Buffett/Berkshire - general news

[keegomaster]

2 hours ago, gfp said:

 

Well Charlie also had this quote on Warren's investments in Japan, "It was like having God just opening a chest and just pouring money into it."

 

I'm not even sure I can calculate the return on investment because the equity sliver was so small, the carry was so positive and the debt used to float the purchases and hedge the currency was so profitable.  If we pencil in that we used insurance float for the tiny "equity" sliver then I guess this is as close to warren giving a master class on free money as we will get.

 

h/t kingswell newsletter for the chart

 

The chart title is a bit of an understatement with positions up 120% to 260%

[gfp]

2 minutes ago, keegomaster said:

The chart title is a bit of an understatement with positions up 120% to 260%

I assume the chart is translating back to US dollars but I didn't make it or know the data source.  Chart source for me was https://www.kingswell.io

[longlake95]

2 hours ago, backtothebeach said:

The Japanese trading house investment is truly a masterpiece.

Purchasing high, durable dividend yields, with hedged currency, using almost free money. After a 30 year sideways market, right before take off. Stunning.

+1

[valueinvesting101]

On 3/1/2024 at 6:22 AM, gfp said:

Attached is the National Indemnity year end NAIC filing that includes investments.  There are quite a few files - I am still going through them.  I will post a few more later today

 

(FWIW, they were selling AAPL for $192.75 / share on December 27th so it could have been primarily tax related - if for some reason it "made sense" to take a gain on AAPL for the 2023 tax year).  edit: they were also selling AAPL the day before in Columbia Insurance at $193.79 / share.  So decent prices

20087.2023.P.AN.PI.O.M.4665561.pdf 642.51 kB · 23 downloads

Thanks a lot @gfp for posting this.

There are no depository from Japan on page 39 of this filing. Can Japanese companies be held without depository? 

Also ICICI Bank, Mumbai India is listed as a depository with balance of 1,500. Does that mean Berkshire is holding investment in India valued at 1.5 Billion? I couldn't find any mention of Indian security in the filing. Is it related to Paytm holding which was liquidated earlier in 2023?

[gfp]

1 hour ago, valueinvesting101 said:

Thanks a lot @gfp for posting this.

There are no depository from Japan on page 39 of this filing. Can Japanese companies be held without depository? 

Also ICICI Bank, Mumbai India is listed as a depository with balance of 1,500. Does that mean Berkshire is holding investment in India valued at 1.5 Billion? I couldn't find any mention of Indian security in the filing. Is it related to Paytm holding which was liquidated earlier in 2023?

 

Re: ICICI Bank, that is literally only $1,500 USD worth of bank deposit cash sitting in the bank.  

 

I don't know where Berkshire "custodies" the Japanese shares but it is probably a division of Citi (or BNY).  The shares are purchased using Berkshire's go-to large block trader, Wallachbeth Capital (which is who Warren uses for almost all large trades for the last several years).  I have no idea which bank wires the JPY to Wallachbeth to settle up since the bank account balances are just shown in their US Dollar equivalents here.  Maybe I could tell by looking at past filings right after a Yen bond sale was completed but I've never wondered myself.

 

*edit: I looked around and none of the Berkshire insurance subsidiaries have a banking relationship with a Japanese bank.  I don't know what they are delivering to Wallachbeth to settle up or from where.  Might come from Wells but the main National Indemnity Wells Fargo bank account pays t-bill-like interest so there isn't any JPY in there.

 

FWIW, as far as I can tell Ted Weschler tends to trade through this 'woman-owned' broker dealer - "Glen Eagle Wealth"  https://gleneagleadv.com/institutional-markets

Edited March 4, 2024 by gfp

[gfp]

It's kind of funny, @valueinvesting101, you got me checking into various depository / banking relationships for the BRK subsidiaries and Berkshire Hathaway Specialty (the newer, fast growing Excess and Surplus lines primary outfit) actually has a bank account at Paypal Holdings.  Surprised me.  Everyone has a venmo account I suppose

 

[gfp]

The best I can tell about the Japanese investments is that Berkshire doesn't actually take the JPY they borrow from the bonds and use that to buy the Japanese stocks.  They borrow the JPY at the Berkshire Hathaway Inc. (BHI, parent, holdco) level and receive JPY and probably immediately swap almost all of it into US treasury bills.  They pay the interest in JPY.  Then, separately, they buy shares of the 5 sogo shosha companies inside National Indemnity, an insurance subsidiary of BHI.  They transfer National Indemnity's treasury bills and some USD cash to Wallachbeth Capital to settle up their trades.  

