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General Category => Berkshire Hathaway => Topic started by: rogermunibond on February 25, 2019, 09:59:23 AM

Title: Buffett CNBC transcript
Post by: rogermunibond on February 25, 2019, 09:59:23 AM
https://www.cnbc.com/2019/02/25/full-transcript-billionaire-investor-warren-buffett-speaks-with-cnbcs-becky-quick-on-squawk-box-today.html
Title: Re: Buffett CNBC transcript
Post by: Liberty on February 25, 2019, 10:32:07 AM
Thank you, roger.
Title: Re: Buffett CNBC transcript
Post by: dcollon on February 25, 2019, 10:55:11 AM
Thank you for posting the link.
Title: Re: Buffett CNBC transcript
Post by: gfp on February 25, 2019, 01:20:50 PM
Bloomberg has said he would sell his interest in Bloomberg LP if he ran for president, or at least if he was elected, if I remember correctly. Maybe Warren would be interested in assisting with that.
Title: Re: Buffett CNBC transcript
Post by: Jurgis on February 25, 2019, 01:34:17 PM
Bloomberg has said he would sell his interest in Bloomberg LP if he ran for president, or at least if he was elected, if I remember correctly. Maybe Warren would be interested in assisting with that.

Warren might be interested, but Bloomberg won't get to a point where he has to sell.
Title: Re: Buffett CNBC transcript
Post by: longinvestor on February 25, 2019, 05:41:14 PM
It's more likely that the elephant is one they partially own, a script which has played out multiple times already....which of these belong permanently in the Berkshire collection? My speculation is the ones bolded,


Shares*        Company                                              Percentage of Company Owned           Cost**            Market(in millions)
151,610,700 American Express Company ....... 17.9                                                   $ 1,287            $14,452
255,300,329 Apple Inc. . . . . . . . . . . . . . . . . . . . . . . 5.4                                                     36,044            40,271
918,919,000 Bank of America Corp. . . . . . . . . . . . . . 9.5                                                     11,650            22,642
84,488,751 The Bank of New York Mellon Corp. . . . . . 8.8                                                      3,860               3,977
6,789,054 Charter Communications, Inc. . . . . . . .  . . 3.0                                                       1,210              1,935
400,000,000 The Coca-Cola Company . . . . . . . 9.4                                                      1,299            18,940
65,535,000 Delta Air Lines, Inc. . . . . . . . . . . . . . . . . 9.6                                                       2,860              3,270
18,784,698 The Goldman Sachs Group, Inc. . . . . . . .  4.9                                                       2,380              3,138
50,661,394 JPMorgan Chase & Co. . . . . . . . . . . . . . . 1.5                                                       5,605             4,946
24,669,778 Moodyís Corporation ..................             12.9                                                       248              3,455
47,890,899 Southwest Airlines Co. . . . . . . . . . .8.7                                                     2,005              2,226
21,938,642 United Continental Holdings Inc. . . . . . . . .8.1                                                     1,195              1,837
146,346,999 U.S. Bancorp . . . . . . . . . . . . . . . . . . . . 9.1                                                      5,548             6,688
43,387,980 USG Corporation ..........................          31.0                                                     836                1,851
449,349,102 Wells Fargo & Company . . . . . . . . . . . . .9.8                                                      10,639            20,706
Title: Re: Buffett CNBC transcript
Post by: gfp on February 25, 2019, 05:47:52 PM
Those are all possibilities.  But Amex would have to give up Bank holding company status to do a deal with Berkshire.
Title: Re: Buffett CNBC transcript
Post by: Dynamic on February 25, 2019, 05:54:04 PM
Southwest Airlines is intriguing, given the recent death of its founder. In the mould of the BNSF deal, if it were an airline I'm guess they'd divest their stakes in the other airlines and would be unlikely to hold any other airline stocks in future, just as they wouldn't be likely to hold Union Pacific stock now they own BNSF in entirety (though railroad regulation is probably more restrictive than airline regulation in this respect.
Title: Re: Buffett CNBC transcript
Post by: sleepydragon on February 25, 2019, 06:03:34 PM
interesting there are questions about banks and JPM and BAC were both mentioned by WEB. But there's no question at all about WFC.
Title: Re: Buffett CNBC transcript
Post by: Gamecock-YT on February 25, 2019, 06:37:59 PM
I like how about 2/3's of the way down the transcript changes to Becky interviewing Joe....that was a mind bender.
Title: Re: Buffett CNBC transcript
Post by: SwedishValue on February 25, 2019, 09:56:35 PM
Given that Buffett said the transaction was very large, I think Southwest is out of the question. Anything below 30 BN can't be considered very large, in my opinion.
Title: Re: Buffett CNBC transcript
Post by: LightWhale on February 26, 2019, 03:12:42 AM
Thanks for the link. Also interesting to read that both Buffett and his deputies have lagged the s&p over the last 7 years. And if I had to guess, I would say Buffett was referring to some chunk of GE, where the price started running away from him towards the end of December.
Title: Re: Buffett CNBC transcript
Post by: Spekulatius on February 26, 2019, 03:39:45 AM
Thanks for the link. Also interesting to read that both Buffett and his deputies have lagged the s&p over the last 7 years. And if I had to guess, I would say Buffett was referring to some chunk of GE, where the price started running away from him towards the end of December.

