Why Has Warren Been So Quiet?

[Jurgis]

He's 89 years old

 

LOL I can see him in isolation at home, unable to get his FaceTime to work. Or maybe his router needs to be reset, and nobody there to help him.

 

Big Co CEO: "Why is Buffett not answering our offer? Should we raise pref rate from 9 to 10%? Should we add warrants? He said he'll answer in 10 minutes and it's been an hour already..."

 

<meanwhile>

 

Buffett: "Why is my computer not working? I need to answer that Big Co CEO and get my elephant! I think I need to do something to restart this computer! Maybe Bill knows! Where is my iPhone? Can anyone find my iPhone? Oh, nobody's here, I'm in self isolation... Where is my iPhone? Maybe Tim knows where it is."

[Guest]

One thing that really annoys me about Buffet in the last 2-3 years is his constant preaching that stocks are not expensive if interest rates stays low.  At the same time, Berkshire was building a war chest of $100bn of cash.  It's one thing when Bill Ackman says that stocks are cheap with interest rate being low.  It's another when it is the icon of value investing pretty much saying that paying 30x FCF is okay due to low interest rates.

 

He said the same thing in this year's annual report. That was released after all of this started.

[buffetteer1984]

How do people know Warren isn't accumulating at the moment? Just because hes selling airlines doesn't mean he can't be a net buyer overall in stocks he probably views as being able to weather this environment much better ie banks possibly.  He's not gonna come out and tell the world it's a good time to buy and have the markets take off on him when he can only buy a certain amount every day.  For most people if you weren't buying when the markets fell to 2200 on your own you have no business buying at 2700 just because buffett gives you his blessing.  He gives his advice annually and that should be sufficient enough to make our own decisions.  We shouldn't need him to go on air everytime there's some panic so he can calm us down.

 

The thing with berkshire is they're not looking to buy and sell stocks.  They're looking to acquire companies to increase cash flow.  It's one thing to buy apple and collect 1% in dividends and another to get the entire company and decide what to do with all the cash flow.  He's holding cash for that purpose.  I'm sure if he didn't have to pay a premium for an entire company he would have bought something already.  That's not the case for berkshire.  So they pick away at stocks while waiting for the elephant

 

One thing that really annoys me about Buffet in the last 2-3 years is his constant preaching that stocks are not expensive if interest rates stays low.  At the same time, Berkshire was building a war chest of $100bn of cash.  It's one thing when Bill Ackman says that stocks are cheap with interest rate being low.  It's another when it is the icon of value investing pretty much saying that paying 30x FCF is okay due to low interest rates.

 

 

[Guest]

How do people know Warren isn't accumulating at the moment? Just because hes selling airlines doesn't mean he can't be a net buyer overall in stocks he probably views as being able to weather this environment much better ie banks possibly.  He's not gonna come out and tell the world it's a good time to buy and have the markets take off on him when he can only buy a certain amount every day.  For most people if you weren't buying when the markets fell to 2200 on your own you have no business buying at 2700 just because buffett gives you his blessing.  He gives his advice annually and that should be sufficient enough to make our own decisions.  We shouldn't need him to go on air everytime there's some panic so he can calm us down.

 

The thing with berkshire is they're not looking to buy and sell stocks.  They're looking to acquire companies to increase cash flow.  It's one thing to buy apple and collect 1% in dividends and another to get the entire company and decide what to do with all the cash flow.  He's holding cash for that purpose.  I'm sure if he didn't have to pay a premium for an entire company he would have bought something already.  That's not the case for berkshire.  So they pick away at stocks while waiting for the elephant

 

One thing that really annoys me about Buffet in the last 2-3 years is his constant preaching that stocks are not expensive if interest rates stays low.  At the same time, Berkshire was building a war chest of $100bn of cash.  It's one thing when Bill Ackman says that stocks are cheap with interest rate being low.  It's another when it is the icon of value investing pretty much saying that paying 30x FCF is okay due to low interest rates.

 

I think he is buying. With that said, he did tell the world that he was buying in Oct 2008...in which the market drop another 20%+ after.

[buffetteer1984]

Maybe Warren learned his lesson not to speak too soon, for better or worse.  One other difference is how swift this down draft has been.  It could be possible Warren needs more time to buy and will speak out when he's done or certain his elephant isn't available.  In 2008 he spoke out after he had already made the big purchase.

 

How do people know Warren isn't accumulating at the moment? Just because hes selling airlines doesn't mean he can't be a net buyer overall in stocks he probably views as being able to weather this environment much better ie banks possibly.  He's not gonna come out and tell the world it's a good time to buy and have the markets take off on him when he can only buy a certain amount every day.  For most people if you weren't buying when the markets fell to 2200 on your own you have no business buying at 2700 just because buffett gives you his blessing.  He gives his advice annually and that should be sufficient enough to make our own decisions.  We shouldn't need him to go on air everytime there's some panic so he can calm us down.

