ValueMaven Posted May 5, 2022 Share Posted May 5, 2022 Link to comment Share on other sites More sharing options...
ElstonG Posted May 5, 2022 Share Posted May 5, 2022 Thank you for sharing! I like many others have deep-Googled Ted and read basically everything that can be found so this is like Xmas in May. Link to comment Share on other sites More sharing options...
JGBRK Posted May 5, 2022 Share Posted May 5, 2022 Thank you ValueMaven. Link to comment Share on other sites More sharing options...
gfp Posted May 5, 2022 Share Posted May 5, 2022 Yes - Thanks for posting this interview. Berkshire got so insanely lucky to find and hire this guy. Link to comment Share on other sites More sharing options...
Sinbius Posted May 6, 2022 Share Posted May 6, 2022 (edited) Looks like he and Buffett are into macro too (Buffett always says he doesn't...)... Edited May 6, 2022 by Sinbius Link to comment Share on other sites More sharing options...
KFS Posted May 6, 2022 Share Posted May 6, 2022 Excellent, thanks. Link to comment Share on other sites More sharing options...
TREVNI Posted May 7, 2022 Share Posted May 7, 2022 Anyone have Ted's letters from Peninsula? Link to comment Share on other sites More sharing options...
gary17 Posted May 7, 2022 Share Posted May 7, 2022 thanks for sharing- i enjoyed this Link to comment Share on other sites More sharing options...
Sinbius Posted May 8, 2022 Share Posted May 8, 2022 (edited) I'm surprised he read so many journals instead of just annual reports or company/sector specific stuff ... does he have a top-down approach? Edited May 8, 2022 by Sinbius Link to comment Share on other sites More sharing options...
ElstonG Posted May 8, 2022 Share Posted May 8, 2022 (Newb question) Can anyone explain in a bit more detail why going over 10% ownership causes enough “hassle” relative to return expectations that it’s rational to avoid doing so in most cases? Ted references this in the interview and of course WEB has before as well, but given the smaller pool of investments that make a difference for Berkshire (due to size and other constraints), it seems weird to me that they’d defer allocating more money to a business that meets their criteria just to avoid various filings and some amount of bureaucratic headache. I know avoidance of bureaucracy is part of BRK’s culture and I applaud that, I am just trying to understand what would make > 10% ownership so annoying as to be willing to pass up what must be hundreds of millions in expected returns. Link to comment Share on other sites More sharing options...
gfp Posted May 8, 2022 Share Posted May 8, 2022 (edited) If we are just talking about non-bank stocks, there are two main "hassles" - one is the "short swing profit rule" which basically has the effect of forcing the 10+% holder of the stock to return to the company any profit it makes if it holds the stock for less than 6 months. Despite what your intentions might be on holding period, it is a pain to not be able to sell out of your position and keep any profits if something changes (like your liquidity needs or the share price for example). That's not the biggest hassle, but it does play into their thinking. The main "hassle" for a high profile investor (remember that Ted and Todd's trades will largely say "Warren E. Buffett, Berkshire Hathaway" when reporting) is that once you are in the stock and over 10%, you have to notify the world 3 days after your first share sale. So you greatly increase your friction costs to exit the position if everybody knows that Warren Buffett (who's supposed to know a lot about these things) is just beginning a major divestment and has a lot more stock to sell. So the price gets pushed lower on you and it costs you real money. With a bank holding company, you cannot go over 10% without Fed approval. Berkshire has conditional approval to go up to 25% on American Express if they remain totally passive and they have conditional approval to go above 10% on BAC - I don't remember how high they can go. Perhaps higher if it is only due to company repurchases. This is why Berkshire periodically sells USB shares. They don't have permission to go above 10%. So they only go above 10% when something is going to be a really long-term hold or they really really like it. They went above 10% on BNSF (something like 22%). They are above 10% on Moody's, DaVita and Occidental. There may be some others (obviously BAC & AXP above). KHC is sort of special because they are part of a control group and use the equity method. To me, it means that they are not buying OXY for a short term hold. They may want the entire company but who knows (not me). Edited May 8, 2022 by gfp Link to comment Share on other sites More sharing options...
