2024 Q4 and Annual Report

[John Hjorth]

3 hours ago, longlake95 said:

John, agreed, totally appropriate. Respectful and classy for BRK to adjust. 

 

Yeah, @longlake95, the above posted by me, a Dane, from microscopic Denmark, who managed some time ago to skip both the cane and crutches, to go directly to the rollator [it actually means : four support wheels!] , 28 years junior to Mr. Buffett. The wheel chair - by hard physical work four times a week - has been moved out in the horizon, though. 

 

In the process, I've learned a thing, or two, about life, and the meaning of it.

 

- - - o 0 o - - -

 

Thursday, my physiotherapist said to me : 'Forget everything about getting rid of the rollator by first of April, based on how you're doing today! - It may end up being first of May or First of June.'

 

If there is anything that still can get my p*ss boiling it's people telling me what I can not do. I'm still up for the challenge.

 

Just to appreciate his challenge, when I got home from him, I ordered, to delivery at his workplace, delivered Friday, his work day off : 

 

Matthew Walker : 'Why we sleep' [He's pursuing an a priori doomed endeavour of getting me correctional directed against not beeing a night owl, and he'll fail on that - Yet, I still try to listen ...]

 

 

 

[Xerxes]

1 hour ago, crs223 said:

BRK diluted this year to buy the rest of BHE.  Does this mean Buffett thinks shares are trading above intrinsic value?

speaks more to BHE seller wanting to be paid in stock for their reasons. Whereas Greg wanting to be paid in cash for his specific reasons. 
 

wether Berkshire trades at or above intrinsic value you will never see (my opinion) management issuing shares again. This was an exception to wrap up BHE with whatever means was required to do, in order to take out the minority owners. 
 

 

 

 

Edited Saturday at 08:17 PM by Xerxes

[John Hjorth]

5 hours ago, 73 Reds said:

Much more positive than a year ago.  His distaste for payment of a dividend continues (Yay!).  Still keeping a lot close to the vest.  Not sure why he shuns most foreign equities unless he believes nothing is cheap anywhere.  

 

Thank you, @73 Reds ,

 

Personally, and for personal tax reasons [being a Dane] I concur with you on 'Berkshire dividends' [perhaps I should call it 'Lack of ...' in stead].

 

What is your personal stance on taking on [modest] margin against investing in Berkshire? - I have for a long time wanted to ask you this question, actually.

Edited Saturday at 07:39 PM by John Hjorth

[sleepydragon]

2 hours ago, crs223 said:

BRK diluted this year to buy the rest of BHE.  Does this mean Buffett thinks shares are trading above intrinsic value?

I think it can’t be done now unless he’s willing to pay in shares and he want this matter to get settled now. 

[schin]

"In 2024, Berkshire did better than I expected though 53% of our 189 operating businesses reported a decline in earnings. "

 

Is this an indicator he ever used? That's interesting. Is it easy to get this type of read from ValueLine or S&P somewhere? A percentage of business that declare declining earnings?

 

[gfp]

"

In January 2025, several wildfires broke out in Southern California resulting in thousands of destroyed or damaged structures. We preliminarily estimate our insurance group could incur pre-tax losses of approximately $1.3 billion from these wildfires "

[longlake95]

4 hours ago, John Hjorth said:

 

Yeah, @longlake95, the above posted by me, a Dane, from microscopic Denmark, who managed some time ago to skip both the cane and crutches, to go directly to the rollator [it actually means : four support wheels!] , 28 years junior to Mr. Buffett. The wheel chair - by hard physical work four times a week - has been moved out in the horizon, though. 

 

In the process, I've learned a thing, or two, about life, and the meaning of it.

 

- - - o 0 o - - -

 

Thursday, my physiotherapist said to me : 'Forget everything about getting rid of the rollator by first of April, based on how you're doing today! - It may end up being first of May or First of June.'

 

If there is anything that still can get my p*ss boiling it's people telling me what I can not do. I'm still up for the challenge.

 

Just to appreciate his challenge, when I got home from him, I ordered, to delivery at his workplace, delivered Friday, his work day off : 

 

Matthew Walker : 'Why we sleep' [He's pursuing an a priori doomed endeavour of getting me correctional directed against not beeing a night owl, and he'll fail on that - Yet, I still try to listen ...]

