Buffett/Berkshire - general news

[gfp]

https://www.businesswire.com/news/home/20250627982115/en/Berkshire-Hathaway-Inc.-News-Release

[John Hjorth]

8 hours ago, gfp said:

https://www.businesswire.com/news/home/20250627982115/en/Berkshire-Hathaway-Inc.-News-Release

 

It's all so simple :

 

Quote

... Nothing extraordinary has occurred at Berkshire; a very long runway, simple and generally sound decisions, the American tailwind and compounding effects produced my current wealth. My will provides that about 99½% of my estate is destined for philanthropic usage. ...

 

[DooDiligence]

Yeah, there's been a marked reduction in posts here lately.

 

[Hsmpanl]

6 hours ago, DooDiligence said:

Yeah, there's been a marked reduction in posts here lately.

 

Hard to see how the excitement comes back to brk. Especially compared to something like Fairfax. Probably famous last words but they just haven’t done much worthwhile on the equity side and I don’t think Ted and Todd are the answer. I’m one of those rotating from brk into ffh.

[73 Reds]

14 hours ago, Hsmpanl said:

Hard to see how the excitement comes back to brk. Especially compared to something like Fairfax. Probably famous last words but they just haven’t done much worthwhile on the equity side and I don’t think Ted and Todd are the answer. I’m one of those rotating from brk into ffh.

Berkshire goes through long periods of lulls, when it seems as if nothing is happening.  But that couldn't be further from the truth.  They are constantly searching for the next investment (and the one after that).  These times are when the stock tends to get cheap and out of favor; everyone figures that they are content with piling into treasuries.  All the better for opportunistic buying.  Right now when there is a lot of optimism in higher-risk type stuff, Berkshire is all but forgotten - except for those of us who have experienced many such times and are confident that they will pay off in the long run.  And wait until the next real economic scare, not some conjured up political nonsense that comes and goes like clockwork.

[sleepydragon]

"The mathematics of the lifetime commitments to the five foundations are interesting. The schedule for annual grants was made on June 26, 2006, and has since been supplemented by significant grants to four of the five recipients. When originally made, I owned 474,998 Berkshire A shares worth about $43 billion and those shares represented more than 98% of my net worth. I have converted A shares into B shares before making contributions. During the following 19 years, I have neither bought nor sold any A or B shares nor do I intend to do so. The five foundations have received Berkshire B shares that had a value when received of about $60 billion, substantially more than my entire net worth in 2006. I have no debts and my remaining A shares are worth about $145 billion"

 

 

[gfp]

I'm curious to read the Skechers merger proxy whenever it is finally released.  That should give a hint if Berkshire got a call on that deal before backing off or being outbid.

 

Berkshire is still growing many large businesses organically and is certainly not capital constrained if there are any good ideas anywhere at all.

 

They over-earned by quite a bit last year for several reasons so it will take a while for the market to readjust.  In the mean time, money comes in the door every day.

[DooDiligence]

Abel might shift to

12 minutes ago, gfp said:

I'm curious to read the Skechers merger proxy whenever it is finally released.  That should give a hint if Berkshire got a call on that deal before backing off or being outbid.

 

Berkshire is still growing many large businesses organically and is certainly not capital constrained if there are any good ideas anywhere at all.

 

They over-earned by quite a bit last year for several reasons so it will take a while for the market to readjust.  In the mean time, money comes in the door every day.

 

I wouldn't be surprised if growing organically became the new focus. Plenty of opportunities for that.

[Buckeye]

Oh man @DooDiligence that cat picture is so sad! That must’ve been what I looked like when I heard Warren start talking about stepping down at the annual meeting.  

 

What I find interesting is that nearly every company in the index, that has anything to do with energy, has been bid into premium territory, on the AI trade.  While Berkshire Hathaway, one of the largest electric utilities in the US, with arguably one of the most seasoned energy executives now as its CEO, has received little interest/credit.  What’s up with that? 
 

Could it be that the liabilities from the California forest fires are overshadowing the rest of their energy operations? 

 

Or perhaps this is just the weighing machine vs. voting machine in action? 
 

