Buffett/Berkshire - general news

[John Hjorth]

Scribbles by Schumpeter on The Economist yesterday :

 

The Economist - Business [September 3^rd 2024] : Has Warren Buffett lost his touch? Assessing Berkshire Hathaway’s recent performance.

 

And [naturally and of course, I'm tempted to express], a bit later, 'da man from St. Louis, who ain't hard to find' [and who has nitpicked [dressed in boxing gloves] Berkshires track record from front, from behind, in the left ear and last the right ear] almost explodes on X with a call to all subscribers of The Economist to cancel their subscriptions! 

 

Damn, it's good entertainment!  - Also the cartoon above [Likely a KAL thingy] !

 

- - - o 0 o - - -

 

The Berkshire track record is what it is, and has already been nitpicked in all aspects and nuances - over and over again. That horse has alreday been beaten to death, I would say.

Edited September 6, 2024 by John Hjorth
Spelling

[Spooky]

Personally, I'm not that concerned with Berkshire's cash position at the moment. At least now they are earning decent interest income on cash. Looking around the world, the geopolitical situation is worrying - seems like lots of potential instability and conflict. War in the middle east as well as Europe with Russia aligning with Iran / China / North Korea. I wonder if the Apple sale is partly driven by risk management given its exposure to China when US and Chinese tensions are high and deteriorating. Not a bad time to have a healthy cash allocation and assets concentrated in safe jurisdictions.

 

Also, Buffett is the goat and has proven his doubters wrong many times. Who am I to question him.

Edited September 4, 2024 by Spooky

[Charlie]

https://archive.ph/WboyO

 

The author thinks we could be acquiring Chubb and is quoting the Thomas Gayner (Markel) sentence. 

Edited September 4, 2024 by Charlie

[sleepydragon]

5 hours ago, Charlie said:

https://archive.ph/WboyO

 

The author thinks we could be acquiring Chubb and is quoting the Thomas Gayner (Markel) sentence. 

 

if web is in the middle of negotiating to acquire Chubb, he won't be buying the stock.

on the contrary, since he sold MRK, he is more likely at least had some discussion about acquiring Markel, impo 

[CassiusKing1]

Acquiring Markel could make sense in adding Thomas Gayner to the BRK fold.  He could help run the insurance business as well as with cash allocation.  Hmmm.

[HubbadaPow]

I've been thinking about Buffett's preference for wholly-owned businesses, and I wonder if that preference is simply to avoid being deemed an investment company by regulators. Does anyone here have any insights into that?  

[gfp]

1 hour ago, HubbadaPow said:

I've been thinking about Buffett's preference for wholly-owned businesses, and I wonder if that preference is simply to avoid being deemed an investment company by regulators. Does anyone here have any insights into that?  

 

I don't think Buffett thinks about the risk of being deemed an investment company at all anymore.  It was decades ago he was careful about that.  Berkshire has something like 400,000 employees and some of the largest operating businesses in the country.  The securities are largely inside insurance companies.  It's a non-issue.

 

Even Munger - who was at risk (and probably technically was one) at DJCO just totally ignored the issue and paid it no mind.

[HubbadaPow]

44 minutes ago, gfp said:

 

I don't think Buffett thinks about the risk of being deemed an investment company at all anymore.  It was decades ago he was careful about that.  Berkshire has something like 400,000 employees and some of the largest operating businesses in the country.  The securities are largely inside insurance companies.  It's a non-issue.

 

Even Munger - who was at risk (and probably technically was one) at DJCO just totally ignored the issue and paid it no mind.

Thanks for the response.  You're probably right.  Although I am often surprised when I get talking to people running larger businesses and learn how many of their decisions are regulatory-driven.

[gfp]

https://www.sec.gov/Archives/edgar/data/70858/000095017024104183/xslF345X05/ownership.xml

 

11.1%

[UK]

5 hours ago, gfp said:

https://www.sec.gov/Archives/edgar/data/70858/000095017024104183/xslF345X05/ownership.xml

 

11.1%

 

Do you expect him to stop just under 10 percent or sell it all?

