Berkshire Hathaway

Longtime Berkshire Hathaway shareholder sells stake, accusing Warren Buffett of ‘thumb-sucking’
* David Rolfe noted his frustration with Berkshire Hathaway’s massive cash hoard, lackluster investments and what he thinks are missed investment opportunities by the Oracle of Omaha and his team during the current bull market.
* Berkshire Hathaway shares have lagged the S&P 500 over the current bull run, which started March 2009.
* “Thumb-sucking has not cut the Heinz mustard during the Great Bull Market,” he says.

Fred Imbert
PUBLISHED MON, OCT 14 20194:03 PM EDT
UPDATED MON, OCT 14 20195:02 PM EDT

David Rolfe, a longtime Berkshire Hathaway shareholder and chief investment officer at Wedgewood Partners, is fed up with Warren Buffett.

Rolfe told clients in a letter he sold the firm’s stake in Berkshire after decades of being shareholders, noting his frustration with the conglomerate’s massive cash hoard, lackluster investments and what he thinks are missed investment opportunities by the Oracle of Omaha and his team during the current bull market.

Berkshire Hathaway shares have lagged the S&P 500 over the current bull run, which started March 2009. In that time, Berkshire’s Class A stock is up 323% while the broad index has gained 334%.

“Thumb-sucking has not cut the Heinz mustard during the Great Bull Market,” Rolfe wrote in the third-quarter letter to clients. “The Great Bull could have been one helluva of an astounding career denouement for Messrs. Buffett and [Vice Chairman Charlie] Munger.”

Not that Buffett will miss Rolfe much, the RiverPark/Wedgewood Fund owned 48,000 shares of the Berkshire B class of stock, amounting to about $10 million. And Rolfe’s performance throughout the bull market has not been the best, either. His fund’s annualized returns, net of fees, are 13.6% over the past 10 years through the second quarter, according to a factsheet found in the Wedgewood Partners website. In that time, the S&P 500 has posted an annualized return of 14.7%.

Berkshire’s cash pile swelled up to more than $120 billion by the end of the second quarter of 2019, a record for the company. In his annual letter to shareholders, Buffet said he wanted to make an “elephant-sized acquisition” but noted prices were “sky-high.” Rolfe thinks so much cash is a “considerable impediment of growth” for the company.

Rolfe also grew frustrated with some of Berkshire’s investments during the current bull market. He highlighted IBM and Kraft Heinz, among others.

Buffett revealed his $10.7 billion IBM stake in the fourth quarter of 2011. But by early 2018, he had sold the entire stake. In that time, IBM shares dropped more than 20%.

Kraft Heinz is another investment that hasn’t panned out for Berkshire, especially since 2018. The stock has lost about two-thirds of its value in that time.

These moves “do not inspire confidence that Buffett & Co. are still at the top of their game,” Rolfe said.

More details in https://www.cnbc.com/2019/10/14/berkshir...cking.html

Buffett's Berkshire invests in Restoration Hardware, whose shares rise

Jonathan Stempel
NOVEMBER 15, 2019 / 4:35 AM

(Reuters) - Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) on Thursday disclosed a new investment in RH (RH.N), boosting shares of the luxury furniture and home furnishings chain once known as Restoration Hardware.

Berkshire owned about 1.21 million RH shares worth $206.3 million as of Sept. 30, according to a regulatory filing detailing Berkshire’s U.S.-listed stocks as of that date.

RH shares rose 6.7% in after-hours trading following the disclosure, after closing up 1.3% at $175.22.

The Corte Madera, California-based company did not immediately respond to a request for comment.

Analysts have said RH has boosted sales and profit margins, in part by expanding its membership program and improving the experience for shoppers in its roughly 70 galleries, though it remains exposed to downturns in the high-end housing market.

RH’s share price has more than doubled since the end of May.

Berkshire also said it owned 7.47 million common shares of Occidental Petroleum Corp (OXY.N) on Sept. 30, less than two months after purchasing $10 billion of preferred stock to help that company buy rival Anadarko Petroleum Corp.

Shares of companies often rise after Berkshire announces new or increased stakes, reflecting investors’ regard for Buffett and the Omaha, Nebraska-based conglomerate he has run since 1965.

