Buffett/Berkshire - general news

[charlieruane]

On 5/1/2024 at 4:37 PM, ValueArb said:

 

These are very good points. Buffett sees exactly what they do and by all his public statements he's been very pleased with their contributions for a long time.

 

Further edified by WB's comments today re: sending Ted up to do a deal in Canada recently. Todd and Ted are keeping busy beyond their public equity duties. 

[gfp]

2 minutes ago, charlieruane said:

 

Further edified by WB's comments today re: sending Ted up to do a deal in Canada recently. Todd and Ted are keeping busy beyond their public equity duties. 

 

That deal he sent Ted to Canada for was quite a few years ago - Home Capital, 2017.

https://www.reuters.com/article/us-home-capital-berkshire-hatha-idUSKBN19D08X/

 

I believe the recent deal he is considering was mentioned as something he and Greg are looking at.  

[charlieruane]

3 minutes ago, gfp said:

 

That deal he sent Ted to Canada for was quite a few years ago - Home Capital, 2017.

https://www.reuters.com/article/us-home-capital-berkshire-hatha-idUSKBN19D08X/

 

I believe the recent deal he is considering was mentioned as something he and Greg are looking at.  

 

Ah, thanks!

[Jaygo]

Tourmaline would be great asset for them. Nat gas to run all those power plants. Mike would be a great fit in the culture imo 

 

could also be something like td, or a pipeline too. Maybe they buy tmx from the gov. 

[yesman182]

1 hour ago, Jaygo said:

Tourmaline would be great asset for them. Nat gas to run all those power plants. Mike would be a great fit in the culture imo 

 

could also be something like td, or a pipeline too. Maybe they buy tmx from the gov. 

I have been readying about Tourmaline all week. It’s a new name to me, but I agree Mike Rose would fit right in. I plan to start an investment idea on them next week. If buffet doesn’t want to buy OXY, I don’t know why they would want TOU. 

[DooDiligence]

On 5/3/2024 at 6:25 PM, KPO said:

One catalyst for a quasi-breakup may be centered around limiting liabilities.  Some of the subsidiaries, like BHE, aren’t wholly owned, so it would be unusual to go after a shareholder in a case like this. I’m not saying it can’t happen, because anything is possible, but modesty reducing ownership in subsidiaries like BNSF could be good financial and risk management in the future. 

 

Tracker(s)? or would that not be WEB's style. Do trackers separate liability from the parent?

[Spekulatius]

On 5/2/2024 at 9:09 AM, gfp said:

It's funny, with Fairfax, nobody points to the bond portfolio and panics over the idle cash.  They get busy calculating the spread between 95% combined ratio cost of capital and +4.5% investment yield.  At Berkshire it sits in 3 month and 6 month bills and it's some huge problem.  If Warren moved $150 billion to 3 and 5 year treasury notes would everybody stop worrying about the "cash problem" and call him a genius like Brian Bradstreet?  Can we just call most of Berkshire's cash the "bond portfolio" and be done with the 'big cash problem' talk?

 

It is a bigger problem at 2x book versus 1x book.

[KPO]

On 5/4/2024 at 11:27 PM, DooDiligence said:

 

Tracker(s)? or would that not be WEB's style. Do trackers separate liability from the parent?

Divesting minority positions with full voting rights and economic interest, similar to how they’ve acquired around 80% of a number of businesses in the past, but keep it around 80%. 

[changegonnacome]

So Berkshire is headed to $200bn cash........I know bears love to get Warren on their side......but for those that follow Berkshire's idle cash reserves over time relative to what Warren ordinarily likes to keep around for black swan insurance events.......is this cash position totally totally out of whack on a historical basis?

 

Obviously one should expect Berkshire to over time hold more cash as its investable universe shrinks and the opportunities to deploy cash at scale get smaller....so for sure there is an element here of the numbers getting bigger.

 

But for those who read the BRK tea leaves more than me....is cash on hand now relative to say total assets or book..or insurance liabilities.......really in some kind of 1999 outlier position?