 

 

 

 

Be well John, get better for Omaha.

[vakilkp]

The below is pretty powerful and something (with revisions) to consider telling the children whom we leave an inheritance. 

 

"So thank you, Uncle Sam. Someday your nieces and nephews at Berkshire hope to send
you even larger payments than we did in 2024. Spend it wisely. Take care of the many who, for
no fault of their own, get the short straws in life. They deserve better. And never forget that we
need you to maintain a stable currency and that result requires both wisdom and vigilance on
your part."

[Spekulatius]

23 hours ago, Munger_Disciple said:

The thing the surprised me most about the 2023 AR was how negative was Buffett about BHE (Berkshire can sustain financial surprises but we will not knowingly throw good money after bad) and to a lesser extent about BNSF.

WEB is human and I think the death of his long time soulmate has affected hier quite a bit. It would not surprise me the least if he steps back from the executive position and just remains chairman of the board at Berkshire. I also think it would be better for Berkshire quite frankly.

[John Hjorth]

36 minutes ago, schin said:

"In 2024, Berkshire did better than I expected though 53% of our 189 operating businesses reported a decline in earnings. "

 

Is this an indicator he ever used? That's interesting. Is it easy to get this type of read from ValueLine or S&P somewhere? A percentage of business that declare declining earnings?

 

@schin,

 

Remember i.e. 1978 ? :

 

 

Mr. Buffett has asked Marc Hamburg for a specification of the 2024 pre tax earnings and after tax earnings divided and specified into each separate contributor, by each subsidiary and the parent. Marc Hamburg then enters the Berkshire consolidation systems report generator, and pushes a button to generate such a priori set up report, and hands the report out to Mr. Buffett, likely a 5 - 6 pages long specification.

 

To could explain how group equity at the beginning of the year ties to group equity at the end of the year via added group earnings for the year, paid out dividends and other equity changes during the year is the ultimate control that your consolidation is correct.

 

Real men eat asbestos with milk for breakfast, goes on vacation in Tjernobyl, and can do consolidation manually by hand, the old fashion way, in green sheets. Nowadays it's all run on special consolidation software, the most fascinating accounting software that exists, because it's also a groupwide collaboration tool, with each subsidiary participating in the process, at Berkshire, quarterly. [Hyperion, SAP, AARO et. al., all awesome!]

[Ballinvarosig Investors]

Quote

At 94, it won’t be long before Greg Abel replaces me as CEO and will be writing the annual letters.

I am going to call it.

 

Warren Buffett will not be the CEO of Berkshire Hathaway as of 2026.

[Parsad]

14 minutes ago, Ballinvarosig Investors said:

I am going to call it.

 

Warren Buffett will not be the CEO of Berkshire Hathaway as of 2026.

 

You may be correct, but that would be a great shame.  Other than my father, I have never had a better teacher in my life than Buffett!  His words have been incredibly enlightening and everything good I've done in the second third of my life has been because of what I've learned from his writings.  The day the annual letter is no longer written by him will be a very sad day for me, and I'm sure thousands, if not tens of thousands of Berkshire shareholders and students of Buffett.  Cheers!

[philassor]

"The American process has not always been pretty – our country has forever had many

scoundrels and promoters who seek to take advantage of those who mistakenly trust them with

their savings. But even with such malfeasance – which remains in full force today – and also

much deployment of capital that eventually floundered because of brutal competition or

disruptive innovation, the savings of Americans has delivered a quantity and quality of output

beyond the dreams of any colonist"

 

 

I can't help but think that was Buffett's covert political statement. Followed by:

 

 

"So thank you, Uncle Sam. Someday your nieces and nephews at Berkshire hope to send

you even larger payments than we did in 2024. Spend it wisely. Take care of the many who, for

no fault of their own, get the short straws in life. They deserve better. And never forget that we

need you to maintain a stable currency and that result requires both wisdom and vigilance on

your part."

