Buffett/Berkshire - general news

[Spekulatius]

I think we are seeing a lot of data that Berkshire execution is slacked off. BNSF, Geico, PCP all have lost relative to competition. Perhaps Lubrizol as well. We may also have a succession issue with Jain possibly on his way out - he is 73 and has sold quite a bit of stock. He will be very hard to replace.

 

Abel is going to have his hands full and probably will run a tighter ship holding managment or subsidies on a shorter leash if they don’t perform. Things will change at Berkshire very soon, because I don’t think WEB will be in his current role longer than Munger.

 

I could see him ceding all operational responsibilities to Abel. He may have done this already de facto, but it will be easier for Abel to bring the hammer down, if it’s official.

[Hektor]

On 10/11/2024 at 2:10 PM, Jaygo said:

Working for or selling out to Warren Buffett of 20 years ago was something to be proud of, something to aspire to

I suspect most (private?) businesses sold to Warren so that they could cash out (or ward off hostile takeover) and continue running the business they built.

[John Hjorth]

16 minutes ago, Hektor said:

I suspect most (private?) businesses sold to Warren so that they could cash out (or ward off hostile takeover) and continue running the business they built.

 

And now what would be potential candidates for that, @Hektor ? - to really move the needle for Berkshire?

[sholland]

1 hour ago, John Hjorth said:

 

And now what would be potential candidates for that, @Hektor ? - to really move the needle for Berkshire?

https://en.wikipedia.org/wiki/List_of_largest_private_non-governmental_companies_by_revenue

[Hektor]

3 hours ago, John Hjorth said:

And now what would be potential candidates for that, @Hektor ? - to really move the needle for Berkshire?

That’s a good question, John. That makes me wonder how often should the needle be moved? Once or twice a decade?

[Hektor]

2 hours ago, sholland said:

https://en.wikipedia.org/wiki/List_of_largest_private_non-governmental_companies_by_revenue

Thanks @sholland

[MarioP]

I was already a shareholder of Apple when Steve Jobs died. No doubt that Apple changed under Cook. And it wasn't for the worst. Now Berkshire will change under Abel and it doesn't mean it will be bad. We will see but there is nothing guaranty. At this point I am not confident enough to keep BRK at 20% of my portfolio like it is since 1995. I will probably put it down at 10%. There is a good chance that in the first 2 or 3 years of is tenure Able will be able to pick some low hanging fruits to boost operational earnings.

[UK]

17 minutes ago, MarioP said:

I was already a shareholder of Apple when Steve Jobs died. No doubt that Apple changed under Cook. And it wasn't for the worst. Now Berkshire will change under Abel and it doesn't mean it will be bad. We will see but there is nothing guaranty. At this point I am not confident enough to keep BRK at 20% of my portfolio like it is since 1995. I will probably put it down at 10%. There is a good chance that in the first 2 or 3 years of is tenure Able will be able to pick some low hanging fruits to boost operational earnings.

 

I think this is actually very true. No one will replace WB being WB, but BRK could very well find other/new strenghts/avenues under new management.

 

Edited October 14, 2024 by UK

[Hektor]

9 hours ago, UK said:

BRK could very well find other/new strenghts/avenues under new management.

e.g., buy tech, initiate a regular dividend. Buy bitcoin? 

[Masterofnone]

It is not unlikely that Berkshire starts paying a dividend when WEB bows out. It is actually an

interesting point to ponder.

What would you do if tomorrow, WEB announced his retirement and the initiation of a $20 per (B)share dividend?

Edited October 15, 2024 by Masterofnone

[DooDiligence]

12 minutes ago, Masterofnone said:

It is not unlikely that Berkshire starts paying a dividend when WEB bows out. It is actually and interesting point to ponder.

What would you do if tomorrow, WEB announced his retirement and the initiation of a $20 per (B)share dividend?

 

I get the feeling it would go something like this with many here.

 

 

[Masterofnone]

Perhaps, but would you sell or hold? What if it was a $30/per share dividend?

Just food for thought.

[Hektor]

Also, invest in China and India.

[DooDiligence]

52 minutes ago, Masterofnone said:

Perhaps, but would you sell or hold? What if it was a $30/per share dividend?

Just food for thought.

 

You had me at $20.

