Buffett/Berkshire - general news

[gfp]

Most of the folks at Berkshire are pretty responsive and helpful if you don't bug them too much and you don't ask about nonpublic information.  I usually email with Mr. Hamburg after the annual report but don't bother him the rest of the year.  People at Berkshire home office are busy!

[jbwent63]

Hey all, first time poster here. The folks at Dataroma do not distinguish between shares held by Berkshire Hathaway or its subsidiaries and the shares held in the Pension funds, which is the reason for the differences. The pension plans hold shares in the following I believe:

 

BK, DVA, GM, KHC, KR, LILA, LSXMK, RH, STOR, USB, VRSN.

 

Also, don't forget about the shares held in Berkshire's name at NEAM, being:

 

AAPL, BAC, BK, DEO, USB

 

Happy to hear if any of this is incorrect. All information from 13-F and Schedule 13 D or G filings and amendments.

 

Jeff

[Spekulatius]

Any risk due to the Ukraine invasion hiding somewhere within insurers? I don’t think much insurance was written in Ukraine, but business interruption insurance or is insurance  for stranded assets like AER planes could require some payouts.

 

Thats not a BRK specific problem, but I think BRK due to their size may see some of this.

[jbwent63]

2 hours ago, Spekulatius said:

Any risk due to the Ukraine invasion hiding somewhere within insurers? I don’t think much insurance was written in Ukraine, but business interruption insurance or is insurance  for stranded assets like AER planes could require some payouts.

 

Thats not a BRK specific problem, but I think BRK due to their size may see some of this.

I'd like to hope war exclusion policy wording would provide some cover for this, but its possible there could be some reinsurance exposure through London markets.

[gfp]

Berkshire refinancing rates -

https://www.sec.gov/Archives/edgar/data/1067983/000119312522068401/d270968dfwp.htm

 

Also borrowing again in Euros, but final rates not published yet

 

Here are the Euro rates -

https://www.sec.gov/Archives/edgar/data/1067983/000119312522069232/d324160dfwp.htm

Edited March 8, 2022 by gfp

[thepupil]

actually think this offering is illustrative of a material increase in spreads in very high quality borrowers. For example, the 2.5% of 2051 issued last January priced at an 85 spread. this offering's 2052's are priced at 165 spread to 30 yr. 

 

at a point, I might consider going long IG credit spreads. not there yet though. 

 

mechanically this would be you go long high quality corporate bonds in IRA, short TLT in taxable. 

 

another way to look at is Berkshire's 2051 note issued last year is at $79 / $100. A successful bond short on the part of Berkshire! 

 

if rates go up and spreads stay same, I think very long duration high quality paper will be an interesting asset class. it won't be impossible to see a 2051 bond issued by berkshire at $60 / $100 and yielding 5% (it's at $80 / 3.6% now). That would be an attractive bond to buy to offset my 2051 mortgage at 2.875%. 

 

Edited March 8, 2022 by thepupil

[thepupil]

41 minutes ago, thepupil said:

actually think this offering is illustrative of a material increase in spreads in very high quality borrowers. For example, the 2.5% of 2051 issued last January priced at an 85 spread. this offering's 2052's are priced at 165 spread to 30 yr. 

 

at a point, I might consider going long IG credit spreads. not there yet though. 

 

mechanically this would be you go long high quality corporate bonds in IRA, short TLT in taxable. 

 

another way to look at is Berkshire's 2051 note issued last year is at $79 / $100. A successful bond short on the part of Berkshire! 

 

if rates go up and spreads stay same, I think very long duration high quality paper will be an interesting asset class. it won't be impossible to see a 2051 bond issued by berkshire at $60 / $100 and yielding 5% (it's at $80 / 3.6% now). That would be an attractive bond to buy to offset my 2051 mortgage at 2.875%. 

 

 

for example, you can buy a 21 year Berkshire Energy bond for 4.2% today, right now. 

 

BRKHEC 5.15% of 2043 for $112. This has duration of 13~14 or so, so mark to market will be bad if rates go up a lot, but it's still a quite safe bond and we haven't seen 4 handles on very safe bonds in 3-4 years. I have a 1.8% position in this. If/when rates go up, I'll add another issuer at a 5 handle yield..and another and another (in tax advantaged). 

 

with i-bonds in taxable at 7% and longer duration high quality borrower yields starting to pick up, over time would hope to "defease" mortgage with high quality fixed income. for now though, it's just a start and you want to do this over time, not all at once IMO. 

 

i think most will vomit at the idea of making 4% for 21 years though. I get it.  

 

 

[longterminvestor]

On 3/5/2022 at 10:01 AM, Spekulatius said:

Any risk due to the Ukraine invasion hiding somewhere within insurers? I don’t think much insurance was written in Ukraine, but business interruption insurance or is insurance  for stranded assets like AER planes could require some payouts.

 

Thats not a BRK specific problem, but I think BRK due to their size may see some of this.

