Buffett/Berkshire - general news

[Eldad]

5 minutes ago, coffeecaninvestor said:

Yes, in hindsight clearly a mistake, but  I think he makes a lot of errors of omission and he’s done ok. But I am a little biased. I was also waiting for lower prices. 

Yes. Part of my frustration was being mostly educated on markets by him and having most of my money in BRK and buying a lot more in the 160s being extremely confident he would make out like a bandit. 
 

73Red is going to die on the hill of it was not a mistake even in hindsight. Ok, agree to disagree. 

[73 Reds]

10 minutes ago, Eldad said:

Yes. Part of my frustration was being mostly educated on markets by him and having most of my money in BRK and buying a lot more in the 160s being extremely confident he would make out like a bandit. 
 

73Red is going to die on the hill of it was not a mistake even in hindsight. Ok, agree to disagree. 

Of course - almost anything can be deemed a mistake of sorts in hindsight because through that lens there is always some better way.    

[Eldad]

4 minutes ago, 73 Reds said:

Of course - almost anything can be deemed a mistake of sorts in hindsight because through that lens there is always some better way.    

True. It would be really cool to know exactly what happened and exactly what they were thinking at certain times. I’m just doing arithmetic and he is doing calculus. I got lucky by not having the analysis paralysis that he was probably dealing with. 

[Whensthepaintdry?]

Not buying stocks aggressively during the Covid drop doesn’t bother me at all. The one that has me scratching my head was the drop in 2023. Amzn and google both had huge drops. I was totally expecting to see an add too amzn, but later there was a cut. While being conservative the performance has been great, so I’m a happy shareholder. 

Edited July 30, 2024 by Whensthepaintdry?

[Eldad]

8 minutes ago, Whensthepaintdry? said:

Not buying stocks aggressively during the Covid drop doesn’t bother me at all. The one that has me scratching my head was the drop in 2023. Amzn and google both had huge drops. I was totally expecting to see an add too amzn, but later there was a cut. While being conservative the performance has been great, so I’m a happy shareholder. 

Yeah would be cool if his stocks looked more like SPY plus float plus buybacks he could outperform on autopilot. 

[Blugolds]

12 minutes ago, Eldad said:

True. It would be really cool to know exactly what happened and exactly what they were thinking at certain times. I’m just doing arithmetic and he is doing calculus. I got lucky by not having the analysis paralysis that he was probably dealing with. 

 

Just now, charlieruane said:

"Mistake in hindsight" - almost a meaningless phrase. What matters is whether Berkshire made a mistake in the moment, given available information. 

 

And again, he did "dip his toes" by plowing $50B into all of the businesses that Berkshire already owned (via buybacks). It was a solid outcome. 

 

 

 

Another thing to consider, and I think I remember hearing it at a shareholder meeting maybe, I cant remember exactly. 

 

A hypothetical, but also probability I would say better than zero...is that with the pandemic scare, maybe the phones WERE ringing in Omaha, and they were discussing particulars working on a deal perhaps, explains the hesitation to deploy capital elsewhere, and then due to the swift rescue by the feds, the deal never transpired and to outsiders it looked like they were sitting there sucking their thumb. 

 

[Eldad]

Here we sit at $440 4 years later which is amazing when you think about it. 

[Munger_Disciple]

55 minutes ago, charlieruane said:

"Mistake in hindsight" - almost a meaningless phrase. What matters is whether Berkshire made a mistake in the moment, given available information. 

 

And again, he did "dip his toes" by plowing $50B into all of the businesses that Berkshire already owned (via buybacks). It was a solid outcome. 

 

  I for one am very happy the way Buffett managed through Covid. 

[yesman182]

I personally think that when Warren is gone Berkshire will buy way less stocks. Greg will focus on running the business, he will buy back stock when appropriate. Do some acquisitions, but I don’t see him hunting down 50-100bn elephants. If someone come knocking sure, they will listen, but I don’t see him spending him time figuring out where to park the 200bn in stocks. 

[UK]

11 hours ago, Eldad said:

Here we sit at $440 4 years later which is amazing when you think about it. 

 

True. Very nice CAGR. And it was a double from 2020 pandemic low price of ~170 USD as early as March 2022! You definitely can make a nice return with BRK, especially buying it at a price near BV. The similarly good price and opportunity was in 2012. In both cases WB confirming it with a buybacks (with a start in 2012 and large actual buybacks in 2020-21) was telling. I made BRK a very large position in both cases. My question is what about the next 5 or 10 years from a current valuation though?

