Buffett/Berkshire - general news

[Jaygo]

He could also just buys some awesome businesses outright but at some point too big is too big. I would not have been upset with 3M at the lows or Graco anytime. 

 

Why not buy out Suncor or TransForce up north? Lots of ideas but WB is the be all and end all so he will decide. Maybe he will buy out Cargill or Mars and we can all stop worrying about cash for a long time.

 

 

[alpha]

 

Jain sold half his Berkshire holdings as the stock price peaked

 

https://www.barrons.com/articles/berkshire-hathway-stock-sell-jain-buffett-7421346b?mod=hp_LATEST

[Munger_Disciple]

25 minutes ago, alpha said:

 

Jain sold half his Berkshire holdings as the stock price peaked

 

https://www.barrons.com/articles/berkshire-hathway-stock-sell-jain-buffett-7421346b?mod=hp_LATEST

 

Wow! Didn't see that coming. 

[UK]

10 hours ago, alpha said:

 

Jain sold half his Berkshire holdings as the stock price peaked

 

https://www.barrons.com/articles/berkshire-hathway-stock-sell-jain-buffett-7421346b?mod=hp_LATEST

 

Wow! Did not see this coming either. But this is exactly what I also did YTD, though perhaps on average Ajit did get a better price. I like seeing someone from BRK being somewhat more enterprising and active with the managing of his capital:))

 

Edited September 12, 2024 by UK

[Luke]

Haha! Probably the right move here! But surprising to see such a large sale from high up in the management.

[Hektor]

Here is the Form-4

https://www.sec.gov/Archives/edgar/data/1067983/000172845124000004/xslF345X05/primary_doc.xml

 

Planning to retire??

Edited September 12, 2024 by Hektor

[Munger_Disciple]

Based on my math, Ajit sold 200 A shares out of his total holdings of 449 equivalent A shares prior to the sale. So the press is wrong. Ajit sold 44.5% of his Berkshire stock and retains 55.5%. Still a significant sale though. 

 

Even after this sale, Ajit owns more Berkshire stock (249 A share equivalents) than Greg (229 A share equivalents). 

Edited September 12, 2024 by Munger_Disciple

[sleepydragon]

It’s almost exactly $100m after tax. Is there a possiblity that Ajain is buying a huge house?   The most expensive house in CT is around $50m, but there are a lot of big houses in Florida

 

[73 Reds]

5 minutes ago, sleepydragon said:

It’s almost exactly $100m after tax. Is there a possiblity that Ajain is buying a huge house?   The most expensive house in CT is around $50m, but there are a lot of big houses in Florida

 

LOL, one would think he'd have no trouble qualifying for a mortgage.  Or Berkshire would lend him the money.  Do we know what else he owns besides BRK shares?  My guess this is part of an estate plan.  

[adesigar]

Probably making a $100 million donation to a charity that he supports.

[adesigar]

https://www.jain-foundation.org/about/our-mission/

[73 Reds]

1 minute ago, adesigar said:

Probably making a $100 million donation to a charity that he supports.

But then why sell the stock and pay CG taxes rather than donate the shares directly?

[Munger_Disciple]

15 minutes ago, sleepydragon said:

It’s almost exactly $100m after tax. Is there a possiblity that Ajain is buying a huge house?   The most expensive house in CT is around $50m, but there are a lot of big houses in Florida

 

 

Perhaps Ajit is planning to move insurance HQ to FL ? He sure would save a few million in taxes every year!

[Munger_Disciple]

8 minutes ago, 73 Reds said:

My guess this is part of an estate plan.  

 

Why would estate planning involve selling stock? That makes no sense. 

[73 Reds]

7 minutes ago, Munger_Disciple said:

 

Why would estate planning involve selling stock? That makes no sense. 

Selling stock to then give the proceeds away to charities makes no sense.  He may want to start giving away his fortune to individuals/non-charities in increments less than the equivalent of an A share.   Does he have a large family or non-charitable (501c) causes that he supports?  Estate planning = reducing the size of your taxable estate.

