Berkshire 2022 Annual Report

[Munger_Disciple]

https://www.espn.com/nba/story/_/id/35746705/sources-marc-lasry-agrees-sell-bucks-haslams-35b

 

Probably the reason Pilot deal was completed in January 2023. 

[jbwent63]

7 hours ago, Spekulatius said:

I believe he is still topping up his allocation to the handful of Japanese trading houses he owns.

Apologies that I cannot remember the user's name, but someone was posting the detailed listings of NICO's investments which listed all the stocks that company and its subs owned, including the foreign ones (Japanese, German, Australian etc.). I hope that person will do so again when the NICO filings are available for 12-31-22 with many thanks.

[Parsad]

On 2/25/2023 at 8:48 AM, John Hjorth said:

 

The yearly shareholder letters have become shorter and shorter during the last few years for each year passing, yes.

 

However, I think Mr. Buffett has served his service, and has done it very well over time [, like in : over now many years].

 

+1!  And myriad books, biographies, etc.  If you need a longer letter to figure out investing at this point, buy index funds.  

 

While I'm sure there is more knowledge to be gleaned from the old man, if he wants to shorten the letter after 60 years of them, then I'm ok with that!

 

Cheers and thanks to Warren for all the letters he's written over the years!

[StevieV]

On 2/25/2023 at 7:16 PM, gfp said:

Pilot company has grown a ton since 2017.  They are doing a lot more business than just the truck stops.  Since they took over control, Berkshire has shut down a portion of their oil trading operation and let some employees go.  I would link to their subsidiaries but they have removed the list from the website as far as I can tell.  Moody's will probably do an update soon to reflect the credit rating bump from being a consolidated Berkshire subsidiary and they may spell out more detail in that report.

 

"Pilot company has grown a ton since 2017.  They are doing a lot more business than just the truck stops."

 

Do you (or anyone else) mind elaborating?  Curious about how they are expanding.  I know essentially nothing about the company.

[Parsad]

On 2/25/2023 at 12:53 PM, Dinar said:

 I was suprised that Buffett who is usually very careful not to offend and always claimed to be a Democrat essentially called Biden and the Democratic party economic illiterates and silver tongued demagogues.  

 

I think he was calling Trump that too, since debt/GDP grew dramatically under his watch as well.  Cheers!

[Parsad]

19 hours ago, backtothebeach said:

 

Tempted to make the pilgrimage for the first time this year...

 

You should go at least once.  It's well worth it...at least one time!  Cheers!

[gfp]

2 hours ago, StevieV said:

 

"Pilot company has grown a ton since 2017.  They are doing a lot more business than just the truck stops."

 

Do you (or anyone else) mind elaborating?  Curious about how they are expanding.  I know essentially nothing about the company.

 

https://www.saratogarack.com

 

https://www.propetroleum.com

 

https://www.scfuels.com

 

https://pilotwatersolutions.com

 

There is also a large energy commodity trading business, a small part of which was shut down by Berkshire.

 

The CEO (first non-family CEO I believe) came from Castleton Commodities International and has an energy trading background.

https://www.pilotcompany.com/leadership/shameek-konar

 

Quote

We are a growth company focused on innovative solutions across our retail, energy, and logistics operations.

Our vast network of more than 800 retail and fueling locations provide travelers with convenient stops that offer an incredible variety of amenities and products to make road travel easier. The Pilot Flying J travel center network includes locations in 44 states and 5 Canadian provinces with more than 790 restaurants and offers truck maintenance and tire service with Southern Tire Mart at Pilot Flying J. The One9 Fuel Network connects a variety of fueling locations to provide smaller fleets and independent professional drivers with everyday value, convenience, credit and perks.

We supply more than 14 billion gallons of fuel per year with the third largest tanker fleet in North America. Our sourcing infrastructure, strong market presence and expertise in energy and logistics optimizes the distribution of fuel, DEF, bio and renewables. Our fleet also provides critical hauling and disposal services in our nation's busiest basins.

 

https://www.pilotcompany.com

[cubsfan]

^^ GFP - you are the man for the deep dive on all things Berkshire. 

[Gamecock-YT]

16 hours ago, Munger_Disciple said:

https://www.espn.com/nba/story/_/id/35746705/sources-marc-lasry-agrees-sell-bucks-haslams-35b

 

Probably the reason Pilot deal was completed in January 2023. 

 

His brother is also purchasing the Nashville Predators hockey team in a slow series of investments that will see him become the sole owner.

