Buffett/Berkshire - general news

[bennycx]

16 hours ago, 73 Reds said:

Oh yeah, the stock is doing just fine.  The company, eh....

I would argue the stock has increased its moat now.

[Munger_Disciple]

14 hours ago, Munger_Disciple said:

 

Interesting hypothesis. However it's a pretty narrow bandwidth spectrum (audio only) so I am not sure why it would be worth significant $$$. Plus they can't really sell it until satellite radio service is no longer viable so it might be several years out. And if they want to repurpose it for terrestrial use, they have to get FCC permission to do so. 

 

I looked a bit more into spectrum held by SiriusXM. The good news is it is in the 2.3GHz band similar to AWS spectrum for 4G/5G. They own two slices of 12.5MHz wide spectrum (one for Sirius & one for XM). The plan is to eventually (by 2030 or so) move all the subs into one slice due to subscriber attrition or old units going away. That frees up one slice which they could either sell or lease. I am not really sure how much it is worth though due to the following issues:

 

1. The availability is 5-8 years away, and most cellular providers have their own 5G/6G spectrum; T-Mobile from Sprint acquisition & T and VZ from C-band purchases. So they are unlikely to bid for this especially 5-8 years out. That leaves a bunch of sub-scale players as potential acquirers which means it's probably not worth a lot. 

2. FCC has to agree to repurpose the spectrum I believe. 

 

One wild bull case for the spectrum is as follows: Apple buys it to offer its own satellite emergency 2-way service (SOS) instead of paying Globalstar to do it as they are doing now. I put this at 5% probability given Apple never showed interest in being in the carrier type business. 

[Munger_Disciple]

I think Ted is a phenomenal investor but this SIRI thing looks more like a cigar butt to me. 2025 outlook from the company looks awful. I presume he thinks there is enough juice in it to wring out before the ice cube melts. While DTV (Directv) investment  produced a great return, I think he & Malone got lucky in that the village moron (AT&T) decided to buy it at a massive premium valuation before it promptly went to 0. 

Edited February 4, 2025 by Munger_Disciple

[Dynamic]

On 2/3/2025 at 7:31 PM, gfp said:

Because you are curious how much BAC he sold?  Or you think there will be other major changes?  Seems like this next one will be awfully boring and predictable but you never know.  Do we get the 10Q before the 13F?  10Q should reveal the moves on the top few positions.

The 13F comes out on 14th Feb, 45 days after the end of the quarter. (All 13F days fall on a 14th except 15th May)

The 10-K has to be within 58 days of the end of the quarter, i.e. by 27th Feb (unlike the 10-Qs which are within 40 days so precede the 13F), but it will almost certainly come out at about 8am Omaha time the Saturday before giving a whole weekend to digest its contents, this day being Saturday 22nd February 2025 in my estimation.

 

I've made a spreadsheet formula to calculate these automatically, and here are the dates, but due to my formatting, being European, it's in dd/mm/yy format not mm/dd/yy format (if you use the formula on your own spreadsheet, it'll take on your locale's formatting per your settings). If the 13F falls on a weekend, I believe it can sometimes be delayed to the next trading day.

Quarter	Qtr End Date		10-K or 10Q release 8am Sat	13F after close
2024Q4	Tue 31/12/24		Sat 22/02/25	Fri 14/02/25
2025Q1	Mon 31/03/25		Sat 03/05/25	Thu 15/05/25
2025Q2	Mon 30/06/25		Sat 23/08/25	Thu 14/08/25
2025Q3	Tue 30/09/25		Sat 22/11/25	Fri 14/11/25
2025Q4	Wed 31/12/25		Sat 21/02/26	Sat 14/02/26

 

10-K formula:

=B2+58-WEEKDAY(B2+58)

10Q formula:

=B3+40-WEEKDAY(B3+40)

13F formula:

=45+B2

[keegomaster]

20 hours ago, Munger_Disciple said:

 

Interesting hypothesis. However it's a pretty narrow bandwidth spectrum (audio only) so I am not sure why it would be worth significant $$$. Plus they can't really sell it until satellite radio service is no longer viable so it might be several years out. And if they want to repurpose it for terrestrial use, they have to get FCC permission to do so. 

