Buffett/Berkshire - general news

[Xerxes]

https://podcasts.apple.com/ca/podcast/acquired/id1050462261?i=1000633030747
 

 

[Malmqky]

30 minutes ago, Xerxes said:

https://podcasts.apple.com/ca/podcast/acquired/id1050462261?i=1000633030747
 

 

No way! Excited to listen to this.

[Monsieur_dee]

So this is the podcast he was talking about being on at the AGM 

[UK]

1 hour ago, Xerxes said:

https://podcasts.apple.com/ca/podcast/acquired/id1050462261?i=1000633030747
 

 

 

Thanks!

[UK]

Does anybody know if there is transcript of this interview available? Tried to search and did not find find any, yet this is whar google shows on it's search page: 

Edited October 31, 2023 by UK

[gfp]

2 hours ago, UK said:

Does anybody know if there is transcript of this interview available? Tried to search and did not find find any, yet this is whar google shows on it's search page: 

It is worth listening to if you skip the long Tiny ad at the beginning- it is a rare well edited audio feed of Charlie. But if you need to read it, this is what I found -

https://app.podscribe.ai/episode/89341322

[UK]

7 minutes ago, gfp said:

It is worth listening to if you skip the long Tiny ad at the beginning- it is a rare well edited audio feed of Charlie. But if you need to read it, this is what I found -

https://app.podscribe.ai/episode/89341322

 

Thank you very much! I listened to it, very good interview with some really interesting tidbits, just wanted to check some places on transcript to be sure I understand them correctly:)

 

 

[gfp]

Berkshire Hathaway Energy has continued to sell some BYD shares in Hong Kong.  We know now that these sales have been used to purchase a $3.3 Billion interest in the Cove Point LNG business.

 

Since June 19th (the last update), they have sold an additional ~$335 million worth of BYD shares (an estimate based on average prices).  The media will of course misreport the sale as only 820,500 shares when the report is actually showing the sale of 10.99 million shares.

 

https://di.hkex.com.hk/di/NSAllFormList.aspx?sa2=an&sid=2508&corpn=BYD+Co.+Ltd.++-+H+Shares&sd=31/10/2022&ed=31/10/2023&cid=2&sa1=cl&scsd=31%2f10%2f2022&sced=31%2f10%2f2023&sc=1211&src=MAIN&lang=EN&g_lang=en&

[backtothebeach]

On 10/30/2023 at 2:22 AM, Xerxes said:

https://podcasts.apple.com/ca/podcast/acquired/id1050462261?i=1000633030747
 

 

Some takeaways:
 

*Warren doesn’t like retail.

*Munger doesn’t even look at the auto industry for investment, BYD was an exception.

*Still believes in China, sees having roughly 18% of the Munger portfolio at risk in China as justified.
 

About predicting the future of companies: “You can’t confidentally say what is going to happen. Cause you may get some guy like Iger in, who just wants to push everything …”

“Warren still cares more about the safety of his Berkshire shareholders, than he cares about anything else.”

Q: Charlie, you turn 100 … on January 1st of next year. Do you have any plans?
Charlie: “I’m gonna party!”

[Luca]

9 minutes ago, backtothebeach said:

Some takeaways:
 

*Warren doesn’t like retail.

*Munger doesn’t even look at the auto industry for investment, BYD was an exception.

*Still believes in China, sees having roughly 18% of the Munger portfolio at risk in China as justified.
 

About predicting the future of companies: “You can’t confidentally say what is going to happen. Cause you may get some guy like Iger in, who just wants to push everything …”

“Warren still cares more about the safety of his Berkshire shareholders, than he cares about anything else.”

Q: Charlie, you turn 100 … on January 1st of next year. Do you have any plans?
Charlie: “I’m gonna party!”

This is highly interesting: 

 

Well, my position in China has been, the Chinese economy has better future prospects for the next 20 years than almost any other big economy. That's number one. Number two, the leading companies of China are stronger and better than practically any other leading companies anywhere. And they're available a much cheaper price. So naturally I'm willing to have some China risk in the Munger portfolio. How much China risk, well that's not a scientific subject, but I don't mind whatever it is, 18% or something, whatever. Whatever's worked out in the Munger family, it's okay with me.

[UK]

14 minutes ago, backtothebeach said:

About predicting the future of companies: “You can’t confidentally say what is going to happen. Cause you may get some guy like Iger in, who just wants to push everything …”

 

 

This was the line I wanted to doublecheck:)

 

Also: "Well, I've never liked Jum Malone's extreme manipulations. I don't wanna be known as the great manipulator like Jum Malone is. He paid less income taxes than anybody. He just pushed everything to the dry extreme." 

 

Somebody should ask Charlie what he thinks about Brookfield, since it is in a competition with Berkshire and Fairfax in other thread of this forum.

 

Edited October 31, 2023 by UK

[CorpRaider]

"Man is a natural trend follower."

[schin]

On 10/31/2023 at 1:50 PM, UK said:

 

This was the line I wanted to doublecheck:)

 

Also: "Well, I've never liked Jum Malone's extreme manipulations. I don't wanna be known as the great manipulator like Jum Malone is. He paid less income taxes than anybody. He just pushed everything to the dry extreme." 

 

Somebody should ask Charlie what he thinks about Brookfield, since it is in a competition with Berkshire and Fairfax in other thread of this forum.

 

 

@uk - I think he was talking about John Malone.

[UK]

https://www.wsj.com/finance/investing/charlie-munger-will-take-your-questions-now-3e842ab7

[Spooky]

43 minutes ago, UK said:

https://www.wsj.com/finance/investing/charlie-munger-will-take-your-questions-now-3e842ab7

 

Seems like a short transcript with not too much new in there. Hopefully they release the full thing.

