Buffett/Berkshire - general news

[WFF]

3 hours ago, Hektor said:

Will BRK acquire some part of this company?

Perhaps trade the shares for Heinz?  Warren like Heinz in the past I believed

[Rainier]

15 hours ago, John Hjorth said:

 

@Rainier,

 

What's your nationality, - do you mind to share ?  - That asked, company culture towards shareholders may vary deerly from country to country

I’m an American living in the US

[gfp]

On 5/19/2025 at 10:01 AM, gfp said:

 

Seems like the confidential security is hidden inside Harney Investment Trust.  Expand Energy (the old Chesapeake) shows up but is probably too small to be required to be included on the 13F.  Millrose properties was spun out of Lennar and apparently didn't show up on the 13F - not sure what that means but I suppose they could be buying or selling it.

 

The most interesting thing in the filing was the additional purchases of Sogo Shosha ->

 

 

 

One thing I have noticed lately is that 1) Millrose Properties did not show up at all in Berkshire's 13F despite them owning it at some point during the quarter (Lennar Spin-off).  So they either sold it right away or are adding to it and requested confidentiality.  I didn't see any sell transactions in the NAIC filing, so that seems to rule out a sale before quarter-end.

 

And what I have noticed recently is a pretty steady stream of insider purchases of Millrose Properties stock.  Maybe T or T read the Greenblatt book and likes the spinco

 

https://www.dataroma.com/m/ins/ins.php?t=q&am=0&sym=MRP&o=fd&d=d

Edited May 23, 2025 by gfp

[BiggieCheese]

@gfp Interesting theory, and I always appreciate your posts. 

 

Where are you looking at sell transactions in the NAIC filing? I'm seeing $100m of proceeds from stock sold during the quarter, and wondering where I'm off. BRK's stake in Millrose would be ~$4m based on the 152,572 shares they owned at Q4 2024 end and Q1 2025 end.  

 

[gfp]

31 minutes ago, BiggieCheese said:

@gfp Interesting theory, and I always appreciate your posts. 

 

Where are you looking at sell transactions in the NAIC filing? I'm seeing $100m of proceeds from stock sold during the quarter, and wondering where I'm off. BRK's stake in Millrose would be ~$4m based on the 152,572 shares they owned at Q4 2024 end and Q1 2025 end.  

 

 

I guess it's page 169?  It lists the sale of T Mobile stock

 

[Munger_Disciple]

Good article on Ajit's succession plan in WSJ:

https://www.wsj.com/finance/investing/berkshire-hathaway-succession-insurance-003dcf86?st=MdcfNY&reflink=desktopwebshare_permalink

 

I suspect the name in the envelope that Ajit gave the board is Kara Raiguel, his protege and current CEO of GenRe. 

[jbwent63]

Does anyone think that WEB might have been dabbling in the B shares at the end of the session today? Looks like almost 1.5 million B shares traded in the last 5 minutes (per CNBC chart). Anyone else thinking of a nibble down almost 10% from the high?

[gfp]

1 minute ago, jbwent63 said:

Does anyone think that WEB might have been dabbling in the B shares at the end of the session today? Looks like almost 1.5 million B shares traded in the last 5 minutes (per CNBC chart). Anyone else thinking of a nibble down almost 10% from the high?

 

I don't think an issuer is allowed to trade in their own securities for the final 1/2 hour of the trading session

 

(the rule that applies to BRK.B might be no trading in the final 10 minutes)

Edited June 4, 2025 by gfp

[jbwent63]

1 minute ago, gfp said:

 

I don't think an issuer is allowed to trade in their own securities for the final 1/2 hour of the trading session

 

(the rule that applies to BRK.B might be no trading in the final 10 minutes)

Thanks, I was not aware of that rule....always learning.

[KPO]

4 hours ago, jbwent63 said:

Does anyone think that WEB might have been dabbling in the B shares at the end of the session today? Looks like almost 1.5 million B shares traded in the last 5 minutes (per CNBC chart). Anyone else thinking of a nibble down almost 10% from the high?

I hope not. Under $450 maybe, but it’s overvalued even today. I hold it in a taxable account that has 25+ years of gains, so I’m not selling, but I hope they continue to be very price sensitive on the buybacks. 

[sleepydragon]

Seems many insurance companies are all falling this week. Feel like some fund is selling the entire industry. War? Interest rate?

 

at the same time, gold silver oil are popping 

[KPO]

Nothing earth shattering here for this audience, but worth a read. Obviously Fairfax is mentioned as one of the firms emulating Berkshire. 
 

https://www.barrons.com/articles/berkshire-hathaway-warren-buffett-companies-howard-hughes-loews-fairfax-financial-greenlight-capital-markel-white-mountains-e631c648

 

[ValueMaven]

 

[John Hjorth]

9 minutes ago, ValueMaven said:

 

 

What do you personally get out of it, @ValueMaven ?

