Buffett/Berkshire - general news

[sleepydragon]

If someone ask a question Buffett don’t want to say much, like “does the inflation worries you so why are u still buying stocks”, “what price are you doing stock buybacks”, he is going to ramble.

 

but if you ask him about Bitcoin, evaluate farm lands, talking about arbitrage, he doesn’t seem to be rambling to me.

 

even when he’s rambling, if you listen very carefully between the lines, you get what he’s trying to say but doesn’t want to say directly, impo.

[Spekulatius]

On 4/30/2022 at 8:49 AM, gfp said:

 

Yeah, GEICO even had a ton of cost-cutting with expense ratios way down.  But this huge boom in the value of used cars and inflation in the cost of car parts is killing them.  PGR is also raising prices, but looks like GEICO is choosing to be slower with price increases.  Also injury claims values are trending higher than general inflation.  Luckily, GEICO can change prices on a 6 month rolling basis, so can adjust over the course of a year if they choose to.

 

More interesting to me is the difference between so many other insurers celebrating "hard market" and writing huge growth in premium volume and profitability, where Berkshire seems to be taking the opposite approach.  Very slow growth outside of BH Specialty/primary - and low underwriting profitability.  Could be more conservative assumptions since maybe Berkshire is being more real about inflation than other insurers.  

Inflation is tricky for insurers. Geico almost went bust due to inflation and bad underwriting in the 70's. The hard market could become a suckers market if the inflation keeps up and insurers underwrite risk where the LT liabilities inflate going forward. I bet Warren remembers this all too well. The rest of the insurers exec probably not so much or take a gamble on inflation normalizing anyways.

[bennycx]

On 5/1/2022 at 11:04 AM, aceskc said:

 

Investments in Banks went up 10B. So it must be +100b business thats not bac and unlikely to be wfc. My best guess is JPM.

Maybe not a Bank but a big non bank financial?

[ValueMaven]

I know people HALF WEB's age that ramble 2x as much.  Give me a break.  

[Blugolds]

1 hour ago, ValueMaven said:

I know people HALF WEB's age that ramble 2x as much.  Give me a break.  

 

I compare Warren to my own grandfather with regard to age and mental acuity. Gramps just recently passed in Jan at 91...did crossword puzzles every single day. When it came to some topics he was sharp, you would think he was 50 yrs old...even remembered to ask for an update on things that we hadnt talked about for several years, but other topics he had a hard time remembering or got mixed up. Overall toward the end he just slowed. It is also sometimes tricky because personally, if you asked me what I ate for breakfast or dinner yesterday or the day before it would take a second...so tough to say what is "normal" with each individual. 

 

Overall I think for their age WB and CM are mentally doing very well with some allowed slow down in mental/verbal speed...my god everyone gets a little "tired" at 90! The fact that they still travel, are mobile, and still are able to sit up there for hours and conduct the meeting to me is impressive as I dont think my grandfather would have been able to do that at all, I know he wouldnt have been able to, granted WB has has a different life, but still, anyone who has spent significant time around the "advanced" elderly would put both WB and CM well beyond average in ability for their age, both mentally and physically. 

 

From my experience also, the mental/physical decay at these ages is not always linear, as in there is not always a specific change from one year to the next that is noticeable, many times I have seen someone past 90 take a 180 within months, either mentally or physically. I certainly dont hope that is the case here, hoping for at least another decade out of both of them, but also realistic. 

 

WB is very aware of the actuary tables, averages etc. I also wonder how much WB is involved now, my guess is that the transition will be smooth as that would be the smartest way to do it. What I mean is that by the time Greg takes over 100% it wont be a sudden change as my guess is he will already have been doing 90% of the job already. That is what I would do if I was in that situation...ie. the kid is already balancing without the training wheels before you take you hand off the back of the seat...

[yesman182]

3 hours ago, bennycx said:

Maybe not a Bank but a big non bank financial?

