Buffett/Berkshire - general news

[John Hjorth]

Astrid looks great on the photo.

[NoCalledStrikes]

4 hours ago, John Hjorth said:

Astrid looks great on the photo.

Well she’s about 15 years younger than Warren and it’s a near certainty that her diet is better than his.

[gfp]

Buffett still buying OXY (but not today, highest price paid 59.50 this week) - another $700m

https://www.sec.gov/Archives/edgar/data/315090/000089924322025723/xslF345X03/doc4.xml

 

Ron Olson buying Berkshire

https://www.sec.gov/Archives/edgar/data/1067983/000120919122041510/xslF345X03/doc4.xml

 

 

Edited July 7, 2022 by gfp

[nwoodman]

Ron Olson, Director, bought 2,410 B Shares worth $661.18K.  Average price $274.35

 

SEC FORM 4

[ValueMaven]

Looks like Berkshire might have sold out of BYD.  A block trade occured that was the exact size of Berkshires stake.  

 

https://www.ft.com/content/23a53509-d732-41ce-aa40-87c7a9de8f31

[kh812000]

1 hour ago, ValueMaven said:

Looks like Berkshire might have sold out of BYD.  A block trade occured that was the exact size of Berkshires stake.  

 

https://www.ft.com/content/23a53509-d732-41ce-aa40-87c7a9de8f31

Good time to buy some BYD.

[ValueMaven]

There is a 1.7% deal spread into the Y transaction currently.  Assuming a tax-free account, you are looking at ~3.4% annualized return on a deal that will likely close in the next few months (Berkshire says 4Q)...worth keeping an eye on.

Edited July 13, 2022 by ValueMaven

[gfp]

Pilot got someone else to pay for the EV fast chargers - sounds smart

 

https://www.cnbc.com/2022/07/14/gm-evgo-and-pilot-company-to-build-network-of-us-highway-ev-chargers.html

[Monsieur_dee]

On 7/13/2022 at 3:32 PM, ValueMaven said:

 

Weird it traded over its buyout price when the deal was announced. 

[ValueMaven]

New: https://assets.empirefinancialresearch.com/uploads/2022/07/Berkshire-Hathaway-analysis-Whitney-Tilson-7-7-22.pdf

 

The most interesting slide to me is slide 10 .. this is also one of the widest gaps to IV in sometime according to Tilson

[yesman182]

8 hours ago, ValueMaven said:

New: https://assets.empirefinancialresearch.com/uploads/2022/07/Berkshire-Hathaway-analysis-Whitney-Tilson-7-7-22.pdf

 

The most interesting slide to me is slide 10 .. this is also one of the widest gaps to IV in sometime according to Tilson

Thanks for posting! I liked slide 21. I think those are very reasonable assumptions. Obviously a lot can change with the equity portfolio, but it doesn't seem unreasonable. 

[yesman182]

On 6/16/2022 at 1:29 PM, aws said:

 

This goes back a ways but some may find it interesting. I think I solved the mystery of the A share buyer today. The answer is that fractional share purchases hit the tape as a whole share. So if someone buys $20 worth of fractional A shares (1/20000th of a share) it still hits the tape as a full share purchase.

 

See this explanation on FINRA's website:

 

Share Quantity

Q101.14: How should a trade for a fractional number of shares, for example, 100.5 shares, be reported?

A101.14: When reporting a trade for a fractional number of shares, firms should delete the fraction and report the whole number, except if the whole number would be 0 (zero). If the whole number would be 0, firms should round up to 1. Thus, for example, for a trade of 100.5 shares, the reported quantity would be 100. Trade reports with a share quantity containing a decimal or a fraction will be rejected. (See also, e.g., OATS FAQ T69.)

Q101.15: Must trades for less than one share be reported?

A101.15: Yes. As noted in FAQ 101.14, where a trade is executed for less than one share, e.g., 1/3 share, firms should round up and report a share quantity of 1.

 

 

I tested this, and I bought about $20 worth of A shares on Robinhood and repeated it as quickly as I could, getting about 20 such orders in. I then checked the tape and each one of these came across as a full share order. So really, there likely has been no increase in the volume of A share traded, but rather it just reflects brokers beginning to offer fractional share purchases.

