Buffett/Berkshire - general news

[KPO]

19 minutes ago, villainx said:

That's interesting.  I assume they got step up around time Abel sold his 1%? So that would have set valuation a little higher than today's sale price.  So it would have been tax neutral, no?  (That's if I'm following the timeline correctly from above posts) But I guess I don't know the internal workings of the Scott trust.

Possibly. I’d have to look at the timeline closer as his passing likely catalyzed a valuation reset, and Abel’s transaction may have reset it again.  I don’t have access to the trust details, but if their current valuation was based on the Abel sale mark, I’m curious as to why they took Berkshire equity, particularly near an all time high. 

[Munger_Disciple]

Wow! After reading the filing, BRK paid $650 per BHE share, a very big mark-down from $1,174 per share they paid for Abel's shares in 2022. That's a 45% mark-down!!

 

This may very well mean that BHE may be pulling back on utility investments significantly. 

Edited October 1, 2024 by Munger_Disciple

[KPO]

9 minutes ago, Munger_Disciple said:

Wow! After reading the filing, BRK paid $650 per BHE share, a very big mark-down from $1,174 per share they paid for Abel's shares in 2022. That's a 45% mark-down!!

 

This may very well mean that BHE may be pulling back on utility investments significantly. 

Yeah, Greg’s timing has me a little less concerned about his investing chops.
 

Whatever the case, I hope reinvesting in BHE drops to maintenance capex levels until the industry and the government arrive at a sustainable solution for wildfire liabilities. If that doesn’t happen I think Buffett and Abel need to reconsider this business altogether. 

[Munger_Disciple]

8 minutes ago, KPO said:

Yeah, Greg’s timing has me a little less concerned about his investing chops.
 

Whatever the case, I hope reinvesting in BHE drops to maintenance capex levels until the industry and the government arrive at a sustainable solution for wildfire liabilities. If that doesn’t happen I think Buffett and Abel need to reconsider this business altogether. 

 

For a regulated utility, pretty much all capital expenditures including any maintenance expenses have to be approved by the regulator since they affect the rate base. 

[jbwent63]

The 92% figure is from the BRK 10-K on page K-7. Does the filing state that BRK now owns 100% of BHE? Is it possible that there is another minority shareholder that is still holding a small position?

[Munger_Disciple]

26 minutes ago, jbwent63 said:

The 92% figure is from the BRK 10-K on page K-7. Does the filing state that BRK now owns 100% of BHE? Is it possible that there is another minority shareholder that is still holding a small position?

 

Berkshire now owns 100% of BHE; there are no other minority shareholders. 

[John Hjorth]

10 minutes ago, Munger_Disciple said:

Berkshire now owns 100% of BHE; there are no other minority shareholders. 

 

@Munger_Disciple,

 

Is this about BHE minority interests, or about Bershire Hathaway minority interests in total?

Edited October 1, 2024 by John Hjorth

[Munger_Disciple]

12 minutes ago, John Hjorth said:

 

@Munger_Disciple,

 

Is this about BHE minority interests, or about Bershire Hathaway minority interests in total?

 

BHE

[John Hjorth]

8 minutes ago, Munger_Disciple said:

 

BHE

 

Thanks for the elaboration, @Munger_Disciple,

 

In the 2024Q2 Berkshire 10-Q, we have Berkshire minority interests as per June 30^th 2024 of USD 6,274 M. At that date, there must be more than BHE.

 

Off my head I can't come with what the rest by now must be related to.

[Munger_Disciple]

29 minutes ago, John Hjorth said:

 

Thanks for the elaboration, @Munger_Disciple,

 

In the 2024Q2 Berkshire 10-Q, we have Berkshire minority interests as per June 30^th 2024 of USD 6,274 M. At that date, there must be more than BHE.

 

Off my head I can't come with what the rest by now must be related to.

 

Many BRK subs have minority interests. For example, the Blumkin family members who still run NFM (Nebraska Furniture Mart) are minority owners in NFM. 

Edited October 1, 2024 by Munger_Disciple

[KPO]

2 hours ago, Munger_Disciple said:

Wow! After reading the filing, BRK paid $650 per BHE share, a very big mark-down from $1,174 per share they paid for Abel's shares in 2022. That's a 45% mark-down!!