[Xerxes]

Russo on Berkshire on Yahoo Finance

 

Explains how the alignment of agency cost is so unique and unusual for Berkshire

 

 

[Intelligent_Investor]

For the annual meeting, is there parking outside the venue? If there isn't should I get a hotel closer or further from the venue? Sorry if this is a dumb question, I am planning on going for possibly the first time this year.

[MikeL]

There are parking lots outside the building, last year, they charged $10/day, people lined up @3AM in the morning in order to get a good seat.

[MCR]

Hotels close to the building are very expensive. Prices always higher for the weekend of the annual meeting. If you're going to go, I'd jump on housing ASAP. Don't forget AirBnB. 

[LounginMKL]

We arrived at the annual meeting 30 minutes prior to the "company movie" and sat at the front of one of many overflow rooms. We moved to the main room during the lunch break, as seats become available after all the "tourists" left. IMO, it's a good trade-off because we could wake up at our normal hour, eat breakfast, and slowly make our way to the venue. The parking wasn't bad at all.

[gfp]

Some folks were disappointed that Warren omitted the list of the company's 15 largest equity holdings by value, since this list sometimes gave additional disclosure of the size of our foreign stock holdings vs. what shows up in a 13F.  This screen shot below is for calendar year 2022, and is only for National Indemnity.  There are additional foreign stock holdings inside General Re and other Berkshire insurance subs.  The list below is just the new shares acquired during 2022 and I have put a red mark next to the foreign purchases since the US stocks are disclosed on dataroma and other 13F sites.  Pay attention to the date acquired and you can see that Berkshire was still adding to the Japanese trading houses late in the year, so he may have omitted the chart for just one year since it would have probably caused his favorites to move up in share price.  I will try to post a few more screenshots of other stuff.  This isn't for all of Berkshire - just National Indemnity.  (BTW, National Indemnity owns GEICO at a $43B carrying value and $6.9B cost basis, and also owns BNSF at a $47.3B carrying value and a $33.8895B cost basis)  The "Harney Investment Trust" is a $77 Billion investment fund that Buffett created decades ago to keep trades hidden, so some of these will be transfers from Harney to National Indemnity direct.  Wallacbeth Capital is Berkshire's preferred "broker" for large block trading.

 

edit: that screen shot was made pretty blurry by this site's compression, try the attached PDF

(also added a PDF showing General Re's year end stock holdings, some foreign, some well known)

 

 

 

 

National Indemnity Foreign Stock purchases.pdf

Gen Re stock portfolio.pdf

Edited March 1, 2023 by gfp

[nwoodman]

@gfpThank-you

[Charlie]

gfp, thank you! 

[Munger_Disciple]

Great stuff @gfp! Thanks

[jbwent63]

On 3/1/2023 at 2:05 PM, gfp said:

Some folks were disappointed that Warren omitted the list of the company's 15 largest equity holdings by value, since this list sometimes gave additional disclosure of the size of our foreign stock holdings vs. what shows up in a 13F.  This screen shot below is for calendar year 2022, and is only for National Indemnity.  There are additional foreign stock holdings inside General Re and other Berkshire insurance subs.  The list below is just the new shares acquired during 2022 and I have put a red mark next to the foreign purchases since the US stocks are disclosed on dataroma and other 13F sites.  Pay attention to the date acquired and you can see that Berkshire was still adding to the Japanese trading houses late in the year, so he may have omitted the chart for just one year since it would have probably caused his favorites to move up in share price.  I will try to post a few more screenshots of other stuff.  This isn't for all of Berkshire - just National Indemnity.  (BTW, National Indemnity owns GEICO at a $43B carrying value and $6.9B cost basis, and also owns BNSF at a $47.3B carrying value and a $33.8895B cost basis)  The "Harney Investment Trust" is a $77 Billion investment fund that Buffett created decades ago to keep trades hidden, so some of these will be transfers from Harney to National Indemnity direct.  Wallacbeth Capital is Berkshire's preferred "broker" for large block trading.

 

edit: that screen shot was made pretty blurry by this site's compression, try the attached PDF

(also added a PDF showing General Re's year end stock holdings, some foreign, some well known)

 

 

 

 

National Indemnity Foreign Stock purchases.pdf 2.1 MB · 62 downloads

Gen Re stock portfolio.pdf 610.05 kB · 49 downloads

GFP, thanks for this. If you could also send along the year end list of owned common stocks for NICO that would be fantastic. Are you going to Omaha this year? I'd like to buy you a beer for your troubles.