Could this be a play that synergizes with the Pilot Flying J Travel Centers....? e.g., offer satellite radio to customers (not sure if there is a membership model in existence at Pilot already...)? 

[benchmark]

On 2/3/2025 at 2:01 PM, Munger_Disciple said:

 

It's possible Buffett didn't sell all of BAC in Q4 but sold the remainder in Q1 '25. Buffett blew out of positions when he wanted to; an example would be airlines in 2020. 

Yes. Once he decided, he acted quickly -- see WFC, which I thought he over reacted...

[Munger_Disciple]

More 5G spectrum sales on the way, which will decrease the residual value of SIRI's spectrum:

 

https://www.lightreading.com/5g/carr-hands-a-spectrum-gift-to-5g-industry

 

Edited February 6, 2025 by Munger_Disciple

[Viking]

@Gregmal From the Markel thread “Yea but the insider ownership percentage at Berkshire ex-Buffett sucks!”

—————

The question that most investors asked in the past was “Is having a controlling shareholder good or bad” for Berkshire Hathaway, Fairfax and Markel. 
 

It was heavily debated, especially when it came to Fairfax. 
 

But it looks to me like investors might have been asking the wrong question. The more relevant/immediate question might be: “Does BRK, FFH and MKL need a controlling shareholder to be able to execute their business model (investments in equities/control positions in businesses) over the long term.”

 

I think the answer is likely yes.

 

I think Buffett said as much in his 1984 shareholder letter (published Feb 1985). 
 

“Our equation is different. With 47% of Berkshire’s stock, Charlie and I don’t worry about being fired, and we receive our rewards as owners, not managers. Thus we behave with Berkshire’s money as we would with our own. That frequently leads us to unconventional behavior both in investments and general business management.”

 

What’s interesting is we are kind of getting a teachable moment with Markel right now. Because they apparently no longer have a controlling shareholder (shows you how closely I have been following Markel).  
 

We will see what the ‘external consultants’ have to say. And what Markel actually does. Perhaps its all smoke… 

 

Family control is not an issue for Fairfax. Prem is grooming his son/daughter to take over one day. The Watsa family has voting control and that is not going to change. 
 

But what about Berkshire Hathaway? Is Buffett not giving most of his shares to various charities? Who will be selling chunks every year? 
 

Bottom line, it doesn’t look to me like Berkshire Hathaway will have a controlling shareholder. Especially 5 or 10 years after Buffett is gone. 
 

Berkshire Hathaway is a wet dream for activist private equity shops in the US - Berkshire Hathaway is an aging, massive conglomerate - the largest in history. Soon to be run by an unknown (Yes, Greg Abel is an unknown). Bagging Berkshire Hathaway would be like scaling Mount Everest. The short term rewards of breaking up Berkshire would likely be massive (its called ‘value creation’). Munger teaches us that incentives matter… activist private equity shops will be all horned up once Buffett is gone… waiting for their chance to pounce (likely together). Once they got started, and the numbers kept growing (value creation) and the stock started to move higher what could stop them? The money would be too big. 

What about long term shareholders? Who cares. When your job (CEO/senior management) is on the line… well, you fall into line. Especially if your performance has been sub-par for a few years.

 

Markel’s stock popped 8% once they announced their strategic review. As a result, other than @bearprowler6 , i think Markel’s decision was widely applauded. Both the board and management at Markel have given it their full support. Long term? Who gives a shit right now. Let’s see what we can do to get that share price higher! Hello? Berkshire Hathaway shareholders are you paying attention? 

 

Edited February 9, 2025 by Viking

[Hektor]

4 hours ago, Viking said:

Bottom line, it doesn’t look to me like Berkshire Hathaway will have a controlling shareholder. Especially 5 or 10 years after Buffett is gone.

Will this matter to BRK? It’s one thing to own a few % of a $25B company and agitate. But owning a % of a few $T company is a tall order. I believe WEB alluded somewhere to the size as a barrier against activists.