[gfp]

4 hours ago, UK said:

 

Do you expect him to stop just under 10 percent or sell it all?

 

I have no idea, but he will certainly gain more privacy once he crosses below 10%.  I don't expect him to stop before then.  With BAC repurchases expected in the future, he would want to at least get a fair bit under 10% before stopping or the reporting issue would just creep up again.

 

My guess is that if BAC's market price stays up here around $40 he will keep selling.  He may stop if the share price falls.  I would not be surprised to see him sell the entire position but we will only find out on 13fs and maybe the 10q.

[Xerxes]

On 9/4/2024 at 5:37 AM, John Hjorth said:

Scribbles by Schumpeter on The Economist yesterday :

 

The Economist - Business [September 3^rd 2024] : Has Warren Buffett lost his touch? Assessing Berkshire Hathaway’s recent performance.

 

And [naturally and of course, I'm tempted to express], a bit later, 'da man from St. Louis, who ain't hard to find' [and who has nitpicked [dressed in boxing gloves] Berkshires track record from front, from behind, in the left ear and last the right ear] almost explodes on X with a call to all subscribers of The Economist to cancel their subscribtions! 

 

Damn, it's good entertainment!  - Also the cartoon above [Likely a KAL thingy] !

 

- - - o 0 o - - -

 

The Berkshire track record is what it is, and has already been nitpicked in all aspects and nuances - over and over again. That horse has alreday been beaten to death, I would say.

instead of blowing a fuse, he could easily sent his comments to The Economist. Where it might even get printed. 
 

Despite that, an unsuspecting reader of the formerly great Economist might conclude that the index is a better investment than BR

[UK]

30 minutes ago, gfp said:

 

I have no idea, but he will certainly gain more privacy once he crosses below 10%.  I don't expect him to stop before then.  With BAC repurchases expected in the future, he would want to at least get a fair bit under 10% before stopping or the reporting issue would just creep up again.

 

My guess is that if BAC's market price stays up here around $40 he will keep selling.  He may stop if the share price falls.  I would not be surprised to see him sell the entire position but we will only find out on 13fs and maybe the 10q.

Thanks!

[John Hjorth]

13 minutes ago, Xerxes said:

instead of blowing a fuse, he could easily sent his comments to The Economist. Where it might even get printed. 
 

Despite that, an unsuspecting reader of the formerly great Economist might conclude that the index is a better investment than BR

 

@Xerxes,

 

Yes, that's actually valid points. If his points were formulated and phrased in a more polite and balanced way, his response might have had a chance for getting printed.

 

And with regard to your quote above from the tweet post [<- Google is my friend] on X, there is just to say that bying the index compared to buying Berkshire are two totally different investments, plain and simple, which is also the very reason and cause for the eternal onging discussion of it, ref. Mr. Bloomstrans use of 'better'. Its all about subjective [personal] perceived judgements about expected returns and assumed risks forward looking.

 

I personally think his points are correct, ref. his great and voluminous work publised during the years [, which I actually really appreciate, and I am thankful for free access to it], but the form in this situation reminds me of that of a very protective terrier.

[Xerxes]

John

 

I don’t have a problem with his content. I am grateful for anything that he writes.
 

The issue is X/Twitter that promote “cult” behaviour.

 

Bloomstran is just the latest Twitter user behaving as a head of a cult. 

[dealraker]

12 minutes ago, Xerxes said:

John

 

I don’t have a problem with his content. I am grateful for anything that he writes.
 

The issue is X/Twitter that promote “cult” behaviour.

 

Bloomstran is just the latest Twitter user behaving as a head of a cult. 

I think it is accurate that some investors feel protected by the likes of Bloomstran (who replaced Tilson).  There are others and their message is pure homespun - playing to the childlike hopefulness and safety seeking of human nature.  An example is his milking of a pretended Berkshire connection - the best selling vehicle of his selling model.   Like so many successful asset gatherings of the past - the 50 page Berkshire analysis is cream of the crop to lace up those shoes.

