Buffett/Berkshire - general news

[gfp]

28 minutes ago, schin said:

 

When Warren passes, I would expect there will be selling of his prized holdings too.

 

I feel like the deferred tax liability will factor in heavily here and that he is spending a huge amount of time talking out these companies with Ted and Todd.  I would be really surprised to see a position like American Express or Coca-Cola messed with after Warren passes.  I could be wrong but my bet is that some of these are truly treated like the rest of the subsidiaries.

 

 

[schin]

15 minutes ago, gfp said:

 

I feel like the deferred tax liability will factor in heavily here and that he is spending a huge amount of time talking out these companies with Ted and Todd.  I would be really surprised to see a position like American Express or Coca-Cola messed with after Warren passes.  I could be wrong but my bet is that some of these are truly treated like the rest of the subsidiaries.

 

If professional sports are good reference points, nobody is sacred. The portfolio will be touched and redeployed. Look at DJCO, I mean.... Wells Fargo and Bank of America is being reduced nonetheless.

 

Whether it's Lou Simpson, Sir John Templeton, Teledyne under Henry Singleton, the position will be touched sadly.

[Munger_Disciple]

1 hour ago, gfp said:

 

I feel like the deferred tax liability will factor in heavily here and that he is spending a huge amount of time talking out these companies with Ted and Todd.  I would be really surprised to see a position like American Express or Coca-Cola messed with after Warren passes.  I could be wrong but my bet is that some of these are truly treated like the rest of the subsidiaries.

 

 

 

  I don't think it is a coincidence that Warren has recently been talking about Coke, Amex and Japanese trading companies in the annual reports. There is no way Berkshire will sell these post-Buffett. Is there a way Berkshire can distribute the large holdings in-kind to shareholders without incurring any corporate taxes? My guess is no. 

Edited April 8, 2024 by Munger_Disciple

[Spooky]

Ya apparently Lou Simpson begged Warren not sell their Nike position when he retired but Warren wasn't comfortable holding someone else's idea.

[charlieruane]

On 4/8/2024 at 10:30 AM, Spooky said:

Ya apparently Lou Simpson begged Warren not sell their Nike position when he retired but Warren wasn't comfortable holding someone else's idea.

 

Fascinating! Mind if I ask where you heard this?

[gfp]

2 hours ago, charlieruane said:

 

Fascinating! Mind if I ask where you heard this?

 

Warren told the story either at an annual meeting or in an interview.  Nike was the example but he had Lou liquidate his entire portfolio before he left.

[Spooky]

11 hours ago, charlieruane said:

 

Fascinating! Mind if I ask where you heard this?

 

Can't remember where I heard this unfortunately but here is an article talking about Buffett inheriting stock positions: https://www.cnbc.com/id/41868643

[Eldad]

Nike has been a great stock. It has always made me uncomfortable as well because it is all based on brand hype. Some good innovation, but mostly branding hype. 

[Spekulatius]

On 3/19/2024 at 10:37 AM, Intelligent_Investor said:

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

I agree the optics matter. Making $10 or $20M isn’t worth the headache for Berkshire. Think about this, if this becomes a political issue, it could mean that WEB get dragged in a Congress hearing to testify. Probably not worth it for him. 

 

[gfp]

HomeServices has settled their antitrust suit -

https://www.wsj.com/business/telecom/warren-buffetts-real-estate-firm-settles-antitrust-matter-for-250-million-e77e87d8

 

 

"

Dusseault said HomeServices faced potential bankruptcy if it didn’t settle. To even appeal the verdict it likely would have needed to post a bond, which a judge could have set in the billions of dollars. 

If Berkshire had instead stepped in to bail out its subsidiary, it would have set a precedent that could make other companies under its umbrella an appealing target for litigation. "

Edited April 26, 2024 by gfp

[cubsfan]

4 minutes ago, gfp said:

HomeServices has settled their antitrust suit -

https://www.wsj.com/business/telecom/warren-buffetts-real-estate-firm-settles-antitrust-matter-for-250-million-e77e87d8

 

 

"

Dusseault said HomeServices faced potential bankruptcy if it didn’t settle. To even appeal the verdict it likely would have needed to post a bond, which a judge could have set in the billions of dollars. 

If Berkshire had instead stepped in to bail out its subsidiary, it would have set a precedent that could make other companies under its umbrella an appealing target for litigation. "

 

Damn - that sounds bad. I didn't realize it was that dangerous.

[John Hjorth]

3 minutes ago, cubsfan said:

 

Damn - that sounds bad. I didn't realize it was that dangerous.

 

Yeah, The US justice system in operation and at its finest. Something to think about here.

[cubsfan]

 

3 minutes ago, John Hjorth said:

 

Yeah, The US justice system in operation and at its finest. Something to think about here.

 

 Isn't it the truth!!

[CassiusKing1]

Add on top of this the California Wildfire litigation.  

 

A company flush with cash has become a target.  I've trimmed my Brk holding due to this new era.  Sad.

[gfp]

Warren always said there are certain businesses where you aren't well served by having a "rich parent."  He never contemplated being a helmet manufacturer, was one of his examples if I remember correctly.  I think his mindset from the insurance industry has served him well over the years in considering as many risks in his other businesses as he can - which is why he gets a little crabby when he misses some.

[yesman182]

1 hour ago, gfp said:

Warren always said there are certain businesses where you aren't well served by having a "rich parent."  He never contemplated being a helmet manufacturer, was one of his examples if I remember correctly.  I think his mindset from the insurance industry has served him well over the years in considering as many risks in his other businesses as he can - which is why he gets a little crabby when he misses some.

