Xerxes Posted February 26 Posted February 26 Clearly Berkshire was sold to generate funds to buy Occidental 1
MMM20 Posted February 26 Posted February 26 A couple years ago I would’ve said that’s a huge intraday swing in a megacap. Efficient markets.
Eldad Posted February 26 Posted February 26 12 hours ago, gfp said: He has received his entire cost basis back in dividends and retains an extremely profitable, durable enterprise that has comparable valuations (UNP = $155 Billion, replacement cost ~$500 Billion ??) that are favorable and the "capital eating enterprise" continues to pay out several billions of cash every year in tax free dividends to the owner. I think it was a once in a lifetime opportunity to buy an irreplaceable productive asset that is almost impossible to buy out of the public markets. He was pretty psyched. Did anyone think he was maybe taking a dig at BNSF management or at least kind of second guessing/being grumpy about their assumptions that maybe he begrudgingly agreed to? No PSR, higher capex, etc. We have the highest capex and worst returns of any railroad but “our margin comparisons can and should improve.”
Munger_Disciple Posted February 26 Posted February 26 58 minutes ago, Eldad said: Did anyone think he was maybe taking a dig at BNSF management or at least kind of second guessing/being grumpy about their assumptions that maybe he begrudgingly agreed to? No PSR, higher capex, etc. We have the highest capex and worst returns of any railroad but “our margin comparisons can and should improve.” Yes. I also think he is more frustrated about BHE than BNSF in the bigger scheme of things: "Our second and even more severe earnings disappointment last year occurred at BHE."
Munger_Disciple Posted February 26 Posted February 26 3 hours ago, gfp said: No clue what that market reaction was but I was like, "did they read the same report as me???" I don't think "they" read anything.
RadMan24 Posted February 26 Posted February 26 2 hours ago, Xerxes said: Clearly Berkshire was sold to generate funds to buy Occidental US DOJ threatening to sue Pacificorp is the reason for "collapse" Headlines came out 4 hours ago.
gfp Posted February 26 Posted February 26 For those that like to read BHE's own 10-K it is here: https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/71180/000108131624000003/bhe-20231231.htm
netnet Posted February 26 Posted February 26 In the annual Buffett talks about rascals, quote below. To whom could Buffett be referring. Who is the Rascal?? Quote In 1863, Hugh McCulloch, the first Comptroller of the United States, sent a letter to all national banks. His instructions included this warning: “Never deal with a rascal under the expectation that you can prevent him from cheating you.” Many bankers who thought they could “manage” the rascal problem have learned the wisdom of Mr. McCulloch’s advice – and I have as well. People are not that easy to read. Sincerity and empathy can easily be faked. That is as true now as it was in 1863
gfp Posted February 26 Posted February 26 1 minute ago, netnet said: To whom could Buffett be referring. Who is the Rascal?? I believe the consensus is Jimmy Haslam #3
netnet Posted February 26 Posted February 26 3 minutes ago, gfp said: I believe the consensus is Jimmy Haslam #3 That makes perfect sense.
anony208 Posted February 26 Posted February 26 (edited) 9 hours ago, Luca said: Like? Black Knight Financial Services (now owned by ICE) Controls more than 65% of the residential mortgage servicing technology market. Edited February 26 by anony208
KPO Posted February 27 Posted February 27 6 hours ago, gfp said: I believe the consensus is Jimmy Haslam #3 Agreed and was surprised this reference wasn’t picked up earlier. He obviously views the Haslams as scum, which sounds about right based on the fact pattern.
UK Posted February 27 Posted February 27 17 hours ago, gfp said: Well I would just like to say thanks for the post nwoodman! I had just woken up, let out the puppy, and saw your post and said "What the fuck is the market doing??" and ran upstairs to start dumping BRK shares pre-market. Sold from 430 all the way down to 424. No clue what that market reaction was but I was like, "did they read the same report as me???" Nimble move:). Curious if you sold it all / for good or until somewhat lower valuation?
gfp Posted February 27 Posted February 27 3 hours ago, UK said: Nimble move:). Curious if you sold it all / for good or until somewhat lower valuation? I sold just about 10% of the total shares for accounts that still own Berkshire. Even after selecting the highest basis shares possible (~$71.85 / b-share in these accounts) there is still a significant tax consequence to selling shares. But 10% is a lot of money and still a lot of tax will be owed. I don't personally own a lot of Berkshire anymore.
UK Posted February 27 Posted February 27 35 minutes ago, gfp said: I sold just about 10% of the total shares for accounts that still own Berkshire. Even after selecting the highest basis shares possible (~$71.85 / b-share in these accounts) there is still a significant tax consequence to selling shares. But 10% is a lot of money and still a lot of tax will be owed. I don't personally own a lot of Berkshire anymore. Thanks!