[Maverick47]

10 hours ago, Viking said:

But what about Berkshire Hathaway? Is Buffett not giving most of his shares to various charities? Who will be selling chunks every year? 
 

Bottom line, it doesn’t look to me like Berkshire Hathaway will have a controlling shareholder. Especially 5 or 10 years after Buffett is gone. 

@Viking  As a small holder of Markel, I also was surprised at the recent news of a business review prompted by activist investors.  This is something Buffett has been concerned about for Berkshire for several decades now.  I think Berkshire is likely to prove to be different from Markel for several reasons:
 

First, Buffett does still have significant voting control through his ownership of A shares with 1,500 times the economic rights and 10,000 times the voting rights of the B shares.  And though he gives some shares  away each year, he still controls, if memory serves, more than 30% of the voting rights of Berkshire.  
 

Secondly, he has promised that his will’s instructions require his executor to continue to hold all Berkshire stock he owns at death and to only distribute these shares over time to the charities he designates.  He has stated that he believes it will take at least 10 to 15 years after his death before this is accomplished.  
 

His son Howard will be chair of the board after his death, and will be charged with maintaining the culture of Berkshire.

 

All current board members own Berkshire stock they have purchased individually, are independently wealthy and do not require any directors fees from Berkshire to maintain their standard of living.  In many cases they have known Buffett for years and are well aware of the culture that he expects them to maintain after his death.  As long as they are physically and mentally able, I expect many of them would consider it an honor to continue to serve on the board after Buffett passes away as a means to ensure his legacy continues.

 

I personally think there will be at least five and more likely 10 years past Buffett’s death before any sort of voting challenge to management that might come from outside of the board of directors might even be remotely possible.  Given the longevity that Buffett and Munger had to set the initial course and culture of the company, I think that is also a difference from what Markel is experiencing.

 

Fairfax has a similar voting stock structure to Berkshire and Prem appears to be setting up a similar set of expectations that family board members will maintain Fairfax’s culture after he passes on. 

 

I think Markel had some second or third generation Markel family members who had been involved in the business, but not as executives for a number of years now.  Voting control among that family had also dissipated over the years, and the next generation of non family executive managers had an illogical multiple CEO structure for a number of years that never made any sense to me.  Leadership by committee, which is what that essentially meant, led to some confusion among investors as to what defined the company and its strategy. Gayner was seen as the Investment CEO, and Markel Ventures was his pet project.  Now that he is sole CEO, I’ll be surprised if the business review results in spinning those companies off, but if it does, that might signal some diminution of his influence on the strategy of the company and his subsequent retirement might then not be much further off.  It’s an open question what this would mean for the future of the company.  I suspect that the new inclusion of a measure of intrinsic value over time was something he hopes will encourage market value of the stock to more closely follow his opinion of intrinsic value.  If he stays on, and the stock responds well, and the Ventures companies are retained, then he might be able to point to the “improved management disclosures” as being at least partly responsible for the market response, justifying his continued leadership.  Might be a 50/50 bet on that at the present time, and if he leaves, no way of knowing what to expect from a new leader and a new corporate strategy.

Bottom line — I think that Sanjeev showed significant prescience years ago in naming this site the Corner of Berkshire and Fairfax and not including Markel in the name….

 

 

 

Edited February 9, 2025 by Maverick47
Corrected voting vs. economic rights of A vs B shares

[DooDiligence]

I've said it before and I'll say it again. Uncle Warrens parting gift to the faithful will be Easter eggs.

 

edit: Nothing is permanent.

Edited February 9, 2025 by DooDiligence

[Viking]

2 hours ago, Maverick47 said:

@Viking  As a small holder of Markel, I also was surprised at the recent news of a business review prompted by activist investors.  This is something Buffett has been concerned about for Berkshire for several decades now.  I think Berkshire is likely to prove to be different from Markel for several reasons:
 

First, Buffett does still have significant voting control through his ownership of A shares with 1500 times the voting rights of the B shares.  And though he gives some shares  away each year, he still controls, if memory serves, more than 30% of the voting rights of Berkshire.  
 

