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Berkshire loosens policy on buy backs


shalab
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  • 10 months later...
Guest longinvestor

 

I went back about a year and pulled up this post. This, to me provides the context for where we stand today.

 

Let’s say Buffett and Munger did not loosen the policy and left the buyback threshold at 1.2x BV. Or even trickled it up. What would everyone be saying still? What has Buffett communicated with shareholders since then? Well, AFAIC, he asks shareholders to look at the forest versus the trees. The grove thing. Yeah, small detail he avoided was to not spell out what the insurance biz was worth to shareholders. But what’s a 100B or more between us boys and girls?😉 I will bet that for Buffett, Insurance represents the margin of safety, the single most important lesson he learned from Graham. It probably lets him sleep like a baby in bed and rest some day in a box.

 

There’re a lot of people who seem pissed at the old guys. They have learned from their mistake of being too explicit about their buyback criterion. They couldn’t buy a single share in the open market. Now they have bought only about 4B worth! Now they choose to be evasive in their answers. Which is the right thing to do by the shareholders. The refrain at the annual meeting was”We’re not in the investment advisory business”. There’s an undeserved expectation that they educate the world but not at the expense of shareholders. It’s only been 10 months since. I am looking forward to the mother of all buybacks.

 

 

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There’s a lot of people who seem pissed at the old guys. They have learned from their mistake of being too explicit about their buyback criterion. They couldn’t buy a single share in the open market. Now they have bought only about 4B worth! Now they choose to be evasive in their answers. Which is the right thing to do by the shareholders. It’s only been 10 months since. I am looking forward to the mother of all buybacks.

 

Couldn't agree more - management has been more than fair in their warnings - and I would not exactly call them "evasive", but they certainly

do not need to be explicit every reporting period....good for them, and good for long term shareholders.

 

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Guest longinvestor

 

There’s a lot of people who seem pissed at the old guys. They have learned from their mistake of being too explicit about their buyback criterion. They couldn’t buy a single share in the open market. Now they have bought only about 4B worth! Now they choose to be evasive in their answers. Which is the right thing to do by the shareholders. It’s only been 10 months since. I am looking forward to the mother of all buybacks.

 

Couldn't agree more - management has been more than fair in their warnings - and I would not exactly call them "evasive", but they certainly

do not need to be explicit every reporting period....good for them, and good for long term shareholders.

 

 

I am thinking about the proper wording for the recent behavior and evasive is not a stretch to me. Not forthcoming may be? Whatever the term, I’m good with anything they say or do that makes the idiots cough up their shares back to the company. 1B a quarter worth would take 20 years, 2B per 10 and so on. Munger, “If there weren’t so many idiots we wouldn’t be so rich, would we, Warren?”

 

 

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Guest longinvestor

Three phrases from Buffett's mouth that moves the market price of Berkshire.

 

- Conservatively calculated (Don't include the Insurance "Grove" in IBV calc)

- We're not salivating over it (buying just 1.7B versus 100B)

- Difference not dramatic (the instant benefit to remaining shareholders)

 

And then we have Munger saying "I predict that we will get more liberal with buybacks over time".

 

This is what they said, let's see what they do. 

 

 

 

 

 

 

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