Berkshire Hathaway

[BRT]

2018 shareholder letter. my fav parts:

"We continue, nevertheless, to hope for an elephant-sized acquisition. Even at our ages of 88 and 95 – I’m the
young one – that prospect is what causes my heart and Charlie’s to beat faster. (Just writing about the possibility of a
huge purchase has caused my pulse rate to soar.)"

"let me remind you of our prime goal in the deployment
of your capital: to buy ably-managed businesses, in whole or part, that possess favorable and durable economic
characteristics. We also need to make these purchases at sensible prices"

"The world’s knowledge of what goes on in Omaha the first
Saturday of every May has grown dramatically since Yahoo came on board. Its coverage begins at 8:45 a.m. CDT and
provides Mandarin translation."
-> prob the only time i visit the yahoo website lol

they say never say never but interesting the word does appear quite a many times in the letter!

http://www.berkshirehathaway.com/letters/2018ltr.pdf

[cyclone]

Berkshire Hathaway has been buying shares of Amazon, Warren Buffett says
* “One of the fellows in the office that manage money ... bought some Amazon so it will show up in the 13F” later this month, Warren Buffett told CNBC Thursday

Becky Quick
PUBLISHED THU, MAY 2 2019  7:41 PM EDT

Berkshire Hathaway has been buying shares of Amazon. But Warren Buffett isn’t the one behind the purchases.

“One of the fellows in the office that manage money ... bought some Amazon so it will show up in the 13F” later this month, Buffett told CNBC Thursday, on the eve of the kick off of Berkshire’s annual shareholders meeting in Omaha. Buffett was referring to either Todd Combs or Ted Weschler, who each manage portfolios of more than $13 billion in equities for Berkshire.

Buffett has long been a fan of both Amazon and its CEO Jeff Bezos, praising the company’s dominance and the founder’s business prowess. But while Buffett has sung the company’s praises, he’s never bought Amazon shares. So a headline that Berkshire was buying shares likely would spark interest in the markets.

“Yeah, I’ve been a fan, and I’ve been an idiot for not buying” Amazon shares, Buffett said. “But I want you to know it’s no personality changes taking place.”

This isn’t the first time Buffett has lamented about underestimating Bezos and not investing in Amazon years ago.

The Berkshire chairman and CEO told CNBC in 2018: “It’s far surpassed anything I would have dreamt could have been done. Because if I really felt it could have been done, I should have bought it,” adding, “I had no idea that it had the potential. I blew it.”

In 2017, Buffett told CNBC that “stupidity” was to blame for his not seeing Amazon’s potential. “I was impressed by Jeff Bezos early, I never thought he’d pull off what he did, on the scale of what’s happened. It’s changed your behavior, everybody’s behaviors. The remarkable thing is he’s done it in two industries at same time that really don’t have that much connection.” Buffett was referring to Amazon’s dominance in e-commerce and its success in the cloud with Amazon Web Services.

Flash forward two years, revenue at AWS grew 41% in the first three months of 2019, helping Amazon crush overall first-quarter earnings and revenue estimates.

More details in https://www.cnbc.com/2019/05/03/berkshir...ffett.html

[Bibi]

In 2017, Buffett told CNBC that “stupidity” was to blame for his not seeing Amazon’s potential. “I was impressed by Jeff Bezos early, I never thought he’d pull off what he did, on the scale of what’s happened. It’s changed your behavior, everybody’s behaviors. The remarkable thing is he’s done it in two industries at same time that really don’t have that much connection.” Buffett was referring to Amazon’s dominance in e-commerce and its success in the cloud with Amazon Web Services.

I thought he preached buying simple businesses such that it will still thrive even with a lousy CEO managing it.

[cyclone]

Buffett says Occidental Petroleum investment is a bet on oil prices over the long term

Berkeley Lovelace Jr.
Published 6 May 2019

Billionaire investor Warren Buffett said Monday Berkshire Hathaway’s $10 billion investment in Occidental Petroleum is a bet on oil prices over the long term.

“It’s also a bet on the fact that the Permian Basin is what it is cracked up to be,” the chairman and CEO Berkshire told CNBC’s Becky Quick in an interview.

More details in https://www.cnbc.com/2019/05/06/buffett-...-term.html

[specuvestor]

"Berkshire said it was “more likely than not” that the tax benefits it received from certain investments from 2015 to 2018 were invalid, according to a May filing that didn’t name the sponsor. It later identified that sponsor as DC Solar. The company took a $377 million charge in the first quarter to reverse the tax benefit."

https://www.bloomberg.com/news/articles/...e-hathaway

[dreamybear]

Saving up firepower for upcoming bargains ?