 

With a 5th graders logic and brain development it is beyond easy to know when to buy the stock of Berkshire.  But if you make the analysis of Berk a 1000 page book?   It sells you as lord protector.

 

Of recent it was none other than Bloomstran - actually Semper - who co-led a mass of frantic obsession/buying with DG that's turned bad, really bad.  My guess though is that Bloomstran had absolutely nothing to do with it all.  He's too busy out-and-about selling.  It's working, assets under management growing nicely.  Won't last.

 

Over time Semper will intermittently give you pre-fee performance figures if you consider that relevant.

 

 

 

 

[Xerxes]

7 minutes ago, dealraker said:

I think it is accurate that some investors feel protected by the likes of Bloomstran (who replaced Tilson).  There are others and their message is pure homespun - playing to the childlike hopefulness and safety seeking of human nature.  An example is his milking of a pretended Berkshire connection - the best selling vehicle of his selling model.   Like so many successful asset gatherings of the past - the 50 page Berkshire analysis is cream of the crop to lace up those shoes.

 

With a 5th graders logic and brain development it is beyond easy to know when to buy the stock of Berkshire.  But if you make the analysis of Berk a 1000 page book?   It sells you as lord protector.

 

Of recent it was none other than Bloomstran - actually Semper - who co-led a mass of frantic obsession/buying with DG that's turned bad, really bad.  My guess though is that Bloomstran had absolutely nothing to do with it all.  He's too busy out-and-about selling.  It's working, assets under management growing nicely.  Won't last.

 

Over time Semper will intermittently give you pre-fee performance figures if you consider that relevant.

 

 

 

 

 

“An example is his milking of a pretended Berkshire connection - the best selling vehicle of his selling model.”

 

love this ! 

[John Hjorth]

3 hours ago, dealraker said:

... Over time Semper will intermittently give you pre-fee performance figures if you consider that relevant. ...

 

Charlie [ @dealraker ],

 

Detailed information about fees are actually for everyone to study on the last page of the latest Client Letter. There appear to be after fee-performance available.

 

The funny thing about it is I get so much data thrown my way from the page, that I'm not even sure I understand it correctly.

 

To me, it looks like a CAGR 1 percent fee drag included in net performance compared to gross, however I'm not sure of it.

 

Berkshire cost of delegation of capital allocation [including access to non-listed investments, you can't buy your self in the market] :

 

Holdco costs 2023 : USD 244 M.

Average equity 2023 : USD [[473,424 M + USD 561,273]/2] = USD 517,349 M,

 

meaning, thus :

 

HoldCo costs at  : 244 / 517,349 ~ 0,05 %. 

 

Why on earth are people representing and owning Berkshire shares for a market value at EOP 2024H1 of USD 175 M [174,809,000, to be exact] [Semper Augustus's position [A + B] , as per Dataroma]  paying USD 1.75 M [1 %] in fees [in aggregate] in stead of buying and holding the damn thing themselves?

Edited September 6, 2024 by John Hjorth
Spelling

[ValueMaven]

People who say that Berkshire would acquire Markel for Gayner's insurance knowledge really dont know Berkshire at all!

Berkshire has the deepest senior talent in the P&C industry period.  This was only enhanced by the addition of Joe Brandon of Alleghany less than 12 months ago!  What would be really cool is if Weston Hicks joined the company, or even the board!

[gfp]

10 minutes ago, ValueMaven said:

People who say that Berkshire would acquire Markel for Gayner's insurance knowledge really dont know Berkshire at all!

Berkshire has the deepest senior talent in the P&C industry period.  This was only enhanced by the addition of Joe Brandon of Alleghany less than 12 months ago!  What would be really cool is if Weston Hicks joined the company, or even the board!

 

My impression was that Gayner wasn't even the "insurance guy" - he was the investment guy who eventually ascended to CEO.

