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>>> 3 Stocks I Bet Warren Buffett Wishes He Held Onto
Once these companies fell out of favor with the Oracle of Omaha, he sold them
By Joel Baglole
InvestorPlace
Oct 9, 2023
https://investorplace.com/2023/10/3-stocks-i-bet-warren-buffett-wishes-he-held-onto/#:~:text=While%20Buffett%20has%20never%20discussed,over%20the%20last%20five%20years.
In retrospect, some of Buffet’s stock sales may have been premature.
Costco (COST): Buffett sold this grocery retailer in 2020 at the height of its profits and sales.
Taiwan Semiconductor Manufacturing (TSM): He bought and sold his stake within just a few months.
Home Depot (HD): Buffett sold this stock during the financial crisis, taking a loss on his position.
Warren Buffett is widely considered the greatest investor of all-time.
His holding company, Berkshire Hathaway has a vast investment portfolio currently worth $340 billion. While Buffett is known as a long-term, buy-and-hold investor, at times he’s been known to change the holdings in his portfolio. Buffett hasn’t hesitated to expunge entire positions if he feels his investment thesis has changed.
For example, Buffett owned stock in most of the major U.S. airlines until the Covid-19 pandemic struck in 2020. He quickly sold them all. While many of his decisions appear wise in hindsight, including the airline stocks, Buffett may have sold some stocks too early. He may even regret dumping them. In fact, certain stocks Buffett sold have gone on to rise considerably.
Let’s dissect the three stocks that I bet Warren Buffett wishes he’d held firmly.
Costco (COST)
Buffett owned shares of Costco Wholesale (NASDAQ:COST) for 20 years before selling his entire stake in the grocery retailer in 2020. The optics of his timing may appear a bit strange.
In the summer of 2020, Costco’s profits were booming as people stocked up on groceries and supplies while sheltering-in-place during the pandemic. Costco’s sales were so robust in 2020 that the company declared a special, one-time dividend payment to stockholders of $10 per share in November of that year. Buffett missed it.
Over 20 years, Buffett built his COST stock position to $1.3 billion from an initial investment of $32 million in 1999. Additionally, Buffett’s business partner and Berkshire Hathaway Vice-Chairman Charlie Munger sits on Costco’s board of directors. He personally owns more than $60 million of Costco stock. Yet Buffett dumped his entire stake in Costco at its peak in 2020. While Buffett has never discussed his reasoning of selling his Costco shares, speculation reveals he felt the stock had become overvalued.
Since Buffett sold out of Costco, its share price has gained 60%. COST stock is up 145% over the last five years. By comparison, rival grocer Kroger (NYSE:KR), which Buffett currently has a $2.17 billion stake in, has seen its share price rise 60% in the past five years, which is less than half the gain of Costco’s stock.
Taiwan Semiconductor Manufacturing Co. (TSM)
Buffett’s relationship with Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) has been puzzling. He quickly bought and then sold the stock.
The Oracle of Omaha had initially taken a $4.1 billion stake in TSM stock during the Q3 of 2022. However, by February of this year, he had reduced his holdings in the stock by 86%. Come May, he’d exited the position altogether.
Analysts initially praised the purchase of TSM stock as prescient given the explosion of demand for microchips and semiconductors. Additionally, Taiwan Semiconductor fit with the type of stocks Buffett prefers. The company manufactures more than 60% of all the microchips and semiconductors worldwide, providing a near monopoly position. Although TSM stock is almost flat since Buffett sold his position in May, the share price is up 125% over the last five years.
Many analysts expect Taiwan Semiconductor to be a big beneficiary of the boom in artificial intelligence (AI) chips. In an uncharacteristic move, Buffett publicly explained his decision to quickly sell the stock after buying it, noting he was concerned about the China-Taiwan political situation.
“Taiwan Semiconductor is one of the best managed and most important companies in the world,” said Buffett, before adding, “I don’t like its location.”
Home Depot (HD)
Buffett was once a big fan of do-it-yourself home improvement retailer Home Depot (NYSE:HD). Berkshire Hathaway initially bought HD stock in mid-2005 during the housing boom.
At its peak, Berkshire’s position in Home Depot stock totaled 3.7 million shares worth nearly $150 million. Then, the 2008 financial crisis hit, plunging the U.S. housing market into collapse. Buffett wasted little time getting rid of his entire Home Depot stake.