[ValueMaven]

@John Hjorth not much - but its rare for a sub-CEO to give an interview like this... thus I thought I'd share it.  I do think NetJet's offers tremendous value for its customers.

[Hektor]

14 hours ago, ValueMaven said:

 

Thanks @ValueMaven

[alpha]

https://www.wsj.com/business/warren-buffett-berkshire-hathaway-forest-river-rv-713259c6

[Txvestor]

On 5/20/2025 at 6:55 PM, Munger_Disciple said:

 

I sure hope not

I think Buffett said Heinz is a very solid company, I bet if he could escape that ill fated investment with the majority of Heinz, he'd do it in a heartbeat. 

Edited June 27, 2025 by Txvestor

[wabuffo]

If it was me I would take the old Kraft business.  A much stronger and bigger business.  Sure, its not a growth company any more - but it is a very good business with a much stronger distribution presence in grocery than Heinz with more supply chain scale/muscle.  Kraft has many more categories where it leads in market share than Heinz does.  Just pull up a list of US brands from the Investor Relations website and check off which brands are Kraft brands and which are Heinz.  And even of the Heinz brands on that chart, many brands are either tiny (Bagel Bites) or meh (Heinz Vinegar).  

 

My own 2-cents is that Heinz was very "fat" from an overhead/SGA perspective and thus very easy prey for the Brazilians' chainsaw when they took over.  I mean they still had the overhang of expensive HQ costs from when Tony O'Reilly ran it (GIK).  So they made good returns on it.

 

Kraft is/was leaner relative to its larger volume of sales.  3G made the going-in error that they could achieve: 1) synergy between the two (ok), and 2) similar SG&A savings within the Kraft structure (nope).   When they couldn't get to their cost cut targets at Kraft, they then made big mistakes in trying to reduce marketing & promotion spend at Kraft which hurt a couple of key categories.   

 

The issue at Kraft was that they way overpaid - not that it is a bad business.  It's still a great business that was tortured by the boys from 3G.   Don't make the mistake that because the Heinz investment worked and the Kraft investment disappointed that it reflects on the business quality of the two businesses.

 

FWIW.

 

Bill

Edited June 27, 2025 by wabuffo

[Eldad]

22 minutes ago, wabuffo said:

If it was me I would take the old Kraft business.  A much stronger and bigger business.  Sure, its not a growth company any more - but it is a very good business with a much stronger distribution presence in grocery than Heinz with more supply chain scale/muscle.  Kraft has many more categories where it leads in market share than Heinz does.  Just pull up a list of US brands from the Investor Relations website and check off which brands are Kraft brands and which are Heinz.  And even of the Heinz brands on that chart, many brands are either tiny (Bagel Bites) or meh (Heinz Vinegar).  

 

My own 2-cents is that Heinz was very "fat" from an overhead/SGA perspective and thus very easy prey for the Brazilians' chainsaw when they took over.  I mean they still had the overhang of expensive HQ costs from when Tony O'Reilly ran it (GIK).  So they made good returns on it.

 

Kraft is/was leaner relative to its larger volume of sales.  3G made the going-in error that they could achieve: 1) synergy between the two (ok), and 2) similar SG&A savings within the Kraft structure (nope).   When they couldn't get to their cost cut targets at Kraft, they then made big mistakes in trying to reduce marketing & promotion spend at Kraft which hurt a couple of key categories.   

 

The issue at Kraft was that they way overpaid - not that it is a bad business.  It's still a great business that was tortured by the boys from 3G.   Don't make the mistake that because the Heinz investment worked and the Kraft investment disappointed that it reflects on the business quality of the two businesses.

 

FWIW.

 

Bill

Maybe. The giant write downs were Kraft and Oscar Mayer. Heinz ketchup may be the only great brand of the bunch in my mind. 
 

Not listening to Charlie on Costco sort of bit him twice. Once from missing on Costco and twice for believing in the moats of the packaged goods companies over store brands. 

[Eldad]

36 minutes ago, wabuffo said:

If it was me I would take the old Kraft business.  A much stronger and bigger business.  Sure, its not a growth company any more - but it is a very good business with a much stronger distribution presence in grocery than Heinz with more supply chain scale/muscle.  Kraft has many more categories where it leads in market share than Heinz does.  Just pull up a list of US brands from the Investor Relations website and check off which brands are Kraft brands and which are Heinz.  And even of the Heinz brands on that chart, many brands are either tiny (Bagel Bites) or meh (Heinz Vinegar).  