 

 

WSJ is confirming what you said about the fractional trading. 

https://www.wsj.com/articles/robinhood-was-behind-phantom-surge-in-berkshire-hathaway-trade-volume-study-finds-11658309401?st=fi9k1yuirb7adhg&reflink=desktopwebshare_permalink

 

[ValueMaven]

AXP - massive quarter.  By my estimates Berkshire is now a ~20% equity holder.  

[newtovalue]

Question - now that BRK owns more than 20% of AXP - does it change the reporting to Equity Method? If that is the case - should we see a boost in operating earnings as BRK can now recognize 20% of AXPs earnings.

I understand this doesn't change anything economically - more just curious about the mechanics.

 

ty!

[Ulti]

https://bisoninterests.com/content/f/buffett-buys-oil-gas-stocks  Dont know if this has already been posted but a good historical read.

[jbwent63]

2 hours ago, newtovalue said:

Question - now that BRK owns more than 20% of AXP - does it change the reporting to Equity Method? If that is the case - should we see a boost in operating earnings as BRK can now recognize 20% of AXPs earnings.

I understand this doesn't change anything economically - more just curious about the mechanics.

 

ty!

My understanding is that the 20% threshold is just a guideline at which one would consider equity accounting. Given the size of AXP, and BRK's lack of influence over it (not involved in day-to-day decisions, board members etc.) I would not think that the equity method would apply at this level of ownership.

[gfp]

57 minutes ago, jbwent63 said:

My understanding is that the 20% threshold is just a guideline at which one would consider equity accounting. Given the size of AXP, and BRK's lack of influence over it (not involved in day-to-day decisions, board members etc.) I would not think that the equity method would apply at this level of ownership.

 

That's correct - Berkshire has a bunch of specific agreements in writing with both AXP and the Federal Reserve that would almost certainly exempt them from required equity method accounting.  This letter from 2019 references the many agreements that are in place and their periodic amendments, for example:

 

https://www.sec.gov/Archives/edgar/data/4962/000000496919000036/exhibit_101.htm

[newtovalue]

Great ! Thank you for the info 

[Ulti]

https://africa.businessinsider.com/markets/warren-buffetts-berkshire-hathaway-has-piled-about-dollar27-billion-into-chevron-and/8thjqvq

[ValueMaven]

Greg Warren of Morningstar (one of my favorite Berkshire analysts) is out with some new commentary from a few days ago.  Worth hunting down!

[DooDiligence]

Small but, damn!

 

Justice Department and Consumer Financial Protection Bureau Secure Agreement with Trident Mortgage Company to Resolve Lending Discrimination Claims

 

Mortgage company owned by Warren Buffett fined for race discrimination against homebuyers

 

---

 

They're no longer taking mortgage applications.

Does WEB suffocate this business under a pillow?

 

https://tridentmortgage.com

[gfp]

That business was part of Fox & Roach, a realtor that HomeServices acquired.  Not even sure if HomeServices of America owned Fox & Roach when the alleged redlining took place. (edit: HomeServices bought the company in 2013, the investigation covered the period 2015-2019)

Edited July 27, 2022 by gfp

[ValueMaven]

A representative from Trident’s parent company, a Berkshire Hathaway affiliate, said in a statement that the resolution included no finding of wrongdoing and that Trident “strongly disagree[s] with the agencies’ interpretation of Trident’s prior lending practices.”

“Trident and any affiliated companies have never denied or discouraged access to mortgage loans or other services based on race,” according to the statement.

[longterminvestor]

BRK.A - Berkshire Hathaway Inc Class A Stock Analysis & Rating - NYSE _ Morningstar.pdfMorningstar commentary.  Gregg needs to update his picture.   

Edited July 27, 2022 by longterminvestor
comment

[yesman182]

11 hours ago, ValueMaven said:

Greg Warren of Morningstar (one of my favorite Berkshire analysts) is out with some new commentary from a few days ago.  Worth hunting down!

Curious if you agree with Greg's assessment that "We think Berkshire Hathaway Energy overall is endowed with a narrow economic moat."

 

I don't know much about regulated utilities, but I find it hard to believe someone is going to come into Iowa and compete with Mid America on price, relationship with the community/regulators or by being more environmentally friendly. Seems like the story is similar out west. 

 

I have a hard time following Greg's logic that BNSF is wide moat and the utility is narrow moat. Id be curious to hear how others feel.