[benchmark]

1 hour ago, philassor said:

 

"The American process has not always been pretty – our country has forever had many

scoundrels and promoters who seek to take advantage of those who mistakenly trust them with

their savings. But even with such malfeasance – which remains in full force today – and also

much deployment of capital that eventually floundered because of brutal competition or

disruptive innovation, the savings of Americans has delivered a quantity and quality of output

beyond the dreams of any colonist"

 

 

I can't help but think that was Buffett's covert political statement. Followed by:

 

 

 

"So thank you, Uncle Sam. Someday your nieces and nephews at Berkshire hope to send

you even larger payments than we did in 2024. Spend it wisely. Take care of the many who, for

no fault of their own, get the short straws in life. They deserve better. And never forget that we

need you to maintain a stable currency and that result requires both wisdom and vigilance on

your part."

I agree. That's Buffet's not so subtle advice. 

[jbwent63]

17 hours ago, Xerxes said:

speaks more to BHE seller wanting to be paid in stock for their reasons. Whereas Greg wanting to be paid in cash for his specific reasons. 
 

wether Berkshire trades at or above intrinsic value you will never see (my opinion) management issuing shares again. This was an exception to wrap up BHE with whatever means was required to do, in order to take out the minority owners. 
 

 

 

 

I think there are two hints about what Buffett/Abel thing about the IV of the shares. One is that they agreed to issue shares to take in the last ~2% of BHE (presumably from the Scott estate) and that there were no buybacks in at least the last two quarters. 

[73 Reds]

18 hours ago, John Hjorth said:

 

Thank you, @73 Reds ,

 

Personally, and for personal tax reasons [being a Dane] I concur with you on 'Berkshire dividends' [perhaps I should call it 'Lack of ...' in stead].

 

What is your personal stance on taking on [modest] margin against investing in Berkshire? - I have for a long time wanted to ask you this question, actually.

Hi John, I don't use margin (or debt) of any kind because it is not necessary.  If you want to try to juice your returns on BRKB you could consider writing call options and rolling them as necessary.  I tried this in a retirement account when the shares became optionable (the only BRKB shares I have ever traded rather than just held) but ultimately didn't have the patience to monitor the price and grew bored with the process and stopped doing it altogether. 

[John Hjorth]

10 minutes ago, 73 Reds said:

Hi John, I don't use margin (or debt) of any kind because it is not necessary.  If you want to try to juice your returns on BRKB you could consider writing call options and rolling them as necessary.  I tried this in a retirement account when the shares became optionable (the only BRKB shares I have ever traded rather than just held) but ultimately didn't have the patience to monitor the price and grew bored with the process and stopped doing it altogether. 

 

Thank you, @73 Reds,

 

Reading your post makes me distance my self from the idea to do so. I think I could easily figure out more meaningful, positive, joyable and entertaining ways, to make the rest of my life more miserable, than messing around with Berkshire options, thank you.

[gfp]

18 hours ago, Xerxes said:

speaks more to BHE seller wanting to be paid in stock for their reasons. Whereas Greg wanting to be paid in cash for his specific reasons. 
 

wether Berkshire trades at or above intrinsic value you will never see (my opinion) management issuing shares again. This was an exception to wrap up BHE with whatever means was required to do, in order to take out the minority owners. 
 

 

 

 

 

I think Warren wanted Greg to be paid in cash for his BHE shares for the optics of paying his taxes and using his own after-tax funds to acquire Berkshire stock, over time, in the open market.  Greg had the option to exchange his BHE shares for Berkshire stock in a tax deferred transaction (just like Sokol did - Sokol took BRK shares in his deal).

 

I think the valuation of BHE in Greg's deal was "more generous" to compensate for the taxable cash deal that Warren preferred.  If you look at BHE valuation datapoints over time, Greg's deal is an outlier.  Obviously bad things happened at BHE before the deal with the Scott estate that partially explain the decrease in valuation.

 

[73 Reds]

4 minutes ago, John Hjorth said:

 

Thank you, @73 Reds,

 

Reading your post makes me distance my self from the idea to do so. I think I could easily figure out more meaningful, positive, joyable and entertaining ways, to make the rest of my life more miserable, than messing around with Berkshire options, thank you.

The "psychological" issue I always had with covered calls is that you are betting against yourself in a way.  If you manage the options you can probably generate a consistent, positive return - particularly on a reliably profitable stock like Berkshire.  As I've written before you can also win a bet with anyone who doesn't believe you can best the S&P 500 index (and most professional money managers) by writing OTM covered calls against the index and rolling them forward in the event you risk losing your underlying position to assignment.  But you're right - time is better spent on other endeavors. 

