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Buffett/Berkshire - general news


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Value investors don't buy yachts - period. They are cheap-skates [, perhaps with some kind of weird obsession to cars or whatever - not yachts!][ ; - D ]

 

- - - o 0 o - - -

 

Now back to Buffett/Berkshire - General news.

Jim Pattison has a yacht: https://www.superyachtfan.com/yacht-nova-spirit.html

 

Charlie Munger has a yacht. https://channelcatcharters.com/about.html

Although it is a cheapskate yacht really.

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Value investors don't buy yachts - period. They are cheap-skates [, perhaps with some kind of weird obsession to cars or whatever - not yachts!][ ; - D ]

 

- - - o 0 o - - -

 

Now back to Buffett/Berkshire - General news.

Jim Pattison has a yacht: https://www.superyachtfan.com/yacht-nova-spirit.html

 

Charlie Munger has a yacht. https://channelcatcharters.com/about.html

Although it is a cheapskate yacht really.

Value investors don't buy yachts - period. They are cheap-skates [, perhaps with some kind of weird obsession to cars or whatever - not yachts!][ ; - D ]

 

- - - o 0 o - - -

 

Now back to Buffett/Berkshire - General news.

Jim Pattison has a yacht: https://www.superyachtfan.com/yacht-nova-spirit.html

 

Both Munger and Pattison use it more for either their customers/clients or charitable events.  Cheers!

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Thank you for the information. In a case like this, how does the recovery work. I guess they already distributed the cash to the shareholders at the time of the acquisition. Not sure how it works, my guess is this will be pretty difficult to recover but I have no experience in the field.

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Is it my impression or Munger's yacht looks a bit dated now especially compared to Pattinson's?

 

Pattinson's is ~5 times larger. And yeah, interior/etc. ages/dates to the time of build. Unless you refurb. Which value investors would be too cheapskate to.  ;)

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Thank you for the information. In a case like this, how does the recovery work. I guess they already distributed the cash to the shareholders at the time of the acquisition. Not sure how it works, my guess is this will be pretty difficult to recover but I have no experience in the field.

 

Haven't read the article but the shareholders were a few family LLCs which have since filed for bankruptcy so I doubt any cash will be headed back.  But you never know

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Funny CNBC article that implies that Apple Inc wasn't a "value stock" at the time Warren bought it.  Who knows

 

https://www.cnbc.com/2020/07/16/warren-buffett-reaps-40-billion-from-giant-apple-stake-since-march-bottom.html

 

“Had he stuck to his guns and only bought value stocks, that portfolio would not have done as well,” Cathy Seifert, a Berkshire analyst at CFRA Research, told CNBC"
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Funny CNBC article that implies that Apple Inc wasn't a "value stock" at the time Warren bought it.  Who knows

 

https://www.cnbc.com/2020/07/16/warren-buffett-reaps-40-billion-from-giant-apple-stake-since-march-bottom.html

 

“Had he stuck to his guns and only bought value stocks, that portfolio would not have done as well,” Cathy Seifert, a Berkshire analyst at CFRA Research, told CNBC"

 

I think Apple was moved to S&P500 Value index last year (or could be the year before).

So Apple had been a “value” stock for a while

 

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It was cheap back then, remember they weren't able to innovate anymore and had just had an iPhone that underwhelmed.  Einhorn even had a pretty big position, but I think he exited his holdings after it ran back to moderate levels following the services and wearables narrative/reality starting to take hold; Buffett rode the tail as he does.

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FT has a good article on the Dominion deal / Berkshire / leveraged buyers, etc.  Plus I hadn't seen that Brookfield had paid $2B for a 25% stake in the same LNG project Berkshire will now run

 

https://www.ft.com/content/aa05c8fb-7daf-46f1-bfff-fce58cf5c77f

 

Thanks, couldn't get past the paywall but this SA page provided insights in the comments section.