Shedding a quarter of its position during Q2 of 2009, it was near the market’s low point. He sold the remainder of his position in 2010. At that time, the stock was trading between $20 and $25 a share, half the price Buffett paid a few years earlier. However, since the summer of 2010, HD stock has gained 875%. The stock peaked at an all-time high of $415 a share in December 2021 during the pandemic market boom.
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Costco --> Munger remained a huge fan of Costco, even after Berkshire sold its stake in 2020 -
>>> Costco to Pay Special Dividend of $15 Per Share: What You Need to Know
Motley Fool
by Daniel Sparks
December 14, 2023
https://finance.yahoo.com/news/costco-pay-special-dividend-15-230100685.html
We knew it was coming. We just didn't know when.
Costco (NASDAQ: COST) Chief Financial Officer Richard Galanti's rhetoric in recent earnings calls, when asked about whether the company would pay out another special dividend, has been that it's "probably a question of when, not if." The day has finally come.
Costco announced on Thursday it would pay a special cash dividend of $15 per share on Jan. 12, 2024 to shareholders of record as of the close of business on Dec. 28. This, of course, is on top of the quarterly dividend the company has already committed to.
The news of Costco's special dividend builds on an upbeat quarterly financial update released on Thursday. The report, which featured double-digit year-over-year earnings-per-share growth, highlighted the membership-based wholesale warehouse's resilience, even in a challenging macroeconomic environment.
Costco's dividend history
This will be Costco's fifth-ever special dividend. Previous special dividends were paid in 2012, 2015, 2017, and 2020 in the amounts of $7, $5, $7, and $10, respectively. This makes the company's 2024 special dividend of $15 its largest, by far.
To fund this dividend, Costco will pay an aggregate amount of $6.7 billion to shareholders.
Unlike many of its peers, Costco operates its business with a significant net cash position. This means its interest expense is extremely low, which helps the company keep its cost structure low to pass those savings onto members. At the end of its just-reported fiscal first quarter, Costco had about $7 billion of debt and nearly $18 billion of cash, cash equivalents, and short-term investments. So there's plenty of cash to spare.
Costco also notably pays a meaningful, growing quarterly dividend of $1.02. The company's most recent hike came in at a double-digit rate of 12%.
Support for a high stock price
A robust special dividend comes at a good time for shareholders. The stock has soared nearly 40% year to date, giving the stock a somewhat pricey valuation. The stock's price-to-earnings ratio is now in the forties. Fortunately, a special dividend and double-digit growth in earnings per share help support this high valuation.
Speaking of Costco's earnings, the company's fiscal first-quarter revenue and earnings per share both came in higher than analysts' estimates. Total revenue of $57.8 billion was up from $54.4 billion in the year-ago quarter, beating analysts' average forecast for revenue of $57.7 billion. Earnings per share of $3.58 (up 17% year over year) was also higher than a consensus estimate of $3.42.
Sales in the quarter were helped by growing demand for the company's groceries and essentials. But strong growth in membership fees also helped. Membership fee revenue rose more than 8%, outpacing net sales growth by 2 percentage points.
Altogether, Costco's results offer a strong reminder of why the company's shares are worth a high premium. This is especially true ahead of a likely membership fee increase in the near future.
Just as management has hinted at a special dividend, it's also hinted that a membership fee increase is up for consideration. Indeed, it wouldn't be surprising to see Costco raise the prices of its memberships in 2024.
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Buffett does some last minute Christmas shopping:
By: TrendSpider | December 14, 2023
• Buffett does some last minute Christmas shopping:
• Bought $588,674,276 in $OXY shares
• Bought $588,674,276 in $BRK.A shares
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Warren Buffett and Berkshire Hathaway $BRK.B just filed for its purchase of 10.5M shares of Occidental $OXY for $588.7 Million
By: Evan | December 14, 2023
• Warren Buffett and Berkshire Hathaway $BRK.B just filed for its purchase of 10.5M shares of Occidental $OXY for $588.7 Million.
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Why is it a "nice" discount to A? I've used Finviz to track both the A and the B class shares. Class A usually very slightly outperforms. Why? Do some investors think the A shares will benefit from a possible restructuring or struggle for control of Berkshire upon Buffett's death?
Bingo! B shares still trading at a nice discount to the BRK.A shares. Hmmmm......
Berkshire Class B Stock Is Relative Bargain as Spread to A Widens
BRK's Class A stock is trading at a wider-than-usual 2.5% premium to the company’s Class B stock after moving more than a half percentage point Monday.
https://www.barrons.com/articles/berkshire-class-b-stock-discount-7574d193
Berkshire Hathaway more than halves stake in HP
By: Investing | December 11, 2023
Warren Buffett's Berkshire Hathaway (NYSE:BRKa) more than halved its stake in HP (NYSE:HPQ) inc, as the conglomerate continues to trim its holdings in the PC and printer maker, according to a regulatory filing Monday.
