Ted and Todd Results

[AzCactus]

I'm sure I'm going to get some sh** for this but is it me or does it seem like they aren't doing such a great job as investment managers.  A few thoughts:

• They have both been with Berkshire 10+ years
• The amount they manage doesn't seem to have grown so significantly given how big Berkshire is
• Warren doesn't appear to bring them up a ton 

 

My thoughts based on being a shareholder is that Buffett praises publicly but these two guys don't seem mentioned very often.  Additionally, the amount they are managing while obviously a lot doesn't seem insane.  I kinda wonder if they just bought VOO for Berkshire if shareholders might be better off.  

 

I just want to be clear-I'm not saying they aren't great investors with smallish sums I'm saying that maybe they are a bit outside their element or something.  Anyone else kinda feel like this or am I just an a**hole

[KPO]

28 minutes ago, AzCactus said:

I'm sure I'm going to get some sh** for this but is it me or does it seem like they aren't doing such a great job as investment managers.  A few thoughts:

• They have both been with Berkshire 10+ years
• The amount they manage doesn't seem to have grown so significantly given how big Berkshire is
• Warren doesn't appear to bring them up a ton 

 

My thoughts based on being a shareholder is that Buffett praises publicly but these two guys don't seem mentioned very often.  Additionally, the amount they are managing while obviously a lot doesn't seem insane.  I kinda wonder if they just bought VOO for Berkshire if shareholders might be better off.  

 

I just want to be clear-I'm not saying they aren't great investors with smallish sums I'm saying that maybe they are a bit outside their element or something.  Anyone else kinda feel like this or am I just an a**hole

In fairness they are being asked to do more than select public equities. For example, Todd seems to have done a decent job turning Geico around in the last couple years. 

[Luke]

29 minutes ago, AzCactus said:

I'm sure I'm going to get some sh** for this but is it me or does it seem like they aren't doing such a great job as investment managers.  A few thoughts:

• They have both been with Berkshire 10+ years
• The amount they manage doesn't seem to have grown so significantly given how big Berkshire is
• Warren doesn't appear to bring them up a ton 

 

My thoughts based on being a shareholder is that Buffett praises publicly but these two guys don't seem mentioned very often.  Additionally, the amount they are managing while obviously a lot doesn't seem insane.  I kinda wonder if they just bought VOO for Berkshire if shareholders might be better off.  

 

I just want to be clear-I'm not saying they aren't great investors with smallish sums I'm saying that maybe they are a bit outside their element or something.  Anyone else kinda feel like this or am I just an a**hole

Their previous track record before Berkshire was insane. 

 

 https://blog.umd.edu/davidkass/2021/08/27/how-ted-weschler-turned-70000-into-264-million-in-a-retirement-account/

 

Right now it does seem kind of mehh indeed. 

[MungerWunger]

Ted made a bunch of money in his personal account with his Dillard purchase: https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-ted-weschler-dillards-stock-sales-return-2022-2

[Thrifty3000]

I think they're grooming Todd to succeed Greg Abel.

 

Todd's a brilliant investment analyst, especially of financial companies. He sits on the board of JP Morgan and meets weekly with Warren Buffett, so he's learning from the best of the best. And, he's running Geico to get legit operating experience (which I'm sure was like drinking from a firehose for him at first). All of that activity hints pretty strongly that Berky is taking his leadership development VERY seriously.

[AzCactus]

33 minutes ago, Thrifty3000 said:

34 minutes ago, Thrifty3000 said:

I think they're grooming Todd to succeed Greg Abel.

 

Todd's a brilliant investment analyst, especially of financial companies. He sits on the board of JP Morgan and meets weekly with Warren Buffett, so he's learning from the best of the best. And, he's running Geico to get legit operating experience (which I'm sure was like drinking from a firehose for him at first). All of that activity hints pretty strongly that Berky is taking his leadership development VERY seriously.

 

I totally buy this.  Nothing is wrong with Greg but he's like 60/61.  If Warren goes another 3-4 years which doesn't seem crazy given his energy that puts Abel basically at 65.  Unless this is going to be a company of geriatrics they need more youth off the bench

 

[Whensthepaintdry?]

Apple can probably be contributed to one of them. So…. There’s that. 

[gfp]

This chart is not super scientific but not a ton of permanent capital loss on the chart.

