Berkshire 2022 Annual Report

[SHDL]

Their foreign stock positions are no longer disclosed for one. Not necessarily complaining though as I’m sure he has good reasons. 

[crs223]

What’s the reason BRK has to disclose domestic holdings but not foreign holdings?  I assume it’s a law.  What problem is such a law trying to solve?

[dealraker]

Buffett has been considered old now for 30 years, many think far too old to be hanging in there.  In some ways I don't disagree with this.

 

Buffett's letters have too greatly disappointed many for 30 years now as apparently he wrote things at some point long ago that stimulated people, their first dose...the one they remember and want more of.  

 

Ahh...the older we get...the better we were!   I just can't wait for the next CEO superstar to be called "the next Buffett" and such.  Or to watch the obsessed upon tech stock that slightly falls and we all buy more and more of, you know the ones that 20 years later have no returns.

 

Isn't all of this the same thing?

 

Life is great...if you can stand it.  My cyncial side this a.m. 

 

[tede02]

20 hours ago, gfp said:

 

It's hard to untangle because many of the operating subsidiaries, including BNSF, are entirely owned by the Insurance Companies - is BNSF's equity funded by float liabilities or the substantial positive net worth of National Indemnity?  Same with so many other subsidiaries.  It's hard to know what he is valuing when he says the Insurance group is worth $90-100 billion or whatever is being implied there.  I wouldn't worry too much about the specific number.

 

I totally agree with respect to how hard it is to untangle. It's always fuzzy to me what percentage of the equity portfolio is float vs. positions owned outright by BRK. Likewise for all the cash disclosed on the balance sheet. 

[SHDL]

5 hours ago, crs223 said:

What’s the reason BRK has to disclose domestic holdings but not foreign holdings?  I assume it’s a law.  What problem is such a law trying to solve?

 

Yes - here is some info about it:

https://www.sec.gov/divisions/investment/13ffaq

 

I've always assumed that foreign stocks are exempt because they are not under US jurisdiction but I could be wrong. 

[gfp]

11 minutes ago, SHDL said:

 

Yes - here is some info about it:

https://www.sec.gov/divisions/investment/13ffaq

 

I've always assumed that foreign stocks are exempt because they are not under US jurisdiction but I could be wrong. 

 

It is securities that trade on a US exchange.  So it includes foreign stocks that trade on a US exchange like DEO and BABA but not Berkshire's ownership of equities that trade on exchanges in Germany, Japan, Hong Kong, Australia, etc...  It also doesn't include traditional open-ended mutual funds or short positions, except for certain short positions in options that are similar to a long position in the equity.

[SHDL]

26 minutes ago, gfp said:

 

It is securities that trade on a US exchange.  So it includes foreign stocks that trade on a US exchange like DEO and BABA but not Berkshire's ownership of equities that trade on exchanges in Germany, Japan, Hong Kong, Australia, etc...  It also doesn't include traditional open-ended mutual funds or short positions, except for certain short positions in options that are similar to a long position in the equity.

 

Right, I believe this is the "official list" of securities that must be reported: https://www.sec.gov/divisions/investment/13flists

I never quite understood why some ADRs are on that list and others aren't but it may have to do with whether they're listed on NYSE/NASDAQ etc vs OTC.

Edited February 26, 2023 by SHDL

[Charlie]

I really miss the list of the biggest equity holdings. Buffett doesn´t like it to be imitated/copy catted. 

 

Does anyone have the full version of the Morningstar analysis?

 

https://www.morningstar.com/stocks/xnys/brk.b/analysis

[gfp]

32 minutes ago, SHDL said:

 

Right, I believe this is the "official list" of securities that must be reported: https://www.sec.gov/divisions/investment/13flists

I never quite understood why some ADRs are on that list and others aren't but it may have to do with whether they're listed on NYSE/NASDAQ etc vs OTC.

 

Yes, that is correct, OTC, pink sheets, etc are not required to be disclosed.  So weird ADRs with long ticker symbols aren't required to be reported (like TCEHY or BYDDY, BYDDF, etc) - I am not saying Berkshire owns those tickers they are just examples.  DJCO owns TCEHY I believe but that is just off the top of my head.

Edited February 26, 2023 by gfp

[John Hjorth]

1 hour ago, dealraker said:

... Buffett's letters have too greatly disappointed many for 30 years now as apparently he wrote things at some point long ago that stimulated people, their first dose...the one they remember and want more of.  

 

Ahh...the older we get...the better we were!   I just can't wait for the next CEO superstar to be called "the next Buffett" and such.  Or to watch the obsessed upon tech stock that slightly falls and we all buy more and more of, you know the ones that 20 years later have no returns.

 

Isn't all of this the same thing? ... 

 

 

Somehow this post by @dealraker hit a nerve by me.

 

Suddenly it hit me - like a cub over my head - how convient investing in Berkshire actually is for the long term. [Please read : How convenient I am!]

 

Investing in conglomerates provide you the opportunity to participate in "creative destruction", ref. Joseph Schlumpeter [and ref. the mentioning in the shareholder letter], while also providing you with option - when things goes wrong & south [perhaps dearly] with a certain investment in the conglomerate, which again provides the opportunity to claim here : "I'm not the dork here, the CEO [of the conglomerate] is." [unless one decide to fire that CEO by offloading the position, that is].

 

[Spooky]

Thought this letter was better than last year's.

[Charlie]

"Investing in conglomerates provide you the opportunity to participate in "creative destruction", ref. Joseph Schlumpeter [and ref. the mentioning in the shareholder letter], while also providing you with option - when things goes wrong & south [perhaps dearly] with a certain investment in the conglomerate, which again provides the opportunity to claim here : "I'm not the dork here, the CEO [of the conglomerate] is." [unless one decide to fire that CEO by offloading the position, that is]."