The stock has had quite a good run the last few years. And it’s performing pretty well this year too. So not complaining here, just wondering out loud. 

[LC]

Not sure I totally agree. Look what happened with Geico? They needed Todd to save the day. Years of mismanagement let Progressive et al to outperform. 

 

I think there is opportunity with Berkshire because they own so many businesses within the umbrella and they have so many reinvestment opportunities, but how do we know that 100s of other subsidiaries are not experiencing what happened to Geico?

 

Will T&T need to devote their lives to fixing mismanaged subsidiaries? I doubt that is what they signed up for.

 

Greg Abel will need to set some firm culture and direction on how he will manage the company going forward.

[DooDiligence]

Thoughts on the possibility of divesting poor performers and concentrating on growing the core businesses. Besides the steady growth opportunities in insurance and energy.

 

===

 

Could and should NFM take on Rooms to Go with a slow expansion and would it be worth it?

 

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McLane has been working hard on expansion.

 

https://brk-b.com/mclane-s-ambitious-quest-for-500-million-in-earnings_240909.html

 

https://www.mclaneco.com/mclane-and-wawa-expand-partnership-to-accelerate-growth-into-new-markets

 

https://www.mclaneco.com/mclane-company-expands-3pl-services-with-circle-k-to-enhance-supply-chain-optimization

 

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Clayton has room to grow.

 

https://brk-b.com/clayton-homes-2024-results-forging-americas-housing-future_250419.html

 

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Marmon's not too shabby either.

 

https://brk-b.com/marmon-2024-berkshires-industrial-titan-nears-2b-mark_250418.html

 

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I was regretting selling my non-taxable stake but BRK is still sized at 9.4% for me and that seems reasonable.

[73 Reds]

44 minutes ago, DooDiligence said:

Thoughts on the possibility of divesting poor performers and concentrating on growing the core businesses. Besides the steady growth opportunities in insurance and energy.

 

===

 

Could and should NFM take on Rooms to Go with a slow expansion and would it be worth it?

 

===

 

McLane has been working hard on expansion.

 

https://brk-b.com/mclane-s-ambitious-quest-for-500-million-in-earnings_240909.html

 

https://www.mclaneco.com/mclane-and-wawa-expand-partnership-to-accelerate-growth-into-new-markets

 

https://www.mclaneco.com/mclane-company-expands-3pl-services-with-circle-k-to-enhance-supply-chain-optimization

 

===

 

Clayton has room to grow.

 

https://brk-b.com/clayton-homes-2024-results-forging-americas-housing-future_250419.html

 

===

 

Marmon's not too shabby either.

 

https://brk-b.com/marmon-2024-berkshires-industrial-titan-nears-2b-mark_250418.html

 

===

 

I was regretting selling my non-taxable stake but BRK is still sized at 9.4% for me and that seems reasonable.

The one question every company strives for but is rarely equipped to answer:  What do you do when you have more money than you know what to do with?

[John Hjorth]

3 hours ago, gfp said:

... Berkshire is still growing many large businesses organically and is certainly not capital constrained if there are any good ideas anywhere at all.

 

They over-earned by quite a bit last year for several reasons so it will take a while for the market to readjust.  In the mean time, money comes in the door every day.

 

Yeah, @gfp,

 

'Only' USD 30.6 billion in cash flow from operations last year - everything Berkshire is just headed towards hell nowadays.  [j/k].

[John Hjorth]

1 hour ago, 73 Reds said:

The one question every company strives for but is rarely equipped to answer:  What do you do when you have more money than you know what to do with?

 

Answer, for Berkshire : Its very best. If the implied risk profile, taking all kinds of things into consideration, management, structure, float, investments etc., every shareholder can reduce position, or sell the whole thing, incurring what are the actual consequences for each individual investor [taxes, if  any, etc.].

 

Both the A and B share trades every day when NYSE is open.

Edited June 29, 2025 by John Hjorth

[gfp]

For any of you BRK-heads that ordered the reprint of the annual meeting book - Celebrating 60 Years of a Profitable Partnership - my copy just arrived in the mail, straight from Farnam Street!