A part of GE for sale would have been my guess as well. WEB knows GE well and has lent them money before. We also know that GE just announced the sale of their biopharm business to DHR for $21.4B, which is the size of a whale for BRK. I suspect though that GE may have tried to sell other assets to BRK than to DHR (DHR has Medical tech focus) but than settled with DHR instead. All the above is pure speculation of course.
Title: Re: Buffett CNBC transcript
Post by: valueinvesting101 on February 26, 2019, 05:47:09 AM
Could he be referring to buy Bloomberg LP?
Title: Re: Buffett CNBC transcript
Post by: gfp on February 26, 2019, 06:36:13 AM
I don't think Bloomberg LP would cost enough to qualify for his characterization.  When the interviewers were like, "you could write a check for $100 Billion" - Warren's reply was, "that is true."

I think he had something big that was possible.  If it was GE it was probably Reinsurance / balance sheet stuff that kept it from being workable at the time.  GE has been in talks with Ajit about their insurance liabilities for a while but I don't think GE can stomach the price it would take to shed to BRK.

Could he be referring to buy Bloomberg LP?
Title: Re: Buffett CNBC transcript
Post by: CorpRaider on March 05, 2019, 05:31:00 AM
What did you guys think of his discussion of the banks and the metaphor to a CD emulating the ROTE of the banks and what multiple of tangible book you would pay for that given the current IR environment?  I found it informative, but I didn't follow his "and its FDIC insured" logic.  I mean I see how it would apply to his metaphor of a CD, but I thought we were really talking about holding equity in the banks.  Seems like one should discount the return on tangible equity some for the whole "levered 5-1" thing. 

I am sort of coming around to the hypothesis that U.S. banking might be more and more a Canadian banking type oligopoly over time (I know it already is to some extent).  BB&T/STI merger and recent WSJ article about small banks being fooked b/c of lack of tech, kind of increased confidence in that.  Trying to decide what, if anything, to do about it. 

I think I would want one of the banks with an ownership interest in the potential Venmo-slayer (and maybe other payments system/networks) Zelle.  Weighing WFC vs. BAC vs. USB.  Somewhat prefer the (admittedly, tarnished of late) brand (they actually have a name and logo that isn't generic 'merica) and lower IB exposure of WFC, but I never liked their overly salemany/golden west/consumer LPO type vibe. Obviously, that ain't the one the GOAT has been buying lately.  Prefer deposit base of WFC and BAC, but USB seemingly has more room to grow above GDP rate.
Title: Re: Buffett CNBC transcript
Post by: Mephistopheles on March 05, 2019, 03:33:50 PM
Can anyone explain why Buffett can hold 17% of Amex but canít go above 10% for other bank. In other words, why doesnít Amex trigger the bank holding company requirement?
Title: Re: Buffett CNBC transcript
Post by: augustabound on March 05, 2019, 03:48:42 PM
Can anyone explain why Buffett can hold 17% of Amex but canít go above 10% for other bank. In other words, why doesnít Amex trigger the bank holding company requirement?
I've wondered that in the past too.  I found a fool.com article that says,
Quote
Berkshire recently asked the Federal Reserve to boost the maximum amount of American Express stock it can own from 17% to just under 25%. Berkshire has committed to be a passive investor in AmEx in order to get around another rule that would have limited its ownership stake to just 10%.

https://www.fool.com/investing/2017/06/20/how-risky-is-american-express-company.aspx
Title: Re: Buffett CNBC transcript
Post by: EricSchleien on March 05, 2019, 05:37:11 PM
Can anyone explain why Buffett can hold 17% of Amex but canít go above 10% for other bank. In other words, why doesnít Amex trigger the bank holding company requirement?
I've wondered that in the past too.  I found a fool.com article that says,
Quote
Berkshire recently asked the Federal Reserve to boost the maximum amount of American Express stock it can own from 17% to just under 25%. Berkshire has committed to be a passive investor in AmEx in order to get around another rule that would have limited its ownership stake to just 10%.