 

Either way, people are interpreting Gayner's "cryptic comment" in strange ways.  What Berkshire deals have been leaked and hinted about publicly way in advance?  Why would Berkshire sell MKL shares if it was interesting in acquiring the entire company?  Why would MKL sell the entire company to Berkshire?  How on earth would Tom Gayner be in the loop on hypothetical confidential negotiations between Chubb and Berkshire?  Why would Chubb sell to Berkshire?

 

"there are things going on that I'm not at liberty to discuss" sounds to me like MKL was never a Buffett position (no surprise, it's too small for him to mess with) and Todd or whoever gave Gayner an excuse.  Maybe something like, "I'm not managing this certain pool of money any more because I have to focus on GEICO so we are liquidating my positions in this portfolio."  Probably wrong but a lot more plausible than the above.

 

 

[Charlie]

On 9/6/2024 at 3:02 PM, gfp said:

My impression was that Gayner wasn't even the "insurance guy" - he was the investment guy who eventually ascended to CEO.

 

Either way, people are interpreting Gayner's "cryptic comment" in strange ways.  What Berkshire deals have been leaked and hinted about publicly way in advance?  Why would Berkshire sell MKL shares if it was interesting in acquiring the entire company?  Why would MKL sell the entire company to Berkshire?  How on earth would Tom Gayner be in the loop on hypothetical confidential negotiations between Chubb and Berkshire?  Why would Chubb sell to Berkshire?

 

"there are things going on that I'm not at liberty to discuss" sounds to me like MKL was never a Buffett position (no surprise, it's too small for him to mess with) and Todd or whoever gave Gayner an excuse.  Maybe something like, "I'm not managing this certain pool of money any more because I have to focus on GEICO so we are liquidating my positions in this portfolio."  Probably wrong but a lot more plausible than the above.

 

Yeah, it was wishful thinking, but it was a lot of fun.

[backtothebeach]

I would love for Buffett to find a way to use the cash to shrink the company by, say, 250 billion in a tax efficient way for shareholders. Maybe acquire something and then spin it out. Then shareholders can choose to hold the spinout or sell it, depending on their tax situation.

A Berkshire with 750 billion market cap should be easier to grow for Greg than a 1 trillion market cap, at least for a while.

 

Probably not gonna happen, doing a spin would be a bad precedent before handing over the reigns.

 

But shrinking the company a bit would be nice.

 

Edited September 10, 2024 by backtothebeach

[bizaro86]

3 hours ago, backtothebeach said:

I would love for Buffett to find a way to use the cash to shrink the company by, say, 250 billion in a tax efficient way for shareholders. Maybe acquire something and then spin it out. Then shareholders can choose to hold the spinout or sell it, depending on their tax situation.

A Berkshire with 750 billion market cap should be easier to grow for Greg than a 1 trillion market cap, at least for a while.

 

Probably not gonna happen, doing a spin would be a bad precedent before handing over the reigns.

 

But shrinking the company a bit would be nice.

 

 

I think you'd be more likely to see a big buyback than a spin. The next time there's a big market crash maybe just buy $100B of BRK...

 

 

[DooDiligence]

54 minutes ago, bizaro86 said:

 

I think you'd be more likely to see a big buyback than a spin. The next time there's a big market crash maybe just buy $100B of BRK...

 

 

 

So many options. All of them stand a chance of being good.

[Jaygo]

7 hours ago, backtothebeach said:

I would love for Buffett to find a way to use the cash to shrink the company by, say, 250 billion in a tax efficient way for shareholders. Maybe acquire something and then spin it out. Then shareholders can choose to hold the spinout or sell it, depending on their tax situation.

A Berkshire with 750 billion market cap should be easier to grow for Greg than a 1 trillion market cap, at least for a while.

 

Probably not gonna happen, doing a spin would be a bad precedent before handing over the reigns.

 

But shrinking the company a bit would be nice.

 

This is my hope too. A buyback would be great but unlikely unless shit gets crazy. Is a return of capital a tax advantaged possibility?