Buffett/Berkshire - general news

[gfp]

For the long term, it's always better to "just hold the goddamn stock" - especially if it means deferring taxes.  In the short term, Berkshire tends to behave like this before bear markets, when market participants who are really going to want cash at first rotate into safer stocks like Berkshire in case they are wrong about wanting to play a little defense.  Then a bit later they realize, "oh shit, what I really need is cash" and Berkshire joins the bear market.

 

Here's an overlay of BRK's valuation in 2007 with today (up till 3/18, so not current).  Some of us lived through this squeeze at the time but it's helpful if you didn't.  credit to Jim "mungofitch" for the graphic.  

 

[longlake95]

Thanks Paint and GFP. I did sell some years ago, to allocate somewhere, then I replaced that stock. But, mostly I've lived the Charlie - "just own it" dictum. I struggle, because as you guys have mentioned the forward return might be lower than the long-run 11@ CAGR, and now that prices are coming down, there's things to do. That being said, we sleep well at night with 25% of the portfolio in BRK. You're not alone...

Edited April 3, 2025 by longlake95

[Hektor]

7 minutes ago, gfp said:

For the long term, it's always better to "just hold the goddamn stock" - especially if it means deferring taxes.  In the short term, Berkshire tends to behave like this before bear markets, when market participants who are really going to want cash at first rotate into safer stocks like Berkshire in case they are wrong about wanting to play a little defense.  Then a bit later they realize, "oh shit, what I really need is cash" and Berkshire joins the bear market.

 

Here's an overlay of BRK's valuation in 2007 with today (up till 3/18, so not current).  Some of us lived through this squeeze at the time but it's helpful if you didn't.  

Good one @gfp. Thanks for the post.

[Charlie]

I have 97% in Berkshire and 3% in cash and sleeping fantastic. 

(Without this outsized Berkshire position I couldn´t stand some unnamed political person )

If you don´t have to pay a lot of taxes on the sales, it could be good to sell some shares,

but if you have to pay a lot of taxes I wouldn´t sell.

I just thought 1,78 P/B is too high and the MAGA bubble could burst, so I sold some shares with the lowest taxation.

But Berkshire will march on, especially with Berkshire Annual Meeting and

great performance coming up in May.

 

Edited April 3, 2025 by Charlie

[73 Reds]

13 minutes ago, gfp said:

For the long term, it's always better to "just hold the goddamn stock" - especially if it means deferring taxes.  In the short term, Berkshire tends to behave like this before bear markets, when market participants who are really going to want cash at first rotate into safer stocks like Berkshire in case they are wrong about wanting to play a little defense.  Then a bit later they realize, "oh shit, what I really need is cash" and Berkshire joins the bear market.

 

Here's an overlay of BRK's valuation in 2007 with today (up till 3/18, so not current).  Some of us lived through this squeeze at the time but it's helpful if you didn't.  credit to Jim "mungofitch" for the graphic.  

 

Yet even for all its cash, one can argue that the discount between BV and price is far more today than it was 18 years ago.  Berkshire's price would have to go a lot higher and prices of anything else of interest would have to be MUCH lower before I'd consider selling.

[dealraker]

5 minutes ago, Hektor said:

Good one @gfp. Thanks for the post.

As a 50 year 2 month and 21 (or 22-23...to lazy to do the calculation) day owner of Berkshire - gfp is correct with the behavior/action of Berkshire the stock in bear markets.

[longlake95]

Thanks for the colour guys.

[Munger_Disciple]

18 minutes ago, Hektor said:

Good one @gfp. Thanks for the post.

 

+1. And this implies we are probably at the beginning of a serious bear market cycle. 

[Jaygo]

1 hour ago, gfp said:

For the long term, it's always better to "just hold the goddamn stock" - especially if it means deferring taxes.  In the short term, Berkshire tends to behave like this before bear markets, when market participants who are really going to want cash at first rotate into safer stocks like Berkshire in case they are wrong about wanting to play a little defense.  Then a bit later they realize, "oh shit, what I really need is cash" and Berkshire joins the bear market.

 

Here's an overlay of BRK's valuation in 2007 with today (up till 3/18, so not current).  Some of us lived through this squeeze at the time but it's helpful if you didn't.  credit to Jim "mungofitch" for the graphic.  

 

 

Thank you for articulating something I have always suspected but couldn't really wrap my head around. 