Secondly, he has promised that his will’s instructions require his executor to continue to hold all Berkshire stock he owns at death and to only distribute these shares over time to the charities he designates.  He has stated that he believes it will take at least 10 to 15 years after his death before this is accomplished.  
 

His son Howard will be chair of the board after his death, and will be charged with maintaining the culture of Berkshire.

 

All current board members own Berkshire stock they have purchased individually, are independently wealthy and do not require any directors fees from Berkshire to maintain their standard of living.  In many cases they have known Buffett for years and are well aware of the culture that he expects them to maintain after his death.  As long as they are physically and mentally able, I expect many of them would consider it an honor to continue to serve on the board after Buffett passes away as a means to ensure his legacy continues.

 

I personally think there will be at least five and more likely 10 years past Buffett’s death before any sort of voting challenge to management that might come from outside of the board of directors might even be remotely possible.  Given the longevity that Buffett and Munger had to set the initial course and culture of the company, I think that is also a difference from what Markel is experiencing.

 

Fairfax has a similar voting stock structure to Berkshire and Prem appears to be setting up a similar set of expectations that family board members will maintain Fairfax’s culture after he passes on. 

 

I think Markel had some second or third generation Markel family members who had been involved in the business, but not as executives for a number of years now.  Voting control among that family had also dissipated over the years, and the next generation of non family executive managers had an illogical multiple CEO structure for a number of years that never made any sense to me.  Leadership by committee, which is what that essentially meant, led to some confusion among investors as to what defined the company and its strategy. Gaynor was seen as the Investment CEO, and Markel Ventures was his pet project.  Now that he is sole CEO, I’ll be surprised if the business review results in spinning those companies off, but if it does, that might signal some diminution of his influence on the strategy of the company and his subsequent retirement might then not be much further off.  It’s an open question what this would mean for the future of the company.  I suspect that the new inclusion of a measure of intrinsic value over time was something he hopes will encourage market value of the stock to more closely follow his opinion of intrinsic value.  If he stays on, and the stock responds well, and the Ventures companies are retained, then he might be able to point to the “improved management disclosures” as being at least partly responsible for the market response, justifying his continued leadership.  Might be a 50/50 bet on that at the present time, and if he leaves, no way of knowing what to expect from a new leader and a new corporate strategy.

Bottom line — I think that Sanjeev showed significant prescience years ago in naming this site the Corner of Berkshire and Fairfax and not including Markel in the name….

 

@Maverick47, I learned lots from your post... As I am sure you can appreciate/recognize, sometimes I like to stir the pot. I get an idea / develop a thesis that I think might make sense and I throw it onto the wall at CofBF to see if it might stick. Feedback from other posters, like you, is much appreciated. It is great to be able to discuss important ideas/themes with smart people like you. 

Edited February 9, 2025 by Viking

[Ulti]

https://podcasts.apple.com/us/podcast/we-study-billionaires-the-investors-podcast-network/id928933489?i=1000689802509
 

Interview with Lawrence Cunningham on 

the value of trust base cultures and organizations and how Buffett has used this over the years…touches on Constellation organization and briefly on Berkshires 300 billion $

[Munger_Disciple]

11 hours ago, Maverick47 said:

@Viking  As a small holder of Markel, I also was surprised at the recent news of a business review prompted by activist investors.  This is something Buffett has been concerned about for Berkshire for several decades now.  I think Berkshire is likely to prove to be different from Markel for several reasons:
 

First, Buffett does still have significant voting control through his ownership of A shares with 1,500 times the economic rights and 10,000 times the voting rights of the B shares.  And though he gives some shares  away each year, he still controls, if memory serves, more than 30% of the voting rights of Berkshire.  
 

Secondly, he has promised that his will’s instructions require his executor to continue to hold all Berkshire stock he owns at death and to only distribute these shares over time to the charities he designates.  He has stated that he believes it will take at least 10 to 15 years after his death before this is accomplished.  
 