[Munger_Disciple]

BHE is named a defendant in lawsuit on real estate commissions:

https://www.wsj.com/finance/warren-buffett-is-getting-dragged-into-the-real-estate-commissions-litigation-79696153?mod=hp_lead_pos10

 

Edited March 4, 2024 by Munger_Disciple

[gfp]

28 minutes ago, Munger_Disciple said:

BHE is named a defendant in lawsuit on real estate commissions:

https://www.wsj.com/finance/warren-buffett-is-getting-dragged-into-the-real-estate-commissions-litigation-79696153?mod=hp_lead_pos10

 

 

I'm starting to feel sorry for the old guy.  He reads all these newspapers every day - opens up the Journal: Apple fined $2 Billion, about to be sued for antitrust, Pacificorp wildfire verdicts, HomeServices, BHE sued for billions!, Haslam's screwing you!  It's rough out there for the deep-pocketed.

[Munger_Disciple]

10 minutes ago, gfp said:

 

I'm starting to feel sorry for the old guy.  He reads all these newspapers every day - opens up the Journal: Apple fined $2 Billion, about to be sued for antitrust, Pacificorp wildfire verdicts, HomeServices, BHE sued for billions!, Haslam's screwing you!  It's rough out there for the deep-pocketed.

 

Yes indeed. 

[Munger_Disciple]

BNSF news: https://www.wsj.com/articles/bnsf-railway-furloughs-mechanics-in-kansas-nebraska-c56ba7a5?mod=hp_minor_pos13

 

[jbwent63]

19 hours ago, longlake95 said:

+1

With the dividends being much larger than the interest on the related debt, if you take into account all the elements, is it possible that the equity sliver has been ground down to zero or less at this point? Therefore making the return uncalculatable i.e. infinity?

[gfp]

BRK proxy -

https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/1067983/000119312524069107/d512828ddef14a.htm

[valueinvesting101]

Looks like repurchasing continued from February 12 to March 6. About 2813 A shares were repurchased. Not sure if these were purchased from market or via private transaction. May be it was a private purchase from Gottesman family. 

Bit surprised that purchases continued during this period when average price of above 400 and lowest was around 395 for B shares. 

Edited March 15, 2024 by valueinvesting101

[charlieruane]

Apropos of nothing, a fun fact about Howard Buffett's foundation: according to its latest 990 filing, although Howard receives no standard compensation for his role as Chairman and CEO, he does receive contributions to an employee benefit plan. In 2022, those contributions totaled $15,219. 

 

Anyone have any color on this? Screenshot from the 2022 990 is attached for reference.  

[charlieruane]

And as a followup, here's one of the most bizarre Buffett anecdotes I've encountered, from an Atlantic article on Howard: 

Edited March 16, 2024 by charlieruane

[charlieruane]

Trump approached Berkshire Hathaway in hopes of getting an appellate bond: 

[Blugolds]

I'm sure everyone already has seen it, but just incase someone missed it over the weekend.

 

 

 

Yahoo: Berkshire Hathaway speeds up stock buybacks

 

In its proxy filing on Friday, Berkshire said it repurchased the equivalent of 3,808 Class A shares this year through March 6, spending approximately $2.2 billion to $2.4 billion depending on the dates of the buybacks.

Nearly three-quarters of the repurchases took place after Feb. 12.

Berkshire repurchased $2.2 billion of its own stock in last year's fourth quarter, and $9.2 billion in all of 2023.

Its peak year for buybacks was 2021, when they totaled $27 billion.

 

Through Friday, Berkshire's share price was up 14% this year, about twice the gain for the Standard & Poor's 500.

 

 

 

 

 

 

https://finance.yahoo.com/news/berkshire-hathaway-speeds-stock-buybacks-185257424.html

 

[longterminvestor]

18 hours ago, charlieruane said:

Trump approached Berkshire Hathaway in hopes of getting an appellate bond: 

Mr. Trump has until March 25 to post an additional bond for $456M.  The dollar amount is approaching a record size.  For example in 2009, Zurich wrote a surety bond for Panama Canal for $450M - believed to be one of the largest deals ever done in surety. 

