Buffett/Berkshire - general news

[Spekulatius]

On 10/20/2021 at 4:58 PM, StubbleJumper said:

 

Another case of a marginally competent family member being given a position on the board.  Should we now call Buffett the Prem Watsa of the south?  

 

SJ

LOL, Woot Woot for nepotism. I sort of wonder how Howard and Susan  keep the Berkshire culture intact if they have no idea what is going on at Berkshire.

Edited October 23, 2021 by Spekulatius

[Munger_Disciple]

32 minutes ago, Spekulatius said:

LOL, Woot Woot for nepotism. I sort of wonder how Howard and Susan  keep the Berkshire culture intact if they have no idea what is going on at Berkshire.

 

Couldn't agree more

[DooDiligence]

11 hours ago, Spekulatius said:

LOL, Woot Woot for nepotism. I sort of wonder how Howard and Susan  keep the Berkshire culture intact if they have no idea what is going on at Berkshire.

This is terribly distracting.

Not as bad as when WEB bought into airlines but nearly so.

[flesh]

They are just votes voting how there told for awhile. 

[John Hjorth]

On 10/22/2021 at 9:21 PM, StubbleJumper said:

 

No, I have never had my father donate $1 billion so I could be hand-picked to run my own philanthropy foundation.  My guess is that somebody who climbed through the ranks of the non-profit sector, with successive jobs of progressively higher responsibility, to eventually be competitively selected to be the boss of a $1 billion foundation would be a pretty talented person.  But, that's not how Susie was selected for the job, was it?

 

The culture of BRK will probably last one or two CEOs post-Buffett and then it will likely revert to a typical organization with an over-confident, self-interested management cadré.  Appointing a 68 year-old family member to the board is unlikely to forestall that process.

 

 

SJ

 

@StubbleJumper

 

I'm thinking about the content of your post. Thank you for sharing your thoughts & line of thinking.

Edited October 24, 2021 by John Hjorth

[IceCreamMan]

On 10/22/2021 at 3:21 PM, StubbleJumper said:

 

No, I have never had my father donate $1 billion so I could be hand-picked to run my own philanthropy foundation.  My guess is that somebody who climbed through the ranks of the non-profit sector, with successive jobs of progressively higher responsibility, to eventually be competitively selected to be the boss of a $1 billion foundation would be a pretty talented person.  But, that's not how Susie was selected for the job, was it?

 

The culture of BRK will probably last one or two CEOs post-Buffett and then it will likely revert to a typical organization with an over-confident, self-interested management cadré.  Appointing a 68 year-old family member to the board is unlikely to forestall that process.

 

 

SJ

 

UNLESS...

 

What if Susie and Howard have been instructed to make sure more "culture keepers" are added to the board (as S & H reach retirement age) and to instruct them continue the cycle?

 

Buffett has talked in the past about his desire for Howard to maintain the Berkshire culture; is it possible that Warren wants to has a plan to try to keep the chain of trust going for as long as possible (i.e. beyond his children)?

[adesigar]

I’d rather have honest people who genuinely care about the company than worthless incompetent big names similar to the board of directors of Theranos.

Edited October 24, 2021 by adesigar

[gfp]

I don't know why it was decided to add Susie to the Board of Directors but I would bet that, if asked, Warren would say that Susie is tasked with saying something when Warren is "losing his marbles" so to speak.  He has talked for many years about how hard it is for directors - or even Warren & Charlie - to speak up and make a change when a CEO is starting to slip cognitively.  Susie spends more time with Warren than just about anybody and he probably recognizes that she is his best option as far as feeling comfortable enough to speak up when it's time to make the call.

 

Another possibility is that Howard is not particularly healthy, but I would place my bet on the first theory.  I wouldn't necessarily expect Susie to stay on the board once Greg Abel is CEO but what do I know?

 

The timing of the announcement was probably just based on the death of Walter Scott.  Obviously they added two and only lost one - but there was likely some debate on who to add and what the pros and cons were and maybe they just said lets chose more than one.  Warren is getting old and working from home was not particularly good for someone who likes to tap dance to work.

[Munger_Disciple]

I feel like the board quality has been going down in recent times. We lost Walter Scott, who brought the energy business opportunity to Berkshire in the late 90s and had an outstanding business career and Bill Gates. Gates' replacement is ok but not as good as Gates. I don't understand why Susie needs to be on the board to provide input to the other members on Warren's mental acuity. Chris Davis is a decent fellow but why do we need one more investor on the board? We already have Meryl Whitmer in addition to Sandy Gottesman. What we really need are board members who have business operating background like Scott and Gates. Having a competent shareholder oriented board is more important than ever given Warren's advanced age and upcoming CEO transition. 

[ValueMaven]

In other news - BYD is going vertical again 

[cubsfan]

1 hour ago, gfp said:

I don't know why it was decided to add Susie to the Board of Directors but I would bet that, if asked, Warren would say that Susie is tasked with saying something when Warren is "losing his marbles" so to speak.  He has talked for many years about how hard it is for directors - or even Warren & Charlie - to speak up and make a change when a CEO is starting to slip cognitively.  Susie spends more time with Warren than just about anybody and he probably recognizes that she is his best option as far as feeling comfortable enough to speak up when it's time to make the call.

