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Buffett/Berkshire - general news


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One of the key points is that all of these re-powering deals (NextEra is doing a lot of them as well) are gaining eligibility to re-start the production tax credits with today's date.  It's a substantial enough rebuild/replacement that it basically counts as a new wind farm after you're getting closer to the end of your original production tax credit period for the old equipment.  Also, of course, the new equipment is much larger and generates more power on land you already have control of, infrastructure already built, etc..

 

- and because of the phase down of tax credits, 2018 is the year you will see the equipment ordered for almost all of the next several years of projects

 

Repowering order from PacifiCorp to Vestas Wind Systems.

 

Quite amazing that it's optimal to scrap nacelles and blades after only approx. 11 years of operation, to get better performance. It says a lot about how the technology in this industry is advancing over time. [Mentioned by Uccmal before here on CoBF.]

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One of the key points is that all of these re-powering deals (NextEra is doing a lot of them as well) are gaining eligibility to re-start the production tax credits with today's date.  It's a substantial enough rebuild/replacement that it basically counts as a new wind farm after you're getting closer to the end of your original production tax credit period for the old equipment.  Also, of course, the new equipment is much larger and generates more power on land you already have control of, infrastructure already built, etc..

 

- and because of the phase down of tax credits, 2018 is the year you will see the equipment ordered for almost all of the next several years of projects

 

Repowering order from PacifiCorp to Vestas Wind Systems.

 

Quite amazing that it's optimal to scrap nacelles and blades after only approx. 11 years of operation, to get better performance. It says a lot about how the technology in this industry is advancing over time. [Mentioned by Uccmal before here on CoBF.]

 

Yes, technology is evolving (longer blades, more efficient turbines etc) and there is more to come but:

 

-this is a reminder of the intensity of capital involved

-the decision to repower, like globalfinancepartners explains, in influenced significantly by the tax implications

 

https://www2.deloitte.com/content/dam/Deloitte/us/Documents/energy-resources/us-er-useful-lives-and-assets-to-qualify-for-tax-credits.pdf

 

Don't want to kill the enthusiasm but helpful to remember that the wind energy business, if you compare to learning how to ride a bike, is progressing but the safety wheels are still on.

 

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  • 2 weeks later...

I don't know the answer to your question - since most of the shares end up sitting in the Gates foundation for quite a while they might not consider them to be much of an increase in free float right away.  Over time, though, Berkshire will get higher and higher weighting in the index.  It already is a big contributor to most days' price moves since many BRK shares outside of indices just sit there with capital gains nobody wants to realize.

 

You do have to appreciate what the timing of the two announcements says about Warren, though...  He could have easily made the announcements in the reverse order.  His charitable gifts would have been larger.  But he would never do that and it doesn't really matter.  He can't use the deductions anyway

-------------

 

I found this post from Geoff Gannon in 2010 that summarizes S&P's methodology -

"According to S&P Float Adjustment Methodology:

 

In cases where holdings in a group exceed 10% of the outstanding shares of a

company, the holdings of that group will be excluded from the float-adjusted count of

shares to be used in index calculations.

 

The "groups" they are talking about include current and former officers and directors as well as Foundations. As I understand it - and I may be wrong here - this means shares given by Buffett to the Gates Foundation wouldn't change float in S&P's eyes until Gates Foundation sells shares.

 

You can read the whole document if you google "S&P Float Adjustment Methodology" and click on the PDF."

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I don't know the answer to your question - since most of the shares end up sitting in the Gates foundation for quite a while they might not consider them to be much of an increase in free float right away.  Over time, though, Berkshire will get higher and higher weighting in the index.  It already is a big contributor to most days' price moves since many BRK shares outside of indices just sit there with capital gains nobody wants to realize.

 

You do have to appreciate what the timing of the two announcements says about Warren, though...  He could have easily made the announcements in the reverse order.  His charitable gifts would have been larger.  But he would never do that and it doesn't really matter.  He can't use the deductions anyway

-------------

 

I found this post from Geoff Gannon in 2010 that summarizes S&P's methodology -

"According to S&P Float Adjustment Methodology:

 

In cases where holdings in a group exceed 10% of the outstanding shares of a

company, the holdings of that group will be excluded from the float-adjusted count of

shares to be used in index calculations.

 

The "groups" they are talking about include current and former officers and directors as well as Foundations. As I understand it - and I may be wrong here - this means shares given by Buffett to the Gates Foundation wouldn't change float in S&P's eyes until Gates Foundation sells shares.

 

You can read the whole document if you google "S&P Float Adjustment Methodology" and click on the PDF."

 

I wonder if the buyback announcement is related to Gates foundation. Perhaps BRK wants to buyback blocks that Gates foundation plans to sell.

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I don't know the answer to your question - since most of the shares end up sitting in the Gates foundation for quite a while they might not consider them to be much of an increase in free float right away.  Over time, though, Berkshire will get higher and higher weighting in the index.  It already is a big contributor to most days' price moves since many BRK shares outside of indices just sit there with capital gains nobody wants to realize.

 

You do have to appreciate what the timing of the two announcements says about Warren, though...  He could have easily made the announcements in the reverse order.  His charitable gifts would have been larger.  But he would never do that and it doesn't really matter.  He can't use the deductions anyway

-------------

 

I found this post from Geoff Gannon in 2010 that summarizes S&P's methodology -

"According to S&P Float Adjustment Methodology:

 

In cases where holdings in a group exceed 10% of the outstanding shares of a

company, the holdings of that group will be excluded from the float-adjusted count of

shares to be used in index calculations.

 

The "groups" they are talking about include current and former officers and directors as well as Foundations. As I understand it - and I may be wrong here - this means shares given by Buffett to the Gates Foundation wouldn't change float in S&P's eyes until Gates Foundation sells shares.

 

You can read the whole document if you google "S&P Float Adjustment Methodology" and click on the PDF."

 

I wonder if the buyback announcement is related to Gates foundation. Perhaps BRK wants to buyback blocks that Gates foundation plans to sell.

I would bet that would be the cause. A day after anither big charitable contribution they announce the buyback. Seems to me that if you want to do charity you shouldn't make the charities sell too much below intrinsic value. Bill Gates was likely reluctant  to sell shares at recent prices.

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Guest longinvestor

John,

 

This is the nature of message boards and the internet generation that we’re in. The first page (headline) gets all the attention. Page 2 maybe but almost never page 15 or 16. I sometimes dig up past discussions to revive them with current happenings but that’s the exception. We’re dealing with memory recall and impatience. The impatience is with saying what I want to say, no matter in which topic so long as it’s on the top of page 1.

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  • 2 weeks later...
BERKSHIRE HATHAWAY INC. Information Regarding Second Quarter Earnings Release

August 02, 2018 04:15 PM Eastern Daylight Time

OMAHA, Neb.--(BUSINESS WIRE)--Berkshire Hathaway Inc. (BRK.A; BRK.B) –

 

Berkshire Hathaway Inc.’s second quarter earnings release and its quarterly report on Form 10-Q will be posted on the Internet on Saturday, August 4, 2018, at approximately 7:00 a.m. Central time where it can be accessed at http://www.berkshirehathaway.com.

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Welcome to you here on CoBF, KFS! [ : - ) ]

 

Just for your information, there is also the last three client letters from Semper Augustus, which can be accessed here, just in case you don't already know them.

 

Thank you.... very good material..... I've been a quiet reader of this forum for some time now, just now emerging from the shadows

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