 

The thing with berkshire is they're not looking to buy and sell stocks.  They're looking to acquire companies to increase cash flow.  It's one thing to buy apple and collect 1% in dividends and another to get the entire company and decide what to do with all the cash flow.  He's holding cash for that purpose.  I'm sure if he didn't have to pay a premium for an entire company he would have bought something already.  That's not the case for berkshire.  So they pick away at stocks while waiting for the elephant

 

One thing that really annoys me about Buffet in the last 2-3 years is his constant preaching that stocks are not expensive if interest rates stays low.  At the same time, Berkshire was building a war chest of $100bn of cash.  It's one thing when Bill Ackman says that stocks are cheap with interest rate being low.  It's another when it is the icon of value investing pretty much saying that paying 30x FCF is okay due to low interest rates.

 

I think he is buying. With that said, he did tell the world that he was buying in Oct 2008...in which the market drop another 20%+ after.

[plato1976]

There is a very big chance that Berkshire didn't take adv of this market melt-down in any meaningful way, and came out to surprise shareholders greatly

 

Maybe Warren learned his lesson not to speak too soon, for better or worse.  One other difference is how swift this down draft has been.  It could be possible Warren needs more time to buy and will speak out when he's done or certain his elephant isn't available.  In 2008 he spoke out after he had already made the big purchase.

 

How do people know Warren isn't accumulating at the moment? Just because hes selling airlines doesn't mean he can't be a net buyer overall in stocks he probably views as being able to weather this environment much better ie banks possibly.  He's not gonna come out and tell the world it's a good time to buy and have the markets take off on him when he can only buy a certain amount every day.  For most people if you weren't buying when the markets fell to 2200 on your own you have no business buying at 2700 just because buffett gives you his blessing.  He gives his advice annually and that should be sufficient enough to make our own decisions.  We shouldn't need him to go on air everytime there's some panic so he can calm us down.

 

The thing with berkshire is they're not looking to buy and sell stocks.  They're looking to acquire companies to increase cash flow.  It's one thing to buy apple and collect 1% in dividends and another to get the entire company and decide what to do with all the cash flow.  He's holding cash for that purpose.  I'm sure if he didn't have to pay a premium for an entire company he would have bought something already.  That's not the case for berkshire.  So they pick away at stocks while waiting for the elephant

 

One thing that really annoys me about Buffet in the last 2-3 years is his constant preaching that stocks are not expensive if interest rates stays low.  At the same time, Berkshire was building a war chest of $100bn of cash.  It's one thing when Bill Ackman says that stocks are cheap with interest rate being low.  It's another when it is the icon of value investing pretty much saying that paying 30x FCF is okay due to low interest rates.

 

I think he is buying. With that said, he did tell the world that he was buying in Oct 2008...in which the market drop another 20%+ after.

[Nomad]

Maybe Warren learned his lesson not to speak too soon, for better or worse.  One other difference is how swift this down draft has been.  It could be possible Warren needs more time to buy and will speak out when he's done or certain his elephant isn't available.  In 2008 he spoke out after he had already made the big purchase.

 

I think that's a very reasonable interpretation. If unemployment and business activity numbers are truly terrible, there's no saying that stocks won't get even cheaper as earnings erode. In the Great Depression, the market crashed in 1929 but didn't bottom until 1932. Buffett is a patient man and willing to wait for asymmetric opportunities - he's been waiting for a decade now, after all.  ;D

[omagh]

Warren strikes me as a paper guy -- he needs a hard copy of things to get into his comfort zone.  So somebody has to print stuff off for him or get his hard copies from the office.  His process is probably a bit slower.  I doubt that he gives out his cell number much either.  So instead of someone setting up the conference call for him, he's all thumbs.  My Dad would be the same... :)

 

But really, he's probably head down working (reading, thinking, calling his brokers) as businesses are on sale, so why waste time with public interviews and statements?

[Mephistopheles]

Remember in the financial crisis he put $5 billion in Goldman, and the very next day Goldman was able to get another $5 billion at better prices from the market? Occam'z Razor - he wants all the good deals for himself, doesn't want to give a boost to the markets by going on TV.

 

He went on TV after 9/11 and during financial crisis, wrote that op-ed. Yea, but times are different. BRK is so large. He might get a chance to deploy like $100 billion in this crisis at killer prices. He doesn't want market to bounce based on him showing his confidence.

[jeffsreng]

Capitalist vulture likes to hunt quietly :)

[walnut]

Keep in mind that for Buffett to add a new public stock position, his size requires that he is in the market over weeks or months, without trying to influence the price.  So I don't think anyone will hear anything until regulatory filings unless it is a private deal that requires disclosure by the company receiving capital

[Uccmal]

Warren strikes me as a paper guy -- he needs a hard copy of things to get into his comfort zone.  So somebody has to print stuff off for him or get his hard copies from the office.  His process is probably a bit slower.  I doubt that he gives out his cell number much either.  So instead of someone setting up the conference call for him, he's all thumbs.  My Dad would be the same... :)

 

But really, he's probably head down working (reading, thinking, calling his brokers) as businesses are on sale, so why waste time with public interviews and statements?

