Buffett/Berkshire - general news

[gfp]

Working on something today I downloaded a few of National Indemnity's recent filings with the National Association of Insurance Commissioners (NAIC) and thought I would upload them here for anyone curious for a more recent "look under the hood" of the Berkshire subsidiary that actually owns many of the other Berkshire subsidiaries.  Hopefully they are attached here as PDF files.  Only the nerdiest would probably be interested in these - fair warning...

 

(file ending ..892 is the most recent quarter, Q3.  The other filings are annual filings from 2020)

file ending ...812 shows many of the actual sales dates and prices of shares sold in 2020, the airlines, wells fargo, costco, apple, oxy dividend shares, etc.  Also shows the acquisitions of the japanese trading company shares with specifics.

 

One undisclosed item I found is that Berkshire (likely Ted or Todd) purchased $646 million worth of Airbus shares in France on 7/30/2021.  Most undisclosed investments are hidden inside "Harney Investment Trust" - the vehicle Berkshire has used to hide investments from public view since 1998.

 

Another data point is that Berkshire OXY warrants currently have a strike price of 59.624  (originally it was 62.50 but Icahn had them do a dilutive deal that adjusted Berkshire's strike per the terms)

 

20087.2020.P.AN.PM.O.A.4100394.pdf 20087.2020.P.AN.PF.O.J.4176868.pdf 20087.2021.P.Q3.P.O.3.4228892.pdf

20087.2020.P.AN.PI.O.M.4067812.pdf

Edited February 23, 2022 by gfp

[alpha]

1 hour ago, gfp said:

Working on something today I downloaded a few of National Indemnity's recent filings with the National Association of Insurance Commissioners (NAIC) and thought I would upload them here for anyone curious for a more recent "look under the hood" of the Berkshire subsidiary that actually owns many of the other Berkshire subsidiaries.  Hopefully they are attached here as PDF files.  Only the nerdiest would probably be interested in these - fair warning...

 

(upper left is the most recent quarter, Q3.  The other filings are annual filings from 2020)

 

One undisclosed item I found is that Berkshire (likely Ted or Todd) purchased $646 million worth of Airbus shares in France on 7/30/2021.  Most undisclosed investments are hidden inside "Harney Investment Trust" - the vehicle Berkshire has used to hide investments from public view since 1998.

 

Another data point is that Berkshire OXY warrants currently have a strike price of 59.624  (originally it was 62.50 but Icahn had them do a dilutive deal that adjusted Berkshire's strike per the terms)

 

20087.2020.P.AN.PM.O.A.4100394.pdf 5.97 MB · 3 downloads 20087.2020.P.AN.PF.O.J.4176868.pdf 3.05 MB · 3 downloads 20087.2021.P.Q3.P.O.3.4228892.pdf 2.27 MB · 9 downloads

 

Thanks for sharing gfp!

[gfp]

Had a couple requests for the 2021 annual NAIC filings from National Indemnity now that they are released.  Posting them here since I can't put attachments on private messages.

 

20087.2021.P.AN.PI.O.M.4259200.pdf20087.2021.P.AN.PK.O.M.4259201.pdf

[gfp]

And the last one, wouldn't fit in first post:

20087.2021.P.AN.PO.O.M.4259202.pdf

[mcliu]

Thanks for sharing!

 

Btw, does anyone know why WB didn't mention DaVita & Verisign as one of the top 15 holdings in his annual letter? Did they sell out?

[ValueMaven]

That is a great point actually.  I highly doubt they sold out given Ted's conviction in the stock - he also personally owns 2M shares.  I've also wondered why DaVita isnt accounted for using the Equity Method given that Berkshire now owns close to 40% of the shares outstanding 

Edited March 2, 2022 by ValueMaven

[gfp]

3 hours ago, ValueMaven said:

That is a great point actually.  I highly doubt they sold out given Ted's conviction in the stock - he also personally owns 2M shares.  I've also wondered why DaVita isnt accounted for using the Equity Method given that Berkshire now owns close to 40% of the shares outstanding 

 

I don't know why it wasn't included but asked Marc Hamburg and will report back if I get an answer.  As for the equity method question, I beleive it has to do with commitments to remain passive shareholders in the agreement between DaVita and Berkshire/Ted.  For the same reason, I would not expect American Express to become an equity method investment this year.

