looked at another way they spent 1.52 billion on the just 4606 A shares they repurchased in Q1. Good thing he did at least some of the buyback back then.

My math is a little different:

Count as of Dec 31

Class A equivalent: 1,543,960

Count as of March 31 

Class A equivalent: 1,525,655  (Count reduced by 18,305 shares or 1.2%)

Count as of April 22 

Class A equivalent: 1,522,371 (Count reduced by 3,284 shares or 0.2%)

 

TOTAL BUY FROM DEC 31 TO APRIL 22

21,589 Class A equivalent shares or 1.4%

 

  

[Gregmal]

 

Cant complain about anything Ive read so far.

Hopefully there is a minimum quarterly repurchase allocation that ramps with discretion. If BRK can buy ~5%(or lets say$20B) of its outstanding shares per year minimum, this becomes a big time winner under almost any circumstance if you have a 5-10 year horizon. , 

My fear would be that at a certain price, they stop altogether. Which I am sure some folks embrace, but also is ruthlessly ignorant of the fact that people have been calling the market wildly overvalued for almost the entirety of the past decade. At the end of the day, nobody knows for sure what characteristics or variables will be the true drivers, and as a result, flexibility in the approach is probably the best way to go. Hoarding cash in the current environment is more dangerous than hoarding Berkshire shares. 

[aws]

40 minutes ago, longterminvestor said:

My math is a little different:

Count as of Dec 31

Class A equivalent: 1,543,960

Count as of March 31 

Class A equivalent: 1,525,655  (Count reduced by 18,305 shares or 1.2%)

Count as of April 22 

Class A equivalent: 1,522,371 (Count reduced by 3,284 shares or 0.2%)

 

TOTAL BUY FROM DEC 31 TO APRIL 22

21,589 Class A equivalent shares or 1.4%

 

  

Perhaps I should have made it clearer, but I was specifically just talking about a discussion from the previous pages about a big increase in A share volume recently, not about the total A share equivalent repurchase. It was possible that Buffett was preferring to buyback A shares, even at a bigger premium, for some reason and that resulted in the higher volume of that class recently. I'm sure the overall buyback numbers you quoted are correct.

[longterminvestor]

12 hours ago, aws said:

Perhaps I should have made it clearer, but I was specifically just talking about a discussion from the previous pages about a big increase in A share volume recently, not about the total A share equivalent repurchase. It was possible that Buffett was preferring to buyback A shares, even at a bigger premium, for some reason and that resulted in the higher volume of that class recently. I'm sure the overall buyback numbers you quoted are correct.

[John Hjorth]

Thank you & very well said, Greg,

Personally, I think about this as a private investor saving and only holding cash & T-bills for the long term. It's doomed to failure in the sense of underperformance for the long term. In fact, Mr. Buffett has been a proponent of exactly this stance & point many times over the years.

I think it was some two to three years ago that I was about have had enough of this continuous cash build and seriously considered to reduce my Berkshire position and go somewhere else with the proceeds.

gfp has also earlier here on CoBF short time ago expressed, that the buybacks for sure appear price sensitive in some way. Mr. Buffett also verbally confirmed it under the AGM yesterday.

Let's just hope it doesn't run up too much, so that the buybacks come to a halt.

- - - o 0 o - - -

Just a few additions here, hopefully without these additions being perceived as too much nitpicking by my fellow CoBF members :

1. Mr. Buffett mentioned under the AGM yesterday that the minimum cash position of USD 20 B is under consideration for a raise [, which to me makes sense - float is still gradually increasing, and as of now [EOP 2021Q1] stands at USD 140 B].
2. Calculation of "excess cash" ["dead money"] should actually include a deduction for cash at hand at BHE, because that cash is de facto earmarked for reinvestment in BHE [no dividends from BHE to the parent].
3. I think it was at the 2017 AGM, that Mr. Buffett was asked a question about the cash build, where he expressed something along these lines [,so not an exact quote here] : "... there is no way we can sit here in front you and consider ourselves a success with more than USD 150 B in cash & cash equivalents on the balance sheet ...". Somehow, Mr. Buffett - so far - has lived up to that.

Edited May 2, 2021 by John Hjorth

[Cigarbutt]

Opinion (opportunity cost aspect): over the next 10 years, BRK has a very reasonable chance to outperform the S&P 500. My guess would be by 5 to 10% at the end of the following ten years.

As for the future, the challenge is always to move from the short term to the long term. Easier said than done.

A table was included showing the 20 largest companies in the world (market cap) in 1989. Then, 13 of the 20 companies were based in Japan (6 of the 13, banks). The future is indeed unknowable and BRK is also likely to be less risky (both the traditional and 'modern' definitions of risk).

[ValueMaven]

https://www.morningstar.com/articles/1036775/berkshire-bounces-back-in-q1-on-solid-operating-results

[backtothebeach]

2 hours ago, ValueMaven said:

https://www.morningstar.com/articles/1036775/berkshire-bounces-back-in-q1-on-solid-operating-results

I dunno, a few numbers in the article seems off. I get:

Shareh. equ. in million	447987
Q end A shares	1525655
BV per A	293636
BV per B	195.76

and:
cash & equiv.	56826
treasury bills	85385
cash railroad	3228
NET CASH	145439

Edited May 2, 2021 by backtothebeach

[aws]

The cash difference is explained by the $4b liability for treasury bills they bought in March and paid for in April, otherwise you'd be counting the cash and the bills.