Edited September 12, 2024 by 73 Reds
missed line

[Munger_Disciple]

7 minutes ago, 73 Reds said:

Selling stock to then give the proceeds away to charities makes no sense.  He may want to start giving away his fortune to individuals/non-charities in increments less than the equivalent of an A share.   Does he have a large family or non-charitable (501c) causes that he supports?  

 

Ajit's sale is not related to charitable giving (he could have gifted shares to avoid capital gains taxes), but it is highly unlikely that it is related to estate planning.

 

My own guess is that Ajit (the best odds maker in the world) sees future capital gains taxes (especially under a democratic administration) going up significantly so he is taking some chips off the table at a high end of Berkshire's intrinsic value if not higher. This thinking is in line with Warren's own stated thinking on higher future corporate tax rates which is one of the reasons he sold Apple stock. 

Edited September 12, 2024 by Munger_Disciple

[73 Reds]

Just now, Munger_Disciple said:

 

Ajit's sale is not related to charitable giving (he could have gifted shares to avoid capital gains taxes), but it is highly unlikely that it is related to estate planning.

 

My own guess is that Ajit (the best odds maker in the world) sees future capital gains taxes (especially under a democratic administration) going up significantly so he is taking some chips off the table at a high end of Berkshire's intrinsic value if not higher. 

I'd take the other side of that bet.  He knows Berkshire as well as anyone and unless he is planning on retiring (or even if he is), doesn't believe that Berkshire will not be more valuable in the future.

[Munger_Disciple]

FT had a funny screenshot of Ajit Jain:

[Munger_Disciple]

They corrected it:

[Xerxes]

Maybe Ajit is pissed that Buffett sold half of Apple. 
 

So he is getting back by selling half of Berkshire and re-deploying to Apple. 

[Xerxes]

59 minutes ago, Munger_Disciple said:

FT had a funny screenshot of Ajit Jain:

I wonder what stocks does Zelenskyy has in his retirement portfolio. 
 

All-in Rheinemetall

[thowed]

Obviously they don't have to, but personally for extra tight corporate governance, I'd like to see a note issued explaining why he's made such a big sale.  Otherwise it just creates speculation that something is wrong.  Not ideal.

[adesigar]

1 hour ago, 73 Reds said:

But then why sell the stock and pay CG taxes rather than donate the shares directly?

 

You are right. 

[janusdr]

4 hours ago, thowed said:

Obviously they don't have to, but personally for extra tight corporate governance, I'd like to see a note issued explaining why he's made such a big sale. 

It can't be personal and company specific (planned retirement in the short term, etc.) because then Buffett would want to have that disclosed first to avoid a perception of frontrunning the news.
It can't be charity related or shares would have been gifted.

It can't be estate related or shares would just have been gifted/pledged.

 

It could be to buy something expensive like a house.

But he could just have mentioned this in 1 short sentence ('proceeds are to finance a personal outlay') , and nobody would care and speculation would stop.

Secondly I don't think Ajit is a guy who buys trophy houses or jets for half his net worth at 73 years old, after not having done that for 40 years.

 

The only reason left is that Berkshire is very overvalued.

But even then it is strange, because neither Buffett nor Abel have sold a substantial amount of Berkshire shares, not now and not in the past when it was fully valued. But Buffett is the personification of Berkshire, and Abel is the next CEO so for them it is probably not done to start market timing their own stock.
Ajit may have less of a problem in that respect. He is also a lot less rich. (didn't have the MidAmerican stake).

 

Berkshire did stop buying back Berkshire shares in the last 2,5 months, even at prices in the low 400's, where he was buying in q1 and q2. 

I still think Buffett sees something coming in the economy. And Ajit sees it as well, and pushed the button when Berkshire ran up almost 20% in the past 2 months.

 

Edited September 12, 2024 by janusdr

[Munger_Disciple]

It is possible that Ajit is making a private personal investment (for example in India) that would be too small to move the needle for Berkshire. And being the best odds maker in the world, he sees a strong likelihood of capital gains taxes going up in the near future (especially under KH). So he might be selling now at a very attractive valuation for Berkshire. 

If one thinks about it, the above scenario is not that different from Buffett's rationale for selling Apple. 

Edited September 12, 2024 by Munger_Disciple