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fareastwarriors

By fareastwarriors
in Berkshire Hathaway

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Krapdivad
Krapdivad

There was a pre-Berkshire meeting by Yahoo Finance today with Laurence Cunningham, Robert Hagstrom, Carol Loomis, and Tom Gayner.    Took a few notes if anyone was interested:   La

fareastwarriors
fareastwarriors

$tsm 👀     

nwoodman
nwoodman

Fascinating purchase by Berkshire.  A couple of thoughts.  1. Is this a cheap way to ride the Apple juggernaut?  2. Is this more Munger than Buffett?  Charlie being interviewed tomorrow on CNBC - coin

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UK Grand Master

UK

Posted
Posted
2 hours ago, marazul said:

In a recent interview, Elon Musk mentioned how part of the AI related backlog is due to the gas turbines and related castings. Precision Catparts might be the leader in the industry. At least believe it was prior to going into Berkshire. Took a look at Howmet, what used to be Arconic/subisidiary of Alcoa I think, and it now has a +$90bn market cap! it was a tenth of that size 5 years ago or so. Think PCC would be highly valued if it were a public company, which would be a turnaround given all the problems since the acquisition. Besides the AI boom, the market for engines is also doing just fine.

 

image.thumb.png.cbb0b6d01ee78628d5b2d4550623c81f.png

Yes, I think gfp also mentioned this before, and it seems it is still the case (Gemini):

 

Yes, Precision Castparts Corp. (PCC) is a leading manufacturer of investment-cast gas turbine blades and vanes, specializing in nickel and cobalt superalloy components. Through their PCC Airfoils division, they produce blades for both aerospace (jet engines) and industrial gas turbine (power generation) applications, including advanced single-crystal and directionally solidified components. 
Key details about PCC's turbine blade manufacturing:
PCC Airfoils LLC: A key business unit focused on casting blades and vanes with complex, internal cooling passages.
Applications: Products are used in both commercial/military aircraft engines and land-based industrial gas turbines.
Technologies: They utilize advanced manufacturing techniques such as directionally solidified (DS) and single-crystal casting to improve high-temperature performance.
Materials: They primarily use nickel and cobalt-based superalloys to handle extreme heat and pressure.
Locations: Manufacturing facilities are located in the United States and Mexico, including specialized sites like the Deer Creek facility. 
PCC also acquired AE Turbine Components Ltd., enhancing their capabilities in producing hot gas path components. 

John Hjorth Grand Master

John Hjorth

Posted
Posted

X account Massimo about Mr. Buffett on 21st February 2026 [I don't know when this was shot]. Obviously Mr. Buffett isen't driving the car himself any longer [, or is that interpretation even valid? - I'm not sure at all.]

 

- - - o 0 o - - -

 

No matter what, I wish him all the best.

 

 

jbwent63 Enthusiast

jbwent63

Posted
Posted

A new tradition starts tomorrow morning. Instead of Coffee with Warren on a Saturday morning in late February/early March, it is Coffee with Greg. It will be interesting to see what changes, or even improves or if Warren has anything to contribute. Not quite as much excitement as in prior years, probably trying to lower my expectations. Enjoy!

John Hjorth Grand Master

John Hjorth

Posted
Posted
43 minutes ago, jbwent63 said:

A new tradition starts tomorrow morning. Instead of Coffee with Warren on a Saturday morning in late February/early March, it is Coffee with Greg. It will be interesting to see what changes, or even improves or if Warren has anything to contribute. Not quite as much excitement as in prior years, probably trying to lower my expectations. Enjoy!

 

That is to me personally actually a great post, @jbwent63😎👍,

 

*Brand new person at the mic, talking' <to us>* -Let's see how it goes. 🙂

redskin Apprentice

redskin

Posted
Posted
1 hour ago, gfp said:

Wow, this was a seriously bad take

https://x.com/Porter_and_Co/status/2028587479687995510

 

Ha.  This is garbage.  When he calculates the BNSF return he comes up with a current value of $39B but then says they should spin it off for $160B?  He also doesn't include all of the cash these invesments have thrown off over the years.  BNSF has returned over $60B to Berkshire since the acquisition.  I think Warren also reported how much cash See's has contributed over the years without needing any additional investment.  Not sure why I wasted my time reading that letter.

longterminvestor Community Regular

longterminvestor

Posted
Posted

you read it because its the intelligent thing to do.  Its called the "Steelman" approach, a lesson taught to us by Mr. Munger.  The practice of understanding an argument, usually the opposition, before sharing your thoughts allows for more fruit understanding of the underlying issue - its the pursuit of truth, not just opining because we are right and someone else is wrong. 