 

https://seekingalpha.com/news/3507213-brookfield-to-take-25-stake-in-dominions-cove-point-in-2b-deal

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FT has a good article on the Dominion deal / Berkshire / leveraged buyers, etc.  Plus I hadn't seen that Brookfield had paid $2B for a 25% stake in the same LNG project Berkshire will now run

 

https://www.ft.com/content/aa05c8fb-7daf-46f1-bfff-fce58cf5c77f

 

Thanks, couldn't get past the paywall but this SA page provided insights in the comments section.

 

https://seekingalpha.com/news/3507213-brookfield-to-take-25-stake-in-dominions-cove-point-in-2b-deal

 

I would love to be a fly on the wall in the meetings where Brookfield determines their fair value marks. Between this, the overpriced Railroad they bought, the  GCP shopping malls, the Forest REIT projects etc. The mental gymnastics will sure make the flys head spin. It would probably kamikaze into cow poop to feel better afterwards.

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FT has a good article on the Dominion deal / Berkshire / leveraged buyers, etc.  Plus I hadn't seen that Brookfield had paid $2B for a 25% stake in the same LNG project Berkshire will now run

 

https://www.ft.com/content/aa05c8fb-7daf-46f1-bfff-fce58cf5c77f

 

Thanks, couldn't get past the paywall but this SA page provided insights in the comments section.

 

https://seekingalpha.com/news/3507213-brookfield-to-take-25-stake-in-dominions-cove-point-in-2b-deal

 

I would love to be a fly on the wall in the meetings where Brookfield determines their fair value marks. Between this, the overpriced Railroad they bought, the  GCP shopping malls, the Forest REIT projects etc. The mental gymnastics will sure make the flys head spin. It would probably kamikaze into cow poop to feel better afterwards.

 

Buzz, buzz...

 

;D

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I don't have more information than this on Ajit's first federal lawsuit testing Berkshire's virus exclusions in federal court - but Insurance Insider's Sunday Recap had this blurb so somebody may be able to find the case in PA federal court.  I don't know what district or who is suing.

 

"Turning to the legal disputes over claims arising from the Covid-19 outbreak, Berkshire Hathaway subsidiary National Fire & Marine Insurance Company has stressed to the judge in a Pennsylvania-based business interruption case the importance of his decision as it may be the first to address the enforcement of a virus exclusion for Covid-19 in federal court."

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I don't have more information than this on Ajit's first federal lawsuit testing Berkshire's virus exclusions in federal court - but Insurance Insider's Sunday Recap had this blurb so somebody may be able to find the case in PA federal court.  I don't know what district or who is suing.

 

"Turning to the legal disputes over claims arising from the Covid-19 outbreak, Berkshire Hathaway subsidiary National Fire & Marine Insurance Company has stressed to the judge in a Pennsylvania-based business interruption case the importance of his decision as it may be the first to address the enforcement of a virus exclusion for Covid-19 in federal court."

https://www.law360.com/articles/1291693/attachments/1

The legal strategy here seems to be based on a two-step process: the virus exclusion clause and then the business interruption from physical damage does not apply aspect.

The case they refer to which arose from a State Circuit Court:

https://www.natlawreview.com/article/first-covid-19-business-interruption-decision-sides-favor-insurers

This is very recent and quite relevant. The judgment, primarily, uses a federal law lens (contracts) and concludes that physical damage has not occurred. The exclusion issue seems to be peripheral.

Edit: In a parallel fashion (turning every stone strategy), they are also trying to suggest that the case, if relevant, should be handled elsewhere.

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Thanks for tracking that down.  It is no wonder that Warren was so confident that his reserving was still accurate and conservative when speaking at the annual meeting.  Warren and Ajit (and Gates) have been thinking about this possibility for many years and made sure they were not covering that risk without being separately compensated for it.  It is likely that even the insurers without the virus exclusions will come out OK on the 'no physical damage to property' bit, but Berkshire's subsidiaries seem to have a belt and suspenders situation built into their contracts.

