Buffett/Berkshire - general news

[DooDiligence]

4 hours ago, ratiman said:

Todd was running Geico and running a big portfolio? That seems unlikely. The reason to shunt him off to Geico was to get him out of managing money. Ted's days are numbered.  

He went to GEICO and ran customers off. Looked good at first. Not so much now. Where's all my low risk policyholders? Progressive, that's where.

Edited May 16 by DooDiligence

[73 Reds]

4 hours ago, ratiman said:

Todd was running Geico and running a big portfolio? That seems unlikely. The reason to shunt him off to Geico was to get him out of managing money. Ted's days are numbered.  

That very well may be true.  It might take a lot to move Berkshire's needle but given the size of Todd's, and now Ted's portfolio they have managed relatively small sums of money and it is hard to see how they have distinguished themselves as outstanding portfolio managers for Berkshire.  In fact, had they performed better, perhaps they'd have been managing larger sums.

Edited May 16 by 73 Reds
missed line

[Spekulatius]

On 5/15/2026 at 4:28 PM, Licorice said:

I'm surprised they didn't hold onto V and MA (and HEI.A as well).

I agree on MA and V. HEI.A is a more specialized case and pretty richly valued but V or MA seems like something you can keep around if you have already cash coming out your hairy ears.I guess rules are rules.

 

WEB going on in on Google will be interesting. The LEN buy is more in his wheel yard.

Edited May 17 by Spekulatius

[Charlie]

Anybody else find it funny that we probably bought a part of our Alphabet shares from Bill Ackman, who markets himself as a mini-Berkshire?

Sounds a little bit like Carl Icahn, who sold us the Apple shares in 2016.... 

 

[CassiusKing1]

Can't say I love seeing the Delta buy.

We'll chalk this one up to a short term trade, don't expect to see it on the books too long.

[AlwaysDay1]

@gfp Hi where do we find the national indemnity filing to source berkshire's average purchase price for Goog in Q1? 

[gfp]

2 hours ago, AlwaysDay1 said:

@gfp Hi where do we find the national indemnity filing to source berkshire's average purchase price for Goog in Q1? 

 

the national association of insurance commissioners (NAIC) filings at insdata - but National Indemnity hasn't filed their Q1 filing yet.  

Edited May 19 by gfp

[LC]

12 hours ago, CassiusKing1 said:

Can't say I love seeing the Delta buy.

We'll chalk this one up to a short term trade, don't expect to see it on the books too long.

I think this is probably how all of Berkshire’s prior airline adventures began  

[sleepydragon]

Google is doing this AI cloud JV with blackstone. Blackstone provides capital and Google provides TPUs and software. But they also need electricity right? I am wondering if Brk’s investment in google has anything to do with this

Edited May 19 by sleepydragon

[Mephistopheles]

The big airlines, namely Delta and United aren't really airline companies anymore. Most of their value comes from their cobranded credit cards along with the ecosystem. Here's a really good video on it:

 

 

 

I would bet it was Buffett, not Abel

[Hektor]

9 hours ago, Mephistopheles said:

The big airlines, namely Delta and United aren't really airline companies anymore. Most of their value comes from their cobranded credit cards along with the ecosystem. Here's a really good video on it:

 

 

 

I would bet it was Buffett, not Abel

Good one @Mephistopheles

[rogermunibond]

Isn't it more the airlines are card issuers?  They partner with banks and the banks buy miles from them.

 

But the airlines don't take on credit risk.

[gfp]

All of Buffett's favorites combined - float (get cash today for miles that are spent at some point in the future, with some breakage where miles don't get spent at all) and the ability to print one's own currency out of thin air.  I don't think it's an accident that Buffett gravitates towards the airline with the Amex partnership.

 

I think it's a little ridiculous that the media keeps characterizing this as the first big move by Abel.  Zero chance Abel decided "I'm going to buy stock in Delta"

[wabuffo]

All of Buffett's favorites combined - float (get cash today for miles that are spent at some point in the future, with some breakage where miles don't get spent at all) and the ability to print one's own currency out of thin air.  I don't think it's an accident that Buffett gravitates towards the airline with the Amex partnership.

 

These loyalty programs also delay profit (and tax) recognition) until the points are used (typically a weighted average duration of 2 years).  And what is the real "cost of goods" charged against points revenue to an airline for providing a seat?

 

Plus, the airlines are like a sovereign currency issuer - in addition to breakage, they can depreciate the currency required to spend on an airline ticket at will (up to customer pushback, I guess).

 

We got a sneak peak at how profitable the airline loyalty programs were during the depths of Covid in 2020 when both United and Delta pushed their loyalty programs into bankruptcy remote SPEs.  This was done in order for the SPEs to issue debt and upstream the cash to the airline to "keep the lights on".  There was so much demand for the debt that the $6.5B was upsized to $9B, IIRC. 

 

Here's Delta's summary of its program (for the 2019 year) from its 2020 roadshow for the strategic transaction described above:

https://www.sec.gov/Archives/edgar/data/27904/000119312520244688/d27099dex991.htm

 

 

Bill

Edited May 19 by wabuffo

[wabuffo]

For comparison, here United's Mileage Plus spin-out exec summary page during that Covid summer:

https://ir.united.com/static-files/1c0f0c79-23ca-4fd2-80c1-cf975348bab9

 

This is a "business" with stable & growing revenues & income.  United put a value on its Mileage Plus program during this transaction of $21B, IIRC.  Today, the entire airline is valued at $29B, FWIW.

