Buffett/Berkshire - general news

[Munger_Disciple]

10 minutes ago, longlake95 said:

Thanks beach, I tried that, didn’t seem to work. I’ll keep trying. Thanks 

 
I just posted the whole article (see my previous post). 

[longlake95]

20 minutes ago, Munger_Disciple said:

 
I just posted the whole article (see my previous post). 

Yes, got it. Thanks. 

[Spooky]

Somewhat off topic -  I've been thinking lately about something that Buffett said at the AGM with respect to the World War II period and the US federal government re-organizing the whole economy and government under direction from someone from Goldman Sachs to build its war time production. Does anyone have any good books or resources about this time period and the changes to the political system and economy that took place?

[gfp]

1 hour ago, Spooky said:

Somewhat off topic -  I've been thinking lately about something that Buffett said at the AGM with respect to the World War II period and the US federal government re-organizing the whole economy and government under direction from someone from Goldman Sachs to build its war time production. Does anyone have any good books or resources about this time period and the changes to the political system and economy that took place?

 

I assume you are referencing Sidney Weinberg.  I'm not sure of what the best books are on this period or his influence but I'm sure if you google his name you can find a bunch of articles about him and several histories of Goldman Sachs.  One of the best monetary histories of the United States is this one, but it's probably not the book you are looking for in your question:

https://www.amazon.com/dp/0691003548/?coliid=I255V4DNCMU3UD&colid=1UBQAXGQNN2BF&psc=1&ref_=list_c_wl_lv_ov_lig_dp_it

[Spooky]

Thanks @gfp, I'll do some more digging. I've actually been wanting to read that Milton Friedman book as well!

[sholland]

 

Quote

8 hours ago, Spooky said:

Somewhat off topic -  I've been thinking lately about something that Buffett said at the AGM with respect to the World War II period and the US federal government re-organizing the whole economy and government under direction from someone from Goldman Sachs to build its war time production. Does anyone have any good books or resources about this time period and the changes to the political system and economy that took place?

 

Read Freedom’s Forge
https://www.amazon.com/Freedoms-Forge-American-Business-Produced/dp/0812982045/ref=asc_df_0812982045/?tag=hyprod-20&linkCode=df0&hvadid=312243616995&hvpos=&hvnetw=g&hvrand=6544409871145515635&hvpone=&hvptwo=&hvqmt=&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9024305&hvtargid=pla-564515663945&psc=1

[Cigarbutt]

On 8/31/2023 at 12:58 PM, Spooky said:

Somewhat off topic -  I've been thinking lately about something that Buffett said at the AGM with respect to the World War II period and the US federal government re-organizing the whole economy and government under direction from someone from Goldman Sachs to build its war time production. Does anyone have any good books or resources about this time period and the changes to the political system and economy that took place?

Biased and potentially misleading addition on my part here.

Off-topic but quite interesting and relevant? to BRK? others?

On a personal level, one of the most interesting aspects of the period is how war efforts were financed (the war was publicly financed) but this is a 'story' for another day.

-----

Freedom's Forge is an interesting reference but is quite uni-dimensional and focuses mostly on some aspects of corporate contribution.

For a more balanced review:

For a more diverse view with a focus on individuals (the book is based on the underlying assumption that the 'secret sauce' (some kind of semi-collaborative context balancing key participants) was in place):

Another useful reference (most likely to meet your limited-time-availability expectations) is:

Mobilizing U.S. Industry in World War II: Myth and Reality (ethz.ch)

The book describes how the US process to get involved in the war was 'messy' but demonstrates that the US was able to eventually get ahead while balancing military and civilian needs. The book describes the 'team' effort. It goes through the various institutions (War Production Board, Office of War Mobilization etc) that were (semi-strategically) put in place and the people who led the team efforts (Sidney Weinberg was a player in the team; it was a time when public office was held in high esteem..). 

And now here 'we' are and this too shall pass.

 

 

[gfp]

$3.3 Billion cash deal for Cove Point closed today.  Greg Abel continuing to put his mark on the company.  This is what they used the proceeds from the partial BYD share sale for.