 

Another possibility is that Howard is not particularly healthy, but I would place my bet on the first theory.  I wouldn't necessarily expect Susie to stay on the board once Greg Abel is CEO but what do I know?

 

The timing of the announcement was probably just based on the death of Walter Scott.  Obviously they added two and only lost one - but there was likely some debate on who to add and what the pros and cons were and maybe they just said lets chose more than one.  Warren is getting old and working from home was not particularly good for someone who likes to tap dance to work.

 

Bravo GFP.

 

This is an excellent point - and who better to protect Berkshire from a declining Warren than his

daughter and son that know how & what their father will want them to do.

Edited October 25, 2021 by cubsfan

[wabuffo]

WTF?   Is Elon Musk making a hostile bid for BRK?

 

[sleepydragon]

40 minutes ago, wabuffo said:

WTF?   Is Elon Musk making a hostile bid for BRK?

 

Or more likely Buffett buying Tesla,  

[hasilp89]

was listening to the 2004 meeting and heard WEB say that there were four internal candidates that could take the reigns. Assuming at the time that was Sokol, Abel and Jain - blanking on the 4th anyone know. Anyway its quite interesting to listen to the Q&A on succession from almost 20 years ago.  

[Munger_Disciple]

2 hours ago, wabuffo said:

WTF?   Is Elon Musk making a hostile bid for BRK?

 

 

https://finance.yahoo.com/quote/BRK-B?p=BRK-B&.tsrc=fin-srch

 

Not reflected in B share price, so it seems like a (fat finger mistake) market order on 3 A shares after hours LOL.

Edited October 27, 2021 by Munger_Disciple

[aws]

Someone did it again today with 1 share trading for 504k, or about 70k over the closing price. Starting to think I should have a GTC sell order just sitting out there. I can even give them a bargain and just have it at 50k over regular trading hour prices.

[Dynamic]

Almost start to wonder if two parties are coordinating to realize capital gains and losses or something.

[John Hjorth]

Yes, @Dynamic,

 

Likely these transactions catch the interest of SEC.

[gfp]

So...... now that it looks like they might be actually getting a bill together that includes a 15% minimum tax on large corporations - there has been some discussion that this would be a 15% minimum tax on "book" income, or GAAP reported net income.  As in, when Berkshire reports a GAAP net income that includes $30 or $40 Billion in unrealized stock market gains that weren't previously taxed under the previous regime but have to be reported through the income statement under GAAP, who here thinks Berkshire will be on the hook for the cash tax payments under this new plan?  I assume they will need to carve out a bunch of exemptions and maybe insurance companies will be one of those - but it is being put together in a hurry and it seems like there will be a lot of hasty decisions that they will have to 'fix in post' so to speak.

 

On the other hand, I'm sure Berkshire will benefit from some of the extensions of utility tax credits.

 

 

[aws]

I don't even really know who this 15% corporate AMT is meant to target. When many of the headlines about such and such big corporation paid no income taxes this year it usually seems to be related to R&D expenses or bonus depreciation.

 

R&D expenses are deducted for both GAAP and tax, so this wouldn't really hit any of them unless the AMT will require adding back those amounts.

 

Bonus depreciation is the one I see most often when there is GAAP net income but no taxable income, because for tax purposes millions or billions of fixed asset purchases are written off immediately whereas for book purposes they are depreciated over their useful life. But bonus depreciation has come and gone many times, and if you don't want that book to tax discrepancy then I don't know why you would keep the accelerated depreciation in the first place.

 

As you say, Berkshire is probably hit harder than anyone because of the newish GAAP rules about taking unrealized gains into book income, but they would be an odd target for such a law because they actually pay their taxes. Unlike many large companies they don't do all these strategies to avoid taxes by shifting income to offshore entities in low tax countries. But I guess if a wealth tax for individuals is the goal, then maybe they want for corporations as well. I doubt either will end up happening as written right now, so I'm not too worried about it.

[gfp]

Not sure where to put this as it doesn't have anything to do with Berkshire and there aren't many recent Charlie Munger threads, but here is an article that is critical of Charlie's new dorms:

 

https://gizmodo.com/architect-says-billionaires-dystopian-dorm-design-is-a-1847964193

[DooDiligence]

39 minutes ago, gfp said:

Not sure where to put this as it doesn't have anything to do with Berkshire and there aren't many recent Charlie Munger threads, but here is an article that is critical of Charlie's new dorms:

 

https://gizmodo.com/architect-says-billionaires-dystopian-dorm-design-is-a-1847964193

 

Eeek! Sounds like something the Chicom's would devise.

[boilermaker75]

2 hours ago, DooDiligence said:

 

Eeek! Sounds like something the Chicom's would devise.

 

There are fire codes. So they can't build it unless it meets those codes.

[DooDiligence]

23 minutes ago, boilermaker75 said:

 

There are fire codes. So they can't build it unless it meets those codes.

 

I love the comments:

 

4500 men enter. One man leaves.

Thunderdorm.

[aws]

Charlie responds: https://www.bloomberg.com/news/articles/2021-10-29/charlie-munger-defends-design-for-dorm-bashed-by-architect