Following the latest reduction for the reporting period ending Nov. 30, the company now holds a 5.2% stake, about 51.5 million shares in HP from nearly 100M previously.
The conglomerate has been trimming its stake in the PC and printer maker after amassing a double digit stake early last year.
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>>> Occidental lands $12 billion takeover of shale producer CrownRock
Reuters
Dec 11, 2023
By Sabrina Valle and Sourasis Bose
https://finance.yahoo.com/news/occidental-petroleum-buy-crownrock-12-120620740.html
HOUSTON (Reuters) - Occidental Petroleum on Monday agreed to buy closely-held U.S. shale oil producer CrownRock in a cash-and-stock deal valued at $12 billion including debt, expanding its presence in the largest U.S. shale oilfield.
The deal comes amid a new wave of shale consolidation underpinned by Exxon Mobil's $60 billion proposed deal for Pioneer Natural Resources and Chevron's $53 billion agreement for Hess.
If approved, the CrownRock takeover would make Occidental a bigger player in the Permian shale field than Chevron and Hess combined. Its total production was 1.2 million boed at Sept. 30.
The CrownRock deal, expected to close in the first quarter of 2024, would boost Occidental's Permian production by 170,000 barrels of oil and gas production per day to 750,000 boed.
"We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion," said Occidental CEO Vicki Hollub.
Occidental's shares rose less than 1% to $56.96 in morning trade.
U.S. oil producers are using the post-Pandemic profit boom to expand their holdings and build assets to secure higher output and drilling inventory. That has led to a series of deals in the two years since the 2020 price crash.
U.S. oil is trading at about $71 per barrel, encouraging higher output as members of the Organization of Petroleum Exporting Countries pare oil quotas.
Occidental said it will finance the purchase with $9.1 billion of new debt, the assumption of CrownRock's $1.2 billion of existing debt and will issue $1.7 billion in common stock.
"The CrownRock assets are generally perceived to be of high quality, but investors are likely to question the merits of adding leverage to the Occidental balance sheet at this point in the cycle," said Third Bridge energy analyst Peter McNally.
Occidental had about $18.6 billion in long-term debt as of Sept. 30 and the deal would increase its debt to nearly $28 billion. CrownRock would be its first big deal since a widely criticized debt-laden purchase of Anadarko Petroleum in 2019.
"We are pretty negative on this deal," said Sankey Research analyst Paul Sankey. "You're adding a load of debt, when arguable you should be paying with shares".
Occidental plans to reduce its debt by about $15 billion and by at least $4.5 billion in the next 12 months from asset sales and cash flow.
Hollub said in a CNBC interview that Warren Buffett's Berkshire Hathaway, which had helped finance the Anadarko purchase, was not involved in the CrownRock deal.
Occidental said it will raise its quarterly dividend by 4 cents, to 22 cents a share, and expects to retain its investment grade credit ratings.
Cole Smead, CEO of Smead Capital Management, which owns about 5.9 million shares of Occidental in its U.S. portfolio said the deal showed "the optimism that Vicki and the folks at OXY exude right now about the future of the oil and gas business and the prices they are getting to take advantage of that".
Reuters first reported in September that CrownRock was preparing to explore a sale that could give it an enterprise value of well over $10 billion.
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Both of them are old pieces of💩💩 Warren needs to be in prison with Bubba. there shouldn’t be no Berkshire halfway shares they should give the money back to the people he stole it from. America. he’s been robbing America, all his life both of them.
"They probably killed Charlie..."
I noticed you 'upvoted' your response. Urban slang has a term for that: Masturliker - A person who performs self gratification in a public forum or on social media by liking their own comments or posts.
BTC and crypto hodlers have no respect anyone or anything in their way of doing nothing for something, pumping the pyramid schemes, or bringing in fresh money to the con game. CM and so many more who actually expend energy by producing GDP and results in general, they don’t understand.
Bingo! Total nonsense being suggested there. Charlie Munger was universally admired across the entire financial industry and investment communities. Not surprising that a Bitcoin pumper would not like Charlie Munger given his wise and candid comments regarding Bitcoin and the crypto phenomena.
lol Yeah, 💩🤡 Charlie bozo the clown
GD freak, so they waited 99 years?