 

https://www.businesswire.com/news/home/20230901350178/en/Berkshire-Hathaway-Energy-Completes-Acquisition-of-Additional-Stake-in-Cove-Point-LNG

[ValueMaven]

Yea - this is a great asset for sure.  Would have love if they bought Oncor several years back ... but BHE is really turning into a componding jewel within Berkshire.  Between the D pipeline assets, these LNG assets plus natural growth capex - BHE is a growth engine for sure.  So glad Charlie finally let BYD go.  What an epic investment

 

BTW - at some point over the next 12-24 months expect BIP to try and monitize its stake in Clove Point (asset rotation) -- so its likely over the next few years BHE will own 100% of this asset.  Wow.

Edited September 2, 2023 by ValueMaven

[NnnnotSoSmart]

15 hours ago, gfp said:

$3.3 Billion cash deal for Cove Point closed today.  Greg Abel continuing to put his mark on the company.  This is what they used the proceeds from the partial BYD share sale for.

 

https://www.businesswire.com/news/home/20230901350178/en/Berkshire-Hathaway-Energy-Completes-Acquisition-of-Additional-Stake-in-Cove-Point-LNG

On a related note, OXY owns 39% in a company called Net Power (NPWR). By virtue of BRK's ~25%+ position in OXY, Berkshire now owns ~ 10% of NPWR.   

 

NPWR has developed technology to produce "zero emission" power using natural gas as fuel.  The first commercial scale installation will be to supply power for OXY's first direct air capture (DAC) unit in west Texas.
https://netpower.com/press-releases/net-power-announces-its-first-utility-scale-clean-energy-power-plant-integrated-with-co2-sequestration/

NPWR IPO'd in June.
https://www.bloomberg.com/press-releases/2023-06-08/net-power-completes-merger-with-rice-acquisition-corp-ii-to-accelerate-clean-natural-gas-power-generation

 

More detailed presentation on the company and technology here:

https://d1io3yog0oux5.cloudfront.net/_1658a8372bf11a36555133c52282b2c5/netpower/db/3583/33173/pdf/netpower+analyst+day+presentation.pdf

 

According to the slides the technology has a huge addressable market replacing old gas fired power generation globally. No doubt Greg Abel watching at this one for application at BHE.  Could provide "clean" back up for all BHE's intermittent wind installations.
 

[gfp]

1 hour ago, ValueMaven said:

So glad Charlie finally let BYD go.  What an epic investment

 

FWIW, Berkshire Hathaway Energy still owns 98.6 million BYD (hk:1211) shares with a current value of $3 Billion USD.

[UK]

https://www.wsj.com/business/energy-oil/green-energy-coal-country-875d52fa

[Cigarbutt]

27 minutes ago, UK said:

https://www.wsj.com/business/energy-oil/green-energy-coal-country-875d52fa

Capital is there, Berkshire is there but, under present circumstances (various 'incentives'...), progress will be slow.

Somehow, progress will become more rapid eventually and this is related to the WW2 reconfiguration question mentioned above thread. In any case, BRK will likely be ready.

Buffett on clean energy push: This country should be ahead of where it is (cnbc.com)

Edited September 4, 2023 by Cigarbutt
spelling

[KPO]

https://archive.ph/D0KXm
 

Happened upon this article about the other famous Buffett and it states that Berkshire has ownership in Margaritaville Enterprises, the holding company for most of the Jimmy Buffett related businesses. Was I the only one that didn’t know this? I wonder if it’s even true? 

[Parsad]

1 hour ago, KPO said:

https://archive.ph/D0KXm
 

Happened upon this article about the other famous Buffett and it states that Berkshire has ownership in Margaritaville Enterprises, the holding company for most of the Jimmy Buffett related businesses. Was I the only one that didn’t know this? I wonder if it’s even true? 

 

Jimmy Buffett was sick for a few years.  He's also been a Berkshire shareholder for many, many years.  I would not be surprised that in the last few years, he may have arranged for the possibility of his demise and how it would affect Margaritaville.  

 

Jimmy Buffett knew what a great home Berkshire was for businesses.  His family probably has little interest in running the company.  It may be that he was doing some succession planning and Berkshire will play a role in that.  We shall find out fairly soon!  Cheers!

[UK]

https://www.bloomberg.com/news/articles/2023-09-08/pacificorp-loses-bid-to-delay-trial-over-final-payout-for-fires?srnd=all

 

Berkshire Hathaway Energy Co.’s PacifiCorp failed to postpone the final phase of a trial over catastrophic Oregon wildfire damages that will determine how much the utility will have to pay — an amount it had estimated to be as much as $11 billion. A state court judge in Portland ordered the trial over the potential payouts to start Jan. 8. The ruling Friday follows a June verdict when the judge ordered PacifiCorp to pay 17 owners of properties destroyed by a series of 2020 fires an average of $5 million each. Those 17 plaintiffs were awarded about $90 million, but Judge Steffan Alexander’s ruling means that calculating damages for as many as 5,000 other residents and business owners will move forward — setting up total potential liability in the billions of dollars. PacifiCorp wanted the proceeding delayed while it appeals the original verdict, and has said it’s confident it will prevail on appeal.

