Buffett/Berkshire - general news

[Stuart D]

20k to $23m in 72 years assumes 10.28% inflation per year.

 

I was running the numbers and it’s incredible how much of a difference tiny changes in the compounding rate affect the final number.

 

eg. increasing from 10.28% to 11%, increases the total from $23m to $36m, and reducing from 10.28% to 10% takes it down to $19m.

 

Edited September 30, 2023 by Stuart D
Updated post with compounding table.

[LC]

Whoops my mistake - the website I used https://www.in2013dollars.com/us/inflation/1951 has the value per $100 of 1951 dollars, I used $1 So yes, about a quarter mil and very impressive for 21 y/o! 

[Cigarbutt]

8 hours ago, mjm said:

thanks for sharing.  do you think he wanted the business to kind of keep tabs on GEICO and how they operated, looking to buy shares and eventually the company?

It's been reported that Mr. Buffett met Jack Byrne, then recently appointed CEO in May of that year and immediately after (starting the next day) started to buy large blocks of shares in the open market. Mr. Buffett had also contacted and met a person named Wallach, a key boss (insurance commissioner) at a small but critical regulatory agency (it seems somehow that Mr. Buffett became convinced that Geico was not to be put in receivership). A key concurrent move was to contribute capital before visible improvements in the bottom line and any financial or operational moves that would support Geico.

[mjm]

9 hours ago, Cigarbutt said:

It's been reported that Mr. Buffett met Jack Byrne, then recently appointed CEO in May of that year and immediately after (starting the next day) started to buy large blocks of shares in the open market. Mr. Buffett had also contacted and met a person named Wallach, a key boss (insurance commissioner) at a small but critical regulatory agency (it seems somehow that Mr. Buffett became convinced that Geico was not to be put in receivership). A key concurrent move was to contribute capital before visible improvements in the bottom line and any financial or operational moves that would support Geico.

so he had a dog in the fight already. thanks. interesting

[gfp]

https://www.sec.gov/Archives/edgar/data/47217/000095017023051239/xslF345X05/ownership.xml

 

As expected, once Buffett starts selling something like this he usually sells it all.  He is about 2 million shares away from going under 10% so there may just be one more filing before he gets privacy on the rest of the sales.

[adesigar]

4 hours ago, gfp said:

https://www.sec.gov/Archives/edgar/data/47217/000095017023051239/xslF345X05/ownership.xml

 

As expected, once Buffett starts selling something like this he usually sells it all.  He is about 2 million shares away from going under 10% so there may just be one more filing before he gets privacy on the rest of the sales.

 

This one did not do well for Berkshire Hathaway.

[adesigar]

I couldn't find the Investments table in the 2022 annual report. Was it removed or did I just miss it?

[gfp]

Just now, adesigar said:

I couldn't find the Investments table in the 2022 annual report. Was it removed or did I just miss it?

 

It was removed this year.  We'll see if it returns next year.  

[UK]

https://markets.businessinsider.com/news/stocks/warren-buffett-forbes-400-stewart-horejsi-berkshire-hathaway-wealth-billionaires-2023-10

https://www.bloomberg.com/news/articles/2013-09-19/berkshire-shares-turned-a-buy-and-hold-buffett-fan-into-a-billionaire?leadSource=uverify wall

[KPO]

10 hours ago, UK said:

https://markets.businessinsider.com/news/stocks/warren-buffett-forbes-400-stewart-horejsi-berkshire-hathaway-wealth-billionaires-2023-10

https://www.bloomberg.com/news/articles/2013-09-19/berkshire-shares-turned-a-buy-and-hold-buffett-fan-into-a-billionaire?leadSource=uverify wall

I’ve met Stewart before at the Berkshire meeting years ago. Can you send a non-paywall link as I’d love to read the story?  Thanks for sharing. 

[gfp]

3 minutes ago, KPO said:

I’ve met Stewart before at the Berkshire meeting years ago. Can you send a non-paywall link as I’d love to read the story?  Thanks for sharing. 