Pretty interesting stuff. They all need to get this dispute resolved. Irt cries out for a negotiated resolution.
"Berkshire countersues billionaire Haslams in battle over Pilot valuation"
"Reuters) - Warren Buffett's Berkshire Hathaway has accused billionaire Jimmy Haslam of promising secret payments to staff that would inflate the price Berkshire would have to pay for the Haslam family's 20% stake in truck stop operator Pilot Travel Centers.
Berkshire made the accusation in partially redacted filings made public on Tuesday in a countersuit against the Haslam family in Delaware Chancery Court, where the Haslams have been suing Buffett's company over Pilot."
https://finance.yahoo.com/news/buffetts-berkshire-countersues-billionaire-haslams-011141314.html
They probably killed Charlie they didn’t want to tell him Warren was doing bad deals behind his back.
WOOHOOOOOOOOOOOO Don’t rest in peace thief Warren Buffett is a thief
Sad news awesome news he was a thief 🤜🤛😎👍
Sad news Charlie Munger passed away
https://www.cnbc.com/2023/11/28/charlie-munger-investing-sage-and-warren-buffetts-confidant-dies.html
Berkshire Hathaway Class A shares yield over 4,400,000% return since Buffett takeover
By: Investing | November 27, 2023
OMAHA - Berkshire Hathaway (NYSE:BRKa) (NYSE:BRK.A)(NYSE:BRK.B), the conglomerate helmed by CEO Warren Buffett, has seen its Class A shares achieve a staggering return of more than 4,400,000% since Buffett's takeover in the mid-1960s. Known as the "Oracle (NYSE:ORCL) of Omaha," Buffett has guided the company through numerous economic cycles, transforming it into a Wall Street behemoth.
Buffett's investment strategy, focusing on value investing and holding onto stocks for the long term, has been a cornerstone of Berkshire Hathaway's success. Under his leadership, the company has grown from a struggling textile manufacturer to a diversified powerhouse with holdings in insurance, energy, transportation, and consumer goods, among other sectors.
The monumental growth of Berkshire Hathaway's stock is a testament to Buffett's investment prowess and the compound power of long-term investing. The company's Class A shares are some of the most expensive individual stock units on the market, reflecting the enormous value that has been generated over the decades.
Investors and analysts alike continue to watch Berkshire Hathaway closely, as its performance is often seen as an indicator of the broader market's health. The remarkable return on Berkshire Hathaway's Class A shares underscores the impact that strategic leadership and a patient, disciplined investment approach can have on a company's fortunes.
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Berkshire Hathaway Sells Entire Stake in Procter & Gamble
By: Investing | November 25, 2023
Berkshire Hathaway (NYSE:BRKa), the conglomerate managed by Warren Buffett, has offloaded its entire investment in consumer goods giant Procter & Gamble (NYSE:PG) (P&G), despite the company's strong financial track record. In the third quarter, Berkshire liquidated approximately $7 billion in equities, including its full stake in P&G, a company known for its 67-year history of consistent dividend payments and robust cash flow.
The decision to sell comes even as P&G maintains a solid reputation in the market, characterized by a wide economic moat—a term used to describe a company's ability to maintain competitive advantages over its rivals to protect its long-term profits and market share. This move by Berkshire Hathaway might raise eyebrows among investors, given P&G's status as a Dividend King, a title awarded to companies with at least 50 consecutive years of dividend increases.
Despite Berkshire Hathaway's divestment, market signals indicate that Procter & Gamble continues to be considered a viable purchase option for investors looking for stable returns and resilience in their portfolios. The sale of such a significant holding is likely to attract attention from the investment community, as stakeholders assess the implications of Berkshire's latest strategic adjustments.
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Just out: Berkshire reveals new stake in Siriius:
Sirius XM Holdings (SIRI) stock jumped as much as 12% on Wednesday after Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B) revealed a new stake in the satellite and online radio company.
According to Berkshire's 13F report, which discloses its holdings, the company purchased nearly 9.7 million shares with a market value of about $43.8 million in its September quarter.
Shares of Sirius have struggled so far this year, down about 10% compared to the S&P 500's (^GSPC) 17% gain over that same time period.
https://finance.yahoo.com/news/sirius-xm-stock-jumps-after-warren-buffetts-berkshire-reveals-new-stake-175353836.html
Berkshire Hathaway sells entire stake in Paytm for Rs 1,370 crore
By: Investing | November 24, 2023
Berkshire Hathaway (NYSE:BRKa) has divested its entire holdings in Indian digital payment firm Paytm, selling shares worth Rs 1,370 crore ($168.6 million) at a price of Rs 877.2 each. The transaction saw prominent buyers such as Copthall Mauritius Investment and Ghisallo Master Fund stepping in to acquire the shares.