[gfp]

12 hours ago, jbwent63 said:

GFP, thanks for this. If you could also send along the year end list of owned common stocks for NICO that would be fantastic. Are you going to Omaha this year? I'd like to buy you a beer for your troubles.

No problem.  I was driving to Virginia all day today but here is the entire document for National Indemnity.  Common Stocks owned are on pages 24 and 25 but if you browse around those pages you can see the individual bond holdings and other details.

 

20087.2022.P.AN.PI.O.M.4461731_NatInd_Inv.pdf

[jbwent63]

9 hours ago, gfp said:

No problem.  I was driving to Virginia all day today but here is the entire document for National Indemnity.  Common Stocks owned are on pages 24 and 25 but if you browse around those pages you can see the individual bond holdings and other details.

 

20087.2022.P.AN.PI.O.M.4461731_NatInd_Inv.pdf 1.82 MB · 9 downloads

Thank you, once again.

[MMM20]

https://rationalwalk.substack.com/p/berkshire-hathaways-2023-proxy-statement

 

Rather than insulting the reader’s intelligence with meaningless self-congratulatory verbiage and virtue signaling hypocrisy related to various trendy political and social issues, Berkshire’s proxy focuses on matters that are actually relevant to shareholders. The company refuses to engage in typical corporate “diversity” initiatives and rightfully focuses on merit and skin in the game rather than the color of one’s skin:

“Berkshire does not have a policy regarding the consideration of diversity in identifying nominees for director. In identifying director nominees, the Governance Committee does not seek diversity, however defined. Instead, as previously discussed, the Governance Committee looks for individuals who have very high integrity, business savvy, an owner-oriented attitude, a deep genuine interest in the Company and have had a significant investment in Berkshire shares relative to their resources for at least three years. 

Berkshire does have women and minorities on the board, but rather than insult them by treating these highly accomplished individuals as props to generate a checkmark on some diversity grid, the proxy emphasizes that they were selected due to what they bring to the table in terms of experience and ownership. In response to a shareholder proposal that is intended to force Berkshire into the practices of most other large companies, the proxy responds with the following statement:

“Berkshire’s commitment to diversity, equity and inclusion and the effectiveness of our companies’ related programs starts with our leaders, including our Board of Directors, of which four members are female and two members are racially or ethnically diverse. However, it should be noted that these directors were not selected for diversity purposes. To ensure long-term success for our shareholders, Berkshire encourages its leaders to execute diversity, equity and inclusion strategies that are tailored to the unique aspects of their businesses.” [Emphasis added]

Readers of the biographies covering Mr. Buffett’s life know that he was an advocate for civil rights from the earliest days of the civil rights movement of the 1960s. He has also made numerous comments over the years about the loss to individual businesses and to society as a whole when women are discriminated against in employment markets. None of this seems to matter to politically driven pressure campaigns intended to intimidate businesses to elevate skin color, gender, and sexual orientation over ownership and business acumen when it comes to corporate governance. 
 

Edited March 18, 2023 by MMM20

[Blugolds]

3 hours ago, MMM20 said:

https://rationalwalk.substack.com/p/berkshire-hathaways-2023-proxy-statement

 

Rather than insulting the reader’s intelligence with meaningless self-congratulatory verbiage and virtue signaling hypocrisy related to various trendy political and social issues, Berkshire’s proxy focuses on matters that are actually relevant to shareholders. The company refuses to engage in typical corporate “diversity” initiatives and rightfully focuses on merit and skin in the game rather than the color of one’s skin:

“Berkshire does not have a policy regarding the consideration of diversity in identifying nominees for director. In identifying director nominees, the Governance Committee does not seek diversity, however defined. Instead, as previously discussed, the Governance Committee looks for individuals who have very high integrity, business savvy, an owner-oriented attitude, a deep genuine interest in the Company and have had a significant investment in Berkshire shares relative to their resources for at least three years. 