 

United paid the last of the debt issued by the SPE last summer - so this is a giant cash box now that gives United almost $8B of growing "float" as a liability on its balance sheet.

 

Bill

Edited May 19 by wabuffo

[yesman182]

On 5/17/2026 at 12:32 PM, Charlie said:

Anybody else find it funny that we probably bought a part of our Alphabet shares from Bill Ackman, who markets himself as a mini-Berkshire?

Sounds a little bit like Carl Icahn, who sold us the Apple shares in 2016.... 

 

Ha I was smiling when I saw the same thing. Bill sells Google, goes up 30%, then he goes on TV to talk about buying MSFT, lol.

[yesman182]

35 minutes ago, gfp said:

All of Buffett's favorites combined - float (get cash today for miles that are spent at some point in the future, with some breakage where miles don't get spent at all) and the ability to print one's own currency out of thin air.  I don't think it's an accident that Buffett gravitates towards the airline with the Amex partnership.

 

I think it's a little ridiculous that the media keeps characterizing this as the first big move by Abel.  Zero chance Abel decided "I'm going to buy stock in Delta"

I also wonder if WEB feels that Americans will prefer to take long haul flights to Europe on delta vs the Middle East carriers. Not sure that I want my family to have a stop over in Dubai, etc 

[Intelligent_Investor]

The problem with all airlines is that they are fucked from an operational leverage perspective with fuel prices, unless the thinking is that airline customers aren't price sensitive and will eat any price increases. But with the world economy on the brink of major issues, that doesn't seem like a high probability bet. Baffling why Berkshire would go back into airlines given how it went last time...

[yesman182]

Delta CEO says WEB sold covid around covid times because he didn't want to hinder their ability to get government aid or be a distraction 

 

https://www.cnbc.com/video/2026/05/18/delta-ceo-appreciative-of-berkshires-return.html

[yesman182]

1 hour ago, wabuffo said:

For comparison, here United's Mileage Plus spin-out exec summary page during that Covid summer:

https://ir.united.com/static-files/1c0f0c79-23ca-4fd2-80c1-cf975348bab9

 

This is a "business" with stable & growing revenues & income.  United put a value on its Mileage Plus program during this transaction of $21B, IIRC.  Today, the entire airline is valued at $29B, FWIW.

 

United paid the last of the debt issued by the SPE last summer - so this is a giant cash box now that gives United almost $8B of growing "float" as a liability on its balance sheet.

 

Bill

United has recently (last two months or so), done two things that make is so that you essentially need their credit card if you fly with them more than once a year. One they raised bag fees (like everyone else), but if you have one of their more premium cards ($150 per year) you get a free checked bag. Second and the bigger deal is that card holders get 10-50% lover award redemption prices with United. So by paying for a credit card your united frequent flier miles are worth significantly more. I will be shocked if others don't copy this award ticket discount for cardholders. 

[charlieruane]

Beyond the float benefits inherent in all airline loyalty programs, Delta has the most devout following of the major airlines... they've successfully positioned themselves as the premium option via investments in lounges (Sky Clubs and Delta One) and premium cabin offerings that outclass their competitors. The Amex partnership only reinforces their walled garden. So with Delta in particular, Buffett/Ted may see some Apple-esque-premium-walled-garden-consumer-product effects in the mix. 

 

Anecdotal, but the airline status-obsessed people in my life uniformly fly Delta. 

 

The other airlines, especially United, have realized the power of this strategy and are starting to play catchup. But Delta has a lead. 

Edited May 19 by charlieruane

[Intelligent_Investor]

Idk why anyone with choice would choose Delta as a rewards program, its objectively the worst of the Big 3 to the point you don't want to hold Delta Skypesos because they devalue so hard.

[bizaro86]

43 minutes ago, Intelligent_Investor said:

Idk why anyone with choice would choose Delta as a rewards program, its objectively the worst of the Big 3 to the point you don't want to hold Delta Skypesos because they devalue so hard.

 

That's a feature not a bug from an investor point of view. As a traveller among the big 3 American miles are clearly the most valuable, then United, then Delta. Since they all likely can charge about the same to their credit card partners, giving the consumer less value per mile is like having higher prices.

 

Delta has convinced customers in various ways (fortress hubs, lounge, service investments) that taking less value than their competitors is still worth it. Basically they're the price leader.

[Mephistopheles]

5 hours ago, Intelligent_Investor said:

The problem with all airlines is that they are fucked from an operational leverage perspective with fuel prices, unless the thinking is that airline customers aren't price sensitive and will eat any price increases. But with the world economy on the brink of major issues, that doesn't seem like a high probability bet. Baffling why Berkshire would go back into airlines given how it went last time...

I think higher oil prices are a net positive for Delta and United. Spirit is done. Frontier, JetBlue, Southwest and even American will suffer far more than Delta. 
 

You don’t need to outrun the bear, just need to outrun your competitors.

 

Edited May 19 by Mephistopheles

[zippy1]

2 hours ago, Mephistopheles said:

I think higher oil prices are a net positive for Delta and United. Spirit is done. Frontier, JetBlue, Southwest and even American will suffer far more than Delta. 
 

You don’t need to outrun the bear, just need to outrun your competitors.

 

Doesn't Delta own a refinery? Shouldn't this give them an advantage?