Buffett/Berkshire - general news

[xo 1]

16 hours ago, cubsfan said:

^^^ There ya' go. I think the point is, Charlie has studied the decline in different oil fields, drilling technology, etc - has plenty of engineering friends and oil contacts. He knows a lot more than people think. Then Warren differs to Charlie on oil - probably tells you a lot. Charlie loves OXY plenty.

Right.  I don't have the source to hand, but I recall Charlie discussing how good a business big oil would be if the big oil companies would just stop with the money-destroying exploration.  I have in mind that is the appeal of OXY: CEO Holub just turns on the cash spigot.  (I haven't reconciled the Permian Basin play with that view though, as even the discussion at the annual meeting made it sound as if shale is an always-explore venture, as contrasted with Charlie's 50-year-plus monthly royalty check.)

[Spooky]

31 minutes ago, xo 1 said:

Right.  I don't have the source to hand, but I recall Charlie discussing how good a business big oil would be if the big oil companies would just stop with the money-destroying exploration.  I have in mind that is the appeal of OXY: CEO Holub just turns on the cash spigot.  (I haven't reconciled the Permian Basin play with that view though, as even the discussion at the annual meeting made it sound as if shale is an always-explore venture, as contrasted with Charlie's 50-year-plus monthly royalty check.)

 

Charlie keeps mentioning he would prefer if American oil companies stopped pumping oil entirely since hydrocarbons have other important uses and there is a limited supply. He mentioned this again at the AGM. I can't help but feel like this is part of the thesis that people are overlooking since it appears that there is still significant oil reserves under the Permian that are currently not easily accessible with current drilling technologies.

 

[cubsfan]

^^^ Well , you hit the nail on the head. This is a long duration asset for him.

[NnnnotSoSmart]

59 minutes ago, Spooky said:

 

Charlie keeps mentioning he would prefer if American oil companies stopped pumping oil entirely since hydrocarbons have other important uses and there is a limited supply. He mentioned this again at the AGM. I can't help but feel like this is part of the thesis that people are overlooking since it appears that there is still significant oil reserves under the Permian that are currently not easily accessible with current drilling technologies.

 

Yes..OXY and Chevron have rights to large portions of this "technically recoverable" oil and gas.  

 

U.S. Geological Survey assessed undiscovered, technically recoverable continuous mean resources:

 

Permian (Delaware and Midland Basins): 70.5 Billion barrels of oil and 300 Trillion cubic feet of gas.

46.3 billion barrels of oil and 281 trillion cubic feet of gas in the Wolfcamp shale and Bone Spring Formation of the Delaware Basin in the Permian Basin Province, southeast New Mexico and west Texas.
https://pubs.usgs.gov/fs/2018/3073/fs20183073.pdf

20 billion barrels of oil and 16 trillion cubic feet of gas in the Wolfcamp shale in the Midland Basin part of the Permian Basin Province, Texas.
https://pubs.usgs.gov/fs/2016/3092/fs20163092.pdf

4.2 billion barrels of oil and 3.1 trillion cubic feet of gas in the Spraberry Formation of the Midland Basin, Permian Basin Province, Texas.
https://pubs.usgs.gov/fs/2017/3029/fs2017173029 .pdf

 

CHARLIE MUNGER: And there’s a lot more oil down there, if anybody can figure out another magic trick. That’s all we need is another magic trick.

 

That "magic trick" could likely be enhanced oil recovery (EOR) for the shales using CO2 injection.  

[Spekulatius]

Or imagine the rest of the world is starting to drill for shale oil and gas. It's not like the US is the only country in the world with shale reservoirs. So far it has been only the US and Argentina recently but there are shale oil and gas reservoirs all over the in the world.  I would be that there are a bunch of permian quality reservoirs out there like the Beetaloo reservoir in Australia.

https://www.industry.gov.au/publications/beetaloo-strategic-basin-plan/beetaloo-strategic-basin-plan

[NnnnotSoSmart]

2 hours ago, Spekulatius said:

Or imagine the rest of the world is starting to drill for shale oil and gas. It's not like the US is the only country in the world with shale reservoirs. So far it has been only the US and Argentina recently but there are shale oil and gas reservoirs all over the in the world.  I would be that there are a bunch of permian quality reservoirs out there like the Beetaloo reservoir in Australia.

https://www.industry.gov.au/publications/beetaloo-strategic-basin-plan/beetaloo-strategic-basin-plan

No need to imagine. The ROW has been drilling for shale oil and gas around the world.  So far, no other Permian Basins have been found. But they'll keep trying.

