[On :freetrade:] Berkshire Hathaway (BRK.B)


Please don’t hate me for this suggestion :joy:

I guarantee it will not be offered, just because Freetrade does not have spare $350,000 to buy one share for fractional use :stuck_out_tongue:

But BRK.B is a must, hence my vote.

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You are probably right but worth a shot, even if it involves Google forms and pledging in advance. But as you say we have BRK.B :tada:

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BRK A has liquidity issues sometimes. Also I don’t think many people have $350K lying around.

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They may be waiting for a dip! :sweat_smile:

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What I would really like to see is Lindt Chocolate Stock, I know the participation certificates are around £6000 a share.

Just a heads up - we don’t have the Class A stocks yet (we might need to wait for fractional shares for that) but we have added the Class B stocks to our universe now :muscle:

Placed an order for a Class B share via :freetrade:, next—a ticket to Omaha in May for a shareholder meeting. Flying Economy or, as they say, coach.

I hope they hire a web designer:
https://www.berkshirehathaway.com/reports.html

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
− Warren Buffett.

I have no idea how to value Berkshire Hathaway with a sum of all parts approach, but as long as Munger and Buffett geniuses are running it :soon: :+1:.

“The Leaders in Uniform Systems” - http://www.berkshirewear.com

Warren Buffet on the list of the 100 individuals most responsible for climate change, due to Berkshire Hathaway.

https://www.peri.umass.edu/greenhouse-100-polluters-index-current

It looks like a U.S. based list.

But anyway is it really that bad?

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Geico, the auto insurer owned by Berkshire Hathaway Inc, on Monday named Todd Combs, one of Warren Buffett’s portfolio managers, as its chief executive officer, adding new responsibilities for a man widely seen as a potential successor to Buffett.

https://finance.yahoo.com/news/warren-buffett-q4-stock-moves-212218281.html

Some interesting stuff in here; Kroger and Biogen in, Wells Fargo and BoA reductions and a somewhat odd move into the S&P 500 ETF via SPY and VOO.

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Does anyone hold Berkshire Hathaway in their portfolio ?
Annual letter out tomorrow.

Berkshire is one of the only stocks I’d feel comfortable putting a sizable chunk of money in.

However, I do worry how the stock price will fare within the next decade or so as Charlie Munger and Warren Buffet unfortunately cant be around forever

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Not to get too dark, but if munger and buffet are around after the next recession, i will pile in some money into BRK. I think they will do well at buying up all the stocks, they’ve got $100B+ in cash, about 25% of the market cap.

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If I were to place a bet on what will likely happen after the Wonder Duo is gone it would be as follows: Berkshire Hathaway, some time after the departure of Buffet & Munger, will very likely start distributing dividends after pressure from activist investors.

As for the stock price movements my guess is as good as any other: I don’t have the slightest

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Some of the key messages from the annual share holder meeting.

The full list of what happened if you want.

Berkshire had a record $137 billion in cash and equivalent at the end of the first quarter, up from about $127 billion at the end of the year. Also, the company spent just $1.8 billion buying stocks and $1.7 billion repurchasing Berkshire Hathaway shares

Seems the best investment was to invest in themselves!

Berkshire reports net loss of $50 billion

Operating earnings increased by $300 million since last year, but this wasn’t enough to offset the losses.

Over the last year, Berkshire has lost 15%, compared to the S&P 500′s 1% loss.

Overall BH outperforms the S&P500, the insurance and travel bets have been stung hard with the pandemic.

“I would like to talk to you about the economic future of the country. Because I remain convinced, as I have – I was convinced of this in World War II, I was convinced of it during the Cuban Missile Crisis, 9/11, the Financial Crisis – that nothing can basically stop America.”

“All you had to do was believe in America. You just had to believe that the American miracle that was intact”

Strong words of encouragement that BH is still very pro the American economy in the long term.

