Why Has Warren Been So Quiet?

[gfp]

I thought Berkshire owned 149,497,786 shares of USB as of August 2019

 

Which went up slightly to 150,088,061 since the 1st of the year.

 

(The event that caused the Form 3 was USB's earnings press release & cc presentation on 4/15/2020 which showed an updated share count of  1,506,000,000)

[Cigarbutt]

gfp,thank you for the clarification and the correction. It seems Dynamic could confirm the exact numbers here. i have an old file on USB and was sloppy for the more recent developments and assumed (wrongly) that ownership went up recently, which, likely, it did not. I was sloppy because i had to go and join the household for a visit (put in the anecdote section).

So, the above post has been edited.

[Dynamic]

150,088,061 shares of USB were controlled by Berkshire at 31 December 2019, unchanged from 30 June 2019, having increased slightly in 2019Q2.

 

17,628,443 of these were held via New England Asset Management 13F-HR so don't show up on most Berkshire portfolio trackers unless they adjust for the latest Form 3 filing like CNBC sometimes does.

 

590,275 were held by subsidiary pension funds, not for the benefit of Berkshire shareholders, so I subtract these from my tracker but they still count towards the 10% rule for filling Form 3.

 

 

[mattee2264]

 

I think it is a combination of things.

 

What I think Buffett really wants to do is make a big acquisition before he retires. Most companies are frozen by the uncertainty and aren't going to do anything hasty like put themselves up for sale especially as they believe they would get much more favourable prices for their businesses when things get back to normal. So I think Buffett is being patient and hoping that there will be opportunities down the line.

 

As for the stock market again Buffett wants to take meaningful positions that move the needle and has very strict buying criteria. The speed of the crash and the recovery does not lend itself to those kind of operations. I am sure Todd and Ted were a lot more active as they are able to operate under the radar and are much more active investors.

 

Also Berkshire Hathaway is a business and he needs to consider the cash needs of the operating companies and maintain Berkshire's fortress balance sheet which is a huge competitive advantage. There are multiple possible scenarios. The market seems to be pricing in the most favourable one. In a less favourable scenario where the economy stagnates for some time then not only will there be better investment opportunities but the cash will also ensure that the operating companies are not forced into decisions that will erode their long term competitiveness such as asset sales and taking on too much debt and so on.

[Guest longinvestor]

Buffett's comments next week will be the most awaited, ever.

 

What if he suggests that given where we are, the $130 B is not enough, he'd be wishing he had more.

 

The five capital allocation buckets mentioned in prior years,

(1) improving the earning power of our many subsidiaries; (2) further increasing their earnings through bolt-on acquisitions; (3) participating in the growth of our investees; (4) repurchasing Berkshire shares when they are available at a meaningful discount from intrinsic value; and (5) making an occasional large acquisition

 

My sense is that the pareto for the next few years: 1) 2) 5) 3) 4)

 

Now is the time for Jain / Abel and their wards to step up. The current crisis is a test of the transition and it is better this way versus current management not being around.  There's got to be many smaller opportunities and the cash hoard should allow the subs to pull away from their competition during this crisis. Truly 1&2 are more in their hands. Everything else is opportunistic which they will do as well but the phone has to ring for that.

 

Looking forward to May 2!

 

[karthikpm]

Bill Gates was on Zakaria's show and he had a lot more skepticism about the economy getting back to Precovid days anytime soon

This may be a big factor in why BRK is not doing much of anything at this time

[NoCalledStrikes]

Well, he’s going to be pretty quiet at the modified AGM too if there is only 45 minutes for questions. I can understand his not wanting to do a full day of video questions, but 45 minutes is not much especially if it includes some formalities.  I can only assume that is by his design.  My conclusion is that he doesn’t want to talk. For someone as long term optimistic as WEB, this is not a cheery data point.

[wescobrk]

If it takes 2 years (vaccine)as Bill Gates said "1-2 years" then it appears we may not have another annual meeting with him and Charlie until 2022, if ever, sadly, due to their age.

I hope they both live to 2022.

[Guest longinvestor]

Rationally thinking about this, what kind of crew is going to be at his house, what gear gets hooked up, what surfaces  does our 90 year old Chairman touch? If 45 or 60 minutes is less risky than say 90 or 180 minutes, that’s what they should do.

 

It’s quite a nice gesture to even have a live event given what’s going on. Let the 90 year old live to 91, 92 etc.

 

CNBC has an archive of every annual meeting going back to 1994. His answers this time are unlikely to be much different.

[wescobrk]

I still don't understand why Warren and Charlie and Ajit just dial in from home and have an audio meeting along with the other directors.

 

[Jurgis]

I still don't understand why Warren and Charlie and Ajit just dial in from home and have an audio meeting along with the other directors.

 

Because Munger is old and tired and does not want the hassle and does not give a crap and feels no obligation to engage faceless horde of not-really-fans (hey just judging based on reactions to his interview)?

 

And Ajit is not a spotlight seeker. Though it's possible Warren did not even invite him.

 

It sometimes seems that people feel entitled to the day worth of entertainment. Warren is happy to oblige... so far.

 

Also audio meetings suck.  8)

[changegonnacome]

Bill Gates was on Zakaria's show and he had a lot more skepticism about the economy getting back to Precovid days anytime soon

This may be a big factor in why BRK is not doing much of anything at this time

 

Think this might be it -Warren was never one to kick the US/Global economy when its down..................and well if you've nothing nice to say, best to say nothing at all (or as little as possible in the AGM case)

[sleepydragon]

Charlie and Warren are not taking any chances. This is good! I would prefer them to take this virus seriously.

[NoCalledStrikes]

I still don't understand why Warren and Charlie and Ajit just dial in from home and have an audio meeting along with the other directors.

 

Both are on the board, so I assume they are dialing in for the director's meeting, just not the public Q&A.

[Xerxes]

Looks like Greg Abdel and Buffet would be answering the Q&A … no Munger

Nothing to add !