You are bang on here. BRK and safe havens drop with a delay but they do drop.

[Viking]

1 hour ago, Munger_Disciple said:

 

+1. And this implies we are probably at the beginning of a serious bear market cycle. 

 

A stock is supposed to be worth the discounted value of all the cash it will spin out in the future. Today it is impossible to know the amount of cash that most companies will be able to earn in the coming years. I don't think that is hyperbole. The level of uncertainty is very high. That means stocks are worth less - and maybe a lot less.  

 

Increasingly, we are learning there is no grand well thought out plan. One man is deciding how resources are going to be allocated in the largest economy in the world (and those of its largest trading partners). And this man is a nut-job (I don't think this is debatable). It looks to me like investors are 'whistling past the graveyard.'

[73 Reds]

20 minutes ago, Viking said:

 

A stock is supposed to be worth the discounted value of all the cash it will spin out in the future. Today it is impossible to know the amount of cash that most companies will be able to earn in the coming years. I don't think that is hyperbole. The level of uncertainty is very high. That means stocks are worth less - and maybe a lot less.  

 

Increasingly, we are learning there is no grand well thought out plan. One man is deciding how resources are going to be allocated in the largest economy in the world (and those of its largest trading partners). And this man is a nut-job (I don't think this is debatable). It looks to me like investors are 'whistling past the graveyard.'

@Viking I love you man, but placing too much emphasis on one individual at one point in time, or subscribing permanent [anything] to what we all knew since November was coming is IMO not a successfully investible long term strategy.  Tradable?  Sure, for those so inclined.  From a realistic fear factor, Covid at its outset had far more dire potentially bad consequences.  The entire dialogue here regarding tariffs reminds me of the old Abbott and Costello skit "Whose on First, What's on Second"?  (For anyone here too young to know what this is I highly recommend Googling the act.). Everyone with an opinion seems to know exactly what is going to happen from now until forever. Let's check back in 6 months and determine precisely where we are with trade, relationships and business in general.  Personally I've funded 4 separate transactions in the last 10 days and have two more upcoming closings.  No one I know or do business with has any dire concerns about their own situations.  People are realistic that asset prices don't rise indefinitely and even the best of businesses go through cycles and difficult times.  Bear markets actually happen.  That doesn't make great businesses worth any less in the long run and gives people like us opportunities.    

[valueinvesting101]

Mr. Buffett repurchased stock at $625K around April/May 2024. I am assuming intrinsic value has increased by 10% in the last 12 months. So repurchase around $687K might happen and most likely assessed intrinsic value is at least slightly (5-10%) above that. So intrinsic value could be around $725-750K. At the current price of $800K, it might be slightly above intrinsic value but not very high.
 

Explanation given in an earlier annual report to purchase stock above book value multiple of 1.1 (in 2011) and then of 1.2(in 2012), can be extrapolated to 2025. After considering growth of operating companies since 2011 and buybacks in early 2020s, higher P/B multiple might be justified.

[Viking]

1 hour ago, 73 Reds said:

@Viking I love you man, but placing too much emphasis on one individual at one point in time, or subscribing permanent [anything] to what we all knew since November was coming is IMO not a successfully investible long term strategy.  Tradable?  Sure, for those so inclined.  From a realistic fear factor, Covid at its outset had far more dire potentially bad consequences.  The entire dialogue here regarding tariffs reminds me of the old Abbott and Costello skit "Whose on First, What's on Second"?  (For anyone here too young to know what this is I highly recommend Googling the act.). Everyone with an opinion seems to know exactly what is going to happen from now until forever. Let's check back in 6 months and determine precisely where we are with trade, relationships and business in general.  Personally I've funded 4 separate transactions in the last 10 days and have two more upcoming closings.  No one I know or do business with has any dire concerns about their own situations.  People are realistic that asset prices don't rise indefinitely and even the best of businesses go through cycles and difficult times.  Bear markets actually happen.  That doesn't make great businesses worth any less in the long run and gives people like us opportunities.    

@73 Reds , I do appreciate your perspective. At the end of the day, I think it is unknowable how things play out from here (what we know today). You may be right. Or not. We will know more in the coming months.

Bottom line, I have a lot of respect for Trump. He is motivated and he has surrounded himself with a loyal team. I think he is much more capable than you suggest (I don’t mean that in a good way). So I am trying not to underestimate what he might do (or how far he is prepared to go).
 

