Buffett/Berkshire - general news

[Munger_Disciple]

17 minutes ago, gfp said:

 

yeah he is usually wrong about a lot of little details.  I think it is because he can't edit tweets and fires them off in a hurry.  As most know, Berkshire is over 10% on BAC and would have been required to disclose any sales within a few days.  No sales of American Express either.  Berkshire did sell stuff in the category though, but it could be quite a few different securities.

 

 

He is also wrong about small addition to Apple (no change to Apple position).

Edited November 6, 2022 by Munger_Disciple

[Bluffy]

They already reduced USB last quarter. My bet would be not to overthink it. They might have sold out completely. Would make sense in comparison to the relatively "weak" share price performance in the last quarter versus the other big bank stocks.

[NnnnotSoSmart]

Nice Gary Gambino write up on new OXY accounting. 

 

https://seekingalpha.com/article/4553994-berkshire-hathaway-operating-earnings-will-take-a-step-up

 

[Ulti]

https://investmentmanagementinsights.substack.com/p/graham-and-dodd-annual-breakfast

Good synopsis featuring Todd Combs

[dcollon]

Thank you for posting the article, Ulti

[Thrifty3000]

19 hours ago, dcollon said:

Thank you for posting the article, Ulti

+1  love the “behind the scenes” insights into convos with WEB and Chuck

[Ulti]

"Combs goes to Buffett’s house on many Saturdays to talk, and here’s a litmus test they frequently use. Warren asks “How many names in the S&P are going to be 15x earnings in the next 12 months? How many are going to earn more in five years (using a 90% confidence interval), and how many will compound at 7% (using a 50% confidence interval)?” In this exercise, you are solving for cyclicality, compounding, and initial price. Combs said that this rubric was used to find Apple, since at the time the same 3-5 names kept coming up. "

I wonder if they used the same rubric for Chevron ?

[Charlie]

Great interview! Thank you!

 

I liked the quote: "His (Buffett´s) great attribute is knowing when and how to adapt. Like the Keynes quote “the facts have changed, what did you do?” Most of us get more set in our ways. It’s part of being a learning machine to avoid that."

[Mephistopheles]

On 11/7/2022 at 12:21 PM, Ulti said:

https://investmentmanagementinsights.substack.com/p/graham-and-dodd-annual-breakfast

Good synopsis featuring Todd Combs

 

Thanks for posting this!

 

Can someone explain to me what this means exactly:

 

(If the business requires additional working capital to maintain its competitive position and unit volume, the incremental spending should also be included in section (c). However, businesses following the LIFO inventory method usually do not require additional working capital if unit volume does not change. LIFO would give the appearance of an additional need for working capital because inventory is held at a cost less than average, and, or FIFO. Buffet is saying not to confuse that with a working capital need.)

[Munger_Disciple]

13 minutes ago, Mephistopheles said:

 

Thanks for posting this!

 

Can someone explain to me what this means exactly:

 

(If the business requires additional working capital to maintain its competitive position and unit volume, the incremental spending should also be included in section (c). However, businesses following the LIFO inventory method usually do not require additional working capital if unit volume does not change. LIFO would give the appearance of an additional need for working capital because inventory is held at a cost less than average, and, or FIFO. Buffet is saying not to confuse that with a working capital need.)

 

If you are using LIFO accounting during inflationary times (reported profits are lower, taxes are lower), it looks like your working capital is going up even if unit volume stays flat. Buffett is saying you need to adjust for the effects of LIFO in that situation and not confuse with increase in working capital not related to LIFO. I think he is referring to a high turnover business where you hold the inventory for a relatively short period of time such as See's Candies or Costco?

Edited November 8, 2022 by Munger_Disciple

[Libs]

2 hours ago, Munger_Disciple said:

 

If you are using LIFO accounting during inflationary times (reported profits are lower, taxes are lower), it looks like your working capital is going up even if unit volume stays flat. Buffett is saying you need to adjust for the effects of LIFO in that situation and not confuse with increase in working capital not related to LIFO. I think he is referring to a high turnover business where you hold the inventory for a relatively short period of time such as See's Candies or Costco?

<The goal of investing is to have intellectual purity. >

 

No wonder Buffett likes Combs so much.

[Mephistopheles]

5 hours ago, Munger_Disciple said:

 

If you are using LIFO accounting during inflationary times (reported profits are lower, taxes are lower), it looks like your working capital is going up even if unit volume stays flat. Buffett is saying you need to adjust for the effects of LIFO in that situation and not confuse with increase in working capital not related to LIFO. I think he is referring to a high turnover business where you hold the inventory for a relatively short period of time such as See's Candies or Costco?