 

TIKR hasn't got Q1 2024 in there yet....but here's the cash to BV chart back to 2003....I mean as the business gets bigger he holds more cash but on a relative basis its relatively inline with book value growth and certainly in line with the shrinking opportunity set that comes with the level of cash they need to deploy.

 

Edited May 6 by changegonnacome

[backtothebeach]

17 minutes ago, changegonnacome said:

But for those who read the BRK tea leaves more than me....is cash on hand now relative to say total assets or book..or insurance liabilities.......really in some kind of 1999 outlier position?

 

Not particularly large historically as a % of market cap.

 

Personally I think Warren wants to be ready for an elephant, maybe even has one in sight. The answer to the question why he sold some AAPL was obviously BS, rambling on for 5 minutes before coming up with a half-way coherent reason (tax rates possibly going higher).

[gfp]

1 hour ago, changegonnacome said:

.is cash on hand now relative to say total assets or book..or insurance liabilities.......really in some kind of 1999 outlier position?

 

No, cash equivalents + fixed income as a percent of all types of measures is totally in line with the post-General-Re era at Berkshire.  The company is just much much bigger and the fixed income portfolio is almost entirely less than 1 year in duration.  As many have pointed out, it won't be out of line or excessive at $200 Billion either.

[changegonnacome]

17 minutes ago, gfp said:

cash equivalents + fixed income as a percent of all types of measures is totally in line with the post-General-Re era at Berkshire.  The company is just much much bigger and the fixed income portfolio is almost entirely less than 1 year in duration.  As many have pointed out, it won't be out of line or excessive at $200 Billion either.

 

Yep thats what i taught thanks - absolute numbers are at a record, relative numbers not so much....

[gfp]

Just imagine the flak they are going to give poor Greg when he holds $400 Billion in t-bills some day.

[KPO]

3 hours ago, backtothebeach said:

 

Not particularly large historically as a % of market cap.

 

Personally I think Warren wants to be ready for an elephant, maybe even has one in sight. The answer to the question why he sold some AAPL was obviously BS, rambling on for 5 minutes before coming up with a half-way coherent reason (tax rates possibly going higher).

He rambled, but it was tax rate arbitrage. Also, you have to wonder if he isn’t trying to give Greg optionality with the larger cash position and a less ridiculously sized single equity position. 

[Eldad]

33 minutes ago, KPO said:

He rambled, but it was tax rate arbitrage. Also, you have to wonder if he isn’t trying to give Greg optionality with the larger cash position and a less ridiculously sized single equity position. 

Charlie gave him crap for the tiny AAPL sell a few years back. WEB replied it would likely be a mistake. Then this. 

Edited May 7 by Eldad

[Xerxes]

It is incredible.

 

Buffett presented the now infamous slide in 2020’ AGM, where he showed the world biggest Japanese companies in late 1980s, and contrasted that to the FANG era, yet he kept and let Apple run for 4 more years and just now he started his “trim” for tax reasons. 
 

Berkshire is happy to pay tax, but Buffett is also very happy to arbitrage against potential corporate tax increases and offset with Paramount tax losses. 

[gfp]

In case anybody wants more detail on these two subsidiaries, they also file with the SEC.

 

BNSF 10Q -

https://www.sec.gov/ix?doc=/Archives/edgar/data/934612/000093461224000009/bni-20240331.htm

 

BHE 10Q -

https://www.sec.gov/ix?doc=/Archives/edgar/data/0001081316/000108131624000010/bhe-20240331.htm

[Eldad]

12 hours ago, Xerxes said:

It is incredible.

 

Buffett presented the now infamous slide in 2020’ AGM, where he showed the world biggest Japanese companies in late 1980s, and contrasted that to the FANG era, yet he kept and let Apple run for 4 more years and just now he started his “trim” for tax reasons. 
 

Berkshire is happy to pay tax, but Buffett is also very happy to arbitrage against potential corporate tax increases and offset with Paramount tax losses. 

Just hold the dang stock as Charlie would tell him. He is too active. You think he would be selling 13% for 27x if Apple was wholly owned? Follow your own wisdom dude, be consistent. 

