Buffett/Berkshire - general news

[73 Reds]

Just now, Buckeye said:

@73 Reds I recall that mention of the threshold too, but for some reason, think it was more (or only) attributed to Charlie? I thought he made some remark about it, but can’t remember if Warren commented on the topic issue as well. Either way, the topic seems to have faded away. 
 

You mentioned up thread that if mgmt were to change its tune about lack of investments, and institute a dividend (I presume), you still wouldn’t want a dividend. Under that scenario, what would you suggest they do with the capital then? If you don’t mind me asking. Thanks. 

I've discussed a few suggestions up-thread, i.e. at least some excess cash could be invested in SPY(or its equivalent) at appropriate valuations.  The topic of a dividend got me to thinking; could a dividend be declared only for B shares?  As a holder of both As and Bs, the proportion of B shares to A shares could be adjusted by each dividend and you'd get the advantage of a whole new class of B-share shareholders.

[Munger_Disciple]

26 minutes ago, gfp said:

A dollar of cash is valued at more than a dollar inside Berkshire according to the market price that has persisted, whether it is 1.2x, 1.5x or whatever.

 

A dollar inside Berkshire is a buck-fifty and just a lowly taxable dollar outside berkshire. 

 

Exactly! It's amazing how many people mindlessly clamoring for dividends cannot understand this basic math. Make your own "dividend" anytime you want, when you want/need cash, by selling a few shares which are valued at roughly 1.5 times book. You will come out far far ahead. 

Edited November 14, 2025 by Munger_Disciple

[Hektor]

23 minutes ago, gfp said:

 

The shares are neatly destined for charity.  Warren will have essentially never sold a share and it all goes back to society.  The money is inside the shares and going to charity.  A dollar of cash is valued at more than a dollar inside Berkshire according to the market price that has persisted, whether it is 1.2x, 1.5x or whatever.

 

A dollar inside Berkshire is a buck-fifty and just a lowly taxable dollar outside berkshire.  It's like robbing the poor kids in Africa and the ladies trying to find a planned parenthood that's still open!

I think this depends on who is handling that $ inside Berkshire. Its one thing if it were Warren/Charlie. With others, if they  start out with the intent of implementing Warren's teachings, but end up in diworsification, that $ is less than a dollar.

[Munger_Disciple]

2 minutes ago, Hektor said:

I think this depends on who is handling that $ inside Berkshire. Its one thing if it were Warren/Charlie. With others, if they  start out with the intent of implementing Warren's teachings, but end up in diworsification, that $ is less than a dollar.

 

But that's not how the market is valuing BRK shares; it's currently valuing $1 inside BRK at $1.58. 

[Hektor]

1 minute ago, Munger_Disciple said:

 

But that's not how the market is valuing BRK shares; it's currently valuing $1 inside BRK at $1.58. 

True.

[Buckeye]

55 minutes ago, 73 Reds said:

I've discussed a few suggestions up-thread, i.e. at least some excess cash could be invested in SPY(or its equivalent) at appropriate valuations.  The topic of a dividend got me to thinking; could a dividend be declared only for B shares?  As a holder of both As and Bs, the proportion of B shares to A shares could be adjusted by each dividend and you'd get the advantage of a whole new class of B-share shareholders.

Yea, I agree with you that a DCA into the S&P could be a potential source of excess capital. I think I could be ok with that as a possible outcome. 

[Buckeye]

46 minutes ago, Munger_Disciple said:

 

Exactly! It's amazing how many people mindlessly clamoring for dividends cannot understand this basic math. Make your own "dividend" anytime you want, when you want/need cash, by selling a few shares which are valued at roughly 1.5 times book. You will come out far far ahead. 

@Munger_Disciple Not sure if you are accusing me mindlessly clamoring for dividends, because that is not at all my position. I am trying understand how I (or we) think the capital is going to be deployed going forward.  

[gfp]

3 minutes ago, Buckeye said:

@Munger_Disciple Not sure if you are accusing me mindlessly clamoring for dividends, because that is not at all my position. I am trying understand how I (or we) think the capital is going to be deployed going forward.  

 

Maybe it will look a little like Apple after Jobs.  New guy comes in and drains the excess capital on share retirement, the company doesn't grow to the moon but the price per share does.  Everyone lives happily ever after

[Buckeye]

34 minutes ago, Munger_Disciple said:

 

But that's not how the market is valuing BRK shares; it's currently valuing $1 inside BRK at $1.58. 

So the math here is that because BRK currently trades at 1.58 BV, every dollar one inside is worth 1.58 in the market?

If so, isn’t it widely accepted that BV is currently underreported? Some may say very underreported? 

How does your math account for that?

 

thanks. 