Context is important; I only have financial assets (no real estate etc). As a result, I tend to be more cautious than most when uncertainty is high. Over 30 years of investing, I have learned to trust my ‘spidey senses’ when they start to tingle. As I learn more I will act accordingly (that ‘be rational’ thing). 

Edited April 4, 2025 by Viking

[cubsfan]

1 hour ago, 73 Reds said:

@Viking I love you man, but placing too much emphasis on one individual at one point in time, or subscribing permanent [anything] to what we all knew since November was coming is IMO not a successfully investible long term strategy.  Tradable?  Sure, for those so inclined.  From a realistic fear factor, Covid at its outset had far more dire potentially bad consequences.  The entire dialogue here regarding tariffs reminds me of the old Abbott and Costello skit "Whose on First, What's on Second"?  (For anyone here too young to know what this is I highly recommend Googling the act.). Everyone with an opinion seems to know exactly what is going to happen from now until forever. Let's check back in 6 months and determine precisely where we are with trade, relationships and business in general.  Personally I've funded 4 separate transactions in the last 10 days and have two more upcoming closings.  No one I know or do business with has any dire concerns about their own situations.  People are realistic that asset prices don't rise indefinitely and even the best of businesses go through cycles and difficult times.  Bear markets actually happen.  That doesn't make great businesses worth any less in the long run and gives people like us opportunities.    

 

Such a great post. No one knows what's going to happen, least of all me. I do know something needs to be done about the debt.  But COVID was far more dangerous than what is happening now.

[ValueMaven]

Is Berkshire overvalued in the near-term?  Yes.  Is it fun to own Berkshire?  Yes.  I need equity exposure, love the culture, and consider it somewhat of an honor to be a long-term shareholder.  Why would I want to sell something (which could go higher on me) to buy something that I likely know a lot less about?  Plus, I have a 10+ year view with Berkshire, and am up a massive amount.  I view Berkshire as the most safe business I know of.  

[Viking]

30 minutes ago, cubsfan said:

Such a great post. No one knows what's going to happen, least of all me. I do know something needs to be done about the debt.  But COVID was far more dangerous than what is happening now.

@cubsfan , did anyone know how Covid was going to play out in the first few weeks? No one had a clue. The reason stocks sold off 30% in weeks was because of the uncertainty. 
 

We are weeks into the current crisis (and yes, it is a crisis). We just entered the high uncertainty phase.  No one has a clue how it plays out from here.

 

Is it dangerous? Yes.

How dangerous? We will only know once we get to the other side (and we are just getting started - this President has 3.75 more years to go). 
 

I love history. There are lots of examples of things starting small and then spiralling out of control. The tail risks of this fiasco getting out of control are increasing (not decreasing). That is not my base case. But every once in a while humanity does truly stupid things. This has that potential.

[cubsfan]

6 minutes ago, Viking said:

@cubsfan , did anyone know how Covid was going to play out in the first few weeks? No one had a clue. The reason stocks sold off 30% in weeks was because of the uncertainty. 
 

We are weeks into the current crisis (and yes, it is a crisis). We just entered the high uncertainty phase.  No one has a clue how it plays out from here.

 

Is it dangerous? Yes.

How dangerous? We will only know once we get to the other side (and we are just getting started - this President has 3.75 more years to go). 
 

I love history. There are lots of examples of things starting small and then spiralling out of control. The tail risks of this fiasco getting out of control are increasing (not decreasing). That is not my base case. But every once in a while humanity does truly stupid things. This has that potential.

 

Respectfully, what you are missing is this:  the events going on now are entirely under the control of those that tariff, and those that don't.  No one is stopping them from coming to terms. It's in Canada's hands - and the USA's hands. 

We had no idea what would happen with the COVID plague. It was totally out of our control.

We all might have died (or so we thought - I certainly did)

 

This is not that. This trade war can end tommorrow if leadership decides to address it.

 

That is what you are missing.

[villainx]

50 minutes ago, ValueMaven said:

Is Berkshire overvalued in the near-term?  Yes.  Is it fun to own Berkshire?  Yes.  I need equity exposure, love the culture, and consider it somewhat of an honor to be a long-term shareholder.  Why would I want to sell something (which could go higher on me) to buy something that I likely know a lot less about?  Plus, I have a 10+ year view with Berkshire, and am up a massive amount.  I view Berkshire as the most safe business I know of.  

