Buffett/Berkshire - general news

[fareastwarriors]

Warren Buffett's deputy has scored a 300% gain on Dillard's in 9 months - and now boasts a $170 million stake

 

https://markets.businessinsider.com/news/stocks/warren-buffett-deputy-ted-weschler-makes-gain-dillards-stock-2021-6-1030534902

[alpha]

Buffett resigns as a trustee from Gates Foundation:

 

https://www.reuters.com/article/gates-foundation-buffett/update-3-warren-buffett-resigns-from-gates-foundation-has-donated-half-his-fortune-idUSL3N2O52OA

[John Hjorth]

The original message from Mr. Buffett mentioned by @alpha in the post above can be found here . Reading it is to me worth our time.

[Fitz]

2 hours ago, John Hjorth said:

The original message from Mr. Buffett mentioned by @alpha in the post above can be found here . Reading it is to me worth our time.

 

Great read! thanks for the link. A gentleman to the end! 

[John Hjorth]

Fitz,

 

-What do you actually read? - I want to discuss!

[wabuffo]

New 13-D by Buffett.

https://sec.gov/Archives/edgar/data/315090/000119312521197258/d174483dsc13da.htm

 

He owns 238,624 A-Shares and 2,412 B-Shares = 15.8% economic interest at of June 21st.

 

That's a reduction since Q1 of 23.05m B-equivalent shares.

 

At an average price of $285 per B-share, that's $6.6b in buybacks in Q2 so far.

 

If yes, that's huge buying even at prices people might've thought would mean he would stop/slow down the share repurchases.

 

wabuffo

[JPerez]

According to the filing after his latest philanthropic donations Warren Buffett's stake in Berkshire is down to 238626.6 class A equivalent shares which represents a 15.8% economic interest.

So if my math is correct outstanding A equivalent shares as per today are between 1515000 and 1505000. There were 1525655 the 31st of march. So they have repurchased between 20000 and 10000. So that is between 4.15 and 8.3 billion.

So it looks like buybacks are continuing at a decent clip despite the higher prices

Edited June 23, 2021 by JPerez
Error in calculation

[wabuffo]

https://seekingalpha.com/news/3709624-hershey-gains-on-berkshire-hathaway-takeover-speculation

 

Hershey corporate jet spotted in Omaha.  Leads to speculation about the Old Fool buying HSY.  Of course, the Hershey Trust would have to approve - but perhaps they would like to do a swap for BRK stock...  

 

Also in the news....

 

https://apnews.com/article/ne-state-wire-health-coronavirus-pandemic-business-144420903ce861113de38af2edc87b71

 

Buffett and Munger sit-down interview on CNBC next Tues. 7pm on CNBC.

 

wabuffo

 

Edited June 24, 2021 by wabuffo

[ValueMaven]

Source on the CNBC interview?  That would be awesome.  

 

Regarding Hershey - I dont know enough.  I know Buffett has sung the praises of Mars for years

[nickenumbers]

19 hours ago, wabuffo said:

New 13-D by Buffett.

https://sec.gov/Archives/edgar/data/315090/000119312521197258/d174483dsc13da.htm

 

He owns 238,624 A-Shares and 2,412 B-Shares = 15.8% economic interest at of June 21st.

 

That's a reduction since Q1 of 23.05m B-equivalent shares.

 

At an average price of $285 per B-share, that's $6.6b in buybacks in Q2 so far.

 

If yes, that's huge buying even at prices people might've thought would mean he would stop/slow down the share repurchases.

 

wabuffo

Wabuffo, 

 

Congrats on being picked up by Whitney Tilson for your work above in Whitney's email today.  And, Thank you for doing the share repurchase math for some of the more lazy investors.  ME!

 

Congrats and CHEERS!

[John Hjorth]

Where does one sign up for e-mails from Whitney Tilson? [Well, right now, I have 131,015 of such [in the meaning: Unread!]].

Edited June 24, 2021 by John Hjorth

[ValueMaven]

https://www.barrons.com/articles/warren-buffett-filing-indicates-berkshire-hathaway-bought-back-6-billion-of-stock-in-2nd-quarter-51624487156?mod=hp_LEADSUPP_1

[hasilp89]

wow has Ted has crushed it in his IRA 9000x over 35 years.  

https://www.documentcloud.org/documents/20971124-ted-weschler-statement

[LearningMachine]

38 minutes ago, hasilp89 said:

wow has Ted has crushed it in his IRA 9000x over 35 years.  

https://www.documentcloud.org/documents/20971124-ted-weschler-statement

Thank you for sharing.  Almost 30% annual return over 35 years without having to worry about taxes.  

[gfp]

Thanks for sharing the link. From the Pro Publica article, Ted had $264.4 million in his Roth IRA at the end of 2018. Safe to assume considerably more today. 
 

Amazing that Berkshire has found such rare talents to take the job. 