[73 Reds]

12 minutes ago, Buckeye said:

@Munger_Disciple Not sure if you are accusing me mindlessly clamoring for dividends, because that is not at all my position. I am trying understand how I (or we) think the capital is going to be deployed going forward.  

@Buckeye I think the notion of "creating your own dividend" by selling shares misses the point altogether.  First of all, anyone can do this with any stock but hardly anyone does.  The reason is that for most people, stock ownership is a purely passive activity.  Ask yourself how many people would own almost any dividend-paying stocks but not for the dividend.  Which brings us to precisely the issue; that being demand for the stock.  The demand for Berkshire shares during Buffett's tenure has been almost entirely and directly due to Buffett.  Now what after he is gone?  His successor is taking over a company with almost no investment opportunities if he sticks to all the investing principles that Buffett has espoused.  How does anyone predict success?  Why would anyone who does not currently own shares now be interested in becoming a shareholder?  These are ripe issues for discussion now that Buffett is weeks away from stepping down.  

Edited November 14, 2025 by 73 Reds
words

[Buckeye]

1 minute ago, gfp said:

 

Maybe it will look a little like Apple after Jobs.  New guy comes in and drains the excess capital on share retirement, the company doesn't grow to the moon but the price per share does.  Everyone lives happily ever after

Ok, I’m down with this idea. Shares outstanding are halved and the share price doubles (extreme example I know), with the market cap staying the same?  
 

The company essentially eats itself?  
 

And one day, just like at FFH and MKL,  Buckeye owns one share of each company and each company owns one share…6 total shares outstanding 

[73 Reds]

10 minutes ago, gfp said:

 

Maybe it will look a little like Apple after Jobs.  New guy comes in and drains the excess capital on share retirement, the company doesn't grow to the moon but the price per share does.  Everyone lives happily ever after

LOL, what next generation products do you see Berkshire creating?

[gfp]

3 minutes ago, 73 Reds said:

LOL, what next generation products do you see Berkshire creating?

 

I heard Elec-tricity is the future Reds.  One guy even told me it replaces money some day.  Beats me

 

 

(anyway, I believe the "watch" was the biggest new product Apple came out with post-Jobs and I've seen them earn just about $100 billion a year over and over with little growth and you know what?  It worked out fine for investors.)

Edited November 14, 2025 by gfp

[MungerWunger]

[gfp]

$4 billion of google is smart.  Wonder if that's one of the youngsters 

[Pellom]

Berkshire finally owns Google. What a day. 

[73 Reds]

6 minutes ago, gfp said:

$4 billion of google is smart.  Wonder if that's one of the youngsters 

Yay!

[MungerWunger]

Probably from Todd or Ted 

[Eldad]

Yeah probably T&T. Doubt Buffett randomly decided to pay 20x for Google at this point. Perhaps a Greg buy? It has to move to him at some point. 

[Munger_Disciple]

41 minutes ago, Buckeye said:

@Munger_Disciple Not sure if you are accusing me mindlessly clamoring for dividends, because that is not at all my position. I am trying understand how I (or we) think the capital is going to be deployed going forward.  

 

I was not referring to you or anyone else by name.  Sorry if you took it the wrong way. In stead, I was discussing people (as a category) who seem to really want a dividend w/o understanding that there is a cost to it, when they can simply manufacture one easily that's far more advantageous for them. This would also enable each shareholder to take the "self manufactured dividend" at a time of their choosing w/o forcing others into it. 

Edited November 14, 2025 by Munger_Disciple

[gfp]

I manufactured my dividend this morning before the open

 

[Munger_Disciple]

38 minutes ago, gfp said:

 

Maybe it will look a little like Apple after Jobs.  New guy comes in and drains the excess capital on share retirement, the company doesn't grow to the moon but the price per share does.  Everyone lives happily ever after

 

Let the buybacks begin baby!

Caveat: assuming no other attractive internal use for deployment 

[Munger_Disciple]

3 minutes ago, gfp said:

I manufactured my dividend this morning before the open

 

 

 Well done @gfp! And you didn't force me to take one either 

[Eldad]

Greg is such a black box to me. Everything about him screams slick corporate dude that would want to spend 350 Bil on buybacks as soon as humanly possible. But then WB keeps telling me he is not that way. 

[John Hjorth]

19 minutes ago, Eldad said:

Greg is such a black box to me. Everything about him screams slick corporate dude that would want to spend 350 Bil on buybacks as soon as humanly possible. But then WB keeps telling me he is not that way. 

 

@Eldad,

 

I personally think that is not fair towards Greg Abel, but he is offcourse materially different than Mr. Buffett. He is more of an industrialist than Mr. Buffett ever has been, or will become, with a great proven track record, that is. I don't think Mr. Buffett is spending time on teaching him capital allocation at all. It's a long time since Greg Abel left the nest in that regard.

 

Like all other shareholders I hope it all will work out well for all of us.