His son Howard will be chair of the board after his death, and will be charged with maintaining the culture of Berkshire.

 

All current board members own Berkshire stock they have purchased individually, are independently wealthy and do not require any directors fees from Berkshire to maintain their standard of living.  In many cases they have known Buffett for years and are well aware of the culture that he expects them to maintain after his death.  As long as they are physically and mentally able, I expect many of them would consider it an honor to continue to serve on the board after Buffett passes away as a means to ensure his legacy continues.

 

I personally think there will be at least five and more likely 10 years past Buffett’s death before any sort of voting challenge to management that might come from outside of the board of directors might even be remotely possible.  Given the longevity that Buffett and Munger had to set the initial course and culture of the company, I think that is also a difference from what Markel is experiencing.

 

Fairfax has a similar voting stock structure to Berkshire and Prem appears to be setting up a similar set of expectations that family board members will maintain Fairfax’s culture after he passes on. 

 

I think Markel had some second or third generation Markel family members who had been involved in the business, but not as executives for a number of years now.  Voting control among that family had also dissipated over the years, and the next generation of non family executive managers had an illogical multiple CEO structure for a number of years that never made any sense to me.  Leadership by committee, which is what that essentially meant, led to some confusion among investors as to what defined the company and its strategy. Gayner was seen as the Investment CEO, and Markel Ventures was his pet project.  Now that he is sole CEO, I’ll be surprised if the business review results in spinning those companies off, but if it does, that might signal some diminution of his influence on the strategy of the company and his subsequent retirement might then not be much further off.  It’s an open question what this would mean for the future of the company.  I suspect that the new inclusion of a measure of intrinsic value over time was something he hopes will encourage market value of the stock to more closely follow his opinion of intrinsic value.  If he stays on, and the stock responds well, and the Ventures companies are retained, then he might be able to point to the “improved management disclosures” as being at least partly responsible for the market response, justifying his continued leadership.  Might be a 50/50 bet on that at the present time, and if he leaves, no way of knowing what to expect from a new leader and a new corporate strategy.

Bottom line — I think that Sanjeev showed significant prescience years ago in naming this site the Corner of Berkshire and Fairfax and not including Markel in the name….

 

 

 

 

Great post! I would just add that Buffett's daughter is also on the board to provide additional security against evil PE barbarians. 

[Spooky]

17 hours ago, Viking said:

But what about Berkshire Hathaway? Is Buffett not giving most of his shares to various charities? Who will be selling chunks every year? 
 

Bottom line, it doesn’t look to me like Berkshire Hathaway will have a controlling shareholder. Especially 5 or 10 years after Buffett is gone. 

 

I don't think this is correct. When Buffett gives shares to charities they convert them from the A shares to the B shares. The Munger family and some other current A share holders will end up with control.

[John Hjorth]

15 minutes ago, Spooky said:

I don't think this is correct. When Buffett gives shares to charities they convert them from the A shares to the B shares. The Munger family and some other current A share holders will end up with control.

 

@Spooky,

 

What is your basis for this statement? Who are those other currrent A shareholders?

Edited February 9, 2025 by John Hjorth

[gfp]

I don't think anybody will have voting control.  Nobody has absolute control today.  Warren is deemed to control Berkshire today because nobody is anywhere close to his % of the voting power (Warren has 30% of the votes and declining every year).  The number of A-shares will continue to shrink through conversions and Berkshire's repurchases.  Eventually they will become extremely illiquid and barely trade, which will make them very difficult to transact in for any potential activist.  All of the volume and liquidity will be in the B-shares.

 

Fidelity Contrafund will have more A-share voting influence than the Munger descendants.

 

The conversions are one-way and many early shareholders know to convert before donating, convert before selling, or call Mark Millard's number in the annual report to sell to Berkshire.

[John Hjorth]

2 minutes ago, gfp said:

I don't think anybody will have voting control.  Nobody has absolute control today.  Warren is deemed to control Berkshire today because nobody is anywhere close to his % of the voting power (Warren has 30% of the votes and declining every year).  The number of A-shares will continue to shrink through conversions and Berkshire's repurchases.  Eventually they will become extremely illiquid and barely trade, which will make them very difficult to transact in for any potential activist.  All of the volume and liquidity will be in the B-shares.

