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Buffett/Berkshire - general news


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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. 

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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.

 

 

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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 ?

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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:

reve.jpg

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  • 2 weeks later...

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.

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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.

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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.

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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.

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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 by gfp
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