This move comes as India's financial landscape continues to evolve with the government emphasizing human development indicators (HDI) and sustainable development goals (SDGs) in its financial allocations to states. In the corporate arena, women are taking on more visible roles in boardroom disputes across India Inc, signaling their ascending leadership positions within the industry.
In related business developments, Tesla (NASDAQ:TSLA) has signaled its willingness to commit $2 billion to establish a manufacturing plant in India, contingent upon the government providing concessions on import duties.
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Berkshire Hathaway eyes new investment, may add Progressive to portfolio
By: Investing | November 24, 2023
Warren Buffett’s leadership at Berkshire Hathaway (NYSE:BRKa) has been marked by a notable compounded annual growth rate of 20% since 1965. Today, the conglomerate's latest confidential filing has sparked curiosity in the financial world with a suggested $1.7 billion investment in an undisclosed company. This move mirrors Buffett's history of making strategic acquisitions, such as those of Chevron (NYSE:CVX) and Verizon Communications (NYSE:VZ) in 2020.
The intrigue deepens as Berkshire Hathaway has recently adjusted its portfolio. The firm reduced its stakes in companies like Globe Life (NYSE:GL), Markel (NYSE:MKL), and Aon (NYSE:AON), while simultaneously increasing its investments in the financial sector by $1.2 billion. Speculation is rife that Progressive Corporation (NYSE:PGR) might be Berkshire's latest target for investment.
Progressive is renowned for its disciplined underwriting practices initiated by Peter B. Lewis in 1965, which have led to an average loss ratio significantly lower than that of GEICO, a subsidiary of Berkshire. Ajit Jain, who has been at the helm of Berkshire’s insurance operations since 1986, has praised Progressive's telematics-based pricing model for contributing to these low loss ratios.
While the market anticipates confirmation from Berkshire’s fourth quarter filings due next February, Progressive is already being recognized as a lucrative investment opportunity. If Buffett and Vice Chairman Charlie Munger’s previous commendations are anything to go by, Progressive’s robust management and competitive edge could soon place it within Berkshire Hathaway’s diverse and carefully curated investment portfolio.
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Buffett's Berkshire Hathaway sees opportunity in Ally Financial amid rate hikes
By: Investing | November 22, 2023
Warren Buffett's investment conglomerate, Berkshire Hathaway (NYSE:BRKa), maintains a significant stake in Ally Financial (NYSE: NYSE:ALLY), valued at approximately $798 million. Despite the auto financing sector being hit by rising interest rates, which has led to a decline in Ally's stock value, Berkshire Hathaway owns nearly 10% of the company. This move signals Buffett's recognition of an undervalued opportunity in the market.
Ally Financial operates a branchless digital banking model, which has been instrumental in offering competitive interest rates to customers while keeping operational costs low. This strategy has contributed to the company amassing over $161 billion in assets and achieving an impressive customer retention rate of 96%. The bank's innovative approach was rewarded with a top industry accolade this year.
Buffett is drawn to Ally due to its valuation at just 86% of tangible book value, along with its strong dividend history. Since mid-2016, Ally has increased its dividend payouts by 275%, showcasing robust financial health even as challenges persist. These challenges include tighter net interest margins and a rise in loan delinquencies, which are indicative of broader economic strain.
Nonetheless, analysts remain optimistic about Ally's future profitability, projecting an increase in earnings per share (EPS) from $3.16 in 2023 to $3.83 in 2024. The bank has also set aside $508 million for credit losses, reflecting prudent financial management during uncertain times.
Berkshire Hathaway itself boasts an impressive annual yield of around 20%, translating to cumulative returns of 3,787,464%. The firm's substantial investment in Ally Financial comes amid a period where the company's value has been slashed by half due to the impact of high-interest rates on the auto loan industry. Despite these headwinds, the consensus among Wall Street analysts supports a positive outlook for Ally Financial's path to profitability recovery.
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Warren Buffett and Berkshire Hathaway’s $BRK.B portfolio was just updated!
By: Savvy Trader | November 17, 2023
• NEW: Warren Buffett and Berkshire Hathaway’s $BRK.B portfolio was just updated!
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Warren Buffett's Berkshire Hathaway has OMITTED reporting one or more holding(s) from its Form #13F filing for Q3
By: HedgeMind | November 15, 2023
• Warren Buffett's Berkshire Hathaway has OMITTED reporting one or more holding(s) from its Form #13F filing for Q3.
