Buffett/Berkshire - general news

[Munger_Disciple]

17 minutes ago, ValueMaven said:

Looks like $1B of buybacks in the Q at an avg price of ~$280.  Looks like another $1.4B was bought back in July ... 

 

Paid closer to $284 per B share for the June repos, and my math agrees with @aws regarding July repos; closer to $470mm in repos in the July 1-July 26 time period at an average cost of $420K per A share or $280 per B share. 

Edited August 6, 2022 by Munger_Disciple

[ValueMaven]

From the Q: 

# of o/s as of 7/26: A-share: 599,924 

# of o/s as of 7/26: B-share: 1,301,126,370 

[aws]

On 6/30 it was 601,167 A + 1,300,940,370 B = 1,468,461 A Share Equivalent

On 7/26 599,924 A + 1,301,126,370 B = 1,467,342 A Share Equivalent

Net reduction was 1,119 A Shares

[ValueMaven]

Bloomstran on the Q

 

[Dynamic]

1 hour ago, ValueMaven said:

[Christopher Bloomstran 's thread]

 

I really found a lot of good content in his whole thread about the Q2 report which starts from this post on Twitter.

Edited August 7, 2022 by Dynamic
Corrected link

[LearningMachine]

@Dynamic and @ValueMaven, thanks for sharing. 

 

Interesting observation:

"Auto insurers are struggling with inflation in used car prices, parts, labor costs and medical costs. GEICO underwrote at a 105% combined, with losses at 92.8%. Policies in force declined so loss in market share relative to PGR continues."

 

Looks like some other insurers with longer tail will get impacted in upcoming years.

Edited August 7, 2022 by LearningMachine

[widenthemoat]

Question for the board on the BRK 10-Q: Does anyone know where the interest/dividend/other income for the non-insurance related investments gets picked up in the "Business segment data (Note 23)"? For example, interest/dividend/other income per Note 23 is $2,284 on insurance investments of $395,260. Compare this to interest/dividend/other income of $2,861 from the income statement on balance sheet investments of $450,135 (Cash: $26,534, T-Bills:  $74,803, Fixed maturity securities: $21,136, Equity securities: $327,662).

 

Thanks in advance. 

[jbwent63]

17 hours ago, widenthemoat said:

Question for the board on the BRK 10-Q: Does anyone know where the interest/dividend/other income for the non-insurance related investments gets picked up in the "Business segment data (Note 23)"? For example, interest/dividend/other income per Note 23 is $2,284 on insurance investments of $395,260. Compare this to interest/dividend/other income of $2,861 from the income statement on balance sheet investments of $450,135 (Cash: $26,534, T-Bills:  $74,803, Fixed maturity securities: $21,136, Equity securities: $327,662).

 

Thanks in advance. 

My guess, and its only a guess, is that the $2,861 includes the $2,284 plus the equity income from KraftHeinz, Pilot, Berkadia etc, but also note that the amount is Insurance and Other. There may be some investment income earned in the Other units (MSR for example), which are immaterial and therefore not disclosed. It would be helpful if there was a reconciliation somewhere in the report for sure.

[gfp]

I believe it is discussed on page 40,

 

"

Other earnings/loss consist primarily of Berkshire parent company investment income and corporate expenses, other intercompany interest income where the interest expense is included in earnings of the operating businesses and unallocated income taxes."

 

So the answer to your question would be that while almost all of the investments are held inside insurance companies (or BYD in the Energy company), Berkshire parent company owns some investments and those investments generate income.

[gfp]

Berkshire's 13F is out showing unsurprising moves that we mostly already knew about.  Added a bit to AAPL, CVX, ALLY, OXY, etc..  Finished selling off VZ, sold half the STOR.

 

Also, New England Asset Management 13F isn't out yet but it looks like they added $583.5 million worth of HPQ at $35.71/share over at General Re on 4/6/2022 so that should show up over at NEAM.

(These were disclosed on this Form 4 which caused HPQ shares to jump the next day: https://www.sec.gov/Archives/edgar/data/0001067983/000089924322014160/xslF345X03/doc4.xml)

 

The ATVI stake increased a little bit - I don't think he wants to go over 10% here for the short swing profit rule or just the Form 4 requirements.  Under the surface he is trading this position a bit.

 

At National Indemnity, he bought 8.6m ATVI shares at 77.69/sh on 4/29 and sold 6.99m ATVI shares at 78.57/sh on 5/6.

 

Also at National Indemnity he added $97m of BASF.  

Edited August 15, 2022 by gfp

[gfp]

Warren paid $138.37 / share for 3.879m shares of AAPL on 5/20/2022, for a total cost of $536,724,551

 

So the quarter-end Apple position is something like 915,226,526 shares ($158.3 Billion at today's close)

Edited August 15, 2022 by gfp

[aws]

They own about 9% of Ally now, that's a pretty large purchase. I wonder why they didn't have to report it earlier when they crossed the 5% threshold.