 

It's not a new article - it is from 10 years ago.  Here it is:

 

Stewart Horejsi’s business was in a funk. It was 1980, and Brown Welding Supply, his family’s third-generation distributor of hydrogen and oxygen tanks, was battling competitors intent on expanding into its corner of Kansas. While “it was a profitable business,” says Horejsi, 75, who lives in Paradise Valley, Ariz., “the competition just grew.” Frustrated, he bought 40 shares of Berkshire Hathaway for $265 each with the company’s cash after friends told him about Warren Buffett, the company’s then-little-known chairman. He bought another 60 shares two weeks later at $295 and 200 more at $330 a month after that.

 

5,800

Horejsi’s peak holding of Berkshire shares

 

Today, he’s a billionaire. The 4,300 Class A Berkshire shares Horejsi says he acquired over the years are now worth $745 million; combined with other holdings, that gives him a net worth of at least $1.1 billion, according to the Bloomberg Billionaires Index. In addition to Buffett, the world’s fourth-richest person, at least six current or former billionaires derive their fortunes from the stock. They include Charles Munger, the company’s vice chairman, and David Gottesman, a Berkshire board member and founder of asset-management firm First Manhattan.

Until now, Horejsi (pronounced “Horish”) had never appeared on such a ranking, and there are probably other Berkshire billionaires to be uncovered. In a June 2010 Fortune magazine article, Buffett said he knew of two shareholders who qualified for the Forbes 400 list of the wealthiest Americans but weren’t on it. These lost billionaires probably fall into one of two categories: investors in the early partnerships Buffett managed, the first of which was started in 1956; or business owners smart or lucky enough to sell their companies to Berkshire for stock instead of cash.

Other shareholders would be billionaires today if they hadn’t given so much to charity, according to Debra Bosanek, Buffett’s assistant. “There are a lot of them out there,” she wrote in an e-mail. Buffett declined to comment.

Horejsi got in early and held. He recalls some long-ago gatherings conducted in the cafeteria of Berkshire insurance subsidiary National Indemnity in downtown Omaha. “There were 12 of us on folding chairs,” he says. He enjoyed the meeting so much that “I took friends and planted questions with them to keep” them going longer. Horejsi built his Berkshire stake to 5,800 Class A shares and, beginning in 1998, sold 1,500 of them. A year later he sold the family welding-supply company to Airgas, a distributor of industrial gases, welding supplies, and safety products. He accumulated control of four closed-end stock funds and now co-manages them through Boulder Investment Advisers, his money-management firm.

After trailing global markets in the aftermath of the financial crisis that began in 2008, Berkshire stock has surged 29 percent this year as of Sept. 17, outpacing the 21 percent return of the Standard & Poor’s 500-stock index. Buffett has added $11 billion to his fortune this year, more than any other billionaire, according to the Bloomberg ranking.

Horejsi shares some habits with Buffett, such as drinking Coca-Colaand eating fudge from See’s Candies, a Berkshire company. He says he’s partial to Costco polo shirts and shorts. He travels on planes operated by NetJets—another Berkshire company—to his other homes, in Mt. Hood, Ore., and Barbados, where he lives in a beachside estate called Bellerive that once belonged to Claudette Colbert. “He’s a believer in Warren Buffett,” says Richard Barr, Horejsi’s fraternity brother at the University of Kansas. “And he’s a firm believer in buy-and-hold.”

[gfp]

hat tip to rational walk - Berkshire now owns BNSF directly at the holding company and it is no longer a subsidiary of National Indemnity.  Doesn't mean much at the moment, except that National Indemnity didn't need the capital (they were only being credited with something less than $50B anyway) and National Indemnity probably also doesn't need the dividends.

 

Either way, the Railroad is no longer owned by the Insurance subsidiary.

 

https://www.sec.gov/Archives/edgar/data/934612/000095015723001029/ex3-1.htm

 

I failed to notice this in the 2nd quarter NAIC filing for National Indemnity, but it was there under subsequent events.  Interesting color on what BNSF counted for inside Nat. Ind. as insurance capital vs. what Berkshire is saying its' "deemed fair value" is on the date of transfer.

 

 

Edited October 5, 2023 by gfp

[John Hjorth]

lol! - This is just so extreme, that it's almost beyond imagination!

 

I visualize a meeting between Mr. Buffett and Mr. Jain, at Mr. Buffetts office, going like this :

 

Mr. Jain : "Warren, I need you to get rid of the railroad on my shoulders! I don't want it it, nor do I need it!. It has nothing to do with what my folks are doing every day."