It made a confidential treatment request from the SEC as disclosed in its filing.
What stock(s) would Warren Buffett be silently accumulating now?? I wonder.
Make your guess...
Will follow up later when Warren Buffett reveals his big bets in its future filing.
$AAPL Warren Buffett's Berkshire Hathaway purchased more shares & increased its total shares to 895,136,175, 5.65% of O/S as of 12/31.
— HedgeMind (@HedgeMind) February 14, 2023
His $AAPL position has gained ~$112B, up 290%+. $AAPL represents ~42% of its portfolio of US exchanged equities.
What a winner!!! https://t.co/sCnRcJ8aGN pic.twitter.com/n4CZqqm36p
Warren Buffett's Portfolio Has Been Updated
By: Evan | November 15, 2023
• WARREN BUFFETT'S PORTFOLIO HAS BEEN UPDATED!!
Here's all the changes Warren Buffett and Berkshire Hathaway $BRK.B made during Q3
Positions fully sold:
- Celanese $CE (Sold 5.36M shares currently worth $674.1M)
- General Motors $GM (Sold 22M shares currently worth $620.4M)
- Mondelez $MDLZ (Sold 578K shares currently worth $49.5M)
- Johnson & Johnson $JNJ (Sold 327.1K shares currently worth $48.4M)
- Procter & Gamble $PG (Sold 315.4K shares currently worth $48M)
- $UPS (Sold 59.4K shares currently worth $8.5M)
- Activision Blizzard $ATVI (Got acquired by MSFT, sold 14.7M shares worth $1.4B at the price it got taken private at)
Positions reduced holdings in:
- Chevron $CVX (Sold 12.9M shares currently worth $1.87B)
- $HPQ (Sold 18.4M shares currently worth $519.5M)
- Markel $MKL (Sold 312.9K shares currently worth $429.2M)
- Globe Life $GL (Sold 1.68M shares currently worth $199.2M)
- Amazon $AMZN (Sold 551K shares currently worth $80.8M)
- $AON (Sold 235K shares currently worth $78.3M)
New Positions:
- Sirius XM $SIRI (Bought 9.68M shares currently worth $47.3M)
- Atlanta Braves $BATRK (Bought 223.6K shares currently worth $8M)
Positions increased holdings in:
- Liberty Media $LLYVK $LLYVA (Bought 16.2M shares currently worth $580.2M)
NOTES:
- Warren Buffett's equity portfolio was worth $318.6 Billion as of the end of Q3
- Buffett's portfolio was updated as of the end of Q3 so these are the changes made to his portfolio from June 30th to September 30th
- We don't know exactly when the shares were sold during Q3 so the current worth part should be taken as just estimates so you can get a ballpark range on the value
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BRK invests puny $8 MILLION into Atlanta Braves.
"Warren Buffett's Berkshire Hathaway (BRK-A, BRK-B) cut its exposure to a number of well-known American companies in the third quarter, exiting stakes in General Motors Co. (GM), Johnson & Johnson (JNJ), and Procter & Gamble Company (PG).
But Berkshire also made a $8 million bet on another American institution: major-league baseball.
The Omaha, Neb.-based conglomerate took a new position in Atlanta Braves Holdings (BATRA), the holding company for the team that finished the recent baseball season with the league's best record. The Atlanta Braves last won the World Series in 2021."
"Buffett has a long-time affinity for baseball, frequently citing his admiration for the hitting of Boston Red Sox great Ted Williams, the last player to hit over .400 in a season (1941). At one time he owned a minority stake in the minor-league team that plays in Omaha."
https://finance.yahoo.com/news/warren-buffetts-berkshire-hathaway-is-making-a-new-bet-on-the-atlanta-braves-150434486.html
Berkshire invests in Atlanta Braves, sheds GM and other stocks
By: Investing | November 14, 2023
(Reuters) - Berkshire Hathaway (NYSE:BRKa), the conglomerate run by billionaire Warren Buffett, on Tuesday said it has made a small investment in the company that indirectly owns the Atlanta Braves baseball team, and eliminated its holdings in General Motors (NYSE:GM) and Procter & Gamble (NYSE:PG).
The changes were disclosed in a regulatory filing that detailed Berkshire's U.S.-listed stock holdings, which comprise most of its $318.6 billion equity portfolio, as of Sept. 30.