 

Oil and gas exploration, including horizontal drilling, has been going on in the Beetaloo Basin since the 1980's.  So far, not much to show for it. A few minor puffs of gas:

https://www.hydrocarbons-technology.com/projects/beetaloo-gas-field-northern-territory-australia/

 

I see that the Australian Government has only recently approved hydraulic fracturing in the Beetaloo.  We'll see how it works out, if and when the environmentalists allow it.

https://www.theguardian.com/australia-news/2023/apr/19/beetaloo-basin-inquiry-calls-for-national-plan-to-offset-vast-emissions-expected-from-gas-projects

 

The Beetaloo Basin hydrocarbon resource is tiny compared to the Permian.  Using the same methodology posted for the Permian Basin above, the USGS estimates the Beetaloo has technically recoverable mean resources of 429 million barrels of continuous oil and 8 trillion cubic feet of continuous gas.

https://pubs.usgs.gov/fs/2019/3013/fs20193013.pdf

 

The Permian has 175 times the recoverable oil and 38 times the recoverable gas. Since the Permian basin sits under mostly fee (private) lands, the environmentalists hold little sway over oil and gas operations.

 

Operating on private land provides a "moat" to Permian operators, protecting them from irrational environmentalists and Federal bureaucrats. One of the many reasons Warren and Charlie like it so much. 

Edited May 10, 2023 by NnnnotSoSmart

[NnnnotSoSmart]

On 5/9/2023 at 1:12 PM, Spekulatius said:

Oil / energy has been a trade for Buffett. Why should this one be any different...

Cuz Charlie said recently: 

 

 "I think having a big position in the Permian Basin through those 2 companies, it’s likely to be a pretty good long-term hold."

 

https://steadycompounding.com/investing/djco23/

 

But wait...Buffett just sold some Chevron in Q1.  Well, at least Charlie and Buffett's sister kept their royalty interests for a long time.

 

Edited May 10, 2023 by NnnnotSoSmart

[John Hjorth]

Youtube [May 5 2023] : Gabelli Interview Panel Adam Mead, Chris Bloomstran & Todd Finkle about Berkshire .

 

For those who may not know, Adam is a CoBF member, username @TREVNI . Enjoy.

[Saluki]

On 5/10/2023 at 9:38 AM, Spooky said:

 

Charlie keeps mentioning he would prefer if American oil companies stopped pumping oil entirely since hydrocarbons have other important uses and there is a limited supply. He mentioned this again at the AGM. I can't help but feel like this is part of the thesis that people are overlooking since it appears that there is still significant oil reserves under the Permian that are currently not easily accessible with current drilling technologies.

 

 

I used to own shares of a land based oil rig driller called Patterson UTI, and the former CEO/founder was a thousand years old and very sharp.  Reminded me of Munger.  He said that the problem with the oil industry (the E&P guys) is that they like to drill holes more than they like making money, and that if you give them a dollar, they will drill you a hole, you give them another dollar and they drill you another hole, and that you run out dollars before they every tell you that it's a bad idea to drill another hole. 

[John Hjorth]

3 minutes ago, Saluki said:

 

I used to own shares of a land based oil rig driller called Patterson UTI, and the former CEO/founder was a thousand years old and very sharp.  Reminded me of Munger.  He said that the problem with the oil industry (the E&P guys) is that they like to drill holes more than they like making money, and that if you give them a dollar, they will drill you a hole, you give them another dollar and they drill you another hole, and that you run out dollars before they every tell you that it's a bad idea to drill another hole. 

 

What a weird kind of libido.

[Parsad]

https://finance.yahoo.com/news/charlie-munger-pockets-70-000-185148690.html

 

Cheers!

[MMM20]

The Real Story of Buffett, Berkshire, and Tobacco https://invariant.substack.com/p/buffett-berkshire-tobacco

[rkbabang]

1 hour ago, MMM20 said:

The Real Story of Buffett, Berkshire, and Tobacco https://invariant.substack.com/p/buffett-berkshire-tobacco

I think the press is going to start trying to change the narrative on Buffett and turn him into some kind of villain because he never completely towed the ESG line and more importantly he’s rich so obviously he’s evil and did bad things. You watch, mark my words 10 years after he’s gone he will not be looked on with respect by the next generation. No industry leader will dare not do what their expected of ESG wise if even Buffett can be turned into a villain.

 

A good book on ESG that I’m currently reading is “Capitalist Punishment”. I highly recommend it.

 

Capitalist Punishment: How Wall Street Is Using Your Money to Create a Country You Didn't Vote For https://a.co/d/hgiy09W

[MMM20]

7 hours ago, rkbabang said:

I think the press is going to start trying to change the narrative on Buffett and turn him into some kind of villain because he never completely towed the ESG line and more importantly he’s rich so obviously he’s evil and did bad things. You watch, mark my words 10 years after he’s gone he will not be looked on with respect by the next generation. No industry leader will dare not do what their expected of ESG wise if even Buffett can be turned into a villain.