MMM20 Posted February 27 Posted February 27 (edited) 3 hours ago, gfp said: I sold just about 10% of the total shares for accounts that still own Berkshire. Even after selecting the highest basis shares possible (~$71.85 / b-share in these accounts) there is still a significant tax consequence to selling shares. But 10% is a lot of money and still a lot of tax will be owed. I don't personally own a lot of Berkshire anymore. Sounds like we're in a similar boat. I'd sold the BRK in my retirement accounts a few weeks ago to buy ~10% more FFH on the Muddy Waters report, and I just sold those extra FFH shares and bought the BRK back ~3% higher. But it's small and I sense that my return expectations are lower than most. If I can just beat cash owning a little bit of BRK as a cash substitute, I'll be happy. If BNSF and BHE are as troubled as he suggests, I might be nervous if I were one of those people with ~80%+ of my net worth in it with, like, a ~$10 cost basis... a high class problem! Edited February 27 by MMM20
sleepydragon Posted February 27 Posted February 27 Someone should do a sentiment analysis on all of WEB’s letters. When he sounds sour towards Brk’s prospects, what’s the next year’s return related to the market? I suspect this backtest will show it’s negative correlated (but it needs to be compared with years when he’s more bullish) also, if what he says it’s right, it’s still better to own Brk then the Casino/market index.
Charlie Posted February 27 Posted February 27 I also deleveraged my Berkshire shares from 105% to 100% of my portfolio. Unfortunately I have to pay taxes, so it was not a No Brainer. As Templeton said, if they desperately want to buy something, help them and sell it to them and when they desperately want to sell something, help them and buy it. I am ready for buying again.
gfp Posted February 27 Posted February 27 16 minutes ago, MMM20 said: Sounds like we're in a similar boat. I'd sold the BRK in my retirement accounts a few weeks ago to buy ~10% more FFH on the Muddy Waters report, and I just sold those extra FFH shares and bought the BRK back ~3% higher. But it's small and I sense that my return expectations are lower than most. If I can just beat cash owning a little bit of BRK as a cash substitute, I'll be happy. If BNSF and BHE are as troubled as he suggests, I might be nervous if I were one of those people with ~80%+ of my net worth in it with, like, a ~$10 cost basis... a high class problem! The only accounts I manage that still have Berkshire in them are fully taxable accounts with very large positions in Berkshire shares at very low cost basis. The type of position those account owners intend to transfer to their heirs and chosen causes on death. I can't do much with it without causing them a bunch of problems but it counts towards my investment performance so I do what I can around the edges and borrow against it in reasonable amounts.
Munger_Disciple Posted February 27 Posted February 27 1 minute ago, gfp said: The only accounts I manage that still have Berkshire in them are fully taxable accounts with very large positions in Berkshire shares at very low cost basis. The type of position those account owners intend to transfer to their heirs and chosen causes on death. I can't do much with it without causing them a bunch of problems but it counts towards my investment performance so I do what I can around the edges and borrow against it in reasonable amounts. I take it you manage SMAs? Is there a web site people can get information? Thanks
gfp Posted February 27 Posted February 27 (edited) 10 minutes ago, Munger_Disciple said: I take it you manage SMAs? Is there a web site people can get information? Thanks Yes SMAs but no website, not a registered investment advisor and only have 10 clients and that's all I will ever have (edit: could definitely have fewer!) Edited February 27 by gfp
Munger_Disciple Posted February 27 Posted February 27 (edited) 1 minute ago, gfp said: Yes SMAs but no website, not a registered investment advisor and only have 10 clients and that's all I will ever have Got it, thanks Edited February 27 by Munger_Disciple
Munger_Disciple Posted February 27 Posted February 27 18 minutes ago, gfp said: only have 10 clients and that's all I will ever have (edit: could definitely have fewer!) I know what you mean; very much appreciate all your posts.
John Hjorth Posted February 27 Posted February 27 Albert Einstein Medical College [Bronx,NY, February 26th 2024] : Montefiore's Albert Einstein College of Medicine Announces Free Tuition in Perpetuity for All Medical School Students. - - - o 0 o - - - Made Possible by Transformational Gift - the Largest to Any Medical School in the Country. R.I.P. Mr. Gottesman.
redskin Posted February 28 Posted February 28 On 2/25/2024 at 10:38 PM, gfp said: He has received his entire cost basis back in dividends and retains an extremely profitable, durable enterprise that has comparable valuations (UNP = $155 Billion, replacement cost ~$500 Billion ??) that are favorable and the "capital eating enterprise" continues to pay out several billions of cash every year in tax free dividends to the owner. I think it was a once in a lifetime opportunity to buy an irreplaceable productive asset that is almost impossible to buy out of the public markets. He was pretty psyched. Berkshire has received $53.68 billion in dividends from BNSF since its purchase in 2009. Did he pay $34B for it?
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