 

I get that he prefers paper but I have never thought of him as a luddite. 

 

He was using a cell phone before most people, in 1998, during the LTCM thing.  He started playing bridge online in 93/94 before the internet took off.  His cell number is likely pretty well guarded.  His security service at home probably knows how to reboot the router and change in printer cartridge anyways. :-).  I think its is more about preferences and disciplined time management. 

 

He is likely watching and waiting and nibbling here and there.  Dude is nearly 90... maybe he is having a nap.

[Sleepwell]

He's waiting for Disney to fall 40% so he can buy the whole thing  :)

[Guest cherzeca]

I have been a long time admirer of Buffett/Munger. and I fully expect that at some point in the next 6(?) months you will see some interesting moves on the buy side.  but having the cash stash they have and selling now (and now is a particularly bad substitute for forever) makes me wonder what the plan is...

[changegonnacome]

Just sold Bank of New York Mellon shareholding to the tune of $30m

[Cigarbutt]

^This looks like adjustments to the 10% ownership level:

https://www.sec.gov/Archives/edgar/data/315090/000120919120024066/xslF345X03/doc4.xml

Is there more?

[beerbaron]

I doubt the elephant would be a bank. BRK had to divest banks in the past for legal reasons and I can't think why the situations would be any different today.

 

BeerBaron

[undervalued]

So far he has been raising cash and selling airlines and bank

[John Hjorth]

Personally, I think Mr. Buffett has been busy rewriting his shareholder letter, scrapping the draft "as was", perhaps before Christmas, trying to do a total rewrite to give it another angle, but likely he'll have a hard keeping up with Mr. Dimon this year.

[spartansaver]

Personally, I think Mr. Buffett has been busy rewriting his shareholder letter, scrapping the draft "as was", perhaps before Christmas, trying to do a total rewrite to give it another angle, but likely he'll have a hard keeping up with Mr. Dimon this year.

 

His letter is already out. He finished it Feb 22.

[John Hjorth]

Agreed, but I think he'll try to rewrite and/or update it, and publish what's on his mind before the digital AGM. The February 22^nd letter is pretty much obsolete as of now. He'll need to take some of the steam off the AGM questions, and inform shareholders in more detail about how Berkshire is doing now under these circumstances. -Wouldn't you expect that of him? ["Inform as our roles were reversed" and all that.]

[Guest cherzeca]

^This looks like adjustments to the 10% ownership level:

https://www.sec.gov/Archives/edgar/data/315090/000120919120024066/xslF345X03/doc4.xml

Is there more?

 

why?

 

you dont have section 16b liability when the issuer buys back shares putting you over 10%, so there was no need to get under 10%.  I just think warren has lost his good sense and munger cant hear any more

[Cigarbutt]

^This looks like adjustments to the 10% ownership level:

https://www.sec.gov/Archives/edgar/data/315090/000120919120024066/xslF345X03/doc4.xml

Is there more?

wh

you dont have section 16b liability when the issuer buys back shares putting you over 10%, so there was no need to get under 10%.  I just think warren has lost his good sense and munger cant hear any more

I was under the impression that BRK had not bought BK shares in the last 6 months so the short-swing profit rule would not apply and that shares were sold as a way to bring the ownership below 10% (I think the Fed rule hasn't changed yet) given that BK kept the buyback going up to recently.

[Charlie]

Barrons has stolen the question from this thread:

 

https://www.barrons.com/articles/stick-with-berkshire-hathaway-stock-even-if-warren-buffett-has-gone-quiet-51586542320

 

 

;)

 

 

 

[Guest cherzeca]

^This looks like adjustments to the 10% ownership level:

https://www.sec.gov/Archives/edgar/data/315090/000120919120024066/xslF345X03/doc4.xml

Is there more?

wh

you dont have section 16b liability when the issuer buys back shares putting you over 10%, so there was no need to get under 10%.  I just think warren has lost his good sense and munger cant hear any more

I was under the impression that BRK had not bought BK shares in the last 6 months so the short-swing profit rule would not apply and that shares were sold as a way to bring the ownership below 10% (I think the Fed rule hasn't changed yet) given that BK kept the buyback going up to recently.

 

no, this refers to potential 16b liability for BRK re selling shares of a portfolio company when you are a >10% holder...which is not triggered when you go over 10% without having made a buy (ie due to portfolio company repurchases shrinking the outstanding)

 

my point is that warren cant justify any sales to get under 10% ownership of a portfolio company to avoid 16b liability, so it is a head scratcher why he would be selling anything now, given depressed portfolio company share prices and no shortage of cash on hand at BRK