I thought he sold JPM because Todd is on the board, not for financial reasons(just my speculation). He has said in the past that he doesn’t want things to even resemble a conflict of interest or that he somehow has “insider information”. All that said I suspect it’s JPM, although it isn’t clear why he was so excited to tell people about ATVI and AAPL but not this bank buying, perhaps because he is don’t with ATVI but not with the banks? 

[r.ph.schaefer]

"Buffett also said at the meeting that Berkshire had bought shares in three German companies in the first quarter, but didn’t disclose the names."

 

Any ideas what stocks these might be? I know, it's just speculation at this point...

[jbwent63]

9 hours ago, r.ph.schaefer said:

"Buffett also said at the meeting that Berkshire had bought shares in three German companies in the first quarter, but didn’t disclose the names."

 

Any ideas what stocks these might be? I know, it's just speculation at this point...

Hopefully gfp will post the quarterly report from NICO that might provide some of these answers for stocks that are not required to be reported to the SEC on form13-F.

[Xerxes]

Knowing what we know about the giant Activision position, it is worth re-watching that segment of the Charlie Rose interview, when he asks Buffett about his two BIG invstments (Oxy and Activision), of course not realizing that there was actually a big position in activision which was not disclosed yet.

 

Buffett had a split-second pause before he responded and went on and on about the media mis-reporting.

[gfp]

1 hour ago, jbwent63 said:

Hopefully gfp will post the quarterly report from NICO that might provide some of these answers for stocks that are not required to be reported to the SEC on form13-F.

 

The NAIC filings for the 1st quarter of 2022 are not posted yet, but I will have a look when I notice them.  Could be a while if they don't come out before I head to Spain for a month, early next week.  But I will look 'cause I'm curious...

[gfp]

Apologies if this has already been posted, but Berkshire is still buying OXY shares -

 

https://www.sec.gov/Archives/edgar/data/0001067983/000089924322016679/xslF345X03/doc4.xml

[LearningMachine]

4 hours ago, gfp said:

Apologies if this has already been posted, but Berkshire is still buying OXY shares -

 

https://www.sec.gov/Archives/edgar/data/0001067983/000089924322016679/xslF345X03/doc4.xml

 

Thanks @gfp for keeping everyone updated on this.

[hasilp89]

On 5/3/2022 at 10:32 AM, gfp said:

 

The NAIC filings for the 1st quarter of 2022 are not posted yet, but I will have a look when I notice them.  Could be a while if they don't come out before I head to Spain for a month, early next week.  But I will look 'cause I'm curious...

Please post if you find it. I heard that too and was curious. I checked his personal holdings on ticker and it showed a position in lanxess. Know he said it was through brk but thought it was interesting.

 

[valueseek]

He is the last person to be influenced but this was pitched at Barron's roundtable 2019 by BRK director Meryl Witmer.

https://www.barrons.com/articles/a-travel-play-and-a-box-stock-favored-by-eagle-capitals-meryl-witmer-51547863453

 

[gfp]

On Lanxess, I believe he started that position through one of General Re's European divisions back in 2017.  There were articles at the time saying he was over 3% or something like that.  He has added to it from time to time, so it could be one of the German securities that he referenced - but this hasn't been a great investment for him so far.

 

Just speculating, but he has traded large positions in Munich Re in the past, and we did see a big increase in "banks, insurance & finance" category of equity holdings at cost basis - so maybe he is back into Munich Re as one of the German buys.

 

The buying may not show up in the NAIC filings at all if it was done through Harney Investment Trust.  If it does, it will probably be within one of the Euro subs of General Re - Cologne Re may have been re-named General Reinsurance AG or something like that.  Will have to root around.

[gfp]

For the Berkshire shareholders interested in following Alleghany's results now that it looks like the deal is on track - here are their recent earnings ->

 

https://www.alleghany.com/investor-relations/press-releases/press-release-details/2022/Alleghany-Corporation-Reports-2022-First-Quarter-Results/default.aspx

 

PDF of the earnings press release (same as above):

https://s24.q4cdn.com/857140222/files/doc_financials/2022/q1/1Q22-Earnings-Release-(Final).pdf

 

PDF of financial supplement:

https://s24.q4cdn.com/857140222/files/doc_financials/2022/q1/1Q22-Financial-Supplement-(Final).pdf

 

PDF of the 10Q:

https://s24.q4cdn.com/857140222/files/doc_financials/2022/q1/29d616ca-5db1-45a1-a5a1-be93d181cd58.pdf

 

----------

 

When I first saw the decline in investment income I was hopeful it was due to a decrease in bond portfolio duration but it was not (avg. duration is 4.4 yrs, was 4.5 yrs at year-end).  It appears Y invests some of its float in hedge funds and other LPs, some of which had significant gains on Cryptocurrencies in the year-ago quarter.

