Buffett/Berkshire - general news

[phil_Buffett]

i dont get this deal. i dont now if google will be the winner in AI. I doubt greg knows it. Last year alphabet was in the doghouse, now they are buying at the top. why holding this big piece of cash years long only to spend it on the top. bullshit for me, even if iam idiot and greg and all the people who like this deal know more then me. ( i have a sizeable brk position for years) but this start to get to point where i have to sell. i dont get the decisions. BRK always make the deals, buy rabbits out of the hat, make brilliant deals, smart add ons. But alphabet at this price, with a uncertain future, sorry....

[rogermunibond]

19 minutes ago, jbwent63 said:

A couple of comments/thoughts:

 

1. The Japanese Trading Houses and Tokio Marine Holdings have a current market value of about $42.7 billion (even after the last month of significant underperformance vs the Nikkei 300).

2. Is it possible that in the background Google is dealing with BHE for electricity for its AI infrastructure build out, and BH's investment in GOOG is a way to ensure BHE is a long-term partner in that electricity business?

 

If you look up where Google's confirmed hyperscale data center projects are located, they are not in the BHE regulated utility footprints.  But that doesn't mean that BHE's merchant power group, BHE Renewables, isn't involved in building a BYOG power plant co-located with the Google DC.  It's just not known.

 

[Gamecock-YT]

50 minutes ago, jbwent63 said:

A couple of comments/thoughts:

 

1. The Japanese Trading Houses and Tokio Marine Holdings have a current market value of about $42.7 billion (even after the last month of significant underperformance vs the Nikkei 300).

2. Is it possible that in the background Google is dealing with BHE for electricity for its AI infrastructure build out, and BH's investment in GOOG is a way to ensure BHE is a long-term partner in that electricity business?

Unless that is spelled out as a commitment in the presser, then I would assume, no. 

[Milu]

1 hour ago, phil_Buffett said:

i dont get this deal. i dont now if google will be the winner in AI. I doubt greg knows it. Last year alphabet was in the doghouse, now they are buying at the top. why holding this big piece of cash years long only to spend it on the top. bullshit for me, even if iam idiot and greg and all the people who like this deal know more then me. ( i have a sizeable brk position for years) but this start to get to point where i have to sell. i dont get the decisions. BRK always make the deals, buy rabbits out of the hat, make brilliant deals, smart add ons. But alphabet at this price, with a uncertain future, sorry....

How do you know what the top is? Unless you have a crystal ball all we know for now is Google is higher than it was a few years ago. If the stock doubles over the next 3 or 4 years then today's price is just a stepping stone to a continued march upwards.

 

I remember when Abel took over I predicted people would be quick to doubt the new leadership and critics would be out in force as soon as some new investments were made. Wasn't expecting the turn in sentiment to happen this fast though. 

[charlieruane]

One could argue that the big news amid all of these moves is actually Greg's ongoing reduction of Berkshire's decentralization, via this new building products/homebuilding platform. One of the costs of this change is that it makes Berkshire a less appealing destination for long-held family businesses that founding families want to see live on unperturbed... though maybe Greg's calculus is that there aren't too many of these businesses left for Berkshire to acquire, so scaring the remaining ones away isn't that big of a price to pay. 

[backtothebeach]

Maybe Greg just wants to reduce the cash pile, and Google is most likely better than cash long-term.

I mean Berkshire has lots of cash coming in every month anyway, and increasing the cash pile even more quarter after quarter would just  make his life more and more difficult.

[Mephistopheles]

Berkshire rallying, to think all it had to do was hop on the AI train!

 

Kidding. Hopefully, at the very least, this means Abel has also stepped up the buybacks to a meaningful amount. Weird that Buffett has commented that there is too much froth in the market yet Abel is going in on Google. Can we also assume that he’s going hard into Berkshire shares? Or does he think Google is undervalued relative to Berkshire? Hard to believe 

 

 

[Eldad]

31 minutes ago, backtothebeach said:

Maybe Greg just wants to reduce the cash pile, and Google is most likely better than cash long-term.