 

I have another, somewhat new worry, regarding the next 10 years. So first of all, WB is my personal hero and I consider him Mozart of investing. But does anyone else have at least some worries with a plan he has  for a possible management transition in the future? Is it really the best way to do it? I have personal bitter experience of what old age (or related health issues) can do to a person and his decision making capacity, no matter who he was before. Many talk here about how his priority is safety and avoiding volatility or uncertainty for long term shareholders etc. But then why not let Greg to become a CEO and to allow him to run BRK for some time, hopefully still long time!, watching him from a position of chairman (or just of a large shareholder), while you are still sharp and able? 

 

Sorry for asking of such a question, maybe I do not understand this completely or worry too much.  Like I said, I have enormous respect for WB and BRK, and I am still a shareholder myself.

 

Edited July 31, 2024 by UK

[Blugolds]

6 hours ago, UK said:

 

. But then why not let Greg to become a CEO and to allow him to run BRK for some time, hopefully still long time!, watching him from a position of chairman (or just of a large shareholder), while you are still sharp and able? 

 

 

 

I guess my thinking is that this IS what he is doing, we see it at shareholder meetings now featuring Warren and Greg at the front table. Without coming out and saying it, my guess is that Greg is basically doing the job already, like a kid riding a bike, mom/dad are holding on to the back of the bike seat and running along the bike, the kid knows/thinks they are there and gives them confidence and then without the kid specifically watching the parents hand pull away from the seat, and still running along side the bike they are riding the bike on their own without the assistance before they even realize it. My guess is that already, or soon, Warrens hand is off the back of the seat, or only occasionally hanging on to the seat while running along side Greg. 

 

If it was ANY other CEO I think the transition probably already happens and louder, but given its WB, and BRK and those two are so connected, it makes it a bigger deal for perception. I personally dont worry about it. Warren is probably one of the most intelligent and thoughtful partners an investor could ask for, and this creation he has made through his life work is his baby, and he certainly has considered all angles for his succession, he had the ability to pick probably anybody in the world to replace him and Greg was his choice, I'm sure he has considered Gregs strengths and weaknesses and will accommodate anything that he felt might pose a challenge. Im sure they have discussed theories and strategies there. I think that they both realize that Greg isnt going to be doing 20% a year but Im also sure that they have discussed options to ensure "adequate" returns for remaining shareholders going forward and what those potential levers are as options for Greg. To continue your Mozart analogy, I fully expect Warrens succession plan to be his Crescendo ending. 

 

This is all speculation, but this is the way I think about it, and it gives me faith because if I, as a simpleton think this way and this would be my goal and the way I would attempt to do things myself if I was in Warrens position, certainly he must think beyond me as he and Charlie are the ones who created the masterpiece and are certainly levels above my own ability. 

[UK]

9 minutes ago, Blugolds said:

 

I guess my thinking is that this IS what he is doing, we see it at shareholder meetings now featuring Warren and Greg at the front table. Without coming out and saying it, my guess is that Greg is basically doing the job already, like a kid riding a bike, mom/dad are holding on to the back of the bike seat and running along the bike, the kid knows/thinks they are there and gives them confidence and then without the kid specifically watching the parents hand pull away from the seat, and still running along side the bike they are riding the bike on their own without the assistance before they even realize it. My guess is that already, or soon, Warrens hand is off the back of the seat, or only occasionally hanging on to the seat while running along side Greg. 

 

If it was ANY other CEO I think the transition probably already happens and louder, but given its WB, and BRK and those two are so connected, it makes it a bigger deal for perception. I personally dont worry about it. Warren is probably one of the most intelligent and thoughtful partners an investor could ask for, and this creation he has made through his life work is his baby, and he certainly has considered all angles for his succession, he had the ability to pick probably anybody in the world to replace him and Greg was his choice, I'm sure he has considered Gregs strengths and weaknesses and will accommodate anything that he felt might pose a challenge. Im sure they have discussed theories and strategies there. I think that they both realize that Greg isnt going to be doing 20% a year but Im also sure that they have discussed options to ensure "adequate" returns for remaining shareholders going forward and what those potential levers are as options for Greg. To continue your Mozart analogy, I fully expect Warrens succession plan to be his Crescendo ending. 

 

This is all speculation, but this is the way I think about it, and it gives me faith because if I, as a simpleton think this way and this would be my goal and the way I would attempt to do things myself if I was in Warrens position, certainly he must think beyond me as he and Charlie are the ones who created the masterpiece and are certainly levels above my own ability. 

 

Thanks for your response! Most likely you are right.

[gfp]

No surprise, Warren still selling BAC.  Down to 12.14%. 

https://www.sec.gov/Archives/edgar/data/70858/000095017024089567/xslF345X03/ownership.xml

[valueinvesting101]

I wonder if he is trying to go below 10% for operational or some other reason. As I remember, there are considerable operation/regulatory issues for Berkshire and/or BAC to hold more than 10% of the bank. Amex is already a bank so getting exception for another Bank is tougher. 
May be regulator are indicating that holding should go below 10% threshold. 

