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Posted
  On 2/26/2024 at 4:38 AM, 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.

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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.”

Posted
  On 2/26/2024 at 5:30 PM, 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.”

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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."

Posted

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

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Posted (edited)
  On 2/26/2024 at 2:25 PM, Luca said:

Like? 🙂

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Black Knight Financial Services (now owned by ICE)

 

Controls more than 65% of the residential mortgage servicing technology market.

Edited by anony208
Posted
  On 2/26/2024 at 9:30 PM, gfp said:

 

I believe the consensus is Jimmy Haslam #3

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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. 

Posted
  On 2/26/2024 at 3:42 PM, 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???"

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Nimble move:). Curious if you sold it all / for good or until somewhat lower valuation?

Posted
  On 2/27/2024 at 9:32 AM, UK said:

 

Nimble move:). Curious if you sold it all / for good or until somewhat lower valuation?

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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.

Posted
  On 2/27/2024 at 1:23 PM, 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.

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Thanks!

Posted (edited)
  On 2/27/2024 at 1:23 PM, 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.

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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 by MMM20
Posted

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.

Posted

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. 🤣

Posted
  On 2/27/2024 at 5:16 PM, 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!

 

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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.

Posted
  On 2/27/2024 at 5:37 PM, 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.

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I take it you manage SMAs? Is there a web site people can get information? Thanks

Posted (edited)
  On 2/27/2024 at 5:40 PM, Munger_Disciple said:

 

I take it you manage SMAs? Is there a web site people can get information? Thanks

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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 by gfp
Posted
  On 2/26/2024 at 4:38 AM, 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.

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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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