I mean Berkshire has lots of cash coming in every month anyway, and increasing the cash pile even more quarter after quarter would just  make his life more and more difficult.

Yeah with the liquidation of Combs stuff I thought about that as well. Gotta at least stay neutral on the cash position I would think. 
 

Hopefully today’s move is in fact buybacks. The old man must be away at a bridge tournament or something. 

[charlieruane]

49 minutes ago, backtothebeach said:

Maybe Greg just wants to reduce the cash pile, and Google is most likely better than cash long-term.

I mean Berkshire has lots of cash coming in every month anyway, and increasing the cash pile even more quarter after quarter would just  make his life more and more difficult.

 

Call me crazy, but the Shiller P/E is above 42—isn't now precisely the moment we *want* Berkshire to sit in cash? Isn't that, like, our core strategy? Sometimes I feel like I'm taking crazy pills. The headier valuations get, the easier we should make it for Greg to sit in cash!

 

I see all of these articles applauding Greg for taking swings, "Berkshire is back," etc. Well, Berkshire was arguably most "back" when it was letting cash pile up amid a speculative fervor. 

Edited Wednesday at 05:46 PM by charlieruane

[Eldad]

5 minutes ago, charlieruane said:

 

Call me crazy, but the Shiller P/E is above 42—isn't now precisely the moment we *want* Berkshire to sit in cash? Isn't that, like, our core strategy? Sometimes I feel like I'm taking crazy pills. The headier valuations get, the easier we should make it for Greg to sit in cash!

 

I see all of these articles applauding Greg for taking swings, "Berkshire is back," etc. Well, Berkshire was arguably most "back" when it was letting cash pile up amid a speculative fervor. 

At the same time WB said like 10 years ago that it would be malpractice to keep so much cash for this long and that he would have to pay a dividend etc, etc. 

[valueinvesting101]

Interesting thoughts from 2012 AGM about IBM, Google and Apple. They changed their positions on IBM and Apple few years after those comments and finally on Google from Q4 2025.

Starting at 3:03:48


As some poster alluded this 10 billion investment could be coming on top of additional purchases beyond Q1 2026 and in effect serves to quickly increase position in Google by 20-30%. We will know about that in few months. I am sure @gfp will sleuth out exact prices of their purchases if any. 

Edited Wednesday at 06:11 PM by valueinvesting101

[73 Reds]

26 minutes ago, charlieruane said:

 

Call me crazy, but the Shiller P/E is above 42—isn't now precisely the moment we *want* Berkshire to sit in cash? Isn't that, like, our core strategy? Sometimes I feel like I'm taking crazy pills. The headier valuations get, the easier we should make it for Greg to sit in cash!

 

I see all of these articles applauding Greg for taking swings, "Berkshire is back," etc. Well, Berkshire was arguably most "back" when it was letting cash pile up amid a speculative fervor. 

I dunno, allocating less than 1% of market cap to perhaps the best known brand name on the planet is hardly going to make a dent in what Greg might ultimately be able to do with Berkshire's cash hoard if/when the shit hits the fan.  In any event, last few times that happened Buffett mostly sat on his hands so who says Greg has the cojones if he's not willing to take some minor swings now?

[thepupil]

24 minutes ago, 73 Reds said:

I dunno, allocating less than 1% of market cap to perhaps the best known brand name on the planet is hardly going to make a dent in what Greg might ultimately be able to do with Berkshire's cash hoard if/when the shit hits the fan.  In any event, last few times that happened Buffett mostly sat on his hands so who says Greg has the cojones if he's not willing to take some minor swings now?

+1 Berkshire needs to deploy like $40B/yr to stand still on cash, they need to deploy like $200B or so of excess cash. not even clear (yet) that Berkshire is a net buyer of stocks YTD.

 

it's nothing. 

 

 

Edited Wednesday at 06:40 PM by thepupil

[CassiusKing1]

Still plenty of cash on the books and more coming to Omaha on a daily basis.  I'm happy to see the activity.  Just hope there have been equally substantial buybacks happening at the same time.

