Author Topic: Buffett buybacks: Could Berkshire tender stock?  (Read 87196 times)

gfp

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #80 on: September 21, 2018, 05:55:41 AM »
Yeah, that was surprising on the day he said that.  It was basically Warren going on TV saying that the current price of Berkshire (at that time) was 'way below intrinsic value, conservatively determined by Warren Buffett & Charlie Munger.'  And he also mentioned, if it's close enough they have to talk about it on the phone, they probably shouldn't be buying it...  He was on 4 networks that day and the stock didn't budge


nickenumbers

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #81 on: September 21, 2018, 06:29:25 AM »
And that fact that GlobalFinancialPartners is pointing out.. that the stock didn't move..  despite there being high probability of making money...  is a scary comment on group herd psychology...  And it is a beautiful thing for all those that listen to the words of Ben Graham-

Short term stock market is a voting machine.
Long term stock market is a weighing machine.

It confounds me how complicated and how simple stock market investing can be!
The fastest Cheetah still waits for the lame baby antelope.  ..patience..

gfp

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #82 on: September 21, 2018, 06:40:03 AM »
Some of this move the last few days has got to be option expiration related.  A lot of folks probably got caught out with covered calls against low basis stock they had no intention of selling.  Look at the opening tick of over 2 million shares traded on the B shares this morning, which is a major option expiry day.

SwedishValue

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #83 on: September 21, 2018, 09:48:37 AM »
Is Buffett (through Berkshire), under US securities law and regulation, allowed to write put options on Berkshire? I would guess not, right?

Kapitalust

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #84 on: September 21, 2018, 09:50:40 AM »
Yeah, that was surprising on the day he said that.  It was basically Warren going on TV saying that the current price of Berkshire (at that time) was 'way below intrinsic value, conservatively determined by Warren Buffett & Charlie Munger.'  And he also mentioned, if it's close enough they have to talk about it on the phone, they probably shouldn't be buying it...  He was on 4 networks that day and the stock didn't budge

After the removal of the buyback announcement and Buffett essentially saying the stock is cheap, I increased the entire portfolio's weighting to 60% Berkshire.

gfp

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #85 on: September 21, 2018, 10:04:55 AM »
It was legal in the 90's as part of a repurchase plan.  I assume it is still legal.  I doubt Berkshire is doing it, but Warren has used short puts to purchase shares several times in the past, including with Coca Cola and BNSF.

'97 wsj article - https://www.wsj.com/articles/SB864243230195870000

Is Buffett (through Berkshire), under US securities law and regulation, allowed to write put options on Berkshire? I would guess not, right?

SwedishValue

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #86 on: September 21, 2018, 10:31:40 AM »
It was legal in the 90's as part of a repurchase plan.  I assume it is still legal.  I doubt Berkshire is doing it, but Warren has used short puts to purchase shares several times in the past, including with Coca Cola and BNSF.

'97 wsj article - https://www.wsj.com/articles/SB864243230195870000

Is Buffett (through Berkshire), under US securities law and regulation, allowed to write put options on Berkshire? I would guess not, right?

Yea that was what brought it to my mind. He did it kind of massively for BNSF, and the way he structured it (issuing puts at prices much higher than the market value), made it likely he would actually get the shares delivered.

nickenumbers

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #87 on: September 21, 2018, 02:12:12 PM »
Did you guys notice the trading volume on the BRK.B shares today.

Normal B share trading volume is 4M.
Today 13M shares changed hands.  That is $3B in one day...

I wonder who the buyers and sellers are.....  humm.....

Gates Foundation
BRK share repurchase

hummmm....
The fastest Cheetah still waits for the lame baby antelope.  ..patience..

gfp

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #88 on: September 21, 2018, 02:16:12 PM »
over 2 million was on the opening tick.  Today was options expiration.

(IB showing less than 5million but Bloomberg and NYSE showing over 13m)


Did you guys notice the trading volume on the BRK.B shares today.

Normal B share trading volume is 4M.
Today 13M shares changed hands.  That is $3B in one day...

I wonder who the buyers and sellers are.....  humm.....

Gates Foundation
BRK share repurchase

hummmm....
« Last Edit: September 21, 2018, 02:18:56 PM by globalfinancepartners »

SwedishValue

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Re: Buffett buybacks: Could Berkshire tender stock?
« Reply #89 on: September 29, 2018, 12:44:32 AM »
I added up the number of traded shares for each day from the 6th of august until the 28th of september. These numbers probably do not reflect transactions off-market, as I've seen people in here report significantly higher numbers for specific days compared with the numbers my broker gives me.

109 127 485 B-shares have been traded.
9 080 A-shares have been traded.

If Buffett bought back 25% of this amount, he would have bough back approximately USD 5.7 Billion of B-shares and USD 0.7 Billion of A-shares. Do I understand it correctly that Buffett is not allowed to purchase more than 25% of average trading volume per day?

If anyone can provide the correct numbers of shares traded including off-market transactions I would be delighted.