Buffett/Berkshire - general news

[ValueMaven]

2-3% annual buyback for the next 10-15 years?!

 

 

[ValueMaven]

Fairly sizable outperformance by Berkshire over the last 5 trading days.  BRKB up 2.6%, while the S&P is down 1.6%

[woodstove]

One can wonder if it is a long-overdue recognition of value?  Or one can wonder if it is a shift from bubble-fluff to solid value.  Maybe those are the same concept?  Anyway, seems to be an ongoing rationale for holding BRK.  Although to be frank, a pullback from recent rise (new high??) may happen, if one is so risk-committed that he wants to trade out and hope to be able to come back in at better price. 

 

What is the tradeoff between APPL and BRK?  If one is long APPL and does not need the dividends, does it make sense to sell some APPL and buy more BRK to gain value?  Haven't done the math but seems there might be a bit of that going on.

 

Well, interesting. 

[MCR]

Interesting and entertaining March 2020 article about See's Candies. Don't think I recall hearing before that WEB turned down a $125M offer for See's in 1982. Very wise decision. https://thehustle.co/how-a-small-candy-company-became-warren-buffetts-dream-investment/

[ValueMaven]

Thank you for sharing.  First time I've heard about the See's offer

[oscarazocar]

See's earned $24m pretax in 1982 and $27m pretax in 1983.  Corporate tax rates at the time were 46%, so if Berkshire sold they would be doing so for something like 5x pretax 1983 earnings or 5-6x aftertax proceeds (say 46% tax on $100m net gain = $79m aftertax proceeds vs. $14m net income in 1983.  It wasn't an overwhelming offer, more indicative of how well the business had performed.

 

 

[aceskc]

On 12/14/2021 at 9:48 AM, ValueMaven said:

Fairly sizable outperformance by Berkshire over the last 5 trading days.  BRKB up 2.6%, while the S&P is down 1.6%

What are the chances he has trimmed AAPL at a 3b valuation and piled the proceeds into repurchases ?

[LearningMachine]

22 hours ago, MCR said:

Interesting and entertaining March 2020 article about See's Candies. Don't think I recall hearing before that WEB turned down a $125M offer for See's in 1982. Very wise decision. https://thehustle.co/how-a-small-candy-company-became-warren-buffetts-dream-investment/

Thank you for jogging everyone's memory on this. 

 

This chart reminds me of an axiom that I'll add to the Axioms list in another thread:

[gfp]

https://www.seattletimes.com/seattle-news/northwest/buffett-rejects-bernie-sanders-call-to-intervene-in-strike/

 

Bernie tried to get Warren (Buffett) involved in a PCP subsidiary with striking workers.  Warren declined.  The CEO of PCP is responsible for his business.

[sholland]

It took me about 15 minutes to find the Bernie Sanders letter and the Warren Buffett response letter.  Links below:

 

https://www.sanders.senate.gov/wp-content/uploads/Sanders-Letter-to-Buffett.pdf

 

https://www.sanders.senate.gov/wp-content/uploads/Letter.pdf

[gfp]

Thanks for posting the originals.  Pretty hilarious to hear Bernie point out to Warren that high inflation is what makes the wage increases inadequate.  I'm sure Warren got a chuckle out of that line of argument considering the source.

[ValueMaven]

How about the typo in the Sanders letter —- Precision Castports —- I had to do a double take 

[Spekulatius]

7 minutes ago, ValueMaven said:

How about the typo in the Sanders letter —- Precision Castports —- I had to do a double take 

Buffett should have written back that he does not own Precision Castports.

[alpha]

BRK is issuing more Yen debt - 

 

https://www.barrons.com/articles/berkshire-hathaways-yen-bond-sale-indicates-warren-buffett-is-buying-japanese-stocks-51641400198

[Mephistopheles]

On 12/30/2021 at 4:52 PM, Spekulatius said:

Buffett should have written back that he does not own Precision Castports.

I like that nice Rockefeller reference

[gfp]

NICO partnership / investment / quota share with Ariel Re -

https://www.reinsurancene.ws/berkshire-hathaways-nico-invests-in-ariel-re/

[gfp]

R.I.P. Lou Simpson

 

https://www.chicagotribune.com/news/obituaries/ct-louis-simpson-obituary-20220110-uc3znwwnznabnjc6ujfu534sty-story.html

[longlake95]

R.I.P Lou. What a legend.

[gfp]

HomeServices ends 2021 with five simultaneous acquisitions -

 

https://finance.yahoo.com/news/homeservices-america-closes-2021-five-170500077.html

[woodstove]

That is impressive.  $200B in residential real estate sales, 400k home sale transactions (so average $500k selling price per transaction), 46k sales associates.  How does that compare with the total US market?  What percent of real estate sales is typical revenue and typical profit, to Home Services?  What are the synergies and possibilities?  The article spoke of "delivering the highest level of customer service while removing any stress and worry from the moving process."  Seems like a good focus.

[DooDiligence]

Why speculate on Zillow when you can own this and sleep well?

[ValueMaven]

They need to move this business out of BHE and into MSR!!

[Dynamic]

4 minutes ago, ValueMaven said:

They need to move this business out of BHE and into MSR!!

While there's still a minority interest in BH Energy I think it will remain there as part of that 'Grove'.

 

The BYD Co HK:1211 stock is technically part of BHE too, so only about 91% owned by Berkshire Hathaway shareholders.

 

I don't think the difference is particularly material in the grand scheme of Berkshire as a whole.

[DooDiligence]

12 hours ago, Dynamic said:

While there's still a minority interest in BH Energy I think it will remain there as part of that 'Grove'.

 

The BYD Co HK:1211 stock is technically part of BHE too, so only about 91% owned by Berkshire Hathaway shareholders.

 

I don't think the difference is particularly material in the grand scheme of Berkshire as a whole.

 

I like the hidden gem aspect.

[gfp]

Berkshire priced the latest batch of Yen bonds -

 

(Berkshire has a higher credit rating than the government of Japan)

 

Quote from Bloomberg:

 

(Jan 14): Warren Buffett’s Berkshire Hathaway Inc. sold 128.5 billion yen ($1.13 billion) in bonds, taking advantage of Japan’s ultra-low borrowing costs.

The U.S. company priced a multi-part debt offering on Friday, marking its fourth bond deal in the Japanese currency in as many years.

With a coupon of 0.203%, the U.S. company priced its 5-year debt at a rate attractive to Japanese buyers given government bonds of that tenor offer negative yields and local companies can sell notes of a similar maturity at less than half that cost.

 

While bond yields in Japan have also climbed at the start of the year amid global consumer price pressures, the moves have been small compared with dollar markets due to the Bank of Japan’s negative-interest rate policy.

Berkshire Hathaway priced one of the biggest yen bond offerings ever by an overseas firm in 2019, and announced the following year that it had built up stakes of about 5% in Japan’s biggest trading companies.

The company’s 2022 yen issuance was smaller than its 160 billion yen transaction in April 2021.

 

update: here are the details, 5 year - 30 year bonds:

https://www.sec.gov/Archives/edgar/data/1067983/000119312522009641/d477637dfwp.htm

Edited January 14, 2022 by gfp