[UK]

2 hours ago, Hektor said:

e.g., buy tech, initiate a regular dividend. Buy bitcoin? 

 

Hostile takovers:))

[Blugolds]

I def would NOT want a dividend, primarily for tax purposes, and I feel like Warren understands that as do most BRK shareholders, its been voted on several times and it resulted in a pretty resounding NO THANKS. 

 

Return of capital would be more beneficial to shareholders while avoiding the tax man, personally it would present additional challenges of finding a new place to deploy, but I'd be fine with it, better I figure out what to do with the $$ rather than Uncle Sam. 

[Hektor]

9 hours ago, UK said:

Hostile takovers:))

I thought about this. However, are there needle moving targets for hostile takeover worthy of management investing time?

[Jaygo]

I wouldn't really want the dividend either. The reason I would sell is strictly due to valuation and the opportunities I see elsewhere. Greg is already in charge and is likely pushing the subs harder than WB.

 

The business idea of float, investments and constant reinvestment is still in place, they are just struggling to find places for reinvestment. It likely a low single digits above inflation return from here with changes. Not bad but not great.

 

They could have bought MMM but were likely scared of lawsuits, they could buy FAST, GGG, SHW, TORO even SBUX and a whole bunch of great businesses that they understand but they dont. I think the system is hitting its limits on size so an exceptional buyback, return of capital or dividend is needed.

 

 

[73 Reds]

13 minutes ago, Jaygo said:

I wouldn't really want the dividend either. The reason I would sell is strictly due to valuation and the opportunities I see elsewhere. Greg is already in charge and is likely pushing the subs harder than WB.

 

The business idea of float, investments and constant reinvestment is still in place, they are just struggling to find places for reinvestment. It likely a low single digits above inflation return from here with changes. Not bad but not great.

 

They could have bought MMM but were likely scared of lawsuits, they could buy FAST, GGG, SHW, TORO even SBUX and a whole bunch of great businesses that they understand but they dont. I think the system is hitting its limits on size so an exceptional buyback, return of capital or dividend is needed.

 

 

Respectfully disagree.  Who is to say that Post-Buffett they don't, or can't understand just about anything?  

[villainx]

The thing is who will take over for Greg Abel.  62 isn't old but it's more likely that Abel reign will be less than 10 years than over.

[Jaygo]

2 minutes ago, 73 Reds said:

Respectfully disagree.  Who is to say that Post-Buffett they don't, or can't understand just about anything?  

They very well could. I just feel that the size of the conglomerate has likely become an obstacle. Yes there is an incredible amount of money coming in so they have many options but is another totally different business being added to the fold going to be easy to manage.

 

I highlighted the above companies because I feel they fit the culture of BRK. All the above have had pretty big downswings in the past few years and they didn't buy into them or buy them outright. This tells me they may be stretched as is.

[John Hjorth]

12 hours ago, Masterofnone said:

It is not unlikely that Berkshire starts paying a dividend when WEB bows out. It is actually an

interesting point to ponder.

What would you do if tomorrow, WEB announced his retirement and the initiation of a $20 per (B)share dividend?

 

@Masterofnone,

 

If you look at the Berkshire financials, have you then ckecked if this [a USD 20 per B share dividend] is even a feasible action? I mean where are all the money?

[73 Reds]

42 minutes ago, Jaygo said:

They very well could. I just feel that the size of the conglomerate has likely become an obstacle. Yes there is an incredible amount of money coming in so they have many options but is another totally different business being added to the fold going to be easy to manage.

 

I highlighted the above companies because I feel they fit the culture of BRK. All the above have had pretty big downswings in the past few years and they didn't buy into them or buy them outright. This tells me they may be stretched as is.

I've never understood the argument that Berkshire is too big.  There are several trillion-dollar market cap companies that only do one or a few things worthy of my investment dollars.  Berkshire can invest in literally anything, anywhere.  They may not have the necessary talent now but there is nothing to prevent them from hiring the right folks for any endeavor.  

[Xerxes]

There was a short CNBC interview with BRK board member back at the AGM, where she made it clear that there will be no regular dividends, but perhaps one day special dividend. 

[Hektor]

7 minutes ago, Xerxes said:

There was a short CNBC interview with BRK board member back at the AGM, where she made it clear that there will be no regular dividends, but perhaps one day special dividend. 

I think it was Susan Decker who said that.