Buffett/Berkshire - general news

[gfp]

Some might remember a while ago when BHE proposed building gas peaker power plants in Texas as a form of "Insurance" following the 2021 freeze/blackouts.  It seemed to not go anywhere at the time and the deal Berkshire proposed is no longer on the table at that price - but the idea hasn't died and Berkshire is still following along and supporting the new bill SB 6.  So who knows - maybe Berkshire gets to build their idle gas power plants at a fixed guaranteed return after all.

 

https://www.washingtonpost.com/business/energy/2023/04/10/texas-californias-its-energy-grid-and-warren-buffett-may-benefit/be725774-d791-11ed-aebd-3fd2ac4c460a_story.html

[gfp]

Surprising that Berkshire is flexing their 80% muscles and replacing Pilot Company's CEO with two executives from Berkshire.  This follows a shut down of some of Pilot's energy trading activities that Berkshire didn't care for.

 

https://www.knoxnews.com/story/money/business/2023/04/10/pilot-flying-j-new-ceo-after-warren-buffett-berkshire-hathaway/70085946007/

[Xerxes]

On 4/4/2023 at 5:36 PM, John Hjorth said:

 

@Xerxes,

 

To me, it appears as somebody - has - more or less  - forgotten - who to serve first [clients]. Because I'm not actually  a customer, my perception may thus be totally wrong.

 

To me, it's just dishonest and disingenious to allocate a material part of capital from limited partners to Berkshire, instead of asking the limited partners buying Berkshire stock themselves to hold.

 

Maybe the content of this post can be boiled to that I'm about to have had enough of Mr. Bloomstran.

 

By further thoughts, I may be absolutely unreasonbly here, because actually, not much really material happens at Berkshire during a year, forgetting the material leaps in some years.

 

Finally, I listened to it.

 

While I do tend to listen to any podcast that talks about Berkshire, I agree that not is much happening over the recent years (certainly over the quarters) to have the need to have the experts all over it. I don't know how many times I heard podcasters talk about how BHE has not paid a single dividend (unlike other utilities) and how BNSF has gone through this large CAPEX cycle in the early 2010s. That is why the CNBCs of the world over emphasis the 13Fs, because the key pillars of the company don't change that fast, so they focus on where the noise is, the dreaded 13Fs. 

 

On Bloomstran, I would be happily pay every year to buy his views on Berkshire, if he requires payment. My view however is that he should not be focusing the bulk of his client letter on one single 10% investment, while ignoring most of the rest .... year after year. There should a letter to clients that talks about the portfolio companies and like everybody else who loves Berkshire, he can write his thoughts on Berkshire as "insights", "books", etc. Those could be viewed as marketing material, giving him credit as an analyst.

 

On Bloomstran (and other money managers) recommending their client to buy Berkshire direct, instead paying him fees, to do for them, I think it truly takes someone like Buffett himself, to do the right thing, if he was presented in the same situation as a money manager. But admittingly this is a hard one for me to square in my head. Ackman did it also in 2020, but sold it off right after the AGM, where he found Buffett to pessimistic. 

 

 

 

 

 

 

 

 

 

 

 

 

 

Edited April 11, 2023 by Xerxes

[John Hjorth]

21 hours ago, gfp said:

Surprising that Berkshire is flexing their 80% muscles and replacing Pilot Company's CEO with two executives from Berkshire.  This follows a shut down of some of Pilot's energy trading activities that Berkshire didn't care for.

 

https://www.knoxnews.com/story/money/business/2023/04/10/pilot-flying-j-new-ceo-after-warren-buffett-berkshire-hathaway/70085946007/

 

Thank you, @gfp,

 

My immediate thought - perhaps more a kind of a question - here is : Is this perhaps a token for Mr. Abel taking more control and putting his own personal fingerprints on things and processes in the privately held [non-listed] non-insurance companies?

Edited April 11, 2023 by John Hjorth

[gfp]

2 minutes ago, John Hjorth said:

 

Thank you, @gfp,

 

My immediate thoght - perhaps more a kind of a question - here is : Is this perhaps a token for Mr. Abel taking more control and putting his own personal fingerprints on things and processes in the privately held [non-listed] non-insurance companies?