 

I would expect event cancellation type policies to pay out for the most part.  And workers compensation could get tricky as people are asked to return to work and feel their employer has not done enough to make it safe for employees.

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^Event cancellation insurance is indeed more straightforward and may be a somewhat profitable line of business going forward. Return to work guidelines are likely to come from the various states' levels and this will come with some uncertainty and an evolving agenda.

 

For the BI insurance, the present legal landscape looks relatively secure but there's the residual legislative risk. Various states have introduced different types of bills which would tend to shift the burden of proof in favor of claimants. The most aggressive form of this phenomenon seems to be coming from California with the use of the "rebuttable presumption" doctrine. For the workers compensation lines in California, the aggressive nature of this legislation is tempered by administrative criteria with the end result that it's a satisfactory compromise in that specific line of business. However (IMO), the introduction of the rebuttable presumption for business interruption insurance (the insurer would sort of need to prove that the virus was not present on premises (as a "contaminant" that triggered) at the time of the public authority announcement of forced closures) would make it much easier for claimants to "win" in lower courts. Still, at some higher levels, it would be established that this new legislation caused unconstitutional impairment of contracts. So, in the end, not much in terms of actual insurance costs but the legal bill will go up.

https://www.natlawreview.com/article/it-s-covid-19-pandemic-it-s-everywhere-new-cal-bill-to-make-insurers-prove-otherwise

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FT has a good article on the Dominion deal / Berkshire / leveraged buyers, etc.  Plus I hadn't seen that Brookfield had paid $2B for a 25% stake in the same LNG project Berkshire will now run

 

https://www.ft.com/content/aa05c8fb-7daf-46f1-bfff-fce58cf5c77f

 

Thanks, couldn't get past the paywall but this SA page provided insights in the comments section.

 

https://seekingalpha.com/news/3507213-brookfield-to-take-25-stake-in-dominions-cove-point-in-2b-deal

 

I would love to be a fly on the wall in the meetings where Brookfield determines their fair value marks. Between this, the overpriced Railroad they bought, the  GCP shopping malls, the Forest REIT projects etc. The mental gymnastics will sure make the flys head spin. It would probably kamikaze into cow poop to feel better afterwards.

 

I started wondering today if any of these public private equity firms are good short/put option candidates. Some are levered at the parent level, and generate are likely coming from highly indebted investments. If investments start turning sour, fees could dry up.

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FT has a good article on the Dominion deal / Berkshire / leveraged buyers, etc.  Plus I hadn't seen that Brookfield had paid $2B for a 25% stake in the same LNG project Berkshire will now run

 

https://www.ft.com/content/aa05c8fb-7daf-46f1-bfff-fce58cf5c77f

 

Thanks, couldn't get past the paywall but this SA page provided insights in the comments section.

 

https://seekingalpha.com/news/3507213-brookfield-to-take-25-stake-in-dominions-cove-point-in-2b-deal

 

I would love to be a fly on the wall in the meetings where Brookfield determines their fair value marks. Between this, the overpriced Railroad they bought, the  GCP shopping malls, the Forest REIT projects etc. The mental gymnastics will sure make the flys head spin. It would probably kamikaze into cow poop to feel better afterwards.

 

I started wondering today if any of these public private equity firms are good short/put option candidates. Some are levered at the parent level, and generate are likely coming from highly indebted investments. If investments start turning sour, fees could dry up.

 

Without deeper insight I would tend to own the parent and short the stepchildren. The reason is simple - the debt is with the subs  and BAM will dilute theit equity if they have to and even benefit at this point if they can.

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Berkshire has been over 10% on BAC for a while now.  These buys put them at 11.3%.  They have been given permission by the Fed.  It is possible that later this year they will be given permission to go as high as 25% under certain conditions.  The decision to further loosen bank holdings company rules was delayed to the fall or winter sometime.  May be further delayed.

 

Remember when Buffett buying $800 million worth of stock in the open market used to get reported on by the press?  Sign of the times

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