 

 

[MCR]

Regardless of size of the positions or whatever profits might be realized, what puzzles (concerns) me is the lack of clarity about the investment philosophy/approach for Todd and Ted. Warren (and Charlie) over the years has talked (and written) many times about his view of stock purchases of companies such as American Express, Coca Cola, or Apple as partial ownership of companies. I realize it's unrealistic that every equity purchase initiated by Warren over the years squarely fell into this category. And not all of them worked out (e.g. airlines -- at least twice). But that's true for some of the wholly owned companies as well. But at least I understood what their "ideal" situation is and can understand and articulate their core philosophy and approach.

 

I cannot do this for Todd and Tedd. For exaample, I've never understood purchases such as SNOW or PAYTM. Both felt so far outside of what Warren & Charlie would do or have explained to us as partial owners in the company with them. I've been wondering about drift for several years now. I am more than a bit wary of the idea of the two of them taking over investment decisions for Warren someday. I was relieved to hear earlier this month of Warren's confidence in Greg's ability to make capital allocation decisions. The way I heard Greg talk about capital allocation sounded just like Warren and Charlie. I left Omaha feeling better about Greg's role in the company.

 

[schin]

@MCR - I see the vote of confidence for Greg Abel, but I have no clue how he would perform on stock purchases. He's an operator and can talk to their sub's CEOs on amount of capital to give them, but I have no clue what he would buy. 

 

I've seen Greg by Warren's side on the Japanese investments..but, did he bring in Chubb? Did Greg advise on the OXY purchase? He's more of a black box than Ted and Todd.

[WFF]

6 hours ago, gfp said:

This chart is not super scientific but not a ton of permanent capital loss on the chart.

 

 

Just looking at it:

 

Ted: DaVita, Liberty, FND 

 

Todd: Ally, NU, COF, MA, SNOW

 

Doesn’t seem shabby.  Yes Paytm, likely a Todd position didn’t work out, but the sizing on that one was 260millon so around 2.6% of his portfolio.  There are enough winners to offset and he is doing a stellar at Geico too.  
 

 

 

[schin]

1 hour ago, WFF said:

Just looking at it:

 

Ted: DaVita, Liberty, FND 

 

Todd: Ally, NU, COF, MA, SNOW

 

Doesn’t seem shabby.  Yes Paytm, likely a Todd position didn’t work out, but the sizing on that one was 260millon so around 2.6% of his portfolio.  There are enough winners to offset and he is doing a stellar at Geico too.  
 

 

 

I don't know how Nubank (black) can have data in 2015, when it didn't IPO until December 2021.

 

Apple is Warren's pick...  If he is doing so great, I think Warren should tout their records.

[gfp]

6 hours ago, schin said:

I don't know how Nubank (black) can have data in 2015, when it didn't IPO until December 2021.

 

Apple is Warren's pick...  If he is doing so great, I think Warren should tout their records.

black is Visa, a Todd pick from his first day at BRK.  Apple was only Warren’s pick after it was Ted or Todd’s pick and he was convinced 

[Whensthepaintdry?]

I agree with the above. No one can say for sure but I think it would be silly not to give some credit to one of the 2 for the Apple investment. 

[Thrifty3000]

They meet every weekend and discuss any S&P 500 companies selling for less than 15x earnings that have long term growth prospects. It's not rocket science. My guess is there aren't many companies selling for 15x or less, and that there are even fewer for which long term growth can be predicted with any confidence (aka: too hard pile).

Edited May 18 by Thrifty3000

[Thrifty3000]

Additionally, hundreds of private deals go across their desks each year, which they analyze. Todd says most of them are deals he wishes he could short. I'm sure the opportunities that do look promising end up getting outbid by private equity.

Edited May 18 by Thrifty3000

[longterminvestor]

Random thoughts:

- If you want to compare to Mr. Buffett (which it is a mistake) but if you want to, think about this.  In 2000, Berkshire's "equity portfolio" was $37B total.  $28B of the $37B (75%) were in 5 businesses: Amex, Coca Cola, Gillette, Washington Post, & Wells.  Need to further unpack that $28B because it basically was permanently allocated - Amex/Cocoa Cola (still owned and untouched) makes up $20B of the $28B, Gillette turned into P&G which was turned into a tax free exchange for Duracell, Washington Post turned into cash, shares of Berkshire, and a TV station (tax efficient), Wells at $3B was added/trimmed and finally sold with sizable gain in 2022 - if not for a little scandal, arguably, he would still be holding today.  That leaves $9B (25%) to allocate in 2000.  Lets just say that again, $9B was a lot in 2000 but nothing today in relation to size of portfolio.   