Berkshire sold $7 billion of stocks and bought just $1.7 billion in the third quarter, a down period for its stock holdings led by Apple (NASDAQ:AAPL), whose share price fell 12%.
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Leaked IRS data obtained by ProPublica showed that Warren Buffett, in the last two decades, has made trades in his personal portfolio on the same companies that Berkshire bought or sold during the same quarter or the quarter before
By: Cheddar Flow | November 13, 2023
Wow.
— Cheddar Flow (@CheddarFlow) November 11, 2023
Leaked IRS data obtained by ProPublica showed that Warren Buffett, in the last two decades, has made trades in his personal portfolio on the same companies that Berkshire bought or sold during the same quarter or the quarter before
Buffett has said before that trading the… pic.twitter.com/DZqjcDXFJA
Berkshire Hathaway Q3 - Under The Hood. What seems on the surface as a strong report (BRK defined earnings +41%) is weaker under the hood
By: Sleepwell | November 6, 2023
• $BRK Q3 - Under The Hood
What seems on the surface as a strong report (BRK defined earnings +41%) is weaker under the hood
Entire increase was driven by insurance (underwriting recovery+investment income from higher rates)
All other businesses were weak.
Q3 Organic revenue:
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Berkshire Hathaway expands into AI sector with diverse portfolio
By: Investing | November 7, 2023
Warren Buffett's Berkshire Hathaway (NYSE:BRKa) has broadened its investment strategy to include substantial holdings in companies with significant AI technology, despite traditionally shying away from tech stocks. Notable names in Berkshire's $342 billion portfolio now include Coca-Cola (NYSE:KO), Amazon (NASDAQ:AMZN), Snowflake (NYSE:SNOW), Bank of America, and Apple (NASDAQ:AAPL).
Coca-Cola has been leveraging AI for marketing and product development, highlighted by its Masterpiece campaign and the AI-formulated Y3000 Zero Sugar drink. The beverage giant also employs a global head of generative AI, indicating a commitment to the technology.
Amazon, another major holding under Berkshire Hathaway, has been using AWS for AI-related operations. The e-commerce giant invested $4 billion in Anthropic and utilizes Trainium and Inferentia data center chips for future models. This move has attracted developers who rely on Nvidia (NASDAQ:NVDA)'s technology.
In the realm of cloud services, Snowflake provides an AI component for business data aggregation. The company recently acquired Neeva to enhance its capabilities in natural language data search.
Bank of America, also part of Berkshire's AI-focused portfolio, has integrated an AI chatbot named Erica into its CashPro digital banking platform. The bank has also announced plans for a $3.8 billion innovation investment.
Apple, known for its tech prowess, uses the A17 Pro CPU processor in its iPhone 15 Pro lineup to handle enhanced AI workloads. The company is also reportedly developing a competitor to ChatGPT alongside large language models.
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Buffett sells BYD shares; a 51% WeWork bid: Insider trades & hedge funds weekly
By: Investing | November 6, 2023
Berkshire Hathaway sells $25.8 million worth of shares in China's BYD
Warren Buffett's investment firm Berkshire Hathaway (NYSE:BRKa) sold 820,500 shares of the Hong Kong-listed electric vehicle manufacturer BYD (SZ:002594) (OTC:BYDDY), raking in HK$201.73 million ($1 = HK$7.82), according to a recent regulatory filing.
The transaction, which took place on October 25, reduced Berkshire's stake in BYD's issued H-shares to 7.98% from 8.05%, as revealed in the filing with the Hong Kong Stock Exchange on Tuesday.
Cole Capital Funds seeks to acquire 51% of WeWork for $9 share
Cole Capital Funds has submitted a letter to the Board of Directors of WeWork (NYSE:WE) proposing the acquisition of a 51% majority stake in the company. The proposed purchase price is set at $9.00 per share for all outstanding shares held by minority shareholders. Additionally, Cole Capital Funds is seeking proper representation on WeWork's board, believing this acquisition to be in the best interest of the company.
InvestingPro | Know Market Moves
A raft of insider buys from company CEOs and directors
Align Technology (NASDAQ:ALGN) President and CEO, Joseph Hogan, purchased 5,319 common shares, or worth about $1M, at $188.
Arbor Realty Trust (NYSE:ABR) Chairman/CEO/President, purchased 80,161 common shares, or worth nearly $1M, at $12.47.
Loews (NYSE:L) (NYSE:{{13083|L}}) Director, Jonathan Locker, purchased 15,870 common shares, or worth more than $1M, at $63.75.