...

At trial, Portland-based PacifiCorp estimated its potential liability at $11 billion. In a more recent regulatory filing, the company reported in August that it faces damages claims of more than $7 billion from all lawsuits over the 2020 Oregon fires and estimated its pre-tax losses through June of this year at $608 million after accounting for probable insurance recoveries.

[gfp]

Berkshire hit $800 Billion market cap today *rocketshipemoji*

[Spekulatius]

How do people here about tail risk for Berkshire

 

BHE - utilities have huge tail risk if they cause fires now.

Apple - risk of China syndrome

 

Then we have the catastrophe risk from the insurance business.

 

Something to think about if you have a huge position.

 

Edited September 12, 2023 by Spekulatius

[bizaro86]

42 minutes ago, Spekulatius said:

How do people here about tail risk for Berkshire

 

BHE - utilities have huge tail risk if they cause fires now.

Apple - risk of China syndrome

 

Then we have the catastrophe risk from the insurance business.

 

Something to think about if you have a huge position.

 

 

The apple one is interesting. In the last week or so (in round numbers) the market price of their Apple stake is down about $12B. 

 

Now, that takes it down to levels it first achieved like 3 months ago, so not exactly a huge deal, but still, definitely a large position.

[longlake95]

47 minutes ago, Spekulatius said:

How do people here about tail risk for Berkshire

 

BHE - utilities have huge tail risk if they cause fires now.

Apple - risk of China syndrome

 

Then we have the catastrophe risk from the insurance business.

 

Something to think about if you have a huge position.

 

 

i worry more about tail risk at subs than tail risks in their marketable securities - like Apple. I don't think you can own something like BHE and not have the occasional - pardon the pun - flare up. Likewise, you can't own a re-insurer and not have some really bad hurricane years. While not fun to endure, I think BRK takes on water over the gunnels, but the ship doesn't sink. The earnings power is just so large. If there's anyone who would increase capex to fix the issues - it's BRK. We'll see what they do at Pacific Corp. Certainly no expert here - but there are now utilities installing fire prevention wrapped utility poles and using a gizmo on the pole that de-energizes the line if something touch it - to prevent fires. Burying lines is just too expensive.

[UK]

1 hour ago, Spekulatius said:

How do people here about tail risk for Berkshire

 

BHE - utilities have huge tail risk if they cause fires now.

Apple - risk of China syndrome

 

Then we have the catastrophe risk from the insurance business.

 

Something to think about if you have a huge position.

 

 

Even if AAPL was cut in half, it would be only some 10 per cent loss to BRK value, but than you end up with them owning somewhat undervalued position:)

 

Re catastrophes, I expect, that it is more of a opportunity, than a threat for them (and other well run insurers). More risks, more oportunities. 

 

Edited September 12, 2023 by UK

[xo 1]

1 hour ago, UK said:

 

Even if AAPL was cut in half, it would be only some 10 per cent loss to BRK value, but than you end up with them owning somewhat undervalued position:)

 

Re catastrophes, I expect, that it is more of a opportunity, than a threat for them (and other well run insurers). More risks, more oportunities. 

 

And further to AAPL, if AAPL's stock price were cut in half, the power of AAPL's buybacks would become even more fearsome.  As a serial buyer of stocks, BRK hopes the price of AAPL is cut in half (so long as the intrinsic value of the business isn't likewise cut in half, which China does not seem to so threaten).

[Munger_Disciple]

BNSF Logistics selling brokerage business to JB Hunt:

https://www.wsj.com/articles/j-b-hunt-transport-will-acquire-bnsf-brokerage-business-a7598c10

[Xerxes]

Berkshire seems to be on a “stealth” bull run. Just noticed that it hit $370 USD. 
 

On a related note Bloomstran did an interview with William Green recently.  
 

 

[UK]

https://www.bloomberg.com/news/articles/2023-09-19/berkshire-shows-unusual-risk-appetite-in-wildfire-court-fight?srnd=premium-europe#xj4y7vzkg