Author Topic: Berkshire 2030  (Read 2442 times)

John Hjorth

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Re: Berkshire 2030
« Reply #10 on: October 14, 2020, 11:35:27 AM »
John
I think of Buffet comment about $100 billion return in the same vein as I do of Watsa being able to pull something close Teledyne’ buyback program. More or less as aspirational goals.


I don't view it that way. 

FFH has had no shortage of places to allocate its capital (some have been good, some have been disappointing), but it has been chronically in need of more to fund its acquisitions, pay that annual divvy and to (not) repay debt.  Prem's assertions about buybacks require a fundamental shift in corporate strategy, which is not an impossible outcome but as they say, I'm from Missouri. 

In contrast, BRK generates about $40b of cash from operations per year, and the investment portion of its SCFP and the cash balance sadly demonstrates a lack of opportunities to deploy that capital.

So, FFH might be willing to initiate a long-term significant return of capital, but it is largely unable to do so without a drastic change in corporate strategy.  BRK is *fully able* to return $20B per year, but is seemingly unwilling to do so.  The outcome has been similar, but the underlying problem is quite different.  I would not describe Prem's or Warren's statements as "aspirational" but rather as "disingenuous" in both cases.


SJ

Thank you to you both for replies, Xerxes & StubbleJumper,

Somehow, the whole thing boils down to "hunger" [for returns] vs. risk awareness. [ ; - ) ] - If & when I start selling out of the [monster] Berkshire position owned by my family and I, I'll post about it here on CoBF - You'll likely get no better buying signal! [ ; - ) ]
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