[backtothebeach]

9 hours ago, aws said:

The cash difference is explained by the $4b liability for treasury bills they bought in March and paid for in April, otherwise you'd be counting the cash and the bills.

Thanks, I missed the liability:

cash & equiv.	56,826
treasury bills	85,385
cash railroad	3,228
payable for treasuries	-4,084
NET CASH	141,355

[aws]

“The directors are in agreement that if something were to happen to me tonight, it would be Greg who’d take over tomorrow morning,” Buffett said. He praised Abel and Vice Chairman Ajit Jain, who runs all of Berkshire’s insurance operations.

https://www.cnbc.com/2021/05/03/when-warren-buffett-eventually-steps-down-as-berkshire-hathaway-ceo-greg-abel-will-succeed-him.html

[Xerxes]

40 minutes ago, aws said:

“The directors are in agreement that if something were to happen to me tonight, it would be Greg who’d take over tomorrow morning,” Buffett said. He praised Abel and Vice Chairman Ajit Jain, who runs all of Berkshire’s insurance operations.

https://www.cnbc.com/2021/05/03/when-warren-buffett-eventually-steps-down-as-berkshire-hathaway-ceo-greg-abel-will-succeed-him.html

 

And there is the Munger statement as well when they were discussing culture where he said: "Greg will keep it that way"

[ValueMaven]

Here is a crazy but interesting idea.  Berkshire issues $20B shares to acquire Markel.  Get's huge float, profitable and unique underwriting business it can easily fold into the Primary Group.  Gayner joins the board.  Then buysback $20B worth of stock.  Roll Markel Ventures into MSR unit.  

Just an idea

[MattR]

3 minutes ago, ValueMaven said:

Here is a crazy but interesting idea.  Berkshire issues $20B shares to acquire Markel.  Get's huge float, profitable and unique underwriting business it can easily fold into the Primary Group.  Gayner joins the board.  Then buysback $20B worth of stock.  Roll Markel Ventures into MSR unit.  

Just an idea

That would be hilarious :D. Personally i think at current prices Markel is actually pretty cheap.

[Charlie]

Interesting to see that Francis Chou has nearly 41% in Berkshire Hathaway:

https://www.dataroma.com/m/holdings.php?m=ca

[ValueMaven]

Is the mystery A share buyer out yet?  I havent seen anything published on this yet....possibly Monday??

[Xerxes]

5 hours ago, Charlie said:

Interesting to see that Francis Chou has nearly 41% in Berkshire Hathaway:

https://www.dataroma.com/m/holdings.php?m=ca

How did Chou got his cost so low for Resolute at $1.26 per share.

 

BRK.A - Berkshire Hathaway CL A	40.83	150	Add 50.00%	$272000.00	$40,800,000
≡	BHC - Bausch Health	24.18	1,558,992	Add 1.30%	$15.50	$24,164,000
≡	WFC - Wells Fargo	6.02	209,542		$28.70	$6,014,000
≡	RFP - Resolute Forest Products	5.77	4,571,960		$1.26	$5,761,000
≡	MBI - MBIA Inc.	4.66	652,531	Add 5.33%	$7.14	$4,659,000
≡	JPM - JPMorgan Chase & Co.	3.09	34,275		$90.04	$3,086,000
≡	GS - Goldman Sachs Group	3.09	20,000	Add 11.11%	$154.60	$3,092,000
≡	C - Citigroup Inc.	2.85	67,695		$42.12	$2,851,000
≡	DVA - DaVita HealthCare Partners	2.49	32,743	Add 204.78%	$76.05	$2,490,000
≡	BB - BlackBerry Ltd.	2.17	529,040	Add 23.31%	$4.10	$2,169,000
≡	SNY - Sanofi Aventis	0.87	20,000	Buy	$43.70	$874,000

 

[StubbleJumper]

4 minutes ago, Xerxes said:

How did Chou got his cost so low for Resolute at $1.26 per share.

 

 

The Resolute shares were likely acquired several years ago (pre-merger) and have been held ever since.

Now that you have posted the table of his major holdings, I wanted to observe that it's interesting that he added to his BB holdings.  It takes a fair level of conviction to add to BB after years of poor execution by the company.

 

SJ

[Xerxes]

1 hour ago, StubbleJumper said:

 

The Resolute shares were likely acquired several years ago (pre-merger) and have been held ever since.

Now that you have posted the table of his major holdings, I wanted to observe that it's interesting that he added to his BB holdings.  It takes a fair level of conviction to add to BB after years of poor execution by the company.

 

SJ

Indeed,

I just hope that he didn't buy it from me back in Q1, when I sold my BBs at $24.99 CAD

[ValueMaven]

Do we find out who the mystery A share buyer is tonight????

[Ballinvarosig Investors]

2021 Q1 13-F out -  https://www.dataroma.com/m/holdings.php?m=BRK

Very little buying activity there.

[Xerxes]

what's that about LBTYA - Liberty Global Inc. reduced by 80%