 

A good book on ESG that I’m currently reading is “Capitalist Punishment”. I highly recommend it.

 

Capitalist Punishment: How Wall Street Is Using Your Money to Create a Country You Didn't Vote For https://a.co/d/hgiy09W

The part I always refer back to is below. I think their sort of business ethics will prove enduring and the top down bureaucratic version en vogue these days will fade away. The sociopathic and psychopathic CEO types *should* be called out and shunned - maybe that’s the bright side of all this - but Berkshire should indeed be viewed as a national asset, and it will be by enough of us. Maybe that’s wishful thinking.

 

Buffett:

So the fact that we’ve not been significant holders of tobacco stocks has not been because they’ve been on a boycotted list with us. It just means that overall we were uncomfortable enough about their prospects over time that we did not feel like making a big commitment in them.

Charlie Munger:

Yeah. I think each company, each individual, has to draw its own ethical and moral lines, and personally, I like the messy complexity of having to do that. It makes life interesting.

Warren Buffett:

I hadn’t heard that before. (Laughing)

We’ll make him in charge of this decision.

Charlie Munger:

Yeah, no, no. But I don’t think we can justify our call, particularly. We have to draw the line somewhere between what we’re willing to do and what we’re not, and we draw it by our own lights.

Edited May 14, 2023 by MMM20

[DooDiligence]

I've seen a couple of meme's on reddit where WEB gets lumped in with the likes of musk and other odious characters. Also got into an argument a while back over the lack of philanthropy among the uber wealthy and when I linked to Buffett's history of giving I got downvoted into oblivion. A lot of people are having a hard time sifting through bullshit to see truth. This has always been a difficult task but I think it's exponentially more difficult in the era of viral hot takes and mis/disinformation.

[sleepydragon]

It has been a long time since then that Buffett have found something that is more addictive (and growing too) than tobacco, and it is iphone.

 

[MMM20]

The ethics stuff reminded me of one of my favorite business books: 

 

The Billionaire Who Wasn't: How Chuck Feeney Secretly Made and Gave Away a Fortune https://www.amazon.com/Billionaire-Who-Wasnt-Secretly-Fortune/dp/1610393341

 

“If you have the right heroes in life, you’re 90% of the way home. Chuck Feeney is a good hero to have.” - Buffett

 

Edited May 15, 2023 by MMM20

[treasurehunt]

The 13F-HR for Q1 is out.

https://www.sec.gov/Archives/edgar/data/1067983/000095012323005270/0000950123-23-005270-index.htm

 

Here are some changes that I noticed - added to OXY; reduced ATVI, CVX and GM; sold out of USB and BK but retained position in Citi.

[backtothebeach]

17 minutes ago, treasurehunt said:

The 13F-HR for Q1 is out.

https://www.sec.gov/Archives/edgar/data/1067983/000095012323005270/0000950123-23-005270-index.htm

 

Here are some changes that I noticed - added to OXY; reduced ATVI, CVX and GM; sold out of USB and BK but retained position in Citi.

Added 20 million shares of AAPL (unless they just moved the shares that were previously in a separate filing, I forget which subsidiary).
 

Edited May 15, 2023 by backtothebeach

[gfp]

31 minutes ago, backtothebeach said:

Added 20 million shares of AAPL (unless they just moved the shares that were previously in a separate filing, I forget which subsidiary).
 

 

They finally cleaned up the separate holdings at Gen Re New England Asset Management.  They all show up on Berkshire's 13F now.  No new AAPL shares have been acquired since the Allegheny purchase.

[backtothebeach]

8 minutes ago, gfp said:

 

They finally cleaned up the separate holdings at Gen Re New England Asset Management.  They all show up on Berkshire's 13F now.  No new AAPL shares have been acquired since the Allegheny purchase.

 

Good to know!

[Munger_Disciple]

24 minutes ago, gfp said:

 

They finally cleaned up the separate holdings at Gen Re New England Asset Management.  They all show up on Berkshire's 13F now.  No new AAPL shares have been acquired since the Allegheny purchase.

 

Also didn't add to BAC. Just consolidated holdings from the two 13-Fs. 

[sleepydragon]

Surprised to see VTS. Thrilled

[Spekulatius]

COF looks like another new position, probably from T&T:

https://whalewisdom.com/filer/berkshire-hathaway-inc#tabholdings_tab_link

[backtothebeach]

2 hours ago, sleepydragon said:

Surprised to see VTS. Thrilled

Not actively bought I think, just the spun off shares.

 

A few quarters ago they had OGN from a spinoff, and sold it within the quarter.

 

So VTS might be already gone.

 

Edit: Just realized that they had almost 3 months to sell it in Q1, but kept it - so maybe they think it is too cheap to sell. Hard to say how much analysis is going on at Berkshire for such a small position.

Edited May 16, 2023 by backtothebeach