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Warren Buffett’s Berkshire Hathaway has racked up a record $122 billion in cash
August 5, 2019

- Warren Buffett’s Berkshire Hathaway racked up a record $122 billion in cash by the end of June as it sold more stock than it bought, cut back on share repurchases, and failed to find a fair-priced acquisition.

- The conglomerate sold $1 billion more stock than it bought last quarter, marking its largest net sale since the end of 2017.

- It bought back $400 million worth of shares, down from $1.7 billion in the first quarter.

- Buffett is keen to make an “elephant-sized acquisition,” but “prices are sky-high for businesses possessing decent long-term prospects,” he told investors earlier this year..................

More details : https://www.businessinsider.sg/warren-bu...?r=US&IR=T

[cyclone]

Buffett's Berkshire boosts Amazon.com bet, attracts Ackman

Jonathan Stempel
AUGUST 15, 2019 / 3:50 AM

(Reuters) - Warren Buffett’s Berkshire Hathaway Inc (BRKa.N) on Wednesday said it boosted its stake in Amazon.com Inc (AMZN.O) by 11% during the second quarter, increasing its bet on the powerful online retailer even as stocks traded near record highs.

Berkshire said it ended June with 537,300 Amazon shares worth about $1.02 billion, up from 483,300 shares three months earlier.

It made the disclosure in a regulatory filing detailing the $208.1 billion of U.S.-listed stocks it owned as of June 30.

Buffett, the world’s fourth-richest person according to Forbes magazine, also drew attention in the quarter from fellow billionaire William Ackman, whose Pershing Square Capital Management revealed a $749 million Berkshire stake.

Berkshire’s stock price is more than 12% below its record high set in October.

The Omaha, Nebraska-based conglomerate also owns more than 90 businesses such as the BNSF railroad, Geico auto insurance and Dairy Queen ice cream.

Berkshire had disclosed earlier this month that it sold more stocks than it bought during the quarter, suggesting possible concern among Buffett and his portfolio managers Todd Combs and Ted Weschler about valuations.

Wednesday’s filing includes investments by all three without saying who bought and sold what, though Buffett has said Combs or Weschler made the initial Amazon investment.

It was unclear whether Berkshire did any buying or selling on other exchanges during the quarter. Buffett’s assistant did not immediately respond to a request for comment.

The biggest investment to exit Berkshire’s portfolio was a roughly $1.7 billion stake in USG, a wallboard maker acquired by Germany’s Knauf KG in April.

Berkshire had agreed to sell its roughly 31 percent stake in USG, a nearly two-decade old investment that Buffett had labeled disappointing, as part of that merger.

The net selling contributed to Berkshire’s ending June with a record $122.4 billion of cash and equivalents.

More details in https://www.reuters.com/article/us-inves...SKCN1V425Y

[dreamybear]

Dear fellow value investors, good things come to those who wait .... and can wait and wait ....  

Berkshire Portfolio Tracker : https://www.cnbc.com/berkshire-hathaway-portfolio/

The Financial Services sector also forms the highest percentage of Temasek's holdings(25% in 2019).
https://www.temasek.com.sg/content/dam/t...9-full.pdf
For info only as I think the holdings(Berkshire vs Temasek) are quite different so it may be quite meaningless for direct comparsion.

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Buffett's been quiet, but his philosophy still speaks volumes
Wed, Aug 28, 2019 - 5:50 AM


........Let's start with his favorite stock market barometer, the market capitalisation-to-GDP ratio. As its name suggests, it measures the total value of the stock market as a percentage of GDP. In simple terms, a lower ratio is bullish and a higher one is bearish. 

Prescient ratios

The ratio was prescient during the last two downturns. It shot up to 146 per cent at the peak of the dot-com bubble in 2000, a record at the time and well above its average of 89 per cent since 1975, going by World Bank numbers. It peaked again at 137 per cent just before the financial crisis in 2007.

Where is the market cap-to-GDP ratio now? It notched a fresh high of 154 per cent in 2017, going by the latest available number, and is almost certainly higher today, given that the US stock market is up roughly 7 per cent since the end of 2017.

So it's probably safe to say that Mr Buffett doesn't love the lofty level of the stock market. And judging by the record US$122 billion of cash he's hoarding at Berkshire Hathaway Inc, it's also safe to assume he doesn't expect the market to remain elevated forever.