[aws]

Based on the numbers in the letter, $70,385 in 1989 to $131 million in 2012 is more like a 39% annual return, which is absolutely incredible considering he said every investment was in publicly traded stocks at market prices.

 

However, I wonder how his tax bill was only $28 million on a $131 million conversion. Roth conversions are ordinary income, and the top tax bracket was 35%, so it should have been more like $46 million. I can't think of any way that could have been possible if he did take all the income in a single year like he said.

 

[thepupil]

any chance he did some huge charitable donation concurrent w/ his roth conversion, like set up a foundation? not sure how exactly the charitable deduction worked then and now. 

 

it's particularly puzzling in tha roth conversions are ordinary income which is hard to offset. 

Edited June 24, 2021 by thepupil

[Munger_Disciple]

After reading Ted's letter, in addition to being blown away by his investing prowess all I can think of is "What a Class Act!" Those of us who are Berkshire shareholders are lucky that the company has such an outstanding bench that includes Ted, Todd, Ajit & Greg ready to step up to the plate when the time comes.  

[sleepydragon]

So Ted said his IRA was at 131 millions when he converted. He paid 29 million tax. 
Also, his IRA account balance is reported to be at 264 million at the end of 2018.

264/ (131-29) -1 = 159% return.

Brk’s return from 1/1/2012 to 12/31/2018 = 168%

Spx’s return= 115%

So this is my speculation: maybe Ted IRA is full of brk stock?

P.s. Brkb was up 17% during 2012. So the number will match assuming he converted any time during 2012.

[aws]

12 minutes ago, thepupil said:

any chance he did some huge charitable donation concurrent w/ his roth conversion, like set up a foundation? not sure how exactly the charitable deduction worked then and now. 

 

it's particularly puzzling in tha roth conversions are ordinary income which is hard to offset. 

 

The most tax efficient way, donating LTCG stock to get a deduction without ever having associated income, is limited to 30% of income, which even if he maxed that out wouldn't quite get you there. He could have contributed cash of course, which has a higher deduction limit, but then how did he have so much cash without having much taxable income? Based on his statement that without the conversion his tax bill would have been under $1 million, so he would have needed something close to $60 million of deductions plus $28 million for cash taxes, without generating enough income to get over $1 million in tax.

 

I'm certainly not accusing him of doing anything improper, but as a CPA myself I can't help but be curious about the whole picture after seeing him give those quite unusual figures.

[sleepydragon]

4 minutes ago, aws said:

 

The most tax efficient way, donating LTCG stock to get a deduction without ever having associated income, is limited to 30% of income, which even if he maxed that out wouldn't quite get you there. He could have contributed cash of course, which has a higher deduction limit, but then how did he have so much cash without having much taxable income? Based on his statement that without the conversion his tax bill would have been under $1 million, so he would have needed something close to $60 million of deductions plus $28 million for cash taxes, without generating enough income to get over $1 million in tax.

 

I'm certainly not accusing him of doing anything improper, but as a CPA myself I can't help but be curious about the whole picture after seeing him give those quite unusual figures.

Maybe he has long term capital loss too.

[aws]

1 minute ago, sleepydragon said:

Maybe he has long term capital loss too.

 

That wouldn't be deductible against ordinary income, as a net capital loss is limited to a $3000 annual deduction.

 

Also, in reference to your other post, I doubt he paid the tax on the conversion out of the account balance, as that would be considered an early withdrawal and subject to a 10% penalty on top of the normal income tax on the conversion. Not only would such a move lessen the value of the conversion, it would also make the reported $28 million tax figure all the more strange as then the implied tax rate on the conversion would have been much lower still.

[Munger_Disciple]

59 minutes ago, aws said:

 

The most tax efficient way, donating LTCG stock to get a deduction without ever having associated income, is limited to 30% of income, which even if he maxed that out wouldn't quite get you there. He could have contributed cash of course, which has a higher deduction limit, but then how did he have so much cash without having much taxable income? Based on his statement that without the conversion his tax bill would have been under $1 million, so he would have needed something close to $60 million of deductions plus $28 million for cash taxes, without generating enough income to get over $1 million in tax.

 

I'm certainly not accusing him of doing anything improper, but as a CPA myself I can't help but be curious about the whole picture after seeing him give those quite unusual figures.

 

It is possible that Ted had some flow through business losses that were related to the wind down of his hedge fund management entity which partially offset the $131M income from Roth conversion. 

[villainx]

even assuming 30% over 30 years, i feel ... i'm going to have a hard time replicating that success.

[IceCreamMan]

6 hours ago, aws said:

Based on the numbers in the letter, $70,385 in 1989 to $131 million in 2012 is more like a 39% annual return, which is absolutely incredible considering he said every investment was in publicly traded stocks at market prices.

 

 

We have to account for the fact that he was probably maxing out his contributions each year, right? I wonder how much that changes the actual time-weighted return. Still probably extremely high. I'm curious what types of investments he made, i.e. typical market cap, typical holding period, type of situation/business, etc.