 

Who knows, but I do believe that Greg is running things more than people believe and there has not been a lot of supervision or many challenging questions from headquarters to a lot of Berkshire's subsidiaries.  Greg will be earning that paycheck for quite a while wrapping his head around that hodgepodge of smaller firms that have been flying under the radar.

[gfp]

https://www.reuters.com/technology/buffett-says-geopolitics-factor-berkshire-sale-tsmc-stake-2023-04-11/

 

Some interesting color coming out of interviews Warren is doing in Japan.  Seems TSM was his position, as I suspected.

[Xerxes]

The source media publisher:

 

Warren Buffett says he intends to add to Japanese stock holdings - Nikkei Asia

 

TOKYO -- Warren Buffett told Nikkei in an interview on Tuesday that he intends to add to his investments in Japanese stocks, saying he is "very proud" of his holdings in the nation's leading trading groups.

Buffett's Berkshire Hathaway disclosed in August 2020 that it acquired slightly more than 5% in each of Japan's top five trading houses -- Itochu, Mitsubishi Corp., Mitsui & Co., Sumitomo Corp. and Marubeni. Berkshire increased its stakes in November.

 

"We're very proud of that," Buffett told Nikkei in Tokyo, saying he would meet with the companies this week "to really just have a discussion around their businesses and emphasize our support."

 

Buffett said additional investments in other Japanese companies are "always a matter of consideration." He added: "At the moment, we only own the five trading companies. There are always a few I'm thinking about."

Buffett also commented on the sale of the bulk of Berkshire's stake in Taiwan Semiconductor Manufacturing Co. After buying more than $4 billion in shares in the world's biggest chipmaker between July and September 2022, it slashed its holdings by 85% to $617 million by the end of 2022.

 

Buffett said geopolitical tensions were "a consideration" in the divestment. He described TSMC as a well-managed company but added that Berkshire had better places to deploy its capital.

Berkshire fueled expectations for additional investment in Japan when it was revealed this month that it was planning to issue yen bonds for the first time since December 2022. The capital raise would help roll over earlier debt, one of the underwriters said.

 

The legendary investor, 92, said he is open to deals with the Japanese trading houses, which are themselves investment companies.

 

"We don't think it's impossible that we will partner with them at some point in the future in a specific deal," he said. "We would love if any of the five would come to us ever and say, 'We're thinking of doing something very big or we're about to buy something and we would like a partner or whatever.'"

 

Not all investors love Japanese trading houses, saying their operations are too complex to understand. They are, in essence, diversified investment companies with footprints in industries ranging from energy and minerals to food, retail and health care. But for Buffett, this diversity is apparently the attraction.

 

"We feel that these five companies are a cross section of not only Japan but of the world," he said. "They are really so much similar to Berkshire. They own a lot of different things."

 

Another attraction of the trading companies is their share buybacks and high dividend payments, he said. "If they are repurchasing their shares, we generally regard that as a plus. We like the idea of the number of shares going down."

Following Nikkei's publication of the Buffett interview, shares in the five trading companies were higher in early afternoon trade. Itochu was up 2.4%, Mitsubishi 1.7%, Mitsui 2.0%, Sumitomo 2.8% and Marubeni 3.6%.

 

Buffett is known as a value investor. His company tends to focus on a small number of carefully selected stocks and hold them for a long time. Examples include Coca-Cola, which the company bought in the 1980s, and Apple, in which the company remains a major investor.

 

As of the end of 2022, Berkshire's stock investments were valued at $309 billion, with most of its holdings in the U.S. More recently, Buffett has signaled his intent to look for investment opportunities overseas.

 

Buffett's last visit to Japan was in August 2011, during which he visited a maker of metal cutting tools, called Tungaloy, based in Fukushima prefecture.

[Xerxes]

It seems that I have missed the part that Buffett is actually in Tokyo. 
 

He is going to joining CNBC with Becky tomorrow and Greg A. In Tokyo. 
 

Based on Becky, he raised the stake to 7.4% for each of the five Japanese companies. 
 