[gfp]

1 minute ago, aws said:

They own about 9% of Ally now, that's a pretty large purchase. I wonder why they didn't have to report it earlier when they crossed the 5% threshold.

 

You don't have to report 5% in a hurry like you do with 10%.  Maybe once a year or something like that.

[ValueMaven]

He basically bottom ticked the Apple buy ... not bad timing !

[yesman182]

3 hours ago, aws said:

They own about 9% of Ally now, that's a pretty large purchase. I wonder why they didn't have to report it earlier when they crossed the 5% threshold.

 I have a feeling one reason they didn't buy more is because they didn't want to get over the 10% ownership mark. I suspect the ownership in ALLY will be like USB were they stay above 9%, but routinely sell off some shares to stay under 10%. 

[Xerxes]

Does the fact that he is adding to Apple, an already large position, is an indication that he is implicitly thinking that the 10-year T-bonds have peaked. 

[scorpioncapital]

I think he is trying to run a balanced ship. Seems Apple is his go-to tech part of his portfolio so he's not gonna add a Google on a dip, unless it was a huge dip maybe. So he nibbles on that. He added to energy to round out the commodity hedge against infation/stagflation. Just seems to me Berkshire is a very balanced ship that mimics in some ways the SP500 but with slightly more energy exposure now.

 

[tooskinneejs]

There was a big shout out to Warren on the series finale of Better Call Saul last night.

[gfp]

As usual, every major media outlet misses half the Chevron share adds and 100% of the additional HPQ purchases that Berkshire just reported because they happened inside General Re.  Even though the HPQ purchases were publicly disclosed in April and they all wrote articles about it.

[yesman182]

44 minutes ago, gfp said:

As usual, every major media outlet misses half the Chevron share adds and 100% of the additional HPQ purchases that Berkshire just reported because they happened inside General Re.  Even though the HPQ purchases were publicly disclosed in April and they all wrote articles about it.

Are you saying that if I want to know the total ownership Berkshire has in a stock I need to combine the holding in the Berkshire 13F and General Re 13F?

[gfp]

1 minute ago, yesman182 said:

Are you saying that if I want to know the total ownership Berkshire has in a stock I need to combine the holding in the Berkshire 13F and General Re 13F?

 

The second 13F is called New England Asset Management and you only count the securities with the "01, 02" designation in Column 7.  But yes, it is part of General Re and it is disclosed in the main Berkshire 13F as containing additional securities owned.  The rest of the NEAM 13F (those that don't have "01, 02" next to them) are not Berkshire corporate holdings.

 

https://www.sec.gov/edgar/browse/?CIK=1004244

 

https://www.sec.gov/Archives/edgar/data/1004244/000108514622003133/xslForm13F_X01/infotable.xml

 

That's how you get to the correct ownership of stocks like Apple, Chevron, BAC, HPQ, etc etc

[John Hjorth]

@yesman182,

 

The very short version of @gfps reply to you above is "yes".

 

Even Dataroma does not get correctly. All media coverage has been missing this point for so many years that it is simply verging to being lame by now. Same on SA [, at least partly].

 

You can find some meticulous work on this in some topics in this forum about Berkshire here on CoBF provided by our fellow board member @Dynamic a few years ago with spreadsheets, comments, details etc.

 

It's very educational.

[backtothebeach]

NAME OF ISSUER	US$ 1000	Shares	MANAGER
APPLE INC	2,792,398	20,424,207	01 02
BANK NEW YORK MELLON CORP	82,978	1,989,411	01 02
BK OF AMERICA CORP	708,251	22,751,400	01 02
CHEVRON CORP NEW	302,880	2,092,000	01 02
CITIGROUP INC	4,093	89,000	01 02
DIAGEO PLC	39,656	227,750	01 02
HP INC	540,109	16,476,783	01 02
MARKEL CORP	5,238	4,050	01 02
US BANCORP DEL	811,261	17,628,443	01 02

Edited August 16, 2022 by backtothebeach

[yesman182]

57 minutes ago, gfp said:

 

The second 13F is called New England Asset Management and you only count the securities with the "01, 02" designation in Column 7.  But yes, it is part of General Re and it is disclosed in the main Berkshire 13F as containing additional securities owned.  The rest of the NEAM 13F (those that don't have "01, 02" next to them) are not Berkshire corporate holdings.

 

https://www.sec.gov/edgar/browse/?CIK=1004244

 

https://www.sec.gov/Archives/edgar/data/1004244/000108514622003133/xslForm13F_X01/infotable.xml

 

That's how you get to the correct ownership of stocks like Apple, Chevron, BAC, HPQ, etc etc

Thank you for the thoughtful and detailed reply. 

[MarioP]

19 hours ago, ValueMaven said:

He basically bottom ticked the Apple buy ... not bad timing !

That remembrer me when he was buying KO. If he ask his brokers to buy everything under 140 he has enough liquidity to set the floor at that price. So it is not timing it is « this is my price for backing up the truck ».