Berkshire does have women and minorities on the board, but rather than insult them by treating these highly accomplished individuals as props to generate a checkmark on some diversity grid, the proxy emphasizes that they were selected due to what they bring to the table in terms of experience and ownership. In response to a shareholder proposal that is intended to force Berkshire into the practices of most other large companies, the proxy responds with the following statement:

“Berkshire’s commitment to diversity, equity and inclusion and the effectiveness of our companies’ related programs starts with our leaders, including our Board of Directors, of which four members are female and two members are racially or ethnically diverse. However, it should be noted that these directors were not selected for diversity purposes. To ensure long-term success for our shareholders, Berkshire encourages its leaders to execute diversity, equity and inclusion strategies that are tailored to the unique aspects of their businesses.” [Emphasis added]

Readers of the biographies covering Mr. Buffett’s life know that he was an advocate for civil rights from the earliest days of the civil rights movement of the 1960s. He has also made numerous comments over the years about the loss to individual businesses and to society as a whole when women are discriminated against in employment markets. None of this seems to matter to politically driven pressure campaigns intended to intimidate businesses to elevate skin color, gender, and sexual orientation over ownership and business acumen when it comes to corporate governance. 
 

 

Rational, logical, a voice of reason. I'd expect nothing less from Omaha. As someone racially/ethnically diverse, its refreshing to read that BRK #1 priority is shareholder benefit. I dont need the board to have an African/Asian, LBGTQ director on the Board, I need them to have the best person for the job. If that person happens to also be African/Asian LBGTQ, good for them. But you cant get your board seat on that merit alone...

 

The people who demand that there is diversity for diversity sake on a BOD are essentially demanding what they are attempting to combat. A BOD full of diversity with no merit is just as bad as a BOD with zero diversity full of rich old white guys aka "yes" men who got the position based on the good 'ol boy network or their alma mater. Swinging to one extreme is no better than the opposite extreme they are attempting to replace. Its madness. 

 

As mentioned, Omaha should be the least of their concerns, as they have always been a lighthouse of integrity in the turbulent ocean of deceit that is wall street. Said simply, their barking up the wrong tree. 

[whatstheofficerproblem]

3 hours ago, MMM20 said:

https://rationalwalk.substack.com/p/berkshire-hathaways-2023-proxy-statement

 

Rather than insulting the reader’s intelligence with meaningless self-congratulatory verbiage and virtue signaling hypocrisy related to various trendy political and social issues, Berkshire’s proxy focuses on matters that are actually relevant to shareholders. The company refuses to engage in typical corporate “diversity” initiatives and rightfully focuses on merit and skin in the game rather than the color of one’s skin:

“Berkshire does not have a policy regarding the consideration of diversity in identifying nominees for director. In identifying director nominees, the Governance Committee does not seek diversity, however defined. Instead, as previously discussed, the Governance Committee looks for individuals who have very high integrity, business savvy, an owner-oriented attitude, a deep genuine interest in the Company and have had a significant investment in Berkshire shares relative to their resources for at least three years. 

Berkshire does have women and minorities on the board, but rather than insult them by treating these highly accomplished individuals as props to generate a checkmark on some diversity grid, the proxy emphasizes that they were selected due to what they bring to the table in terms of experience and ownership. In response to a shareholder proposal that is intended to force Berkshire into the practices of most other large companies, the proxy responds with the following statement:

“Berkshire’s commitment to diversity, equity and inclusion and the effectiveness of our companies’ related programs starts with our leaders, including our Board of Directors, of which four members are female and two members are racially or ethnically diverse. However, it should be noted that these directors were not selected for diversity purposes. To ensure long-term success for our shareholders, Berkshire encourages its leaders to execute diversity, equity and inclusion strategies that are tailored to the unique aspects of their businesses.” [Emphasis added]

Readers of the biographies covering Mr. Buffett’s life know that he was an advocate for civil rights from the earliest days of the civil rights movement of the 1960s. He has also made numerous comments over the years about the loss to individual businesses and to society as a whole when women are discriminated against in employment markets. None of this seems to matter to politically driven pressure campaigns intended to intimidate businesses to elevate skin color, gender, and sexual orientation over ownership and business acumen when it comes to corporate governance. 
 

 

I am in tears, if only.. if only all companies had this policy, a lot of good people would have their share. DEI recruitment is even worse. I don't know where the world is going, there is now a filter in school admissions and after being admitted there is a filter in employment, this double filtering is nothing but insult. Thank you Berkshire for being the voice of reason in today's world, or whatever it is.

Edited March 18, 2023 by whatstheofficerproblem

[Paarslaars]

On 3/19/2023 at 12:16 AM, Blugolds11 said:

A BOD full of diversity with no merit is just as bad as a BOD with zero diversity full of rich old white guys aka "yes" men who got the position based on the good 'ol boy network or their alma mater.  

I would still argue the former is worse, as rich old white guys are still likely to have some form of merit to them as they are rich... even if the only thing they did is not fuck up inherited wealth.