 

Mr. Buffett : "Ajit, OK, OK, I'll ask Marc to look into it, and then I'll get back to you about what's doable about it!".

 

What about taxes on dividends here?

[gfp]

1 hour ago, John Hjorth said:

lol! - This is just so extreme, that it's almost beyond imagination!

 

I visualize a meeting between Mr. Buffett and Mr. Jain, at Mr. Buffetts office, going like this :

 

Mr. Jain : "Warren, I need you to get rid of the railroad on my shoulders! I don't want it it, nor do I need it!. It has nothing to do with what my folks are doing every day."

 

Mr. Buffett : "Ajit, OK, OK, I'll ask Marc to look into it, and then I'll get back to you about what's doable about it!".

 

What about taxes on dividends here?

no tax on dividends within Berkshire but the BNSF dividends did go into Nat. indemnity previously so now they will go to BHI parent. 

[yesman182]

3 hours ago, gfp said:

hat tip to rational walk - Berkshire now owns BNSF directly at the holding company and it is no longer a subsidiary of National Indemnity.  Doesn't mean much at the moment, except that National Indemnity didn't need the capital (they were only being credited with something less than $50B anyway) and National Indemnity probably also doesn't need the dividends.

 

Either way, the Railroad is no longer owned by the Insurance subsidiary.

 

https://www.sec.gov/Archives/edgar/data/934612/000095015723001029/ex3-1.htm

 

I failed to notice this in the 2nd quarter NAIC filing for National Indemnity, but it was there under subsequent events.  Interesting color on what BNSF counted for inside Nat. Ind. as insurance capital vs. what Berkshire is saying its' "deemed fair value" is on the date of transfer.

 

 

Where did the $82Billion value come from? Is that the book value if BNSF? 

[gfp]

2 hours ago, yesman182 said:

Where did the $82Billion value come from? Is that the book value if BNSF? 

 

The book value is like ~$48 Billion.  I have no idea where the $82 Billion came from but it certainly isn't a crazy value.  UNP is still at around $120B market cap.  I don't think there is any way this gets re-marked on Brk's books.

[mjm]

7 hours ago, gfp said:

 

The book value is like ~$48 Billion.  I have no idea where the $82 Billion came from but it certainly isn't a crazy value.  UNP is still at around $120B market cap.  I don't think there is any way this gets re-marked on Brk's books.

my question is why do it?  Only reason I can think of( and I know next to nothing about it) is to give more capital to parent company if he thinks market may melt down and he wants to make a run at a company and may need some extra financing?

[gfp]

1 hour ago, mjm said:

my question is why do it?  Only reason I can think of( and I know next to nothing about it) is to give more capital to parent company if he thinks market may melt down and he wants to make a run at a company and may need some extra financing?

 

I don't know why they decided to do it, but it would be a good question to ask at the next AGM.  As far as insurance capital goes, it wasn't a very efficient use - they only received regulatory capital credit for book value for an asset that was worth substantially more than book value.  But it didn't matter since NiCo is so overcapitalized for the level of business they write.  It may have been inside NiCo as an accident of history since that is where they started buying BNSF common stock and writing the naked puts.

 

If I had to guess I would say it has more to do with where the substantial cash distributions go each quarter.  If NiCo is overcapitalized he may prefer the dividends go to the holding company and build up there for some future acquisition.  

 

Or maybe there was a disagreement with a regulator on owning such a unique operating subsidiary with insurance capital and it complicated things unnecessarily.   I don't think there are any tax consequences involved here.

 

The easy line is that this makes it easier to break up Berkshire in the future by spinning off BNSF since "the pickle is now out of the jar" but I don't think that is the reason or at all likely to occur.

 

Could be as simple as building a stronger ship by properly bulk heading each major element of value from each other.

[John Hjorth]

That reads logically and very likely, @gfp.

 

We could perhaps add to that, that BNSF is now Mr. Abels turf, not Mr. Jains turf, so if it could be done now so to say for free, it makes good sense also in that respect.

[John Hjorth]

Bloomberg - Pursuits [October 6^th 2023] : Berkshire Hathaway's Charlie Munger gives $40 million in stock to California museum.

 

- - - o 0 o - - -

 

Charles Munger SEC Form 4 dated October 5^th 2023.