- Ted/Todd manage roughly $15B each, that's 10% of Berkshires "investments in equity securities".  Pittance in relation to Mr. Buffett's $300B+.  

- Traditional money managers/hedge funds may have $20B, $40B, $60B+.  They employ 100's of people.  Ted/Todd each have 1 assistant.  

- Size is the biggest thing holding them back from outsized returns, who knows what other funds actually manage and their are some lists out there but here is the point, they are tiny in comparison. Both Ted/Todd proved they could deliver outsized returns with small amounts of capital in previous life.  Also previous market cycle.  

- Ted/Todd true value will only shine through once the loaming shadow of Mr. Buffett is gone

- Finding a "stock picker" successor was not the task for Mr. Buffett in looking for replacement, it was about capital allocation for the next 10/15/20years.  Giving Ted/Todd a traditional yardstick to compare performance is not the game although monthly reports are shown to CEO.  

- Trying to paint Ted/Todd as classical money managers is a mistake.  They do many things for Berkshire.  And just having them at the ready for future issues is important.  I view them as the fire sprinkler alarm handle inside Berkshire.  Rarely used but when needed incredibly important.  

- Ted/Todd are going to make some mistakes with hindsight, they will lose money.  Mistakes are fine.  Permanent loss of large amounts of capital is not fine and trusting someone to do that job as well as deliver "alpha" is yeoman's work - could prove to be difficult in coming years as capital amounts grow.  

- Ted/Todd have not had an opportunity, due to the "Fed Put" and other governmental intervention, to operate in a prolonged bear market.  Everyone has made money for previous 12-15years - most glorious bull market in history coming off 2008-2009 financial crisis.  

- Ted/Todd will also have to replace themselves at the end of their tenure and finding someone who can replace themselves is not an easy job.  I believe both Ted/Todd have the character traits to attract/find the right kind of replacement when that time comes.

 

Final thought:

- Berkshire today is not the same company as Berkshire in 2000.  Different game.  

- Ted/Todd's value will be shown when they can allocate significant sums into situations - $50B-$100B+ and there be a significant margin of safety.  

- Mr. Buffett has repeatedly said Ted/Todd are Berkshire's intellectual property.  Almost like the recipe for Coca Cola, you don't share the recipe hence the reason why they do not get on the mic and to cast their views on markets/businesses.  I tend to agree.  

- Looking forward to watching them both grow as managers/allocators and be stewards of Berkshire's capital (our money).  

 

[Dinar]

3 hours ago, longterminvestor said:

Random thoughts:

- If you want to compare to Mr. Buffett (which it is a mistake) but if you want to, think about this.  In 2000, Berkshire's "equity portfolio" was $37B total.  $28B of the $37B (75%) were in 5 businesses: Amex, Coca Cola, Gillette, Washington Post, & Wells.  Need to further unpack that $28B because it basically was permanently allocated - Amex/Cocoa Cola (still owned and untouched) makes up $20B of the $28B, Gillette turned into P&G which was turned into a tax free exchange for Duracell, Washington Post turned into cash, shares of Berkshire, and a TV station (tax efficient), Wells at $3B was added/trimmed and finally sold with sizable gain in 2022 - if not for a little scandal, arguably, he would still be holding today.  That leaves $9B (25%) to allocate in 2000.  Lets just say that again, $9B was a lot in 2000 but nothing today in relation to size of portfolio.   

- Ted/Todd manage roughly $15B each, that's 10% of Berkshires "investments in equity securities".  Pittance in relation to Mr. Buffett's $300B+.  

- Traditional money managers/hedge funds may have $20B, $40B, $60B+.  They employ 100's of people.  Ted/Todd each have 1 assistant.  

- Size is the biggest thing holding them back from outsized returns, who knows what other funds actually manage and their are some lists out there but here is the point, they are tiny in comparison. Both Ted/Todd proved they could deliver outsized returns with small amounts of capital in previous life.  Also previous market cycle.  

- Ted/Todd true value will only shine through once the loaming shadow of Mr. Buffett is gone

- Finding a "stock picker" successor was not the task for Mr. Buffett in looking for replacement, it was about capital allocation for the next 10/15/20years.  Giving Ted/Todd a traditional yardstick to compare performance is not the game although monthly reports are shown to CEO.  