https://www.fool.com/investing/2017/06/20/how-risky-is-american-express-company.aspx

So why can't he make these same kind of requests for the banks?
Title: Re: Buffett CNBC transcript
Post by: SHDL on March 05, 2019, 05:59:47 PM
IIRC the story here was that Berkshire already had its huge stake in American Express when it converted to a bank holding company. Buffett then asked regulators if he could hold on to his shares, and they said okay ó as long as he meets certain conditions (like staying passive and such).
Title: Re: Buffett CNBC transcript
Post by: aws on March 05, 2019, 08:28:36 PM
He did make the request for Wells Fargo but was told if approved it would limit the ability of Berkshire and its subsidiarys to transact with Wells Fargo in the course of their business.
Title: Re: Buffett CNBC transcript
Post by: EricSchleien on March 06, 2019, 10:18:48 AM
He did make the request for Wells Fargo but was told if approved it would limit the ability of Berkshire and its subsidiarys to transact with Wells Fargo in the course of their business.

Oh interesting, I didn't know that!
Title: Re: Buffett CNBC transcript
Post by: Rasputin on March 06, 2019, 11:38:27 AM
http://www.berkshirehathaway.com/news/apr1217.pdf

After several months of discussions with representatives of the Federal Reserve, we have concluded that the
commitments that would be required of us by the Federal Reserve to retain ownership of 10% or more of Wells
Fargoís outstanding common stock would materially restrict our commercial activity with Wells Fargo.
Title: Re: Buffett CNBC transcript
Post by: scorpioncapital on March 15, 2019, 02:59:25 AM
When he said he bought a test position in Oracle, then upon contemplation realized he didn't really understand the long term dynamics I got two impressions, one good and one bad.

Good impression: He asks himself on every investment if he really understands the business model and dynamics. He only invests in what he feels he understands so that there are no really bad surprises at Berkshire.

Bad impression: He is unable to expand his circle of competence. This last point I find potentially problematic if Berkshire requires some new big deals to boost gains on top of the existing businesses. I do believe there are other areas of competence other investors have and have done very well. But of course they could in time be wrong as well. Many investors think they know something very well but in the end find out they are just buying something they know maybe 60% or 70% and that part they don't know reduces long term return.

To me it's crucial that Berskshire can expand it's circle of competence as the world changes. Maybe the new blood will help with this. And hopefully Apple is an example of a successful expansion of the competence circle.
Title: Re: Buffett CNBC transcript
Post by: xo 1 on March 16, 2019, 07:44:53 PM

Bad impression: He is unable to expand his circle of competence. This last point I find potentially problematic if Berkshire requires some new big deals to boost gains on top of the existing businesses. I do believe there are other areas of competence other investors have and have done very well. But of course they could in time be wrong as well. Many investors think they know something very well but in the end find out they are just buying something they know maybe 60% or 70% and that part they don't know reduces long term return.

To me it's crucial that Berskshire can expand it's circle of competence as the world changes. Maybe the new blood will help with this. And hopefully Apple is an example of a successful expansion of the competence circle.
With respect, it is quite a leap to suggest that not being about to get confidence in Oracle's future prospects suggest an inability to expand circle of competence.  I tend to your first impression, recognizing that the number of people who have tech within their circle of competence - in an investable way - is vanishingly small.
Title: Re: Buffett CNBC transcript
Post by: alpha on March 17, 2019, 05:58:57 PM
When he said he bought a test position in Oracle, then upon contemplation realized he didn't really understand the long term dynamics I got two impressions, one good and one bad.

Good impression: He asks himself on every investment if he really understands the business model and dynamics. He only invests in what he feels he understands so that there are no really bad surprises at Berkshire.

Bad impression: He is unable to expand his circle of competence. This last point I find potentially problematic if Berkshire requires some new big deals to boost gains on top of the existing businesses. I do believe there are other areas of competence other investors have and have done very well. But of course they could in time be wrong as well. Many investors think they know something very well but in the end find out they are just buying something they know maybe 60% or 70% and that part they don't know reduces long term return.

To me it's crucial that Berskshire can expand it's circle of competence as the world changes. Maybe the new blood will help with this. And hopefully Apple is an example of a successful expansion of the competence circle.


I think there is probably more behind the Oracle purchase then he is mentioning publicly. Anyone in the tech industry can tell you Oracle is going no where in the cloud business and Buffett is best friends with Bill Gates, he can get first hand knowledge from the leaders of tech any time he wants. Around the time of the stock purchase Larry Ellison was doing an abnormal amount of media appearances, and Amazon announced they were dropping Oracle internally. Maybe there was speculation of a buyout or deal that fell through.