Edited May 8, 2022 by gfp

[Spekulatius]

On 5/3/2022 at 10:27 AM, Xerxes said:

Knowing what we know about the giant Activision position, it is worth re-watching that segment of the Charlie Rose interview, when he asks Buffett about his two BIG invstments (Oxy and Activision), of course not realizing that there was actually a big position in activision which was not disclosed yet.

 

Buffett had a split-second pause before he responded and went on and on about the media mis-reporting.

I looked into getting into the ATVI arb as well, but what bugs me about is how much other video game stocks have gone down since the deal was announced. So, if this deal falls apart, I think the downside is quite large and I think the stock could easily see a 5 handle.

 

Anyways, I concluded it's not for me.

[Ballinvarosig Investors]

On 5/3/2022 at 5:13 AM, r.ph.schaefer said:

"Buffett also said at the meeting that Berkshire had bought shares in three German companies in the first quarter, but didn’t disclose the names."

 

Any ideas what stocks these might be? I know, it's just speculation at this point...

Should be easy enough to create a shortlist. There's only 70 German companies with a market cap of greater than $5bn. Doubt Buffett would go lower than that.

• Allianz is a high quality insurer that consistently writes at a combined ratio of under 100. Trades at 10x earnings, buys back stock. Anaemic growth however.
• Adidas has improved their business in the last few years, increased margins, now buying back stock. Doesn't look much different than something like Nike, which makes me think this one isn't likely. You'd think if Buffett was interested, he'd stick with the ones he knows better.
• Knorr Bremse is quite a bit smaller than the above, but it's reasonably priced, it's got some growth, reasonably stable operating margin. They don't buy back stock, but they don't issue it either. We know Buffett likes railways, why not train makers too? 

 

 

[KPO]

2 hours ago, Ballinvarosig Investors said:

Should be easy enough to create a shortlist. There's only 70 German companies with a market cap of greater than $5bn. Doubt Buffett would go lower than that.

• Allianz is a high quality insurer that consistently writes at a combined ratio of under 100. Trades at 10x earnings, buys back stock. Anaemic growth however.
• Adidas has improved their business in the last few years, increased margins, now buying back stock. Doesn't look much different than something like Nike, which makes me think this one isn't likely. You'd think if Buffett was interested, he'd stick with the ones he knows better.
• Knorr Bremse is quite a bit smaller than the above, but it's reasonably priced, it's got some growth, reasonably stable operating margin. They don't buy back stock, but they don't issue it either. We know Buffett likes railways, why not train makers too? 

 

 

He seemed familiar with Bayer when discussing the Monsanto merger arb deal, so that’s one to put on the short list. 

[Snorky]

Any chance that it will revealed which companys he bought?

[gfp]

For the German companies Berkshire purchased in Q1, they were:

 

Allianz, Munich Re and BASF

 

Edited May 17, 2022 by gfp

[Thelilyinvestor]

24 minutes ago, gfp said:

For the German companies Berkshire purchased in Q1, they were:

 

Allianz, Munich Re and BASF

 

 

This is great, Thanks!

[Lemsip]

3 hours ago, gfp said:

For the German companies Berkshire purchased in Q1, they were:

 

Allianz, Munich Re and BASF

 

Thanks. What source is this from ?

[gfp]

10 minutes ago, Lemsip said:

Thanks. What source is this from ?

1st quarter NAIC filing for National Indemnity. Will post the pdfs later but traveling currently 

[Charlie]

The strong US-Dollar could be a good tailwind for the German investments.