 

[Munger_Disciple]

If Greg starts buying SpaceX IPO shares at $1.75 Trillion valuation, I will have to seriously rethink my BRK holding 

Edited Wednesday at 11:46 PM by Munger_Disciple

[Parsad]

4 hours ago, thepupil said:

+1 Berkshire needs to deploy like $40B/yr to stand still on cash, they need to deploy like $200B or so of excess cash. not even clear (yet) that Berkshire is a net buyer of stocks YTD.

 

it's nothing. 

 

 

 

+1!  During Buffett's tenure, a dividend was not a priority or something Buffett felt inclined to pursue.  I think with Berkshire's size now, if buybacks aren't available regularly at a decent discount to intrinsic value, it's time to consider a small dividend to shareholders to keep cash manageable by Abel. 

 

I don't think most investors in Berkshire are there now for outsized gains relative to the S&P500.  If they meet it or beat it slightly, they will be happy...all the while not having to incur large capital gains by selling stock that they may have over decades in BRK.  FFH has not been hurt in any way by the dividend they pay really.  Maybe time for BRK to consider one too.  Cheers!

[Munger_Disciple]

4 minutes ago, Parsad said:

I don't think most investors in Berkshire are there now for outsized gains relative to the S&P500.  If they meet it or beat it slightly, they will be happy...

 

As a LT BRK shareholder, I'll be happy even if BRK underperforms the SPX a by a percentage point or so in the long run due to large amount of deferred taxes on my position. 

[thepupil]

2 hours ago, Munger_Disciple said:

If Greg starts buying SpaceX IPO shares at $1.75 Trillion valuation, I will have to seriously rethink my BRK holding 

This is probably the most lucrative thing Greg could do. Announce $5 billion allocation to SPCX. Berkshire goes down 10-20% and share repo window opens wide  

Edited yesterday at 01:32 AM by thepupil

[Spekulatius]

9 hours ago, thepupil said:

This is probably the most lucrative thing Greg could do. Announce $5 billion allocation to SPCX. Berkshire goes down 10-20% and share repo window opens wide  

Top it up buying a bit of bitcoin and some Tesla to rile up the shareholder bade even more. Out the old, in with the new.

[boilermaker75]

10 hours ago, thepupil said:

This is probably the most lucrative thing Greg could do. Announce $5 billion allocation to SPCX. Berkshire goes down 10-20% and share repo window opens wide  

 

Brilliant!

[DooDiligence]

2 hours ago, Spekulatius said:

Top it up buying a bit of bitcoin and some Tesla to rile up the shareholder bade even more. Out the old, in with the new.

 

Buy some Pershing too and add Billy boy to the BOD.

[John Hjorth]

Gents,

 

Here, just a gentle, balanced reminder, that today is actually Thursday, -it's not Friday today! - Aren't you all going a bit crazy one day early here? 

[Intelligent_Investor]

21 hours ago, charlieruane said:

One could argue that the big news amid all of these moves is actually Greg's ongoing reduction of Berkshire's decentralization, via this new building products/homebuilding platform. One of the costs of this change is that it makes Berkshire a less appealing destination for long-held family businesses that founding families want to see live on unperturbed... though maybe Greg's calculus is that there aren't too many of these businesses left for Berkshire to acquire, so scaring the remaining ones away isn't that big of a price to pay. 

There likely aren't any that will move the needle. I don't know of many $100b family businesses

[Munger_Disciple]

14 hours ago, thepupil said:

This is probably the most lucrative thing Greg could do. Announce $5 billion allocation to SPCX. Berkshire goes down 10-20% and share repo window opens wide  

BRK stock might go up if it buys SPCX given the how crazy the market is right now

[Wanderer]

Let's come back to the fundamentals: I think, Greg just looked a GOOG's backlog, checked in with the companies owned by BRK, checked in with BHE and came to the conclusion that GOOG's cash inflow is likely to increase significantly in the next years. (I know, a P/E of 30 is high - or 40, if you substract the capital gains from Anthropic and SpaceX, but couldn't it be that GOOG will grow into this valuation?)