Buffett/Berkshire - general news

[Luca]

23 minutes ago, Gamecock-YT said:

quit propping your kids up to ask questions. it's cute the first time, not so the 7th time

Absolutely embarrassed for the girl that couldnt even spell out the names of the guys sitting there...common...besides that i am very happy to see both of them sharp and cheerful

Edited May 6, 2023 by Luca

[gfp]

One important bit of breaking news from the meeting was that Warren came right out and said he would not be bidding for control of Occidental.  He may buy more and obviously still has the warrants to exercise but he isn't going to buy Occidental entirely.  Someone else might eventually, of course.

 

The other big news was that Jan. 1st renewals were disappointing for Ajit but that they got lucky when April 1st came around and prices had zoomed up and they quickly wrote $15 Billion of Florida Cat risk where they can lose a maximum of $15B this year and could make $7 Billion if no major storm hits Florida.

[Parsad]

Ron Olson at halftime was talking about Greg Abel.  Literally said that Greg grew Mid-American from a tiny company to what it is today.  No mention at all of Sokol or anything.  When Buffett cuts you off, the board and everyone else cuts you off too! 

 

Tragic and rather cut-throat...the Salomon threat to employees was definitely not pretense, but a precursor if you hurt Berkshire/Buffett's reputation!  Cheers!

[dealraker]

I had to leave the house for a couple hours today.  I'm assuming there was no specific discussion about Bank of America.  Is this correct?  

[gfp]

6 minutes ago, dealraker said:

I had to leave the house for a couple hours today.  I'm assuming there was no specific discussion about Bank of America.  Is this correct?  

The specific mention was Warren reminding us that it was Warren who asked for the deal to buy into BAC on those special terms and he felt honor bound essentially to stay in it. And he likes the management. I’m sure he doesn’t love the securities book but this too shall pass

[dealraker]

2 minutes ago, gfp said:

The specific mention was Warren reminding us that it was Warren who asked for the deal to buy into BAC on those special terms and he felt honor bound essentially to stay in it. And he likes the management. I’m sure he doesn’t love the securities book but this too shall pass

Yep, thank gfp.

[fareastwarriors]

3 hours ago, John Hjorth said:

Finally, there was a question about the american banking system, US regional banking in particular, and Mr. Buffett started  - before saying anything - by flipping table name tags on the podium like this [  ]  :

 

 

legendary

[Parsad]

 

2 minutes ago, gfp said:

The specific mention was Warren reminding us that it was Warren who asked for the deal to buy into BAC on those special terms and he felt honor bound essentially to stay in it. And he likes the management. I’m sure he doesn’t love the securities book but this too shall pass

 

They are essentially out of banks other than BAC, which as GFP said was because they originated that deal and want to remain a reliable partner.  Buffett said there could be 3rd or 4th levels of counterparty risk that lead to unpredictable things and the average U.S. citizen doesn't understand banking or how bank deposits are insured.  I suspect they expect things to get worse before they get better.

 

On another note, there was a young 13 year old girl who asked a question about US debt and the U.S. dollar.  She was extremely poised and eloquent.  Maybe Berkshire should hire her or the FDIC should put her in charge of some banks! 

 

Cheers!

[Parsad]

Just now, Parsad said:

 

 

They are essentially out of banks other than BAC, which as GFP said was because they originated that deal and want to remain a reliable partner.  Buffett said there could be 3rd or 4th levels of counterparty risk that lead to unpredictable things and the average U.S. citizen doesn't understand banking or how bank deposits are insured.  I suspect they expect things to get worse before they get better.

 

On another note, there was a young 13 year old girl who asked a question about US debt and the U.S. dollar.  She was extremely poised and eloquent.  Maybe Berkshire should hire her or the FDIC should put her in charge of some banks! 

 

Cheers!

 

A couple of months ago, I sold out of BAC after holding it from 2009.  I just couldn't predict the different outlier events that could happen and who was holding what bag.  If BRK didn't originate that deal, I doubt Buffett would have held on to BAC...even as terrific a CEO Brian Moynihan is. 

 

The industry does well when things are good, but are probably the worst businesses to own when things turn bad.  With their leverage, and the stupid things bankers will do, they may actually be one of the riskiest areas to invest long-term, because they will get hit at some point from dumb behavior.  And even if you avoided the stupid behaviors of your peers, you will suffer collateral damage for some time from fear.

 

Cheers!

[dealraker]

The comment that most entertained me was when Buffett referring to commercial real estate quoted someone from the past saying, "It is worth what someone will lend on it without the borrower putting his name on it (the loan)."  I couldn't help but think about my favorite punching bag Brookfield, how much more fragile their relayed story is than some believe.  

[gfp]

4 minutes ago, Parsad said:

On another note, there was a young 13 year old girl who asked a question about US debt and the U.S. dollar.  She was extremely poised and eloquent.  Maybe Berkshire should hire her or the FDIC should put her in charge of some banks! 

 

Always tough to know if the kids are just reading stuff their parents wrote, but he shut down her "de-dollarization"  question in about 2 seconds.  "I don't see an alternative reserve currency available."

 

I was happy to hear Warren clarify several times that it was the size of the fiscal deficits that were risking inflation and not anything from the Federal Reserve.  He was not concerned with the size of the Fed's balance sheet.  Also interesting that he has been tracking the number of hundred dollar bills in circulation.  He was like, "I wonder where they are" and I was hollering "Abroad!"  It would be interesting to know how much US currency is physically stored by drug cartels.