[gfp]

Sort of annoying that Charlie can't be bothered to convert the A shares to B's before he donates them but I'm not in a position to advise Charlie LOL..  Maybe he told the Huntington to convert them to B's before they sell any.

[KPO]

22 hours ago, gfp said:

 

It's not a new article - it is from 10 years ago.  Here it is:

 

Stewart Horejsi’s business was in a funk. It was 1980, and Brown Welding Supply, his family’s third-generation distributor of hydrogen and oxygen tanks, was battling competitors intent on expanding into its corner of Kansas. While “it was a profitable business,” says Horejsi, 75, who lives in Paradise Valley, Ariz., “the competition just grew.” Frustrated, he bought 40 shares of Berkshire Hathaway for $265 each with the company’s cash after friends told him about Warren Buffett, the company’s then-little-known chairman. He bought another 60 shares two weeks later at $295 and 200 more at $330 a month after that.

 

5,800

Horejsi’s peak holding of Berkshire shares

 

Today, he’s a billionaire. The 4,300 Class A Berkshire shares Horejsi says he acquired over the years are now worth $745 million; combined with other holdings, that gives him a net worth of at least $1.1 billion, according to the Bloomberg Billionaires Index. In addition to Buffett, the world’s fourth-richest person, at least six current or former billionaires derive their fortunes from the stock. They include Charles Munger, the company’s vice chairman, and David Gottesman, a Berkshire board member and founder of asset-management firm First Manhattan.

Until now, Horejsi (pronounced “Horish”) had never appeared on such a ranking, and there are probably other Berkshire billionaires to be uncovered. In a June 2010 Fortune magazine article, Buffett said he knew of two shareholders who qualified for the Forbes 400 list of the wealthiest Americans but weren’t on it. These lost billionaires probably fall into one of two categories: investors in the early partnerships Buffett managed, the first of which was started in 1956; or business owners smart or lucky enough to sell their companies to Berkshire for stock instead of cash.

Other shareholders would be billionaires today if they hadn’t given so much to charity, according to Debra Bosanek, Buffett’s assistant. “There are a lot of them out there,” she wrote in an e-mail. Buffett declined to comment.

Horejsi got in early and held. He recalls some long-ago gatherings conducted in the cafeteria of Berkshire insurance subsidiary National Indemnity in downtown Omaha. “There were 12 of us on folding chairs,” he says. He enjoyed the meeting so much that “I took friends and planted questions with them to keep” them going longer. Horejsi built his Berkshire stake to 5,800 Class A shares and, beginning in 1998, sold 1,500 of them. A year later he sold the family welding-supply company to Airgas, a distributor of industrial gases, welding supplies, and safety products. He accumulated control of four closed-end stock funds and now co-manages them through Boulder Investment Advisers, his money-management firm.

After trailing global markets in the aftermath of the financial crisis that began in 2008, Berkshire stock has surged 29 percent this year as of Sept. 17, outpacing the 21 percent return of the Standard & Poor’s 500-stock index. Buffett has added $11 billion to his fortune this year, more than any other billionaire, according to the Bloomberg ranking.

Horejsi shares some habits with Buffett, such as drinking Coca-Colaand eating fudge from See’s Candies, a Berkshire company. He says he’s partial to Costco polo shirts and shorts. He travels on planes operated by NetJets—another Berkshire company—to his other homes, in Mt. Hood, Ore., and Barbados, where he lives in a beachside estate called Bellerive that once belonged to Claudette Colbert. “He’s a believer in Warren Buffett,” says Richard Barr, Horejsi’s fraternity brother at the University of Kansas. “And he’s a firm believer in buy-and-hold.”

Thanks for posting 

[sleepydragon]

 

[VersaillesinNY]

Todd Combs - Investing, the Last Liberal Art, Oct 9th, 2023

 

https://www.joincolossus.com/episodes/14034172/combs-todd-combs-investing-the-last-liberal-art?tab=transcript

Edited October 9, 2023 by VersaillesinNY

[sleepydragon]

1 hour ago, VersaillesinNY said:

Todd Combs - Investing, the Last Liberal Art, Oct 9th, 2023

 

https://www.joincolossus.com/episodes/14034172/combs-todd-combs-investing-the-last-liberal-art?tab=transcript

Thanks for posting this!