Author Topic: Buffett buybacks: Could Berkshire tender stock?  (Read 20881 times)

globalfinancepartners

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #110 on: October 06, 2018, 05:25:17 PM »
My understanding is that nothing has to be publicly disclosed in a filing when an issuer is using the plan for a repurchase. Other types of plans, for insider selling for instance, usually get mentioned in the form 4 - but the confidential details of the trading rules are usually not public.  Sometimes you can divine them through other disclosures though - a cap price can sometimes be observed if trading prices are detailed in a form 4.

So no, Berkshire doesn’t have to file anything but might mention it in a footnote later.


SwedishValue

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #111 on: October 07, 2018, 04:18:23 AM »
Globalfinancepartners, this is very helpful. Thanks for the very valuable contribution!

John Hjorth

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #112 on: October 07, 2018, 04:36:52 AM »
Globalfinancepartners, this is very helpful. Thanks for the very valuable contribution!

Agreed! - So we'll just have to wait to next 10-Q and see. The observation made by sleepydragon is actually quite striking. I really hope this is a material change in the buyback narrative, as longinvestor has called it. - Wait, wait, wait ...
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SwedishValue

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #113 on: October 07, 2018, 07:41:45 AM »
I just wanna have this on the record.

1. I believe Buffett has been repurchasing shares aggressively, in excess of 10% of daily trading volume.

2. I believe share buybacks will take place as long as prices are at least within 110% of the price when Buffett commented on the buybacks on CNBC (at least until 230 USD).

3. I think both the ”soft trading floor” and the fact that Buffett considers the stock to be significantly undervalued, to be strong reasons for a very significant long position in Berkshire.

I am long, for the first time ever, since shortly after the buyback treshold change.

boilermaker75

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #114 on: October 07, 2018, 02:12:01 PM »
I just wanna have this on the record.

1. I believe Buffett has been repurchasing shares aggressively, in excess of 10% of daily trading volume.

2. I believe share buybacks will take place as long as prices are at least within 110% of the price when Buffett commented on the buybacks on CNBC (at least until 230 USD).

3. I think both the ”soft trading floor” and the fact that Buffett considers the stock to be significantly undervalued, to be strong reasons for a very significant long position in Berkshire.

I am long, for the first time ever, since shortly after the buyback treshold change.

Just for the record, BRKB is my largest position, about 40% of my portfolio. Most was acquired in 2008, but using puts I added in the range of $184-$198 in May and June.

nickenumbers

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #115 on: October 07, 2018, 05:22:49 PM »
On Friday, almost all the financials are down, and almost all the stocks in my portfolio/watch lists are down, Except BRK. So someone has to be buying. To move BRK like this, I think it needs at least $5B demand per week.

I have been thinking about sleepydragon's observation from a couple different angles.  And I think there is a very high probability that he is right..

Do you guys think there is any flight/movement to "value"?  One of the economists that I like from Prudential thinks that it is coming in the market cycle.  But, I haven't really seen it yet..  Except BRK is rising.  But the increase in BRK could also be directly caused by BRK share repurchase.

"When we hear hoof sounds we should think horses [BRK buy backs], we should not think zebras  [Illuminati secret buyers.]"
The fastest Cheetah still waits for the lame baby antelope.  ..patience..

nickenumbers

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #116 on: October 07, 2018, 05:39:55 PM »
I just wanna have this on the record.

1. I believe Buffett has been repurchasing shares aggressively, in excess of 10% of daily trading volume.

2. I believe share buybacks will take place as long as prices are at least within 110% of the price when Buffett commented on the buybacks on CNBC (at least until 230 USD).

3. I think both the ”soft trading floor” and the fact that Buffett considers the stock to be significantly undervalued, to be strong reasons for a very significant long position in Berkshire.

I am long, for the first time ever, since shortly after the buyback treshold change.

Right on SwedishValue for going on record, and that is where you money is invested too.

I think WEB and CM will continue to purchase with available cash if the share price continue to rise as long as the IV is well above the share price.  So, if BRK in a year is at $250, and BRK has grown IV by another 15%, the margin between the IV and share repurchase price is still good potentially.

This is our current reality, and numbers as SwedishValue has outlined.  Fingers Crossed.

Also, we have new variables entering the share price calculus, that we have never had before.  That is real cash/share buybacks and fewer shares outstanding for BRK.  How long does BRK purchase, how much do they purchase, at what prices do they purchase?  What happens to the share price when the rate of repurchase becomes public?  What does WEB say publicly about the repurchase?  What does WEB and CM say at the SH meeting 5/2019?

Great time to be a Brk shareholder.
The fastest Cheetah still waits for the lame baby antelope.  ..patience..

globalfinancepartners

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #117 on: October 07, 2018, 06:41:32 PM »
There are several factors in addition to repurchase activity that could be pushing BRK up relative to the market. One is the rise in interest rates and Berkshire’s unique positioning relative to interest rates (float based businesses become more valuable along with money, but most insurance companies hold large bond portfolios that get marked lower - Berkshire’s traditional long bond portfolio is comically small relative to total assets).

Another is simple technical analysis reasons, which also relates to violated option strikes, where Brk held above its recent breakout. Might sound like Mumbo Jumbo, but covered calls are a factor at Brk, where everyone holds at a gain, most with large gains they are not eager to be called on and realize.

But stock repurchases are undoubtably a factor as well

longinvestor

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #118 on: October 07, 2018, 08:51:40 PM »
I just wanna have this on the record.

1. I believe Buffett has been repurchasing shares aggressively, in excess of 10% of daily trading volume.

2. I believe share buybacks will take place as long as prices are at least within 110% of the price when Buffett commented on the buybacks on CNBC (at least until 230 USD).

3. I think both the ”soft trading floor” and the fact that Buffett considers the stock to be significantly undervalued, to be strong reasons for a very significant long position in Berkshire.

I am long, for the first time ever, since shortly after the buyback treshold change.

Right on SwedishValue for going on record, and that is where you money is invested too.

I think WEB and CM will continue to purchase with available cash if the share price continue to rise as long as the IV is well above the share price.  So, if BRK in a year is at $250, and BRK has grown IV by another 15%, the margin between the IV and share repurchase price is still good potentially.

This is our current reality, and numbers as SwedishValue has outlined.  Fingers Crossed.

Also, we have new variables entering the share price calculus, that we have never had before.  That is real cash/share buybacks and fewer shares outstanding for BRK.  How long does BRK purchase, how much do they purchase, at what prices do they purchase? What happens to the share price when the rate of repurchase becomes public?  What does WEB say publicly about the repurchase?  What does WEB and CM say at the SH meeting 5/2019?

Great time to be a Brk shareholder.


I have posted on COBF before (don't remember which thread under Berkshire) but it is my speculation that the net buyback $ will approximate Warren Buffett's peak personal stake in the company. 30%+. It may take well over a decade and the market has to cooperate by allowing attractive repurchases. It will be a fitting way to seal his legacy by retiring all of his ownership. This was his painting anyway.

Cigarbutt

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #119 on: October 07, 2018, 09:11:35 PM »
I have posted on COBF before (don't remember which thread under Berkshire) but it is my speculation that the net buyback $ will approximate Warren Buffett's peak personal stake in the company. 30%+. It may take well over a decade and the market has to cooperate by allowing attractive repurchases. It will be a fitting way to seal his legacy by retiring all of his ownership. This was his painting anyway.
Interesting speculation.
Need the following assumptions:
-limited outside re-investment opportunities
-cooperating market
-capital deployment discipline

Unusual scenario but not unheard of:
https://brianlangis.files.wordpress.com/2017/07/grants-article-1148.pdf