"Anything can happen in terms of markets. And you can bet on America but you’re going to have to be careful about how you bet. Simply because markets can do anything.”

“There’s no reason to use borrowed money to participate in the great American tailwind, but there’s every other reason to do so.”

This was in relation to using margin or gearing your trades. In short, avoid borrowing money to get involved with the markets right now. Long term things will look up but if you borrow your short term is extremely unlikely.

“In my view, for most people, the best thing is to do is owning the S&P 500 index fund”

“There are huge amounts of money people pay for advice they really don’t need.”

This has been a belief that Warren has had for a long time, simply following the markets and keeping your costs down.

“Every one of those people that issued bonds in late March and April ought to send a thank you letter to the Fed because it wouldn’t have happened if they hadn’t operated with really unprecedented speed and determination”

A big thanks to the fed as well. Saying they reacted well and going off what happened in 2008/9 they made a fast and decisive move.

“When we bought airlines, we were getting an attractive amount for our money when investing across the airlines, it turned out I was wrong about that business because of something that was not in any way the fault of four excellent CEOs.”

“I don’t know that 3-4 years from now people will fly as many passenger miles as they did last year … you’ve got too many planes.”

“The world has changed for the airlines. And I don’t know how it’s changed and I hope it corrects itself in a reasonably prompt way”

This is a rarer change of tone when it comes to their long term investment. Generally when looking 10-20 years into the future the short term isn’t as much of a worry. Clearly in this case it is.

The final point about the short term pain where there is an oversupply of airlines and planes compared to the demand of passengers will be a tricky point. What airlines are going to survive and what will they look like?

Asked by CNBC’s Quick to clarify if Berkshire had sold all of its airline holdings, Buffett answered “yes.”

I guess that is the answer to what BH thinks about the airline industry hopes for the future.

“We have not done anything because we haven’t seen anything that attractive,”

“We are not doing anything big obviously. We are willing to do something very big. I mean you could come to me on Monday morning with something that involved $30, or $40 billion or $50 billion. And if we really like what we are seeing, we would do it.”

This is in relation to the massive amount of cash they are sitting on. Even given the turn down in the markets they still don’t see any great companies who are at the valuations they are happy with.

Another side might be the aggressive term sheets that BH can offer. Preference shares, additional dividends etc. Money was easy to come by so no one needed this unfavourable terms, maybe after the pandemic companies will be more eager to deal with BH.

“If you were to sell Berkshire’s various subsidiaries you would incur a very significant amount of tax at the corporate level before anything was distributed to the shareholders”

“There is not a big discount to break up value embodied in Berkshire’s price…It isn’t going to happen.”

“And it not only ensures that the money that’s been made at Berkshire all of it ends up going to various philanthropies staggered over time, but it also — it will keep the wolves away.”

As expected there are no plans to breakup and split the group into smaller parts. The big plus to the large group is the ability to move money around freely and effectively. They see this as one of their biggest value adds’.

“It’s very politically correct to be against buybacks now”

“There’s a lot of crazy things being said about buybacks. Buybacks are so simple. It’s a way of distributing cash to shareholders.”

“It should also be obvious to repurchase shares and there shouldn’t be the slightest taint to it anymore than there is to dividends.”

After BH spent so much buying back their own stock, and them encouraging their portfolio to do the same this comment shouldn’t be a surprise. I feel like this is a little off tone, as the issue with buybacks has been companies using bailouts and government funding to make the buybacks happen. The money used to save a company being funnelled to shareholders is more the issue.

“The price has not been at a level where it really feels way better to us than other things, including the option value of money, to step up in a big way”

When asked why they didn’t buy back even more of their own shares given how much cash on hand they have.

All in all, another very interesting annual meeting. A dark picture is being painting for the airline industry. I expected he would go back and buy them up cheap, but it looks like he is done with the airlines for the new few years.

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Thanks for the write-up. I really enjoy discussing companies like this.

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