- Trying to paint Ted/Todd as classical money managers is a mistake.  They do many things for Berkshire.  And just having them at the ready for future issues is important.  I view them as the fire sprinkler alarm handle inside Berkshire.  Rarely used but when needed incredibly important.  

- Ted/Todd are going to make some mistakes with hindsight, they will lose money.  Mistakes are fine.  Permanent loss of large amounts of capital is not fine and trusting someone to do that job as well as deliver "alpha" is yeoman's work - could prove to be difficult in coming years as capital amounts grow.  

- Ted/Todd have not had an opportunity, due to the "Fed Put" and other governmental intervention, to operate in a prolonged bear market.  Everyone has made money for previous 12-15years - most glorious bull market in history coming off 2008-2009 financial crisis.  

- Ted/Todd will also have to replace themselves at the end of their tenure and finding someone who can replace themselves is not an easy job.  I believe both Ted/Todd have the character traits to attract/find the right kind of replacement when that time comes.

 

Final thought:

- Berkshire today is not the same company as Berkshire in 2000.  Different game.  

- Ted/Todd's value will be shown when they can allocate significant sums into situations - $50B-$100B+ and there be a significant margin of safety.  

- Mr. Buffett has repeatedly said Ted/Todd are Berkshire's intellectual property.  Almost like the recipe for Coca Cola, you don't share the recipe hence the reason why they do not get on the mic and to cast their views on markets/businesses.  I tend to agree.  

- Looking forward to watching them both grow as managers/allocators and be stewards of Berkshire's capital (our money).  

 

With all due respect, where do you get the idea that Todd delivered outsized returns before Berkshire?  As for size being an impediment to their performance, first of all, they clearly missed: MSFT, Alphabet, Meta, LVMH, Hermes, Costco, Chipotle, Progressive, Visa, MasterCard, and the list goes on and on.  Also, somehow large size did not prevent sir Christopher Hohn from putting damn good numbers.  

[gfp]

9 hours ago, Dinar said:

With all due respect, where do you get the idea that Todd delivered outsized returns before Berkshire?  As for size being an impediment to their performance, first of all, they clearly missed: MSFT, Alphabet, Meta, LVMH, Hermes, Costco, Chipotle, Progressive, Visa, MasterCard, and the list goes on and on.  Also, somehow large size did not prevent sir Christopher Hohn from putting damn good numbers.  

 

Well you can criticize Todd all you want but I wouldn't accuse him of "missing" Visa or Mastercard.  He also boldly told both Charlie and Warren that Progressive was the better business vs. their beloved GEICO.  Warren has said for many years that MSFT was on the 'do not invest' list because of this close friendship with Gates.  Maybe that has changed more recently.

 

Warren and Charlie met a lot of investors over their lifetimes.  It was very hard to impress them.  I can only think of 6 or so that they ever let touch any of their capital.  Everything is going to be OK.

[crs223]

To the money-manager-pickers on the forum: start your own insurance/investment companies.  I will move our family’s money over and we will become rich!

 

In the meantime I’m going to stick with the greatest that has ever lived… and his hand-picked successors.

 

 

Edited May 19 by crs223

[Whensthepaintdry?]

I think what is more depressing than missing the big winners listed above were the investments in vz and hpq. 

[ValueMaven]

Stupid post.  They've also helped Berkshire with the Apple position which was $100B profit.

Plus, Todd is running GEICO now, and Ted is doing a lot of M&A type of deals.  Honestly these two are great assets for Berkshire.  They dont need to beat the S&P.

[Hektor]

I feel one of the reasons for WEB not talking about them anymore may be to tamp down the demand that T&T are made available to field investor questions.

[gfp]

44 minutes ago, Whensthepaintdry? said:

I think what is more depressing than missing the big winners listed above were the investments in vz and hpq. 

 

Both of those were Warren's positions.  It turns out he's not perfect.

[John Hjorth]

To me, there isen't anywhere near sufficient public available data and facts to say something fact- and databased about Ted and Todds results. So why even try to guess them on that basis, to have an opinion about them [<- the results].

 

It's to me more a feature than a bug. Mr. Buffett has for many years now had the attitude towards to practice what in his own mind should be disclosed to investors and shareholders, as long as it's going on inside the borders af being legal in accordance with existing rules and regulation. Here, why not give Ted and Todd the rights and advantages of operating below the radar in the first place, where there are no specific requirements for public records of these results separately.

Edited May 19 by John Hjorth