As a broker, we write cargo policies with "world wide coverage" - some policies have war/confiscation exclusions and some do not.  I have received some mid term endorsements excluding Ukraine and war/confiscation recently.  None of these accounts have direct exposure to Ukraine - they are US distributors who source product from Asia.  Berkshire is not the primary risk bearer on these cargo deals (unknown if they participate on a reinsurance basis) however trying to provide some color on this question.  

 

Unknown on the carriers who underwrite 1st party multi-peril (property insurance) in Ukraine - not my market.  

[BroKon]

From their 10-K: "Certain catastrophe, individual risk and aviation excess-of-loss contracts tend to generate low frequency/high severity losses"

 

Only 2/3 insurers big enough to take this quantum of excess of loss risk on, so you have to assume they are on the hook for their fare share.

[Charlie]

Berkshire Hathaway nominates Wally Weitz to fill open board seat:

 

https://finance.yahoo.com/news/berkshire-hathaway-nominates-wally-weitz-232726159.html

 

Cheers!

[wabuffo]

Also - Buffett repurchased a further 4.5m B-share equivalents in the 2 weeks since the 10-K came out.  I reckon another $1.4b in common stock at ~ $315-$316 avg price per B-share.  

 

Good to see him still buying at prices well above $300 per B-share -- though pace this Q will definitely be lower than last couple of years.

 

 

Bill

Edited March 12, 2022 by wabuffo

[yesman182]

1 hour ago, wabuffo said:

Also - Buffett repurchased a further 4.5m B-share equivalents in the 2 weeks since the 10-K came out.  I reckon another $1.4b in common stock at ~ $315-$316 avg price per B-share.  

 

Good to see him still buying at prices well above $300 per B-share -- though pace this Q will definitely be lower than last couple of years.

 

 

Bill

Thanks for sharing this. Between the OXY and buyback, the cash pile shouldn't be growing too much in the first Q!

[ValueMaven]

Thanks Bill!!  @wabuffo

[fareastwarriors]

 

Family of Late Berkshire Billionaire Retains $7.5 Billion Stake

 

Quote

Family members of Walter Scott Jr., a longtime Berkshire Hathaway Inc. director and friend of Warren Buffett who died last year, have retained his roughly 8% stake in Berkshire Hathaway Energy, according to a regulatory filing. 

 

That position is worth about $7.5 billion, based on Bloomberg calculations and details of an earlier filing showing that the stake in the Berkshire unit can be exchanged for shares in the parent company. 

 

The family members have agreed not to sell their shares in the energy subsidiary without offering Berkshire the right to buy them first, according to the filing. 

 

 

Edited March 12, 2022 by fareastwarriors

[xboojum]

Looks like the CEO of Lubrizol (since all of 2021) has been removed; JM's Mary Rhinehart stepping in for now: https://www.businesswire.com/news/home/20220311005450/en/Mary-Rhinehart-Named-Interim-President-and-CEO-of-Lubrizol

[fareastwarriors]

Slow and steady

 

https://www.cnbc.com/2022/03/16/berkshire-hathaway-closes-at-a-record-above-500000-a-share-as-buffetts-conglomerate-roars-back.html

 

[Charlie]

Berkshire Hathaway to Acquire Alleghany Corporation for $848.02 Per Share in $11.6 Billion Transaction

 

https://www.berkshirehathaway.com/news/mar2122.pdf

 

 

Cheers! 

[nwoodman]

7 minutes ago, Charlie said:

Berkshire Hathaway to Acquire Alleghany Corporation for $848.02 Per Share in $11.6 Billion Transaction

 

https://www.berkshirehathaway.com/news/mar2122.pdf

 

 

Cheers! 

Awesome

[wabuffo]

Good to see that Buffett is making an all-cash acquisition and not issuing any BRK stock.   I wonder if a superior bid to BRK's offer comes in and, if so, what the break-up fee is.

 

Buffett must really be worried about inflation - he's putting the cash pile to work w/ OXY, Y.  What else will he go after next?

 

Bill

Edited March 21, 2022 by wabuffo

[Williams406]

Long-time admirer of Alleghany (though not for as long as Buffett!) and former CEO Weston Hicks. Current CEO? Joe Brandon. $22 billion investment portfolio.

[mjm]

could he be beefing up on  people to help run insurance at BRK along with the company itself?

Edited March 21, 2022 by mjm

[ValueMaven]

I like the deal.  Y has a bunch of really boring businesses, but is very profitable and strong underwriters from the Insurance side.  Diversifies Berkshire insurance exposure.  I know Buffett loved Brandon at one point - but wasnt he forced out of Gen Re due to a weird AIG transaction back in the day?  Obviously Buffett/Jain knows a lot more about this when we do.  

 

Good use of capital and a fair price.  Let's hope this closes.

[ValueMaven]

Weston Hicks was an AWESOME CEO.  I'd also pointout that John Burns back in the day helped to create BNSF - with the merger of Burlington Northern and the Santa Fa railroad ... a lot of history here. 

[ValueMaven]

reading the press release - looks like Buffett still loves Brandon: 

 

'I am particularly delighted that I will once again work together with my long-time friend, Joe Brandon' 

[ander]

I'm not familiar with Allegheny. Does the transaction add new lines of business that Berkshire isn't involved with or is it just more with substantial overlap?