[Whensthepaintdry?]

He also sold Costco in the 300s I think. I would love to hear Munger’s reaction to that. 

[Hektor]

https://finance.yahoo.com/m/6f63c4a9-f79e-398b-abbd-30450d38d1df/this-day-in-markets-history-.html

 

This Day in Markets History: Warren Buffett Takes Control of Berkshire Hathaway

 

On May 10, 1965, In a boardroom on Cove St. in New Bedford, Mass., a young, crew-cut Warren Buffett took control of a decrepit textile maker. Stock in Berkshire Hathaway closed that day at $18 a share. Nowadays, the company's class A stock trades above $600,000 a share.

[gfp]

6 minutes ago, Hektor said:

https://finance.yahoo.com/m/6f63c4a9-f79e-398b-abbd-30450d38d1df/this-day-in-markets-history-.html

 

This Day in Markets History: Warren Buffett Takes Control of Berkshire Hathaway

 

On May 10, 1965, In a boardroom on Cove St. in New Bedford, Mass., a young, crew-cut Warren Buffett took control of a decrepit textile maker. Stock in Berkshire Hathaway closed that day at $18 a share. Nowadays, the company's class A stock trades above $600,000 a share.

The dog that caught the bus.  At least it came with a snazzy name.

[John Hjorth]

24 minutes ago, gfp said:

The dog that caught the bus.  At least it came with a snazzy name.

 

Actually a totally wild story, almost beyond imagination. After an endless amount work and transactions during now 59 years, this piece of crap is by now rank #8 on the list of world's most valuable companies.

 

Somehow I always end up  thinking in visualizations about this dog comes to think Garfield The Cat's doggo friend Odie chasing cars, remembering a cartoon, where Odie actually catches the rear bumper on a car, stopping, and thinking "What to do now? [Odie at the end of the carton seen siting on his butt in a thoughtfull moment, - the bumper in his mouth looking like some kind of oversize moustache beard, thinking : "Should this be fun?" - The answer is "Yes".

[Hektor]

https://www.wsj.com/finance/stocks/is-roaring-kitty-the-internets-warren-buffett-b31d63bc

 

Is Roaring Kitty the Internet’s Warren Buffett?

 

"Perhaps Roaring Kitty is now part of a select cadre of elite active investors so highly regarded that whatever targets they choose tend to trade at higher valuations. This is sometimes known as the “Einhorn effect”: Whenever Greenlight Capital founder David Einhorn bet for or against a stock, his views had a persistent impact on its price. The legendary Warren Buffett appears to have a similar influence. "

 

"Roaring Kitty has been posting a barrage of memes and clips from movies, including one featuring Marvel supervillain Thanos. With the amateur trading subculture as strong as ever, these cryptic messages may well play the role of the letters that Buffett sends annually to the shareholders of Berkshire Hathaway, which are analyzed and parsed for every bit of investment wisdom. "

 

[DooDiligence]

4 minutes ago, Hektor said:

https://www.wsj.com/finance/stocks/is-roaring-kitty-the-internets-warren-buffett-b31d63bc

 

Is Roaring Kitty the Internet’s Warren Buffett?

 

"Perhaps Roaring Kitty is now part of a select cadre of elite active investors so highly regarded that whatever targets they choose tend to trade at higher valuations. This is sometimes known as the “Einhorn effect”: Whenever Greenlight Capital founder David Einhorn bet for or against a stock, his views had a persistent impact on its price. The legendary Warren Buffett appears to have a similar influence. "

 

"Roaring Kitty has been posting a barrage of memes and clips from movies, including one featuring Marvel supervillain Thanos. With the amateur trading subculture as strong as ever, these cryptic messages may well play the role of the letters that Buffett sends annually to the shareholders of Berkshire Hathaway, which are analyzed and parsed for every bit of investment wisdom. "

 

ng

 

I got lucky going long GMCR when Einhorn was short. Made a killing when KO invested (seemed like an idiotic move for them).