LearningMachine Posted May 8, 2022 Share Posted May 8, 2022 13 minutes ago, gfp said: With a bank holding company, you cannot go over 10% without Fed approval. Berkshire has conditional approval to go up to 25% on American Express if they remain totally passive and they have conditional approval to go above 10% on BAC - I don't remember how high they can go. Perhaps higher if it is only due to company repurchases. This is why Berkshire periodically sells USB shares. They don't have permission to go above 10%. Effective April 1, 2020, Berkshire can now go over 10% percent as long as it can avoid some factors that could lead to rebuttable presumption of control. See https://www.federalreserve.gov/aboutthefed/boardmeetings/files/control-rule-fr-notice-20200130.pdf. Here is a clearer table from https://www.arnoldporter.com/en/perspectives/advisories/2020/02/federal-reserve-adopts-final-rule-clarifying that clarifies what factors Berkshire would need to avoid for different levels of ownership to not have to deal with rebuttable presumption of control: Link to comment Share on other sites More sharing options...
gfp Posted May 8, 2022 Share Posted May 8, 2022 Ah yes, I forgot that became effective. So Berkshire has other reasons for not wanting to go above 10% on USB. Thanks for posting that Link to comment Share on other sites More sharing options...
ElstonG Posted May 8, 2022 Share Posted May 8, 2022 Thanks, gfp, that was a helpful/clear overview of the downsides. Link to comment Share on other sites More sharing options...
dajidali Posted May 9, 2022 Share Posted May 9, 2022 Thank you for sharing - the talk was great. I met Ted at the annual meeting. He is really down to earth and very approachable. There was this Capitalist card that was selling for $1 at the annual meeting. He got a bunch from the head office and was giving them away for free. When he finished his own 5K run (7th in his age group), he would cheer for everyone at the finish line. Link to comment Share on other sites More sharing options...
n.r98 Posted May 9, 2022 Share Posted May 9, 2022 Nice interview but always get the feeling that Ted is very secretive with his process and approach towards markets.. Or maybe it's really *that simple*. He also sounds exactly like Warren: talks, laughs and outlook re life and success...no wonder they get along. Link to comment Share on other sites More sharing options...
Xerxes Posted May 12, 2022 Share Posted May 12, 2022 I listened to it. Pretty good. Liked how he describe current market condition (post-invasion/higher rate) being something that their team is more familiar with as oppose to mid-March 2020. It seems that the same discipline being applied to individual name seem to be applied at “macro event situations”. March-April 2020 was not a fat pitch but post-Feb 2022 was Link to comment Share on other sites More sharing options...
longterminvestor Posted January 22, 2023 Share Posted January 22, 2023 New interview: Link to comment Share on other sites More sharing options...
gfp Posted January 22, 2023 Share Posted January 22, 2023 On 5/4/2022 at 7:09 PM, ValueMaven said: Not new. Just someone on YouTube trying to monetize someone else's interview from May Link to comment Share on other sites More sharing options...
Xerxes Posted January 23, 2023 Share Posted January 23, 2023 Anyone seen this from 2014 Link to comment Share on other sites More sharing options...
Luke Posted January 23, 2023 Share Posted January 23, 2023 10 hours ago, longterminvestor said: New interview: Enjoyed this one very much, thanks! Link to comment Share on other sites More sharing options...
longterminvestor Posted January 23, 2023 Share Posted January 23, 2023 13 hours ago, gfp said: Not new. Just someone on YouTube trying to monetize someone else's interview from May I'm the sucker whose helping. Link to comment Share on other sites More sharing options...
gfp Posted January 23, 2023 Share Posted January 23, 2023 4 minutes ago, longterminvestor said: I'm the sucker whose helping. It's certainly a good interview - I definitely recommend it. The "owner" of the content is Nebraska Furniture Mart FWIW. Link to comment Share on other sites More sharing options...
PatchesAKF Posted January 24, 2023 Share Posted January 24, 2023 Does anyone know what service Todd is referring to when he mentions Delta Reports? Is there a specific service that creates delta reports for filings? Link to comment Share on other sites More sharing options...
giulio Posted January 24, 2023 Share Posted January 24, 2023 I've been using this one https://draftable.com/compare It saves me time and helps spotting accounting standards changes. Link to comment Share on other sites More sharing options...
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