Author Topic: Buffett/Berkshire - general news  (Read 491671 times)

captkerosene

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Re: Buffett/Berkshire - general news
« Reply #440 on: April 04, 2017, 10:00:32 AM »
Is it just me or does WEB look a little Chinese on the can?


netnet

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Re: Buffett/Berkshire - general news
« Reply #441 on: April 05, 2017, 01:00:29 PM »
Is it just me or does WEB look a little Chinese on the can?
It is most certainly not you.  It is interesting. It's CPG so undoubtedly it was a design choice. 

That said, other cultures and ethnic group will put their stamp on a figure or image from another culture or ethnicity. Images of Alexander the Great for example.  In a more modern context, see for example, the statue of Martin Luther King by a Chinese sculptor, on the mall in DC. The statue makes him look like he is about to lead the cultural revolution by posture and with, shall I say, eyes not as 'round' as they obviously were!

John Hjorth

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Re: Buffett/Berkshire - general news
« Reply #442 on: April 06, 2017, 10:37:30 AM »
An SA article, by Left Shark Investing, in my humble opinion, worth a link here: Berkshire Hathaway: An In-Depth Look at Normalized Return on Equity.

I like the line of thinking and method of shaving off "Insurance" from "Insurance and other", thereby trying to analyze the earnings etc. of the big black box called "Other".
« Last Edit: April 11, 2017, 07:23:17 AM by John Hjorth »
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gfp

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Re: Buffett/Berkshire - general news
« Reply #443 on: April 11, 2017, 07:06:35 AM »
Sounds like Star Furniture CEO was fired by the parent company.  NFM grandson added to the board for oversight that Warren trusts -

http://hfbusiness.com/hfbnow/ArticleId/15622/kimbrell-resigns-as-star-furniture-ceo-blumkin-named-to-board

John Hjorth

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Re: Buffett/Berkshire - general news
« Reply #444 on: April 12, 2017, 02:50:16 PM »
Berkshire starts selling WFC shares, to keep position on 10 per cent, or just below.

Edit:

What's next with regard to Berkshire and bank stocks long term? Building a position in JPM? Or a merger between WFC and JPM? If this continues long term, Berkshire will own about 10 per cent of the whole US banking system, without even being a bank holding company - I'm just speculating and kidding here.
« Last Edit: April 12, 2017, 04:13:07 PM by John Hjorth »
”In the race of excellence … there is no finish line.”
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Jurgis

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Re: Buffett/Berkshire - general news
« Reply #445 on: April 13, 2017, 10:29:27 AM »
They can buy more UAL with proceeds.  8)
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John Hjorth

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Re: Buffett/Berkshire - general news
« Reply #446 on: April 13, 2017, 10:38:24 AM »
They can buy more UAL with proceeds.  8)

Jurgis,

I just hope that the extra proceeds from the enormous Berkshire position in WFC ends up in something that has the capacity to suffer - something antifragile ... not airlines! - Time will tell.
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

fareastwarriors

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Re: Buffett/Berkshire - general news
« Reply #447 on: April 13, 2017, 11:10:17 AM »
They can buy more UAL with proceeds.  8)

Jurgis,

I just hope that the extra proceeds from the enormous Berkshire position in WFC ends up in something that has the capacity to suffer - something antifragile ... not airlines! - Time will tell.

Maybe if United falls, Delta and American can have a duopoly. Even more pricing power.

Spekulatius

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Re: Buffett/Berkshire - general news
« Reply #448 on: April 15, 2017, 07:27:48 AM »
Thanks for posting the transcript.  I was asleep for the first part and it was interesting to hear him describe his shorting DOW common in anticipation of their conversion.  He ended up timing it perfectly, with a net zero position the day after they sent him 72 million shares -

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"Quick: The reason I ask-- that question just now is because Dow Chemical preferred shares-- they called those the preferred shares on December 30th. And from what I read it said that it should've translated into about 6 percent of the shares outstanding of the company—

Buffett: 70, 72 million shares, yeah.

Quick: But I did not notice Dow Chemical on the 13-F in this most recent filing. Would have--

Buffett: We timed our sales so that once it got above the conversion price-- we timed our sales-- we tried to time 'em—because 72 million shares would be a lot of shares to get and we did not want to own the common stock we don't own any common stocks of any chemical companies so and as the stock when higher we sold it more aggressively because we wanted to get 72 million shares done by the day which was becoming more probable all the time that they would call it and they called it exactly when we thought they would call it. And I think our last shares were sold the day before, the day after, the same day we timed it to be out of 72 million shares when we received those shares.