 

When you walk in their moccasins, you can bath in the idea.  Its a way to invert the issue.  Steelman is the opposite of strawman.  I love doing it, it teaches me a lot.  

 

And to the author of the twitter post, yeah, most ideas are misplaced.  Like the amount of leverage used in the comps.  Mr. Buffett and Mr. Munger have told us time and time again, countless billions and billions have been left on the side of the road due to the lack of leverage at Berkshire - just so they could sleep at night.  Not a terrible outcome, and something I appreciate very much.  Leverage can do many things besides juice returns, it can lead to ruin just the same.  

gfp Grand Master

gfp

Posted
Posted (edited)
6 hours ago, good-investing said:

This is quite eye-opening in this context: 

 

 

 

There is a thread on this forum on MarketWise, which is the public SPAC vehicle that Porter's previous company merged with.  He was forced out before the SPAC deal and then came in to try to run the place after the stock tanked and then left again when he couldn't get the public company's independent board members to approve a merger of his private publishing business, Porter & Co., with MKTW.  The Berkshire piece is written under his current private company's banner - Porter & Co.  I don't know if that youtube video mentioned it 'cause I ain't gonna watch all that, but Porter was also implicated in the murder of his close friend (Rey Rivera)  in a Netflix episode of unsolved mysteries.  (I don't think Porter actually threw his close friend off a roof to his death, this particular allegation was not credible - but it didn't help the brand LOL).

 

I have an email of a leaked communication from Porter from Sept. 2024 where he is hatching up a similar hit piece campaign against Berkshire.  They are designed to scare potential customers, many of which hold a large block of BRK stock they won't sell for tax reasons.  Going after BRK gets views and attention (sorry, I contributed to that by posting it here) and gets higher engagement from the outrage factor.

 

The Sept. 2024 campaign idea was to highlight Buffett's many blunders and then predict that PacifiCorp's legal issues would bankrupt the entire company (!!!)  It was sent to me to get my take on the risk of Pacificorp spreading to kill the mothership.  As you can imagine, I wasn't concerned that Pacificorp would bankrupt BHE, much less BRK.  Berkshire stock subsequently went up in price and I don't know if he ever ran that campaign.

 

These guys got seriously rich in the financial publishing industry as the industry evolved from the direct mail, rent a list of addresses and mail physical sales letters at great cost, to the rise of email marketing and they basically invented the "Agora Method" of creating free daily newsletters that end up with millions of subscribers and contain promotions for paid products between the "content."  That huge funnel feeds entry level price point newsletters which feeds premium and lifetime subscription products with very high price points and maintenance subscription fees.

 

Porter's former boss Bill Bonner is the wealthiest of the Agora crowd and his family are bona fide billionaires from 40 years in this industry.

 

The USEC promo that got them into trouble (mentioned in the youtube video) was risky because it threatened their regulation as a "general interest publication" - it was important to settle that case because losing the "general interest" designation would nuke a business that was already worth hundreds of millions of dollars at that point.

 

Anyway, sorry to muddy the BRK thread with this nonsense - Porter probably does it for the eyeballs more than believing in the content.

 

 

 

Edited by gfp
xboojum Enthusiast

xboojum

Posted
Posted
10 hours ago, gfp said:

Wow, this was a seriously bad take

https://x.com/Porter_and_Co/status/2028587479687995510

 

 

I'll make myself unpopular not by defending this take (which I think is bad) but by saying that I do think there's something to the idea that ownership by Berkshire prevents most subsidiaries from really dominating their industry; the capital getting sent upstream rather than reinvested in the business is the right decision for mediocre businesses (or even ones like See's that don't have much opportunity to reinvest) and the wrong one for world-beaters. Of course most of the businesses under the umbrella are somewhere in-between, making things trickier, but it's a pretty common pattern, comparing e.g. Benjamin Moore to Sherwin Williams, or BNSF to the independent Class I rail companies, or even in recent years GEICO (for decades a world-beater!) to Progressive.