 

 

[Libs]

On 6/29/2025 at 8:39 AM, gfp said:

They over-earned by quite a bit last year for several reasons 

 

How so?

[Munger_Disciple]

8 minutes ago, Libs said:

 

How so?

 

Higher rates on T-bills, and hard insurance market in 2024. Rates are going to be lower and insurance market is likely to soften a bit going forward. 

Edited July 1, 2025 by Munger_Disciple

[gfp]

13 minutes ago, Libs said:

 

How so?

 

The biggest factors for me are:

 

Large gains on USD strength (JPY and EUR borrowings) - not only can these not recur, they can reverse in the billions

GEICO over-earning - combined ratio was crazy low vs. target of around 96

Peak T-bill rates (will be somewhat offset by increased cash balances this year)

 

[Intelligent_Investor]

As a whole, the businesses will probably be fine, the issue will be size. Unless Greg pulls a Tim Cook and starts massive repurchases, it's hard to see BRK outperform the market by a large amount.

[gfp]

8 minutes ago, Intelligent_Investor said:

As a whole, the businesses will probably be fine, the issue will be size. Unless Greg pulls a Tim Cook and starts massive repurchases, it's hard to see BRK outperform the market by a large amount.

 

It becomes a lot easier if "the market" performs poorly.  Berkshire will trade down with the index and the Tim Cook scenario unfolds with big numbers.

 

A hundred billion dollars a year of capital return through repurchases?  Count me in

[backtothebeach]

Maybe we will see some repurchases soon. That would be a way for Warren to signal to Greg that it’s OK to repurchase at higher multiples than he did historically.

[Munger_Disciple]

On 7/1/2025 at 1:06 PM, gfp said:

Large gains on USD strength (JPY and EUR borrowings) - not only can these not recur, they can reverse in the billions

 

 

But there is an offsetting asset (the equity positions in Japanese trading companies) on the balance sheet supporting this liability in Yen denominated bonds. Presumably the mark-to-market value of equity positions may increase in USD if the Yen strengthens against the dollar (but that's no means that's certain). Overall I think it's a wash even though the Yen liabilities look bigger in USD if the Yen strengthens; but so do the Yen denominated assets generally. 

 

The insurance earnings and lower T-bill rates are much bigger issues I think going forward. 

Edited July 2, 2025 by Munger_Disciple

[jbwent63]

On 6/30/2025 at 1:04 PM, gfp said:

For any of you BRK-heads that ordered the reprint of the annual meeting book - Celebrating 60 Years of a Profitable Partnership - my copy just arrived in the mail, straight from Farnam Street!

 

 

DHL has mine. Sent me the notification to pay sales tax and fees to clear customs. I'm happy to pay it. Better than dragging it home (to Ontario) from Omaha. Can't wait to get it. Thanks, Warren.

[gfp]

2 hours ago, Munger_Disciple said:

 

But there is an offsetting asset (the equity positions in Japanese trading companies) on the balance sheet supporting this liability in Yen denominated bonds. Presumably the mark-to-market value of equity positions may increase in USD if the Yen strengthens against the dollar (but that's no means that's certain). Overall I think it's a wash even though the Yen liabilities look bigger in USD if the Yen strengthens; but so do the Yen denominated assets generally. 

 

The insurance earnings and lower T-bill rates are much bigger issues I think going forward. 

 

The difference is that the move in the FX for the bonds gets reported in operating earnings and the move in the stocks is buried in much bigger mark to market gain/loss that tends to get separated from operating earnings.  Plus the japanese trading houses earn a lot of their income in dollars so they aren't pure JPY businesses.

[Munger_Disciple]

5 hours ago, gfp said:

 

The difference is that the move in the FX for the bonds gets reported in operating earnings and the move in the stocks is buried in much bigger mark to market gain/loss that tends to get separated from operating earnings.  Plus the japanese trading houses earn a lot of their income in dollars so they aren't pure JPY businesses.

 

I haven't looked at the trading companies in detail but I was under the impression that most of their revenue came from Yen denominated sales, mostly in Japan to Japanese customers even though they invested capital in resources abroad. 

Edited July 3, 2025 by Munger_Disciple