 

I would like to highlight Chubb previously issued a $91.6M bond with brokerage account as collateral allowing Mr. Trump an appeal.  When the news broke of Chubb issuing the $91.6M bond, there was a ton of blow back to Chubb.  CEO Evan Greenberg (son of Hank Greenberg - formerly of AIG now Starr) wrote a letter addressing the $91.6M bond (letter attached).  I really liked reading the letter from Mr. Evan Greenberg - showed some leadership and belief in our system of government.  One could argue the other side saying Greenberg/Chubb is favoring Mr. Trump and bring in all the politics however I want to believe Mr. Greenberg's words in his letter "we support the rule of law and our role in it".  I just liked the letter a lot especially in this political climate where we need leadership.  

 

As a shareholder, I trust Berkshire made a sound decision.  With a juicy premium and liquid collateral/margin of safety could be a good risk.  However the political nature probably just makes it a too hard pile issue so I get it.  Berkshire could have easily declined on same basis of Chubb - lack of collateral or size.  As Mr. Buffett says, cash/liquidity is like oxygen.  

 

 

chubb-letter-on-trump-bond-3132024.pdf

Edited March 19, 2024 by longterminvestor

[nwoodman]

3 hours ago, longterminvestor said:

As a shareholder, I trust Berkshire made a sound decision.  With a juicy premium and liquid collateral/margin of safety could be a good risk.  However the political nature probably just makes it a too hard pile issue so I get it.  Berkshire could have easily declined on same basis of Chubb - lack of collateral or size.  As Mr. Buffet says, cash/liquidity is like oxygen.  

 

 

chubb-letter-on-trump-bond-3132024.pdf 126.98 kB · 6 downloads

Thanks for the post.  I agree, not sure there is a number that could offset the political optics.  The irony is obviously Berkshire could do it in a heartbeat, so it is a potential snub anyway.  Good thing there was 30 insurers who came to the same conclusion.  Safety in numbers

[bizaro86]

Republicans buy insurance to.

 

Charging high fees for bespoke insurance that no one else can write is what I want Berkshire to do. If they didn't feel his collateral was good then fine, but I hope they aren't giving up lucrative opportunities for political/optics reasons.

 

 

[Intelligent_Investor]

29 minutes ago, bizaro86 said:

Republicans buy insurance to.

 

Charging high fees for bespoke insurance that no one else can write is what I want Berkshire to do. If they didn't feel his collateral was good then fine, but I hope they aren't giving up lucrative opportunities for political/optics reasons.

 

 

I feel like they always have, Warren once he got big enough knew one of the biggest risks to Berkshire was political risk so he wants no part in that at all

[John Hjorth]

@longterminvestor,

 

What is your souce for the letter from Chubb attached to your last post? -Thank you in advance.

Edited March 19, 2024 by John Hjorth

[Spooky]

14 hours ago, Blugolds11 said:

I'm sure everyone already has seen it, but just incase someone missed it over the weekend.

 

 

 

Yahoo: Berkshire Hathaway speeds up stock buybacks

 

In its proxy filing on Friday, Berkshire said it repurchased the equivalent of 3,808 Class A shares this year through March 6, spending approximately $2.2 billion to $2.4 billion depending on the dates of the buybacks.

Nearly three-quarters of the repurchases took place after Feb. 12.

Berkshire repurchased $2.2 billion of its own stock in last year's fourth quarter, and $9.2 billion in all of 2023.

Its peak year for buybacks was 2021, when they totaled $27 billion.

 

Through Friday, Berkshire's share price was up 14% this year, about twice the gain for the Standard & Poor's 500.

 

 

 

 

 

 

https://finance.yahoo.com/news/berkshire-hathaway-speeds-stock-buybacks-185257424.html

 

 

Thanks for sharing. I find it interesting that Buffett is buying back stock so heavily given his pessimistic statements about Berkshire's future prospects. Maybe one of the few companies capable of moving the needle is Berkshire itself.

[gfp]

12 minutes ago, Spooky said:

 

Thanks for sharing. I find it interesting that Buffett is buying back stock so heavily given his pessimistic statements about Berkshire's future prospects. Maybe one of the few companies capable of moving the needle is Berkshire itself.

 

I wouldn't say this repurchase pace is "heavy."  It will be interesting to see the split between A-shares and B-shares repurchased in the 10-Q.  I think it is quite possible that Warren was offered a block of A-shares and he has shown a preference for retiring A-shares before he leaves the scene.