 

 

**edit: I believe at least 17.5 million of Berkshire's DaVita shares are held in pension funds

 

**edit: CFO confirms the above, about half of the DVA position is in pension funds

Edited March 2, 2022 by gfp

[ValueMaven]

Thank you @gfp !!

[Buckeye]

Damn @gfp, contacting the CFO? Nice work.

[gfp]

Most of the folks at Berkshire are pretty responsive and helpful if you don't bug them too much and you don't ask about nonpublic information.  I usually email with Mr. Hamburg after the annual report but don't bother him the rest of the year.  People at Berkshire home office are busy!

[jbwent63]

Hey all, first time poster here. The folks at Dataroma do not distinguish between shares held by Berkshire Hathaway or its subsidiaries and the shares held in the Pension funds, which is the reason for the differences. The pension plans hold shares in the following I believe:

 

BK, DVA, GM, KHC, KR, LILA, LSXMK, RH, STOR, USB, VRSN.

 

Also, don't forget about the shares held in Berkshire's name at NEAM, being:

 

AAPL, BAC, BK, DEO, USB

 

Happy to hear if any of this is incorrect. All information from 13-F and Schedule 13 D or G filings and amendments.

 

Jeff

[Spekulatius]

Any risk due to the Ukraine invasion hiding somewhere within insurers? I don’t think much insurance was written in Ukraine, but business interruption insurance or is insurance  for stranded assets like AER planes could require some payouts.

 

Thats not a BRK specific problem, but I think BRK due to their size may see some of this.

[jbwent63]

2 hours ago, Spekulatius said:

Any risk due to the Ukraine invasion hiding somewhere within insurers? I don’t think much insurance was written in Ukraine, but business interruption insurance or is insurance  for stranded assets like AER planes could require some payouts.

 

Thats not a BRK specific problem, but I think BRK due to their size may see some of this.

I'd like to hope war exclusion policy wording would provide some cover for this, but its possible there could be some reinsurance exposure through London markets.

[gfp]

Berkshire refinancing rates -

https://www.sec.gov/Archives/edgar/data/1067983/000119312522068401/d270968dfwp.htm

 

Also borrowing again in Euros, but final rates not published yet

 

Here are the Euro rates -

https://www.sec.gov/Archives/edgar/data/1067983/000119312522069232/d324160dfwp.htm

Edited March 8, 2022 by gfp

[thepupil]

actually think this offering is illustrative of a material increase in spreads in very high quality borrowers. For example, the 2.5% of 2051 issued last January priced at an 85 spread. this offering's 2052's are priced at 165 spread to 30 yr. 

 

at a point, I might consider going long IG credit spreads. not there yet though. 

 

mechanically this would be you go long high quality corporate bonds in IRA, short TLT in taxable. 

 

another way to look at is Berkshire's 2051 note issued last year is at $79 / $100. A successful bond short on the part of Berkshire! 

 

if rates go up and spreads stay same, I think very long duration high quality paper will be an interesting asset class. it won't be impossible to see a 2051 bond issued by berkshire at $60 / $100 and yielding 5% (it's at $80 / 3.6% now). That would be an attractive bond to buy to offset my 2051 mortgage at 2.875%. 

 

Edited March 8, 2022 by thepupil

[thepupil]

41 minutes ago, thepupil said:

actually think this offering is illustrative of a material increase in spreads in very high quality borrowers. For example, the 2.5% of 2051 issued last January priced at an 85 spread. this offering's 2052's are priced at 165 spread to 30 yr. 

 

at a point, I might consider going long IG credit spreads. not there yet though. 

 

mechanically this would be you go long high quality corporate bonds in IRA, short TLT in taxable. 

 

another way to look at is Berkshire's 2051 note issued last year is at $79 / $100. A successful bond short on the part of Berkshire! 

 

if rates go up and spreads stay same, I think very long duration high quality paper will be an interesting asset class. it won't be impossible to see a 2051 bond issued by berkshire at $60 / $100 and yielding 5% (it's at $80 / 3.6% now). That would be an attractive bond to buy to offset my 2051 mortgage at 2.875%. 

 

 

for example, you can buy a 21 year Berkshire Energy bond for 4.2% today, right now. 