 

My own 2-cents is that Heinz was very "fat" from an overhead/SGA perspective and thus very easy prey for the Brazilians' chainsaw when they took over.  I mean they still had the overhang of expensive HQ costs from when Tony O'Reilly ran it (GIK).  So they made good returns on it.

 

Kraft is/was leaner relative to its larger volume of sales.  3G made the going-in error that they could achieve: 1) synergy between the two (ok), and 2) similar SG&A savings within the Kraft structure (nope).   When they couldn't get to their cost cut targets at Kraft, they then made big mistakes in trying to reduce marketing & promotion spend at Kraft which hurt a couple of key categories.   

 

The issue at Kraft was that they way overpaid - not that it is a bad business.  It's still a great business that was tortured by the boys from 3G.   Don't make the mistake that because the Heinz investment worked and the Kraft investment disappointed that it reflects on the business quality of the two businesses.

 

FWIW.

 

Bill

Sorry misread your point, Heinz better deal but worse brands. Disregard my write down sentence. 

[wabuffo]

Heinz ketchup may be the only great brand of the bunch in my mind. 

 

Wouldn't disagree with the power of the ketchup business.   But the rest of legacy Heinz is ho-hum at best.

 

Bill

 

 

[LC]

1 hour ago, Eldad said:

twice for believing in the moats of the packaged goods companies over store brands. 

 

I don't bemoan old guys missing the shift here. The mid-late 20th century was all about rolling out industrialized goods under big american brands. That was a big economic shift which made a lot of people a lot of money, so I can understand how difficult it would be to change views on that.

[John Hjorth]

3 hours ago, LC said:

I don't bemoan old guys missing the shift here. The mid-late 20th century was all about rolling out industrialized goods under big american brands. That was a big economic shift which made a lot of people a lot of money, so I can understand how difficult it would be to change views on that.

 

Yes, @LC,

 

One of a few investments Mr. Buffett and Mr. Munger did not get roughly right. Berkshire even approached Unilever, too, at some time in point, where the initiative was turned down by the Unilever board of directors immedially.

Edited June 27, 2025 by John Hjorth

[Viking]

5 hours ago, wabuffo said:

Heinz ketchup may be the only great brand of the bunch in my mind. 

 

Wouldn't disagree with the power of the ketchup business.   But the rest of legacy Heinz is ho-hum at best.

 

Bill

The glory years for the packaged goods industry (like Kraft) was likely the decades before 2000. Buffett purchased General Foods in late 1970’s/early 1980’s. Brilliant purchase. He nailed it.
 

General Foods was taken out by Philip Morris in 1985. Philip Morris then purchased Kraft in 1988 and merged the two companies in 1989. In 2007, Philip Morris spun off Kraft General Foods. Brilliant move by PM (they KNEW the moat/fundamentals of the business were deteriorating). 
 

Buffett bought Kraft in 2007 (after it was spun off from PM) and he owned more than 8% of the company by early 2008. 
 

The problem is the packaged foods business in 2008 was not the same as the business in the early 1980’s and Buffett seems to have completely missed the important changes that were happening under the hood. 
 

The first big change was the slow shift in power from the big manufacturers to the big retailers (and their store brands). Costco and Kirkland Signature is the poster child of this. In Canada the best example was Loblaws and their President's Choice brand. More recently, direct to consumer has appeared to shift power away from both the big manufacturers and big retailers to mid size and smaller manufacturers (the Amazon Prime phenomenon). 
 

Kraft Heinz also had its own issues. Terrible management. As an example, when Heinz bought Kraft in 2015, in Canada they gassed the whole senior management team at Kraft (i.e. they didn’t keep the best people). This juiced profits for a short period of time - driven by cost savings. And then the business got torched. This is a great example of the problems that can happen when you manage a business focussed on maximizing cash generation over the very short term. 
 

Buffett first invested in Heinz in 2013. Heinz then purchased Kraft in 2015. Since Kraft Heinz started trading in 2015 it had been an unmitigated disaster for retail investors. The IPO price was $84/share. 10 years later the shares are trading at $25.61. The opportunity cost has been enormous. I wonder how many retail investors bought the Kraft Heinz IPO because of Buffett's significant ownership position. 
 

Back in 2015 Buffett got three things wrong with this investment:

1.) Management - terrible

2.) The moat/economics of the business - it was rapidly deteriorating

3.) When the above two became obvious Buffett did nothing = massive opportunity cost. 

 

What is the learning: all great investors make mistakes. 

----------

Here is summary of Buffett's investment in Kraft Heinz 

 

https://thefinancecorner.substack.com/p/deep-dive-into-kraft-heinz-khc

 

Edited June 27, 2025 by Viking