[dealraker]

2 minutes ago, Parsad said:

 

A couple of months ago, I sold out of BAC after holding it from 2009.  I just couldn't predict the different outlier events that could happen and who was holding what bag.  If BRK didn't originate that deal, I doubt Buffett would have held on to BAC...even as terrific a CEO Brian Moynihan is. 

 

The industry does well when things are good, but are probably the worst businesses to own when things turn bad.  With their leverage, and the stupid things bankers will do, they may actually be one of the riskiest areas to invest long-term, because they will get hit at some point from dumb behavior.  And even if you avoided the stupid behaviors of your peers, you will suffer collateral damage for some time from fear.

 

Cheers!

I sway back and forth on banking but it is meaningless now that I have about 1/10th of 1% there.  It was just such an easy cyclical growth sector to make money in for so many years...and I mean years, years, and more years.  It is like a sector that has changed so much that you can't even invest in a bank like East West without thinking you are the clueless idiot of the bunch.  

[Parsad]

5 hours ago, Ulti said:

https://www.berkshirehathaway.com/meet01/visguide2023.pdf

Didnt know I could shop from home all week...or am i misreading?

 

 

No, you can shop directly online or by phone.  I've been shopping there for years...mainly BRK memorabilia stuff.

 

Cheers!

[gfp]

I don't know if Charlie has told the story before or not, but it was great when he said he used to always fly coach to the Berkshire annual meeting each year and the plane from LA would be full of all these rich Berkshire shareholders headed to the meeting and they would all applaud and cheer when he took his seat in coach.  "I miss that." he said

 

Now he flys on net jets.  

 

I was also surprised how ruthless Buffett was on "Wheels Up," basically implying that people that gave them money for their jet cards ($1 Billion) would basically lose out (unsecured creditors in line at BK)...  He doesn't want to cause bank runs by naming any firm specifically but went straight for the jugular on Wheels Up.  I don't know anything about them but it sounded like a SPAC deal from context.

[adesigar]

Anyone know if the Buffett/Munger squishimallows are only for sale at the meeting or also available online?

[Parsad]

Their comments on Elon Musk were priceless and classic Buffett & Munger!  I couldn't stop laughing.  

 

"We don't want to compete with Elon!" - Buffett

 

"We don't want to go through so much failure!" - Munger

 

Cheers!

[Parsad]

Another gem from Munger when asked about practicing law.

 

"I don't think I have a lot of advice on how to succeed in law.  I have a son-in-law who works at a modern law practice at a big firm, he says "it's like a pie eating contest where the winner gets to eat more pie!"

 

"And I advise you to avoid that kind of a law firm.  Life is too short but to do nothing but eat pie!"

 

Cheers!

[Spekulatius]

I think his comment on Oxy and Chevron were interesting, he clearly likes that resources are mostly in the US, but he won’t buy them outright as @gfp noted.

 

He also applied the same logic to TSMC - he likes everything about them but their location, so he sold for that reason alone as he obviously changed his mind a out geopolitical risk

 

I also liked the answer about what commercial real estate is worth - the answer “ whatever I can borrow against without guaranteeing it personally” is quite revealing. What it means is that it is almost entirely depending on lending market, not stuff like replacement cost and maybe not even cash flow in many cases

[sleepydragon]

I thought what he said about TSMC was “because of a few reasons “ - it may not just be geopolitical. Might be inflation/capx, currency risk, and geopolitical 

 

also, it feels like to me  Buffett is going to buy more ATVI but he and Munger is not saying more.. Typtically M&A funds are forced to sell failed arb deals within a specified period( But I have no idea if they have sold or not yet). 
 

[Jaygo]

40 minutes ago, Spekulatius said:

I also liked the answer about what commercial real estate is worth - the answer “ whatever I can borrow against without guaranteeing it personally” is quite revealing. What it means is that it is almost entirely depending on lending market, not stuff like replacement cost and maybe not even cash flow in many cases

I think this goes for lot in our economy. Just look at heavy duty trucks. That’s not a $95,000.00 super duty. It’s only $1,200.00 a month. 
 

without borrowing our current economy would stop dead in a week. 

[backtothebeach]

1 hour ago, sleepydragon said:

also, it feels like to me  Buffett is going to buy more ATVI but he and Munger is not saying more..

Munger said to Buffett something like “you kissed that one goodbye beautifully”. Not sure if he meant ‘you got out of the position beautifully’ or ‘you evaded that question beautifully’.

[backtothebeach]

Wow CNBC posted the whole thing already. Good on them!

 

 

[yesman182]

9 hours ago, Parsad said:

I'm certain that Greg Abel is very capable, but after watching today's Q&A (morning session), I sure wish Ajit was 20 years younger. 

 

He would be exceptional and the perfect successor to Buffett...in intellect, skill, ethics, ability, leadership and doing these AGM's for the next 40 years!  Cheers!

That biggest problem with that wish is that Ajit doesn’t want that job. I hope he stay healthy and can work for another 20+ years. 

[gfp]

41 minutes ago, yesman182 said:

That biggest problem with that wish is that Ajit doesn’t want that job. I hope he stay healthy and can work for another 20+ years. 

yeah that is about the best part of it.  No castle drama, no power struggle - Ajit wants the job he has, which is one of extraordinary esteem in his industry.  I hope Ajit wants to work for us for decades more but it is a huge advantage that he does not want the job Greg is doing/will do. I will take lucky over good any day

[yesman182]

1 hour ago, backtothebeach said:

Munger said to Buffett something like “you kissed that one goodbye beautifully”. Not sure if he meant ‘you got out of the position beautifully’ or ‘you evaded that question beautifully’.

‘you evaded that question beautifully’. Is how I viewed it