Investors monitor Berkshire’s quarterly filings for signs on where Buffett and his portfolio managers Todd Combs and Ted Weschler see value.

More details in https://www.reuters.com/article/us-inves...SKBN1XO2WO

Warren Buffett’s latest attempt to put his cash to work is thwarted
* Tech Data late Wednesday said it had agreed to be bought by private-equity firm Apollo Global Management for $145 a share, which values the tech company at about $5.14 billion, excluding debt.
* The deal was sweetened from Apollo’s previous bid of $130 a share, or just over $4.77 billion, after an unnamed suitor topped Apollo’s original offer.
* The undisclosed competing suitor was none other than Berkshire Hathaway, CNBC has learned exclusively.

Becky Quick
PUBLISHED FRI, NOV 29 20196:00 AM EST

Berkshire Hathaway’s cash hoard keeps growing, topping $128 billion according to the company’s latest SEC filing. Now, we finally have an idea of what Warren Buffett has been thinking of doing with some of that money.

In a little-noticed announcement late Wednesday, Tech Data said that it had agreed to be bought by private-equity firm Apollo Global Management for $145 a share, which values the tech company at about $5.14 billion, excluding debt. The deal was sweetened from Apollo’s previous bid of $130 a share, or just over $4.77 billion, after an unnamed suitor topped Apollo’s original offer.

The undisclosed competing suitor was none other than Berkshire Hathaway, CNBC has learned exclusively. Berkshire Chairman and CEO Warren Buffett said one week ago he bid $140 a share, or just over $5 billion excluding debt, for Tech Data.

Apollo’s latest offer topped Buffett’s bid, and was accepted by Tech Data as the better offer. Buffett said he does not intend to make a higher offer.

Tech Data is a global distributor of technology products and services. It supplies small companies with technology software and hardware made by large technology companies. It had $37 billion in revenue last year. About 16% of its sales come from Apple products, while products from Cisco and Hewlett Packard Enterprise make up about 11% each.

Tech Data currently has a market cap of $4.5 billion, and is trading at an all-time high. Its shares rose after the first bid from Apollo was made public. As part of the original deal with Apollo, Tech Data had a go-shop provision until Dec. 9, meaning another bidder could still come in with a higher offer before that date.

Buffett is not known for paying hefty premiums for his deals. In fact, some might even call him cheap. He’s also commented in recent years that the premium for buying companies outright has gotten too rich, because there is so much liquidity in the markets, and competition from private-equity companies and other players has pushed prices to extremes.

But when Bank of America brought the go-shop provision from Apollo’s deal with Tech Data deal to his attention, he quickly swung into action.

Bank of America called Todd Combs, one of Berkshire investment managers, on Tuesday, Nov. 19. By Wednesday, Nov. 20, Buffett had decided he would be willing to offer up to $140 a share for the company, besting Apollo’s offer of $130 a share. On Friday, Nov. 22, Berkshire Vice Chairman Greg Able traveled to Clearwater, Florida, to meet with Tech Data management. The next day Berkshire formally made an offer of $140 a share for the company, streamlining the process by simply borrowing Apollo’s existing contract for Tech Data in large part, amending it only in a few areas, and on terms that would benefit Tech Data. On Sunday evening, the Tech Data board approved Berkshire’s offer as a superior deal to Apollo’s original deal.

More details in https://www.cnbc.com/2019/11/29/warren-b...arted.html

Warren Buffett is sitting on $128 billion, raising questions about whether the market is overvalued
https://www.cnbc.com/2019/11/29/buffett-...ation.html

Warren Buffett Buys Kroger, Biogen in 4th Quarter
* Guru also opens positions in 2 ETFs

Sydnee Gatewood
15 February 2020

Warren Buffett’s $555.69 billion conglomerate, Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B), disclosed its equity portfolio for the fourth quarter of 2019 on Friday, listing new positions in The Kroger Co. (NYSE:KR), Biogen Inc. (NASDAQ:BIIB), the SPDR S&P 500 (SPY) and the Vanguard S&P 500 (VOO).