[gfp]

Here is one more soundbite from the WSJ interview with Charlie, Re: Apple

 

Charlie Munger isn't too worried about Apple's valuation.

During a recent conversation with the Berkshire Hathaway vice chairman, I asked if he thought the tech giant's shares have gotten expensive to continue being a major Berkshire holding.

Apple is trading at about 26.7 times its projected earnings over the next 12 months, compared with a 10-year average of 18.5, according to FactSet.

“I don’t think we’ve got any rules about what we do at Berkshire. If it makes sense at the time in a rough kind of way, we do it. And that’s our system,” Munger responded. “I would argue that Berkshire would have less advantageous future prospects if we didn’t have our Apple.”

[MCR]

Wondering about the potential impact of the $1.8B - $5B ruling this week against HomeServices (and National Association of Realtors & Keller Williams) on BRK?

 

https://www.nytimes.com/2023/10/31/realestate/nar-antitrust-lawsuit.html?unlocked_article_code=1.7Ew.a41H.EF4-FdX6QOld&smid=url-share

 

Bonus: on Bogleheads found a link to this interesting blogpost about the prospects for appeal of the verdict:  https://notoriousrob.substack.com/p/thinking-about-nars-appeal

[yesman182]

Seems to me that this will hurt small firms a lot more than large firms. When I saw this ruling come out I thought Redfin and Zillow would pop, since they already offer commissions less than 6%. I know I was sure happy with the verdict. I hope we can find a way to have sellers pay less than 6% to sell a house. 

[Spekulatius]

On 11/3/2023 at 4:11 PM, yesman182 said:

Seems to me that this will hurt small firms a lot more than large firms. When I saw this ruling come out I thought Redfin and Zillow would pop, since they already offer commissions less than 6%. I know I was sure happy with the verdict. I hope we can find a way to have sellers pay less than 6% to sell a house. 

Like negotiate with the realtor. Not too hard to pay 5% and less.

Edited November 4, 2023 by Spekulatius

[yesman182]

3 minutes ago, Spekulatius said:

Like negotiate with the realtor. Not too hard to pay 5% and less.

5% on a $1,000,000 house yes,2% no. Seems like other parts of the world are closer to 2% than 5%. 

[John Hjorth]

Attached is the Pilot complaint, ref. the discussion above.

Pilot Corporation v. Greg Abel, Kevin Clayton, Marc Hamburg, Mark Hewett, Scott Thon, Berkshire Hathaway, Inc., National Indemnity Company, and Pilot Travel Centers, LLC, 2023-1068, No. 92889746 (Del..pdf

[gfp]

Thanks John.  It really doesn't sound like the Haslams are way out of line here, so I wonder what the real story from Berkshire's side is.  I assume this will just get negotiated between the parties before too long and we won't hear much more about it.

 

It is interesting that 10x pre-tax earnings seems to be a Buffett sweet spot for buying private companies.  No wonder they haven't made very many deals lately

[John Hjorth]

I personally think like you, @gfp,

 

I have been back reading the original press release of October 3^rd 2017  [ Link ] on the Berkshire website, and I have been wondering if there is any SEC filing related to these three transactions over time, now that Pilot Flying J was privately held [not listed] in the first place? It isen't even in the press release from back then mentioned that NICO is the acquirer.

 

Mr. Buffett isen't exactly a newbie and nowice into such matters, and he is backed by Mr. Hamburg as the inhouse undisputed expert in this stuff. So let's just say I feel confused. 

 

- - - o 0 o - - -

 

Edit : No filing there on SEC, as I see things. [Disclaimer : I'm a complete incapable idiot navigating SEC filings.]

Edited November 5, 2023 by John Hjorth

[gfp]

There isn't any problem with Berkshire's method of accounting, which Berkshire uses on their other acquisitions and understates profitability in a way that is consistent with Berkshire's conservative accounting style and rejection of earnings "optics." 

 

There is no reason Pilot can't keep two sets of books, or simply adjust the Berkshire-kept figures for the excess depreciation and amortization and include derivative hedging gain/loss.  Companies do this all the time.  Hell, a lot of companies keep three sets of parallel books.  That's why I think they will just negotiate an adjustment to the computation of earnings before taxes and settle the matter.  Since it impacts Berkshire's reputation as an acquirer that "does right by their seller partners," I feel like there is more to the story when you consider the other changes Pilot and Berkshire made.  Pilot brought in a commodity trader CEO and started trading a lot more around energy commodities (a business Berkshire exited), Berkshire fired that CEO and the CFO immediately after assuming control, Berkshire exited the more trading-related businesses and focused back on the plain vanilla lines of business Pilot was in at the time of the original deal. 

[Cigarbutt]

22 minutes ago, gfp said:

...there is more to the story...

Clearly.

This open confrontation is unusual.

From a recent CPAJ piece:

"If an acquiree does not adopt pushdown accounting in a change-in-control event, it can elect to apply it in a subsequent period, subject to the requirements for a change in accounting principle. An entity may make a change in accounting principle only if it justifies that the alternative accounting principle is preferable. GAAP requires that companies apply the change in accounting principle retrospectively to the change-in-control event date (ASC 250-10-45-2)."

It looks like BRK 'found' evidence that some kind of material impairment was present AND had been present at least since the time of change of control.

It looks like this goes further than simply an intent to question an 'accounting' principle.

 

Edited November 5, 2023 by Cigarbutt
spelling