[gfp]

12 hours ago, valueinvesting101 said:

I wonder if he is trying to go below 10% for operational or some other reason. As I remember, there are considerable operation/regulatory issues for Berkshire and/or BAC to hold more than 10% of the bank. Amex is already a bank so getting exception for another Bank is tougher. 
May be regulator are indicating that holding should go below 10% threshold. 

 

It's possible that is the reason.  Also possible he just wants the privacy of being below 10%.  Berkshire has regulator approval to own up to 25% of BAC but things can change I suppose.  If I had to guess, he just wants to sell the stock.

[sleepydragon]

I am more curious if the reason why Buffett is he’s bearish on BAC specifically or he sees some danger with the overall economy ?

[nwoodman]

13 minutes ago, charlieruane said:

Does anyone know roughly what % of BNSF's freight is coal these days vs. historically?

In the good old days of the last decade it was around 18-20%.  More like 10-12% these days

 

From their Q2

 

“Coal volumes decreased 29% and 25%, respectively, in the second quarter and first six months of 2024 compared with the same periods in 2023 primarily due to lower natural gas prices, which displaces coal as a fuel used by utilities.”

 

https://www.bnsf.com/about-bnsf/financial-information/pdf/performance-summary-2q-2024.pdf

 

 

[schin]

On 8/2/2024 at 9:53 PM, sleepydragon said:

I am more curious if the reason why Buffett is he’s bearish on BAC specifically or he sees some danger with the overall economy ?

 

If he sees danger, I would think he and Todd/Ted would be reducing positions too. But again, I think tech stocks are still high, but other stocks are still within the reasonable range.  

 

If the Fed does reduce interest rates, it's generally bullish for the market. Again, I don't remember seeing him thinning positions from an economic PoV. He devised his airline stocks because he didn't like the optics of the bailout that must happen and how it would be perceived as a pass through to him... but, he has been selling off his other bank holdings before he started thinning BAC.

[backtothebeach]

Finally sold SNOW as well. No big purchases.

 

[DCG]

Curious what they see in Sirius XM. Seems like they face way too much competition these days.

[LC]

45 minutes ago, DCG said:

Curious what they see in Sirius XM. Seems like they face way too much competition these days.

Probably they smell a deal coming?

[gfp]

National Indemnity Q2 NAIC filing.  maybe a coupe of you nerds that like reading these.  The way Citi shares were moved to add capital to West Guard Insurance during the quarter along with other Buffett positions makes it seem more likely that Citi is a Warren Buffett investment and not a Ted/Todd position.  Average price of AAPL shares sold during the quarter was approximately $188.40

 

I'll bet he stopped at 400m shares even.  The stock went sideways while he was a seller and when he stopped selling it was able to go up with the market.

20087.2024.P.Q2.P.O.2.4817539.pdf

[gfp]

You can see how National Indemnity capital is sometimes used to refinance subsidiaries - Pilot came with a bunch of expensive bank debt and National Indemnity appears to have refinanced them out of most of it at 5.25%.  This stuff gets eliminated in consolidation on the SEC filings since it is between subsidiaries.

[John Hjorth]

52 minutes ago, gfp said:

You can see how National Indemnity capital is sometimes used to refinance subsidiaries - Pilot came with a bunch of expensive bank debt and National Indemnity appears to have refinanced them out of most of it at 5.25%.  This stuff gets eliminated in consolidation on the SEC filings since it is between subsidiaries.

 

Thanks for sharing, @gfp,

 

It's very interesting. I have always wondered, why Berkshire hasen't does more of this stuff [called 'intelligent finance' and so]. In the 'total system' there must have been large amounts of net financial costs to save, from a group perspective.

 

[I personally loved to help clients with such stuff earlier in life, before the hair turned grey and started an exodus due to gravitation etc. from a point, where every direction is south bound ...] Very easy money earned for a satisfied and happy client, fairly easy work for a relative huge bill to client, all happy.

 

I suppose this has something to do with both Mr. Buffetts and Mr. Mungers abhorrence for administrative and corporate bloat.

 

I wonder if these transactions has been based on Mr. Abel calling Mr. Jain, or Mr. Abel setting someone up to call Mr. Jain.

Edited August 15, 2024 by John Hjorth

[gfp]

Yeah I don't know who called who but Pilot was unique in that it came with some very expensive bank debt that stuck out like a sore thumb in BRK's capital structure.  I'm sure there was some grumbling at Berkshire when Pilot aggressively borrowed and paid out dividends (including dividends to Omaha for its share) and now they have the debt to deal with.   They probably planned to replace the bank loans when they took over 100%.  

 

Nice recent article in the Knoxville paper about the Pilot CEO in case anybody here missed it -

https://www.knoxnews.com/story/money/business/2024/08/07/who-is-adam-wright-pilot-ceo-and-former-nfl-player/74271777007/