[John Hjorth]

19 hours ago, Parsad said:

You may be correct, but that would be a great shame.  Other than my father, I have never had a better teacher in my life than Buffett!  His words have been incredibly enlightening and everything good I've done in the second third of my life has been because of what I've learned from his writings.  The day the annual letter is no longer written by him will be a very sad day for me, and I'm sure thousands, if not tens of thousands of Berkshire shareholders and students of Buffett.  Cheers!

 

The first three years of my CofB&F membership, I wasen't really participating on the board, instead I was reading - sucking up! - sucking up knowledge here on CofB&F from other board members, just reading the board!, at about 100 posts within the first three years, I think - or something thereabout.

 

I still remember this :

 

CofB&F [CofB&F member Parsad][February 17 19^th 2009] : Buy Berkshire!

 

Edited Sunday at 08:43 PM by John Hjorth

[longlake95]

10 hours ago, benchmark said:

I agree. That's Buffet's not so subtle advice. 

Absolutely. He’s telling government to have a steady hand. Let’s hope everyone listens. 

[Xerxes]

4 hours ago, John Hjorth said:

 

 

 

 

Amazing !!!

 

[Xerxes]

5 hours ago, gfp said:

 

I think Warren wanted Greg to be paid in cash for his BHE shares for the optics of paying his taxes and using his own after-tax funds to acquire Berkshire stock, over time, in the open market.  Greg had the option to exchange his BHE shares for Berkshire stock in a tax deferred transaction (just like Sokol did - Sokol took BRK shares in his deal).

 

I think the valuation of BHE in Greg's deal was "more generous" to compensate for the taxable cash deal that Warren preferred.  If you look at BHE valuation datapoints over time, Greg's deal is an outlier.  Obviously bad things happened at BHE before the deal with the Scott estate that partially explain the decrease in valuation.

 

 

Cheers

 

[John Hjorth]

15 hours ago, Xerxes said:

Amazing !!!

 

There are some really fascinating stories laying around here on CofB&F about the past.

 

One thing is experiencing Sanjeev [ @Parsad ], as if he was in a candy store under a fire sale, ref. above [lol!], while everything was collapsing and going down? Guts certainly required!

 

How about a story about a pair [the male being a CofB&F member, reporting here, I forgot who], standing on a Sunday afternoon, looking at the car getting car washed at the gas station [, as one do] , hubby asking wifey [, so, casually, you know, all while both staring at the car getting washed] : 'Is it OK I dump all your stuff tomorrow, to go all in on BAC WFC, which is extremely cheap by now?', wifey stating , after a short explanation provided by hubby : 'Go for it!'  

Edited Monday at 11:21 AM by John Hjorth

[Libs]

4 hours ago, John Hjorth said:

 

There are some really fascinating stories laying around here on CofB&F about the past.

 

One thing is experiencing Sanjeev [ @Parsad ], as if he was in a candy store under a fire sale, ref. above [lol!], while everything was collapsing and going down? Guts certainly required!

 

How about a story about a pair [the male being a CofB&F member, reporting here, I forgot who], standing on a Sunday afternoon, looking at the car getting car washed at the gas station [, as one do] , hubby asking wifey [, so, casually, you know, all while both staring at the car getting washed] : 'Is it OK I dump all your stuff tomorrow, to go all in on BAC, which is extremely cheap by now?', wifey stating , after a short explanation provided by hubby : 'Go for it!'  

 

Ha, that was me. Surprised any one remembered! It was March 9, 2009 as I recall. The bottom. Buffett had been on CNBC that morning, at 4 AM PST,  coming as close to endorsing a stock as I'd ever heard. It was WFC. He said, "Wells is interesting at 3X (or whatever it was) pre-provision income. " Words to that effect. I'd been studying the stock and that was all I needed to hear. Cleared it with the wife and went all-in at $10. Sold it at $50 a few years later.

 

I'd say Buffett is 80% responsible for my net worth, for reasons Parsad cited. Wabuffo is probably 10%, LOL.