 

This may very well mean that BHE may be pulling back on utility investments significantly. 

Yeah, I’m pretty familiar with regulated utilities. What I’m getting at is BHE should be run for cash or divested if they have frequent unpleasant surprises from wildfires and/or other liabilities ambulance chasing attorneys can make stick. 

[Hektor]

https://finance.yahoo.com/news/pilot-debt-rating-moody-brings-165850784.html

 

Pilot’s new debt rating from Moody’s brings it up to investment-grade

 

 

[DooDiligence]

4 hours ago, Munger_Disciple said:

 

Berkshire now owns 100% of BHE; there are no other minority shareholders. 

 

https://rationalwalk.com/berkshire-hathaway-acquires-bhe-minority-interests/?utm_source=substack&utm_medium=email

[gfp]

Interesting news!  I'm in Japan so just seeing this now as I wake up.  I think Abel was paid a premium price for his shares in order to take cash instead of the BRK.A stock he could have exchanged for under his shareholders agreement - so I think the story isn't really that BHE declined in value by 45% on the wildfire liabilities.  RationalWalk makes a good point that there was a deal with Scott family interests at around $50 billion in 2020.  

 

Berkshire didn't use any of its own cash to do this deal!  BYD sales proceeds, cash on hand at BHE and a debt swap covered most of the deal in the form of a repurchase at the BHE level.  The remaining minority shares (which benefitted form the repurchase and became more potent) were a straight tax-deferred equity swap.

 

 

[John Hjorth]

@Luke posted this in the LVMH topic earlier today :

 

 

Containing :

 

Quote

... Look at Buffett, Munger etc, they dont even want to wear fancy stuff because it just harms them and their peace of mind. 

 

I have always been thinking about what watch Mr. Buffett is wearing. Does anyone here on CoBF know it, or have a guess? And yes, plus his wedding ring, that's it.

Edited October 4, 2024 by John Hjorth
Spelling

[Luke]

8 minutes ago, John Hjorth said:

@Luke posted this in the LVMH topic earlier today :

 

 

Containing :

 

 

I have always been thinking about what watch Mr. Buffett is wearing. Does anyone here on CoBF know it, or have a guess? And yes, plus his wedding ring, that's it.

He occasionally wears a gold Rolex, but that's it. He couldnt care less about LV clothes, Gucci etc. If you are really wealthy than you shouldnt wear that stuff because it attracts attention you dont want!   

[UK]

12 minutes ago, John Hjorth said:

@Luke posted this in the LVMH topic earlier today :

 

 

Containing :

 

 

I have always been thinking about what watch Mr. Buffett is wearing. Does anyone here on CoBF know it, or have a guess? And yes, plus his wedding ring, that's it.

https://www.cnbc.com/2017/02/27/warren-buffett-only-wears-suits-made-by-a-chinese-entrepreneur.html

 

Not about watch but funny:)

 

Edited October 4, 2024 by UK

[John Hjorth]

Thanks, @UK!

 

I had forgotten that nice story.

 

Found it : Bob's Watches : Which Rolex Watch Does Warren Buffett Wear? He has certainly deserved it. Silent luxury, as @Luke called it.

[DooDiligence]

36 minutes ago, John Hjorth said:

Thanks, @UK!

 

I had forgotten that nice story.

 

Found it : Bob's Watches : Which Rolex Watch Does Warren Buffett Wear? He has certainly deserved it. Silent luxury, as @Luke called it.

 

I thought he'd wear something a bit less pedestrian.

Edited October 4, 2024 by DooDiligence

[John Hjorth]

16 minutes ago, DooDiligence said:

 

I thought he'd wear something a bit less pedestrian.

 

I tried to look up a price tag for such Rolex models, looks like USD 15,000 - 25,000, depending on model. Not exactly just change for everyone. But change for him.

[DooDiligence]

35 minutes ago, John Hjorth said:

 

I tried to look up a price tag for such Rolex models, looks like USD 15,000 - 25,000, depending on model. Not exactly just change for everyone. But change for him.