 

Fidelity Contrafund will have more A-share voting influence than the Munger descendants.

 

The conversions are one-way and many early shareholders know to convert before donating, convert before selling, or call Mark Millard's number in the annual report to sell to Berkshire.

 

 

Exactly, this, @gfp, 

 

I think the same, but I can't really back it up with data.

 

The question is still interesting, though.

 

Here on CofB&F we should really try - in cooperation with each other - to map where the Berkshire A-shares not owned by Mr. Buffett are owned / laying around.

 

Perhaps we should add the B shares to the mapping, too, if we are already at it, to max, full possible perspective.

[Munger_Disciple]

Just the sheer size of BRK makes it almost impossible for activists to agitate for change. Its market cap is $1 trillion now, and is likely to be $2-$3 trillion in about 10 years from now. Add the voting control by A shareholders, we can safely say BRK will remain in its current corporate structure for the foreseeable future.  

 

For instance, MSFT has had no activist issues despite founder shareholders (Gates & Allen) exiting, largely due to its size.

Edited February 9, 2025 by Munger_Disciple

[John Hjorth]

8 minutes ago, Munger_Disciple said:

Just the sheer size of BRK makes it almost impossible for activists to agitate. Its market cap is $1 trillion now, and is likely to be $2-$3 trillion in about 10 years from now. Add the voting control by A shareholders, we can safely say BRK will remain in its current corporate structure for the foreseeable future.  

 

For instance, MSFT has had no activist issues despite founder shareholders (Gates & Allen) exiting, largely due to its size.

 

One never really know in advance the outcomes of shareholder votes on shareholder proposals, untill they are done and over with.

 

Don't try to sell the fur of the bear before the bear is shot, or you may end up surprised, unleasantly.

[Munger_Disciple]

2 minutes ago, John Hjorth said:

 

One never really know in advance the outcomes of shareholder votes on shareholder proposals, untill they are done and over with.

 

Don't try to sell the fur of the bear before the bear is shot, or you may end up surprised, unleasantly.

 

 

Of course no one knows for sure what the future holds but I feel pretty confident as a shareholder that BRK will stay in its current form for >10 years.

A humble suggestion: try to be respectful to other posters. No one is selling anything here, we are all discussing potential future outcomes. 

[John Hjorth]

4 minutes ago, Munger_Disciple said:

Of course no one knows for sure what the future holds but I feel pretty confident as a shareholder that BRK will stay in its current form for >10 years.

A humble suggestion: try to be respectful to other posters. No one is selling anything here, we are all discussing potential future outcomes. 

 

You aren't discussing here fact and data driven, @Munger_Disciple,

 

Never mind, now please let it go from here.

[Munger_Disciple]

31 minutes ago, John Hjorth said:

 

You aren't discussing here fact and data driven, @Munger_Disciple,

 

Never mind, now please let it go from here.

 

It's called probabilistic thinking & judging the odds of something happening or not. Anyhow, one can only have "fact or data" about the past, not future. Future is always about "judgment". 

 

But, I agree let's move on. 

Edited February 9, 2025 by Munger_Disciple

[WFF]

Grandpa Warren just bought more Occidental.  760k shares @ 46.82
 

https://www.sec.gov/Archives/edgar/data/315090/000095017025018266/xslF345X05/ownership.xml

[gfp]

https://www.sec.gov/Archives/edgar/data/927066/000095017025020189/xslF345X05/ownership.xml

https://www.sec.gov/Archives/edgar/data/927066/000095017025020183/xslSCHEDULE_13D_X01/primary_doc.xml

 

First of the required quarterly sales of DaVita shares by Berkshire entities back to DaVita.  The BRK group isn't allowed to stay above 45% so once each quarter they have to sell stock back to DaVita based on the VWAP that DaVita repurchased stock at in the quarter just passed.  So GEICO sold stock at $156 on a day it traded for $173 but what can ya do...