 

Of course, the businesses Berkshire owns is an evolutional process. The flowers bloom, the weeds get automatically cut down. That is the way with nearly everything.

[Spekulatius]

Yes, the letter are getting shorter.

 

Stuff that he could have written about, but didn’t:

1) His view on inflation and what they are seeing in their business

2) something from or about Ajit and Abel

3) How he views his large new holdings in CVX and OXY (energy bet)

[Aurel]

2 minutes ago, Spekulatius said:

Yes, the letter are getting shorter.

 

Stuff that he could have written about, but didn’t:

1) His view on inflation and what they are seeing in their business

2) something from or about Ajit and Abel

3) How he views his large new holdings in CVX and OXY (energy bet)

Right?

 

Quote

...Buffett says, his sisters are “not active in business, so they’re not reading about it every day. I pretend that they’ve been away for a year and I’m reporting to them on their investment.”

 

[Spekulatius]

OT - if you think you know everything  about BRK, watch this:

Better than Bloomstans stuff, Imo.

[dealraker]

I liked the brevity of the letter this year.  The annual meeting will be great as always.  

[backtothebeach]

1 hour ago, dealraker said:

I liked the brevity of the letter this year.  The annual meeting will be great as always.  

 

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

[Xerxes]

13 hours ago, Spekulatius said:

Yes, the letter are getting shorter.

 

Stuff that he could have written about, but didn’t:

1) His view on inflation and what they are seeing in their business

2) something from or about Ajit and Abel

3) How he views his large new holdings in CVX and OXY (energy bet)

 

The word "inflation" came up exactly once.

 

Our job is to manage Berkshire’s operations and finances in a manner that will achieve an acceptable result over time and that will preserve the company’s unmatched staying power when financial panics or severe worldwide recessions occur. Berkshire also offers some modest protection from runaway inflation, but this attribute is far from perfect. Huge and entrenched fiscal deficits have consequences

 

[Munger_Disciple]

I missed seeing a summary of large equity holdings in this year's letter. I am not sure why it was dropped by Buffett. I think It is the first time it was omitted since at least 1977. Given the very large size of equity holdings relative to shareholder equity I think it is a significant omission. 

Edited February 27, 2023 by Munger_Disciple

[longterminvestor]

Not bothered by the brevity (I expected a short letter).  I appreciated section about the traits to seek in a partner.  The simple lessons of life and business ring truer now than ever before.  I still find myself making spreadsheets - trying to find nuggets in the dark corners of the balance sheet/P&L.  Maybe I need to relax a little there and heed the words, find someone who can laugh and teach something at the same time.  

 

The letter sans summary of equity holdings just tells me to think more about the operating businesses inside Berkshire.  

 

Mr. Buffett even enlarged the font a touch so the letter was even shorter than you may think!  (I will save the word count for the obsessed hungry 23 year old...that would have been something I would have done years ago....hehe)

 

Mr. Buffett doesn't even have to write a letter or sit on stage at this point but he still does.  Thank you Mr. Buffett for your teachings.

[jbwent63]

8 hours ago, Munger_Disciple said:

I missed seeing a summary of large equity holdings in this year's letter. I am not sure why it was dropped by Buffett. I think It is the first time it was omitted since at least 1977. Given the very large size of equity holdings relative to shareholder equity I think it is a significant omission. 

I agree, it's always the first part of the letter I go to in order to see if there is something new not shown in the 13-F reports (like a new foreign stock). After thinking about it, I wondered if there was a large position in a non-US traded equity that would have made the list but that he didn't want to disclose as he is still building a position. It is the only reason I can think of not to do it. Those of us who try to identify which share positions are owned by pension funds not Berkshire itself that are included in the 13-F took that listing as a way to confirm or discover those shareholdings. It's also how I found out about the shares held by NEAM that are Berkshire's (GenRe more likely).

[gfp]

Here is the 10-K filed this morning for Burlington Northern Santa Fe, LLC for those nerds that like to look at subsidiary annual reports, check the cash distributions ($5 Billion in 2022), compare to other railroads, etc

 

https://www.sec.gov/ix?doc=/Archives/edgar/data/0000934612/000093461223000005/bni-20221231.htm

Edited February 27, 2023 by gfp

[Spekulatius]

1 hour ago, jbwent63 said:

I agree, it's always the first part of the letter I go to in order to see if there is something new not shown in the 13-F reports (like a new foreign stock). After thinking about it, I wondered if there was a large position in a non-US traded equity that would have made the list but that he didn't want to disclose as he is still building a position. It is the only reason I can think of not to do it. Those of us who try to identify which share positions are owned by pension funds not Berkshire itself that are included in the 13-F took that listing as a way to confirm or discover those shareholdings. It's also how I found out about the shares held by NEAM that are Berkshire's (GenRe more likely).

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

[Michael Campbell]

Or buying Taiwan-listed TSM….

[cubsfan]

1 hour ago, gfp said:

Here is the 10-K filed this morning for Burlington Northern Santa Fe, LLC for those nerds that like to look at subsidiary annual reports, check the cash distributions ($5 Billion in 2022), compare to other railroads, etc

 

https://www.sec.gov/ix?doc=/Archives/edgar/data/0000934612/000093461223000005/bni-20221231.htm

 

GFP - If I remember correctly, early on, BNSF went into large capital expense mode for rail maintenance, tunnel expansion,  etc - before and right after the Berkshire acquisition. Do you see this subsiding, and is that the reason for the large cash distributions?  Just trying to understand whether the other railroads have really been cutting corners and paying for it now - ie., Norfolk..