 

I thought this would be more in alignment with him.

 

https://www.alange-soehne.com/us-en/timepieces/saxonia/lange-31

[Hektor]

https://www.wsj.com/business/logistics/can-a-precision-scheduling-expert-fix-berkshire-hathaways-railroad-f33811e4

 

Can a ‘Precision Scheduling’ Expert Fix Berkshire Hathaway’s Railroad?

Warren Buffett’s designated successor is taking a hands-on approach with BNSF Railway, one of Berkshire’s biggest companies.

[John Hjorth]

8 hours ago, DooDiligence said:

 

I thought this would be more in alignment with him.

 

https://www.alange-soehne.com/us-en/timepieces/saxonia/lange-31

 

Awesome watch, Jeff [ @DooDiligence ]!,

 

The more I think about it, I'm likely to come to the conclusion that this Rolex of his may not even be  be his own buying decision.

 

Perhaps one of his wifes decided to 'dress him up 'suitable'' [at one of his birthdays or whatever] more in accordance with the man he really is, pulling the payment for the watch on a mirror card of his personal Amex card, so he ended up paying for it himself!

 

- Women / wifes / men / husbands / better halfs / significant others / mistresses / lovers [<-?] can some times be so bold and ballsy risk takers so that one gets scared just thinking about it! 

 

- - - o 0 o - - -

 

I once was as a youngster on an audit of a quite complex private holding company, and in the process I ended up in an open office to ask the CFO why there were entries in the general ledger of utilities costs related to an appartment at a certain adress in Copenhagen, which appartment I coulden't see nor find in the balance sheet / books for the holding company. Furthermore, no rental income from it booked anywhere.

 

So I had to call the boss at end of normal working hours to tell him that I had f**ked up dearly during the day, at least unintentionally.

 

Answer from boss : No problem, John, - let it go. He [the controlling shareholder] called me two or three weeks ago, where we talked about nothing and everything. He actually complained to me, he had not been getting any sex lately with his wife [and he felt that he coulden't really take the freedom to go to Copenhagen anytime soon, so he was dearly frustrated!]

 

[- so what do you do when you're in deep shit and are frustrated about it and don't know what to to ? - You call your CPA for guidance and advice, naturally! ] ,

 

Because he had been to a meeting with a reinsurance company in Copenhagen during a day some time ago, and when he dressed off that evening to go to bed at home, his wife just asked him : 'This morning, when you dressed for going to work, you had an undershirt under your shirt. Where is that  now?' <wifey pulling for checkmate in one move>. 

Edited October 4, 2024 by John Hjorth

[UK]

17 hours ago, Hektor said:

https://www.wsj.com/business/logistics/can-a-precision-scheduling-expert-fix-berkshire-hathaways-railroad-f33811e4

 

Can a ‘Precision Scheduling’ Expert Fix Berkshire Hathaway’s Railroad?

Warren Buffett’s designated successor is taking a hands-on approach with BNSF Railway, one of Berkshire’s biggest companies.

 

Would love to know what dealraker thinks about this...

 

Edited October 5, 2024 by UK

[dealraker]

10 hours ago, UK said:

 

Would love to know what dealraker thinks about this...

 

Basically UK I observed and participated with virtually all the rail Co's changes for over 40 years and one since 1976.  Improved operations and vastly better financial performance has intermittently surged within all rails for years - even decades - before HH.  My view is that if profitability is pushed too hard and too fast there is near equal repercussions that take years process through... its happening now.

 

So over a the next few years in my view is that UNP's supposed efficiency gains over BNSF will prove nothing but a short term breakaway easily caught up with.   Railroads that cut investments and too many workers to pump quarterly numbers via buybacks like UNP are like spun-out solo cyclists being bore down on by the pellaton.  Thus the last mile of much of the HH model in my view is or was just dysfunctional whitewash, needless one step forward two steps back, quick profits for selling shareholders at the expense of loyal ones.

 

It is the exact same thing in the insurance brokerage business and that's why all of them model overall growth over simply obsession with operating margin. 

Edited October 5, 2024 by dealraker