 

[fareastwarriors]

Amazing to see Warren stilling traveling internationally in his 90s and doing investment meetings!

 

God Bless this man! 

 

[backtothebeach]

55 minutes ago, fareastwarriors said:

Amazing to see Warren stilling traveling internationally in his 90s and doing investment meetings!

 

God Bless this man! 

 

 

Amazing! Also sending a signal how important Japan has become for him. And Greg Abel is tagging along and learning.

Feeling pretty good about Berkshire right now.
 

[CorpRaider]

This is pretty interesting to me.  I was looking at Japanese stuff and even thought about buying some of one of those two U.S. listed closed end Japanese value funds, but never got there as far as comfort with the fees and just outsourcing it (I also can't issue negative yielding bonds to fund it). 

Edited April 11, 2023 by CorpRaider

[Parsad]

https://finance.yahoo.com/news/buffett-says-geopolitics-factor-berkshire-141522492.html

 

Cheers!

[wescobrk]

Interesting, I didn’t think he would do another interview with cnbc as it has been over 3 years, I’m looking forward to tomorrow.

92 and still going strong!

[Gamecock-YT]

Must be really needing to hype up this bond issuance

[Xerxes]

Anybody knows how to watch this live without any of that CNBC PRO firewall

 

EDIT:  i would be surprised if Buffett does not push CNBC to make this available pronto without the firewall. He is all about democratizing access to his point of views without hurdles. But would prefer to watch live. 

Edited April 12, 2023 by Xerxes

[crs223]

2 hours ago, Xerxes said:

Anybody knows how to watch this live without any of that CNBC PRO firewall

 

EDIT:  i would be surprised if Buffett does not push CNBC to make this available pronto without the firewall. He is all about democratizing access to his point of views without hurdles. But would prefer to watch live. 

 

... you can sign up for a free trial week of YoutubeTV and watch it on the CNBC channel.

 

I assumed we could watch it for free on CNBC but you've got me thinking otherwise now... how frustrating.

[ValueMaven]

They are posting clips on Twitter.... at some point there will be a free video posted on CNBC.com.  

 

WEB is as sharp as ever ... it really is unreal to have this genius working for us on our behalf.  Great segment with Greg as well.  

Edited April 12, 2023 by ValueMaven

[Gamecock-YT]

Honestly there hasn't really been much. He hasn't wanted to answer a lot of questions and Becky hasn't really held him or got him to clarify the answers to the questions that were being asked. 

[gfp]

He mentioned they have put out $7-8 Billion to pay for Pilot and $4 Billion buying BRK stock and are still probably "up on cash and treasury bills" vs. year-end.  Sounds like insurance float is growing well and when hedging his comments about conditions in the general economy (carloads down, some managers surprised demand is weaker than they would have predicted 6 months ago, retail down, etc..) he was always pretty careful to point out that insurance is not hurting.  I expect a decent result from Insurance at BRK this year, despite the shrinking into profit going on at GEICO.

[Gamecock-YT]

let me tell you, referencing the nuclear bomb while in japan goes over swimmingly. 

[ValueMaven]

Disagree - I thought it was an awesome interview ... a lot of interesting insight

[Xerxes]

I listened to a clip where he was talking about the banking crisis after Becky asked a question about him seeing the losses on banks B/S, I couldn’t understand a word that he was saying when he was answering. I think he was dancing around the answer. 

[gfp]

I thought it was pretty funny when she asked him about Paramount, which from his answer is clearly his position and not Ted or Todd's.  He went on to list a bunch of reasons why streaming wasn't a good business and why Paramount and the industry in general wasn't a good business to invest in.  Then she said something like, "well that was a lot of reasons NOT to buy Paramount, but why did you buy it?" and he basically said, "well, we'll see how it works out."  As in, "this company is going to be sold."

[gfp]

Also, when was the last time you heard an investor cite "seismic risk" when discussing potential downside on Taiwan Semiconductor

[gfp]

Also, "why did you keep BAC but sell almost every other bank holding?"  Well, I got a special deal back when I bought the majority of the position and I really like Brian Moynihan.