With a record $128 billion to spend on stocks, the renowned guru and his two portfolio managers, Ted Weschler and Todd Combs, also added to the conglomerate’s holdings of Occidental Petroleum Corp. (NYSE:OXY), Suncor Energy Inc. (NYSE:SU), General Motors Co. (NYSE:GM) and RH (NYSE:RH).

The long-term investors also reduced its positions in Wells Fargo & Co. (NYSE:WFC), Goldman Sachs Group Inc. (NYSE:GS), The Travelers Companies Inc. (TRV), Apple Inc. (AAPL), Phillips 66 (PSX), Bank of America Corp. (BAC), American Airlines Group Inc. (AAL) and Bank of New York Mellon Corp. (BK).

Valued at $242.05 billion, the equity portfolio consists of 52 stocks as of the end of the fourth quarter. Nearly half the portfolio was invested in financial services stocks at 43.32%, while the technology sector has a weight of 31% and the consumer defensive space represents 14.26%.



Buffett’s five largest holdings as of the end of the quarter, accounting for over half of the portfolio, were Apple, Bank of America, The Coca-Cola Co. (KO), American Express Co. (AXP) and Wells Fargo.

More details in https://www.gurufocus.com/news/1039810/w...th-quarter

Berkshire Hathaway empire ‘prepared’ for Warren Buffett’s departure
https://www.scmp.com/news/world/united-s...n-buffetts


BERKSHIRE HATHAWAY INC.
https://berkshirehathaway.com/letters/2019ltr.pdf

With 1 billion of incoming operating cashflow per month, a 5 billion purchase is probably "peanuts" as it just means soaking up most of the operating earnings for the year (assuming there is some impact from Covid-19 but not huge). It is equivalent to an OPMI using their dividends to purchase shares on a regular basis.

Buffett’s SEC Filing Implies Repurchases

During the Berkshire Hathaway annual meeting held on May 2, 2020, which was covered in the Rational Reflections newsletter, Warren Buffett seemed very worried about the COVID-19 pandemic and general economic conditions. During the meeting, he disclosed that Berkshire halted all repurchase activity after March 10 despite the stock price plunging well below the level of Berkshire’s recent repurchase activity. The transcript of the meeting is worth reviewing in order to understand the level of Buffett’s caution in early May. He clearly stated that the range of possible economic outcomes resulting from shutting down large segments of the economy remained “extraordinarily wide”. The fact that Buffett was repurchasing shares as late as March 10 before halting activity reveals that a change in his thinking might have taken place at that point. Perhaps it was related to his discussions with Bill Gates and Dr. Anthony Fauci around that time.

In light of Buffett’s comments only ten weeks ago, it was surprising to learn that Berkshire Hathaway almost certainly repurchased a significant amount of stock at some point between the annual meeting and July 8 when Buffett submitted a regulatory filing to the Securities and Exchange Commission documenting his annual charitable donations of Berkshire Hathaway stock.

https://www.rationalwalk.com/buffetts-se...purchases/

with buffett buying back shares, means that he see value in bekshire, more than the rest of US's markets, :O :O :O

(14-07-2020, 10:09 AM)brattzz Wrote: with buffett buying back shares, means that he see value in bekshire, more than the rest of US's markets, :O :O :O

At this stage, capital allocation that is heavily dependent on Buffett's decision making are probably those multi-billion investments (>10billion USD type). These elephants "escaped" from his gun's crosshair, especially after the Fed came out with their own firepower back in March 2020 to "scare" them away.

I do suspect Buffett's lieutenants have probably been active in the US equity markets on a much smaller scale. So at least, this indicates Buffett sees better value buying back BH's shares than distributing them as dividends. In another way, activism is very alive in the US markets and so I suspect he always has to look out his back to ensure that circumstances don't actually tempt some big whale to force his hand (eg. Carl Icahn's demand on Apple to return its enormous cash hoard)

Warren always said airlines is a bad investment then he went and bought shares in the major USA airlines.

We also know he said Gold is useless compared to silver and would not buy it.
Now he is buying gold exploration company and selling his big bank holdings.
It seems desperate times call for desperate measures.... Is he starting to signal his loss in confidence???

https://finance.yahoo.com/news/warren-bu...28776.html