His cash pile is more than half the value of Berkshire's US$208 billion portfolio of public companies; since 1987, his cash allocation as a percentage of Berkshire's portfolio has only been higher in the years leading up to the financial crisis.

At the same time, the few stocks that do appeal to Mr Buffett suggest that his faith in value investing is unshaken, despite a miserable decade of under-performance for the strategy. Roughly 45 per cent of Berkshire's stock portfolio is allocated to the financial sector, and eight of the portfolio's top 12 holdings are financial stocks - a deeply contrarian bet.

The sector has been hampered for much of the last decade by tighter regulation and low interest rates. While profits have picked up recently, many investors fear that a prolonged period of low rates will keep a lid on profits for the foreseeable future. As a result, the financial sector has been one of the cheapest sectors by most measures for years. It's still the most represented sector in many value indexes, including a 21 per cent allocation in the S&P 500 Value Index and 23 per cent in the Russell 1000 Value Index.......

Mr Buffett has said that he regrets passing on Amazon.com Inc and Google parent Alphabet Inc when the companies were younger, but don't mistake the maestro. The fact that he isn't loading up on them today, despite having the cash, speaks volumes.......

There's little indication, in other words, that he is wavering from his long-standing investing principles. It's a timely example, even if he is no longer eager to say so. BLOOMBERG  

Read more : https://www.businesstimes.com.sg/executi...ks-volumes

[pencilin]

very helpful article. thanks dreamybear for sharing with us

[dreamybear]

Thanks pencilin for the compliment, glad to value-add to this forum.

Even though Berkshire & 3G worked together on the Kraft Heinz investment previously, WB did not sell any shares despite the latest move by 3G. Does investing into Kraft Heinz at this point in time mean a chance at beating WB at the investment game* ?   or or ? Food for thought ....

*"At its lowest this morning, Berkshire's 325.4M shares of KHC were valued at $8.66B vs. the $13.5B carrying value on Berkshire's books at June 30, 2019." Ref : https://seekingalpha.com/news/3489640-be...omes-short

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Kraft Heinz falls after second-largest shareholder 3G Capital sells more than 25 million shares
Updated Tue, Sep 17 2019 1:14 PM EDT

The second-largest investor in Kraft Heinz Company disclosed that it has again trimmed its stake in the food company.

Private equity firm 3G Capital Partners said Monday it sold 25.1 million shares at a price of $28.44 per share, bringing its stake down by about 9% to 245 million shares.

The Brazilian private equity giant founded by Jorge Paulo Lemann is the company’s second largest shareholder, after Warren Buffett’s Berkshire Hathaway. After the sale, 3G Capital still has 20% ownership of Kraft Heinz. The stock was down 4% Tuesday afternoon.

In a separate filing Monday, Lemann disclosed that he increased his personal holding of Kraft Heinz stock by approximately $100 million. The 3G sale was also sparked by periodic liquidity windows by 3G investors in the fund that holds Kraft Heinz stock and the private equity fund has no current intention to sell any additional shares, a spokesman for Kraft Heinz told CNBC.......

Read more : https://www.cnbc.com/2019/09/17/kraft-he...hares.html

-------------------------------- other news ------------------------------------------------
A Warren Buffett protege is leaving to start her own Berkshire
Updated Wed, Sep 18 2019 4:35 PM EDT

Berkshire Hathaway’s executive Tracy Britt Cool is leaving the firm after a decade to start a company that replicates Warren Buffett’s business model.

Cool, who joined Berkshire in 2009 as Buffett’s financial assistant, said she’s building an investment vehicle that acquires companies “too small for Berkshire,” The Wall Street Journal reported.

CNBC confirmed Cool’s move.

“I want to build a long-term platform and a long-term vehicle to acquire and build businesses,” Cool said in an interview with the WSJ. “There are companies that I think there’s a lot of value in helping them get to the next level, but they’re too small for Berkshire.”

Cool scored a job at Berkshire after graduating Harvard Business School by asking Buffett to work for him for “a day, a week, a month” and “do anything.” She became Buffett’s right-hand woman at the age of 25, performing financial research, accompanying the CEO to meetings and sometimes driving him around town. Five years later, Cool was named CEO of premiere kitchen tools line Pampered Chef, a Berkshire subsidiary.....

Read more : https://www.cnbc.com/2019/09/18/berkshir...aving.html