 

BRKHEC 5.15% of 2043 for $112. This has duration of 13~14 or so, so mark to market will be bad if rates go up a lot, but it's still a quite safe bond and we haven't seen 4 handles on very safe bonds in 3-4 years. I have a 1.8% position in this. If/when rates go up, I'll add another issuer at a 5 handle yield..and another and another (in tax advantaged). 

 

with i-bonds in taxable at 7% and longer duration high quality borrower yields starting to pick up, over time would hope to "defease" mortgage with high quality fixed income. for now though, it's just a start and you want to do this over time, not all at once IMO. 

 

i think most will vomit at the idea of making 4% for 21 years though. I get it.  

 

 

[longterminvestor]

On 3/5/2022 at 10:01 AM, Spekulatius said:

Any risk due to the Ukraine invasion hiding somewhere within insurers? I don’t think much insurance was written in Ukraine, but business interruption insurance or is insurance  for stranded assets like AER planes could require some payouts.

 

Thats not a BRK specific problem, but I think BRK due to their size may see some of this.

As a broker, we write cargo policies with "world wide coverage" - some policies have war/confiscation exclusions and some do not.  I have received some mid term endorsements excluding Ukraine and war/confiscation recently.  None of these accounts have direct exposure to Ukraine - they are US distributors who source product from Asia.  Berkshire is not the primary risk bearer on these cargo deals (unknown if they participate on a reinsurance basis) however trying to provide some color on this question.  

 

Unknown on the carriers who underwrite 1st party multi-peril (property insurance) in Ukraine - not my market.  

[BroKon]

From their 10-K: "Certain catastrophe, individual risk and aviation excess-of-loss contracts tend to generate low frequency/high severity losses"

 

Only 2/3 insurers big enough to take this quantum of excess of loss risk on, so you have to assume they are on the hook for their fare share.

[Charlie]

Berkshire Hathaway nominates Wally Weitz to fill open board seat:

 

https://finance.yahoo.com/news/berkshire-hathaway-nominates-wally-weitz-232726159.html

 

Cheers!

[wabuffo]

Also - Buffett repurchased a further 4.5m B-share equivalents in the 2 weeks since the 10-K came out.  I reckon another $1.4b in common stock at ~ $315-$316 avg price per B-share.  

 

Good to see him still buying at prices well above $300 per B-share -- though pace this Q will definitely be lower than last couple of years.

 

 

Bill

Edited March 12, 2022 by wabuffo

[yesman182]

1 hour ago, wabuffo said:

Also - Buffett repurchased a further 4.5m B-share equivalents in the 2 weeks since the 10-K came out.  I reckon another $1.4b in common stock at ~ $315-$316 avg price per B-share.  

 

Good to see him still buying at prices well above $300 per B-share -- though pace this Q will definitely be lower than last couple of years.

 

 

Bill

Thanks for sharing this. Between the OXY and buyback, the cash pile shouldn't be growing too much in the first Q!

[ValueMaven]

Thanks Bill!!  @wabuffo

[fareastwarriors]

 

Family of Late Berkshire Billionaire Retains $7.5 Billion Stake

 

Quote

Family members of Walter Scott Jr., a longtime Berkshire Hathaway Inc. director and friend of Warren Buffett who died last year, have retained his roughly 8% stake in Berkshire Hathaway Energy, according to a regulatory filing. 

 

That position is worth about $7.5 billion, based on Bloomberg calculations and details of an earlier filing showing that the stake in the Berkshire unit can be exchanged for shares in the parent company. 

 

The family members have agreed not to sell their shares in the energy subsidiary without offering Berkshire the right to buy them first, according to the filing. 

 

 

Edited March 12, 2022 by fareastwarriors

[xboojum]

Looks like the CEO of Lubrizol (since all of 2021) has been removed; JM's Mary Rhinehart stepping in for now: https://www.businesswire.com/news/home/20220311005450/en/Mary-Rhinehart-Named-Interim-President-and-CEO-of-Lubrizol

[fareastwarriors]

Slow and steady

 

https://www.cnbc.com/2022/03/16/berkshire-hathaway-closes-at-a-record-above-500000-a-share-as-buffetts-conglomerate-roars-back.html