Author Topic: Buffett CNBC transcript  (Read 6113 times)

SwedishValue

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Re: Buffett CNBC transcript
« Reply #10 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.


LightWhale

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Re: Buffett CNBC transcript
« Reply #11 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.
« Last Edit: February 26, 2019, 03:15:05 AM by LightWhale »

Spekulatius

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Re: Buffett CNBC transcript
« Reply #12 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.
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valueinvesting101

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Re: Buffett CNBC transcript
« Reply #13 on: February 26, 2019, 05:47:09 AM »
Could he be referring to buy Bloomberg LP?

gfp

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Re: Buffett CNBC transcript
« Reply #14 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?

CorpRaider

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Re: Buffett CNBC transcript
« Reply #15 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.
« Last Edit: March 05, 2019, 09:11:31 AM by CorpRaider »

Mephistopheles

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Re: Buffett CNBC transcript
« Reply #16 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?

augustabound

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Re: Buffett CNBC transcript
« Reply #17 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
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EricSchleien

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Re: Buffett CNBC transcript
« Reply #18 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?

SHDL

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Re: Buffett CNBC transcript
« Reply #19 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).