Author Topic: Buffett/Berkshire - general news  (Read 674916 times)

mountboney

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Re: Buffett/Berkshire - general news
« Reply #1680 on: July 02, 2020, 09:27:50 AM »
I don't get the BI insurance fear with regards to BRK.  Straight out of his mouth at this years annual meeting:

"We are not big in the commercial, multiple peril business.
Warren Buffett: (02:49:47)
So I mean, this is not like our auto business or anything of that sort, but we will have claims. We’ll have litigation costs, but proportionally it’s not the same with us as with some other companies, which have been much more…
Warren Buffett: (02:50:03)
…those with some other companies which have been much heavier in writing business interruption as part of a commercial, multiple peril."

How much clearer could he be?


longterminvestor

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Re: Buffett/Berkshire - general news
« Reply #1681 on: July 08, 2020, 03:38:32 AM »
So lets say BRK purchased some Markel shares.  Knowing Markel owns some BRK shares, is there some kind of tax-free exchange the two corporations could make if they gave each other an equal amount of the others shares?  Weird question but just curious. 

sleepydragon

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Re: Buffett/Berkshire - general news
« Reply #1682 on: July 08, 2020, 05:12:38 AM »
So lets say BRK purchased some Markel shares.  Knowing Markel owns some BRK shares, is there some kind of tax-free exchange the two corporations could make if they gave each other an equal amount of the others shares?  Weird question but just curious.

I think BRK did this from Graham

wabuffo

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Re: Buffett/Berkshire - general news
« Reply #1683 on: July 08, 2020, 05:17:18 AM »
Also did this with  PG - got Duracell business in tax-free return for BRK’s PG common shares.  Buffett has done this a few times.  In the WaPo tax-free exchange, BRK also received a Miami TV station.

wabuffo
« Last Edit: July 08, 2020, 05:19:03 AM by wabuffo »

gfp

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Re: Buffett/Berkshire - general news
« Reply #1684 on: July 08, 2020, 06:46:09 AM »
Berkshire released a bit more commentary on this year's annual gift by Warren to the various foundations.  Must be an election year

https://berkshirehathaway.com/news/jul0820.pdf

aws

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Re: Buffett/Berkshire - general news
« Reply #1685 on: July 08, 2020, 09:53:12 AM »
So lets say BRK purchased some Markel shares.  Knowing Markel owns some BRK shares, is there some kind of tax-free exchange the two corporations could make if they gave each other an equal amount of the others shares?  Weird question but just curious.

It only works when there is a business involved, and the business has to be a substantial part of the total deal (I think at least one third of the total deal value).  In the Graham deal Berkshire bought a TV station and obviously they bought Duracell in the P&G deal.  It's probably only worth bothering when you have one side with a very low cost basis in the shares so the tax savings are material to the overall deal size.

rolling

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Re: Buffett/Berkshire - general news
« Reply #1686 on: July 08, 2020, 11:28:37 AM »
So lets say BRK purchased some Markel shares.  Knowing Markel owns some BRK shares, is there some kind of tax-free exchange the two corporations could make if they gave each other an equal amount of the others shares?  Weird question but just curious.

It only works when there is a business involved, and the business has to be a substantial part of the total deal (I think at least one third of the total deal value).  In the Graham deal Berkshire bought a TV station and obviously they bought Duracell in the P&G deal.  It's probably only worth bothering when you have one side with a very low cost basis in the shares so the tax savings are material to the overall deal size.

https://corporatefinanceinstitute.com/resources/knowledge/deals/cash-rich-split-off/
My usual portfolio: Highly concentrated (up to 3 or 4 positions) in smallcaps and microcaps.

jwelborn93

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Re: Buffett/Berkshire - general news
« Reply #1687 on: July 09, 2020, 12:14:07 PM »
The shutdown of the DAPL pipeline in the Bakken should be very positive for BNSF going forward.  They have most of the capacity in the region and crude rail capacity will likely double if the shutdown remains in place to transport the marginal barrel.  Railing crude has historically been the most profitable end market for the rails from a margin perspective. 

gfp

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Re: Buffett/Berkshire - general news
« Reply #1688 on: July 10, 2020, 10:32:46 AM »
WSJ has an article about the OXY warrants that Icahn hatched up.  I'm not sure they have it 100% correct as it relates to the Berkshire security's protections against dilution.  They also seem to miss that OXY has to pay Berkshire 9%, not 8%, when paying the dividend in stock.  Will have to take a peek at the filings for the OXY Berkshire preferred after I walk the dog

https://www.wsj.com/articles/oxys-sweetener-a-bitter-pill-for-warren-buffett-11594378801

CorpRaider

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Re: Buffett/Berkshire - general news
« Reply #1689 on: July 10, 2020, 11:16:01 AM »
I agree.  My impression reading the article was, "yeah BRK is really hurt by raising capital that is subordinated to the preferred in this environment." ::)

« Last Edit: July 10, 2020, 11:29:10 AM by CorpRaider »