 

I guess the way I invest, if I sold any Berkshire and bought something else, it'll take a steep decline in Berkshire before I get back in.  That's mainly why I am tempted but still reluctant to sell even a little.

 

And the way I invest is mainly to be as fully invested as possible, ... which kinda sucks at the moment.

 

[Buckeye]

BRK is @ 30% of my portfolio and I intend to never sell.  Having said that, this is exactly the time that I want to own a stock like Berkshire.  So maybe it’s fully valued, so what?!  I don’t believe that, but even if I did, I’m a partner and I’m not cutting out on Warren like that, just because Mr. Market’s getting excited about our future.  
 

You’ve got one of the greatest capital allocators of all time, with over 300B in cash, at the helm of an aircraft carrier, heading into what may be some choppy waters ahead.  I envision Warren rolling out his maps and getting out his wooden pointer, surrounded at the table by Greg, Ajit, Ted and Todd. 
 

Bring it on mofos.

Edited April 4, 2025 by Buckeye

[Cigarbutt]

16 minutes ago, Buckeye said:

BRK is @ 30% of my portfolio...

You’ve got one of the greatest capital allocators of all time, with over 300B in cash, at the helm of an aircraft carrier, heading into what may be some choppy waters ahead.  I envision Warren rolling out his maps and getting out his wooden pointer, surrounded at the table by Greg, Ajit, Ted and Todd. 
Bring it on mofos.

i had to look up what mofo meant. The first definition i came across was from the cryptocurrency world: it says "Master of Financial Operations and then i found the slang definition. Interesting

-----

Another way to look at this, from a portfolio perspective, keeping in mind that a regular poster mentioned today he had built a 40% cash allocation at this time to meet the mofo's consequences.

When holding BRK, one can look at the look-through leverage (similar to look-through earnings) and also the look-through cash and then confirm that someone else is doing the capital allocation adjustments for you.

But then again, there's the Yoda definition: Missing out, fear of.

 

[nwoodman]

3 hours ago, Buckeye said:

You’ve got one of the greatest capital allocators of all time, with over 300B in cash, at the helm of an aircraft carrier, heading into what may be some choppy waters ahead.  I envision Warren rolling out his maps and getting out his wooden pointer, surrounded at the table by Greg, Ajit, Ted and Todd

Couldn’t resist, not perfect, but I really liked your analogy

 

Edited April 4, 2025 by nwoodman

[Charlie]

One of the simplest rule of life is something like this:

Where a lot of great/wonderful things came from, there is a high probability that more great/wonderful things will come from,

because the underlying cause is the same (e. g. Berkshire Hathaway).

If you invert it:

Where a lot of terrible things came from, there is a high probability that more terrible things will come from,

because the underlying cause is the same (e. g. Trump administration).

 

or as Buffett or Munger said: "Track record is everything."

 

 

Cheers! 

 

Edited April 4, 2025 by Charlie

[Buckeye]

7 hours ago, nwoodman said:

Couldn’t resist, not perfect, but I really liked your analogy

 

Hahahaha…yes! I love this picThank you Woodman! Also, great interpretations on mofo. I was using it in its slang term (sorry for being a little off-color) and directing it towards “Mr. Market.” Go get em dudes.

[Buckeye]

A couple more days, or weeks, like this and the phone may start ringing in Omaha!

 

 

[Hektor]

 

https://finance.yahoo.com/news/berkshire-dismisses-false-reports-buffett-191724855.html

 

Berkshire dismisses 'false' reports on Buffett comments after Trump shares video

 

(Reuters) - Berkshire Hathaway said on Friday that reports on social media regarding comments allegedly made by its chairman are "false," after Donald Trump's account on Truth Social shared a video suggesting that Warren Buffett endorsed the U.S. president's economic policies.

 

The video, posted by a user named AmericanPapaBear, said Trump was intentionally "crashing" the market to force the U.S. Federal Reserve to lower interest rates while making stocks more affordable to middle-class investors.

 

"This is why Warren Buffett just said Trump is making the best economic moves he's seen in 50 years," the video said.

Berkshire said in a statement: "There are reports currently circulating on social media (including Twitter, Facebook and Tik Tok) regarding comments allegedly made by Warren E. Buffett. All such reports are false."

 

Buffett told CNBC that it was important to quickly knock down misinformation, and that he is not talking to anybody about the markets, the economy and tariffs between now and Berkshire's annual shareholder meeting on May 3 in Omaha, Nebraska.