 Thanks for this. It makes sense 

[LearningMachine]

On 11/7/2022 at 9:21 AM, Ulti said:

https://investmentmanagementinsights.substack.com/p/graham-and-dodd-annual-breakfast

Good synopsis featuring Todd Combs

 

Thank you @Ulti for sharing.

 

Awesome principles:

• "Founder led businesses outperform because the founders are the fiduciary, and they have a longer time horizon."
• Focus on "sticky customers and how that affects valuation."
  • "Figure out CAC and LTV...When you slice the data, there are really big pockets where the LTV is negative, and that is where the potential is to improve margins.”
  • So consistent with Buffett's feedback to American Express CEO in the middle of the pandemic that their affluent customer base was their best asset!  They must have also calculated LTV of Apple's customers was much higher as you could make more money from customers in the top x% of income distribution vs. those in the bottom x%.
• "Focus your attention on the unit economics."
• "The worst business grows and needs infinite capital with declining returns. The best business grows exponentially with no capital. "

 

Is anyone else surprised to hear Todd say they are right on maybe 1/10 predictions?  Maybe he meant something else and it didn't get transcribed correctly in the article?

Edited November 9, 2022 by LearningMachine

[competitive-advantage]

3 hours ago, LearningMachine said:

Is anyone else surprised to hear Todd say they are right on maybe 1/10 predictions?  Maybe he meant something else and it didn't get transcribed correctly in the article?

“The nature of the world is that things are constantly changing, and Todd says they are right on maybe 1/10 predictions. “

…
“He reiterated that they don’t do macro, and they don’t predict the future at all. What they do instead is take the world they’ve been given in the present, without having to understand the future.”

 

He’s talking about macro and arguing against trying to predict macroeconomic dynamics.

[gfp]

Looks like USB was one of the big financial stock sales 

https://www.sec.gov/Archives/edgar/data/36104/000119312522282565/d302279dsc13ga.htm

 

they also filed in HK with another 14.285 million share sale of BYD

https://di.hkex.com.hk/di/NSAllFormList.aspx?sa2=an&sid=2508&corpn=BYD+Co.+Ltd.++-+H+Shares&sd=11/11/2021&ed=11/11/2022&cid=2&sa1=cl&scsd=11%2f11%2f2021&sced=11%2f11%2f2022&sc=1211&src=MAIN&lang=EN&g_lang=en&

Edited November 11, 2022 by gfp

[Ulti]

Nice refresher:

https://www.morningstar.com/articles/1122817/12-lessons-on-money-and-more-from-warren-buffett-and-charlie-munger

[Spekulatius]

Buffet is selling out USB. He used to own ~8.5% and is now down to ~3.6%. he is probably going to sell down his entire position. Now that I bought USB....

https://www.sec.gov/Archives/edgar/data/36104/000119312522282565/d302279dsc13ga.htm

 

I see our resident expert @gfp beat me to it.

Edited November 11, 2022 by Spekulatius

[fareastwarriors]

$tsm  

 

 

[Luca]

Very exiciting, i think its a great addition!!

[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 - coincidence? 3.  TSMC were down another 10% from the end of Q3 so perhaps this position is closer to $5-6bn (taken into account the bounce and Buffett pop).  4.  Would the recent discussions of 3nm manufacture in the USA figure at all i.e. more USA exposure less China risk.  

Edited November 14, 2022 by nwoodman

[UK]

4 hours ago, nwoodman said:

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 - coincidence? 3.  TSMC were down another 10% from the end of Q3 so perhaps this position is closer to $5-6bn (taken into account the bounce and Buffett pop).  4.  Would the recent discussions of 3nm manufacture in the USA figure at all i.e. more USA exposure less China risk.  

 

Re 2. Or is still not to large to be for T or T? Interesting pick nevertheless. Some really deep tech:)?

 

At what time or where do you see information on Charlies interview?

[nwoodman]

11 minutes ago, UK said:

 

Re 2. Or is still not to large to be for T or T? Interesting pick nevertheless. Some really deep tech:)?

 

At what time or where do you see information on Charlies interview?

 

 

[UK]

4 minutes ago, nwoodman said:

 

 

 

Thanks!

[CorpRaider]

For all the OXY ink, good lord that CVX position is Buffett, is yuge, and he's still buying.  Interesting to see him sell some $BK. Wonder if Paramount is WEB or Ted.  Up to 15% of the class.  $LPX is kind of interesting given the history with building materials, johns manville, and unforeseen liabilities.  Super cheap cyclical, maybe it's Ted.

Edited November 15, 2022 by CorpRaider

[UK]

Yes, oil bet is big and definately Buffett's. PARA I would guess is not his bet. Also it is possible, that USB was bought by WB and also later by one of T. If TSM was bought by WB himself, it would be quite a surprise, but it is almost to large for T or T, but maybe their allocations of BRK portfolio were increased?