He also said Berkshire shouldn't own the TSA. That comment kept me from investing in Clear Secure.  

[scorpioncapital]

I wasn't aware that someone suing a division of Berkshire can't access the parent. Is this in the sense that it can be allowed to go bankrupt and protect the cash of the parent? If so it seems another bonus of BRK's structure.

[gfp]

28 minutes ago, scorpioncapital said:

I wasn't aware that someone suing a division of Berkshire can't access the parent. Is this in the sense that it can be allowed to go bankrupt and protect the cash of the parent? If so it seems another bonus of BRK's structure.

 

It depends on the subsidiary and how the bulkheads are constructed.  I believe a subsidiary of BHE, like Pacificorp for instance, can be put into bankruptcy without the other assets of BHE being risked, much less the parent company holding company.  But I'm sure there are exceptions for nefarious asset stripping or fraud.  I mean, look at JNJ and the Talc stuff - you don't see all of JNJ at risk.

[John Hjorth]

34 minutes ago, LearningMachine said:

 

Not so fast :-).  It is a complex issue.  

 

You can try to protect all you want with legal structures, but if a subsidiary doesn't have enough assets to satisfy the damages, the party suing would try to convince the court to "pierce the corporate veil" from the subsidiary to the parent.  The party would need to start with showing that the parent effectively exercised control over the subsidiary e.g. by appointing leadership, and show intermingling, etc.  The party being sued would try to delay it by filing for bankruptcy, and then eventually ideally settle because parent with a lot of assets wouldn't want to test the court to decide that whether the veil should be pierced.  ...

 

Yeah, the concept 'company limited liability' is indeed a complicated legal matter.

 

The legal basis is the legal form for the actual legal entity in mention, and what may furthermore be stated in the articles of association and bylaws of the legal entity.

 

Also, some creditors may be capped one way or an other, [i.e. 'non recource' certain pledged asset[s]].

 

If a creditor may want to excercise some kind of economic responsibility for the obligations of the legal entity against the legal entitys owners, the creditor has to establish a causuality between the creditors receivable and the owners responsibity and actual actions. This isen't - in general - trivial by any means.

[Ulti]

https://www.msn.com/en-us/money/savingandinvesting/warren-buffett-or-not-berkshire-hathaway-stock-is-built-to-last/ar-AA1nGYvR

[DooDiligence]

OK, which one of you did this? Because it's friggin' brilliant. Not sure how I feel about the bare bones presentation layer, but the (quasi-AI generated) content is compelling.

 

https://brk-b.com

 

Sample: https://brk-b.com/bloomstran-s-tip-insights-for-berkshire-hathaway-2024_240423.html

Sample: https://brk-b.com/farmland-berkshire-hathaway-to-align-with-buffets-vision_240420.html

Sample: https://brk-b.com/the-hartford-berkshire-s-next-strategic-move_240331.html

 

Disclaimer: Images on this page are largely generated by artificial intelligence. They are not actual fotos and may not be confused with real people, although they might look very familiar.

 

===

 

Also, check out the photonics101.com link at the bottom,

+ links to platform tools.

[DooDiligence]

Sorry for spamming things up here but would this be reasonably accurate (albeit a bit repetitive)?

 

https://brk-b.com/no-room-for-romance-the-unwinding-of-berkshire-hathaway-s-stake-in-markel-the-baby-berkshire_240216.html

Edited April 27, 2024 by DooDiligence

[gfp]

1 hour ago, DooDiligence said:

Sorry for spamming things up here but would this be reasonably accurate (albeit a bit repetitive)?

 

https://brk-b.com/no-room-for-romance-the-unwinding-of-berkshire-hathaway-s-stake-in-markel-the-baby-berkshire_240216.html

did that article ever mention that it is unlikely that Warren Buffett was the one who actually bought the MKL stock?  It was a lot of words without saying much so I couldn’t read it all. 

[DooDiligence]

On 4/27/2024 at 2:41 PM, gfp said:

did that article ever mention that it is unlikely that Warren Buffett was the one who actually bought the MKL stock?  It was a lot of words without saying much so I couldn’t read it all. 

 

I did add an "albeit repetitive"   but my point was that it seems like a fair-ish AI generated bit of Berkshire content. Agreed, it could have said the same thing in just a few paragraphs. How do you get these AI's to understand that brevity is the soul of everything?

Edited April 29, 2024 by DooDiligence

[Spooky]

On 4/26/2024 at 8:47 PM, gfp said:

 

It depends on the subsidiary and how the bulkheads are constructed.  I believe a subsidiary of BHE, like Pacificorp for instance, can be put into bankruptcy without the other assets of BHE being risked, much less the parent company holding company.  But I'm sure there are exceptions for nefarious asset stripping or fraud.  I mean, look at JNJ and the Talc stuff - you don't see all of JNJ at risk.

 

If Berkshire's legal structure is set up properly it can insulate the parent from risks at the subsidiary / operating level. Generally the maximum you can lose in a corporation is the capital that you have put into it, there is no default right to go after the assets of a parent corporation or shareholders. There are a few exceptions: 1) parent company guarantees of debts / contracts at the subsidiary level; 2) piercing the corporate veil - a judge can look through the corporate form if a corporation is not run as a distinct entity of the shareholder (I doubt this is a risk for BRK, more common with small corporations with one or two shareholders); 3) certain regulatory regimes like GDPR can give you a penalty equal to a percentage of the global revenue of a company which is terrifying but I think this penalty would be levelled at the subsidiary which violated the rules.