Quick: So I was going to say you didn't sell 72 million shares on December 30 and 31st

Buffett: No we didn't want to be in that position.

Quick: but you had been timing those shares all along and preparing for it.

Buffett: exactly and it became you were in a very strong market and as Dow kept moving up we would get more aggressive so towards the end we might have been selling a couple million shares a day when it got up to 56 or some price like that. We were hoping to get out of it, out of the common by the time they sold the common and like I said it worked out to the day we were kind of lucky on that we could have ended up with 10 million shares but we were going to quit obviously when we got to the amount that was going to be handed to us.

Quick: Why don't you like Dow or the other chemical shares?

Buffett: We've never owned chemical shares. We own a specialty chemical company Ebersol a chemical common stock we own we bought the preferred stock of Dow because we wanted a preferred position and we held it. It was kind of interesting we bought that stock in July of 2008, the preferred and they were going to acquire, Dow was going to acquire Rohm & Haas and they needed money for it and then the world fell apart in the fall and Dow wanted to get out of the contract, they sued Rohm & Haas to get out of the contract but it was held that they had to stick with it. So we closed the deal to buy the preferred stock in April of 2009 by which time the market had totally disintegrated the time we closed that we bought $3 billion worth it probably wasn't worth tops more than
60 cents on the dollar so we showed up with $3 billion for something that was worth $1.8 billion at the time which is one reason why people offer us deals they know we will be around at the closing. We showed up for the Wrigley closing too that was on October 4 or something but during that whole period we had commitments and that kept me from doing some other things we might have done at that time. The fact that we had this $3 billion going out the door

Quick: What did you ultimately end up making on Dow Chemical shares.

Buffett: we ended up making about a billion dollars and plus we had an 8.5 percent coupon those years.

Quick: You made a billion even before the preferred dividend that was paid?

Buffett: We had a billion dollar of capital gain very roughly, and then we had $255 million a year dividends during the time we owned it."

Looks like WEB really dislikes DOW and hedges his exposure. I think he is onto something,because DOW was snreally to a large extend a commodity chemical company that claims to be a specialty checmical company and that will at some point see a Dramatic reduction in margin. I think it will be a great short at some point. Besides that, even specialty chemicals see large variations in margins, that tend to expand early in the economic cycle and contract in the mature state. There is a lot of petrochemical capacity being build in NA, which I think can lead to oversupply issues.
To be a realist, one has to believe in miracles.

Spekulatius

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Re: Buffett/Berkshire - general news
« Reply #449 on: April 15, 2017, 07:43:12 AM »
Interesting aspect on Lubrizol's loss for the year: http://www.crainscleveland.com/article/20170228/NEWS01/170229809/berkshire-hathaways-lubrizol-takes-365-million-loss-on-oilfield

It is amazing how Buffet has this public persona where if you went to work for him, you had a job till you die.  But in reality, if you made mistake, you get the boot or as they say "retire".   

Despite this, I think Berkshire has some of the best executive/employee retention track record.  Does anyone here know how Berkshire pays its managers and what are the tools to keep them on?
It seems to me he has this low risk culture for subsidiary executives. If they just dividend the money back to him they get paid more; if they risk some money: they better get it right; if they do get it right, then they get to manage a bigger subsidiary and get paid even more; if they get it wrong, they'd have been better off not taking unnecessary risks and letting Buffett manage the money... In other words: they are allowed to shoot fishes inside a dry barrel; if there is still water then they shouldn't risk it.


This kind of low risk culture is the exact opposite we see in public companies CEOs and seems to me is a big advantage for Berkshire wealth maintenance objective.

I suspect the acquired business weren't that great and t wasn't just the decline in the price of crude that impaired the,. WFT for example appears to run their business very poorly, or they become poor business while they own them. The executive probably was canned, because that was an unforced error - WEB encourages bold on acquisitions, but does so, because they are supposedly low risk. I think he sees the acquisition price and probably was Ok will what they paid, but if the business owners twelfth is crap, it's on the executive and in my opinion should be dealt with,
From my perspective, the due diligence that a lot is of executives do on these acquisitions is laughable. I have experienced a few as an engineer where I thought that sending a few good engineers and operations people into the to be acquire company for some due diligence would have uncovered issues very quickly, the came later back to haunt. in public companies, failure with acquisitions are rarely acknowledged an much less leads firings, at least not at the executives ve level. It can lead to consequences at a mid r upper management levels, when they can't get a handle on fixing something that supposedly did not need to get fixed to begin with.

My favorite quote from the Sopranos applies to the business wowners world as well, maybe even more so than for the Mafia:

"Money flows up, shit flows down"
To be a realist, one has to believe in miracles.