 

But the prescriptions in the tweet are bad because he doesn't seem to understand why Buffett diversified, and the individual comparisons (Nebraska Furniture Mart, a furniture store with a bare handful of locations, vs. Home Depot, one of the great American retail successes of the last 50 years that doesn't sell furniture?) are risible, but I think it's probably true, overall, that Berkshire's subsidiaries tend to underinvest in themselves compared to their hindsight-selected category winners. There's a reason he's comparing (and it's a bad comparison) See's to Hershey's and not Sow Good (or Kraft). The other thing is that if he's complaining about Buffett not producing the results he did in his relative youth, Buffett's results as a pure stock-picker aren't as good as they were in his youth! It's not just size; the market doesn't reward the same things that Buffett was zeroed in on when he was accumulating his stake in Coca-Cola or Cap Cities. Those opportunities largely don't exist any more! He's probably right that if someone could reliably compound the $300 billion cash pile at 20% a year, selling off the subsidiaries and becoming a pure-play insurance-and-securities company would make people more money, but that's like asking why Warren doesn't wave his arms and fly to the moon.

A final issue that this guy elides is that the Western power companies, where Buffett really was happy to reinvest billions upon billions of dollars, got hit by the one-two of tax changes under Trump and global warming-enhanced fire risk (which certainly aren't unique to BHE, look at PG&E). 

xboojum Enthusiast

xboojum

Posted
Posted
9 minutes ago, gfp said:

Anyway, sorry to muddy the BRK thread with this nonsense - Porter probably does it for the eyeballs more than believing in the content.

 

I for one think that's really interesting context, so thanks.

 

And I am I think in the "swing, you bum!" peanut gallery, where I don't think that building up a dragon's hoard of capital and waiting for a downturn while just doing nothing around the margins is the best strategy, so I'm hoping that having a touch more centralized and active governance under Abel gets things moving while we wait, possibly another decade, to fire that elephant gun. (I remain disappointed that Marmon, which I hoped would turn into something like ITW as a place that could soak up capital for a lot of different uses, doesn't seem to have really turned into that.) Selling down the Apple investment as far as he did without anything apparent to do with the cash other than clip coupons was dispiriting to me. 
 

Finally, the mention of Dairy Queen was interesting not for the McDonald's comparison, which truly is ludicrous, but there does seem to be some movement in a company that I think was probably undermanaged for a decade or more of Berkshire's ownership. 

backtothebeach Mentor

backtothebeach

Posted
Posted

Here is another hot take on Buffett's performance, lol:

 

In a recent episode of the All In Podcast (E182), Chamath Palihapitiya discussed Warren Buffett's historical performance, attributing a shift to the introduction of Regulation Fair Disclosure (Reg FD) in 2000, which restricted selective disclosure of material information.

 

Here's the relevant quote from Chamath:

 

“Markets thrive when there's information asymmetry. Now I'm gonna get a lot of people really upset with me. This is an example of Warren Buffet's returns pre- and post-Reg FD. Now what do you see? His returns were double the market returns when this kind of information sharing was legal.

 

And the minute that it became illegal and you had to act on the same edge as everybody else, his returns went to the market return. He generated zero alpha. In fact, he probably, on the margins, lost a little bit.

So this is the single best investor in the world. This is what happens when you have information symmetry.

So it's just meant to explain that markets thrive when there's asymmetry. Billions and billions of dollars will be made in asymmetry.

 

The prediction markets today, unless they are regulated out of existence or shut down, will look like the stock market pre-Reg FD, and there's nothing we can do except choose not to bet it, because otherwise what you're going to have are a ton of sharps taking advantage of a ton of squares."

 

This segment was part of a broader discussion on information asymmetry in markets, including its implications for prediction markets. Note that Chamath's claim has sparked debate, with some critics arguing that factors like Berkshire Hathaway's growing size (rather than just Reg FD) contributed more to the performance shift.

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