Greenbrier (NYSE:GBX) Director, Patrick Ottensmeyer, purchased 10,000 common shares, or worth $338,579, at $33.8579.
Fifth Third Bancorp (NASDAQ:FITB) Director, Bryan Daniels, purchased 64,500 common shares, or worth more than $1.5M, at an average price of $23.31 per share.
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The BRK/Pilot saga has been dicussed on the DD board
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=173160372
Warren states that he is just adhering to the contract language. Will be interesting to see how this is resolved. Can't believe BRK shares are down this am given the strong beat on operating earnings. Folks look at the reported loss due to the paper losses for the quarter on equity investments, and don't understand how these earnings have to be reported.
Berkshire Hathaway Reports Increased Liquidity: Buffett Gearing Up for Dip Buying?
By: Investing | November 6, 2023
- Warren Buffett's Berkshire Hathaway reported robust earnings and increased liquidity in the third quarter.
- Despite the solid performance, Warren Buffett maintains a cautious outlook on market valuations, considering them overvalued.
- Berkshire Hathaway's financial health reveals impressive strengths but prompts a closer look at the stock's average valuations and potential for a 35% upside based on fair value analysis.
Segueing into discussions about market valuations and opportunities, the market still appears overvalued from the perspective of Warren Buffett.
Berkshire Hathaway (NYSE:BRKb) (NYSE:BRKa), America's seventh-largest company by market capitalization, reported robust earnings in the third quarter.
Notably, the company also reported a substantial $10 billion increase in liquidity during the quarter, pushing its total liquidity to a record $157 billion, in close proximity to Apple (NASDAQ:AAPL)'s ($162 billion) liquidity.
The company disclosed operating profits of $10.76 billion, marking a substantial 41% increase, or $7.4 per Class A share. This performance was attributed to the impact of high interest rates on liquidity and gains in its insurance businesses.
However, when factoring in losses on investments and derivatives, Berkshire reported unrealized losses of nearly $12.8 billion, equivalent to $8.8 per Class A share, significantly exceeding the previous year's losses of $2.8 billion, primarily stemming from its stake in Apple, which experienced a 12% decline.
On a separate note, Berkshire Hathaway B reported third-quarter earnings per share of $10.22, which fell short of analysts' estimates of $4.34.
The company's revenue for the quarter reached $93.21 billion, exceeding estimates. Additionally, Berkshire Hathaway engaged in buybacks amounting to $1.1 billion during the third quarter, bringing the year-to-date total to approximately $7 billion.
Evaluating Berkshire Hathaway's Class A financial health through InvestingPro involves ranking the company across more than 100 factors in comparison to other firms within the same industry.
Source: InvestingPro
The company earned a score of 4 out of 5 by performing better than all of its competitors on profit margins, high earnings quality, higher liquidity than debt on the balance sheet, and free cash flow exceeding net income.
Delving deeper, however, we can see how the comparison with the market and competitors, sees the stock at average valuations:
Source: InvestingPro
In fact, if we look at the most popular indicators, we can see it is now worth more than 2 times its revenues, and more than 8 times its earnings.
The Fair Value, which represents the target price determined through 13 different models, currently stands at $719.935. This indicates a potential upside of 35% with a low level of uncertainty associated.
Another critical aspect is the spread price, which guides us through the periodic fluctuations, falling within the range of $503,000 to $911,000.
This range is calculated as an average, factoring in the price performance over the past 52 weeks, the analysts' target, and insights derived from the InvestingPro tool.
Source: InvestingPro
Its performance from the October 2022 bottom to date has been more than +30%, recording a new all-time high in September 2023
Berkshire Hathaway Class A Stock Price Chart
When comparing the performance of Berkshire Hathaway to Apple, it's clear that they often move in tandem.
The correlation coefficient, used in statistics to measure the relationship between assets on a scale from 1 to -1, indicates a strong positive correlation when it's close to 1, meaning that both assets tend to rise and fall together.
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>>> Charlie Munger Raves About Warren Buffett's Rare Japanese Investment Opportunity Of A Century — 'It Was Like Having God Just Opening A Chest And Just Pouring Money Into It' — High Rewards For A Low Risk
Benzinga
by Jeannine Mancini
November 1, 2023
https://finance.yahoo.com/news/charlie-munger-raves-warren-buffetts-164102631.html
Warren Buffett’s unexpected decision to invest in Japan during the 2020 pandemic seems to have paid off, and no one appears more pleased than Berkshire Hathaway Inc. Vice Chairman Charlie Munger.
The strategy was a departure from the company’s well-known preference for American enterprises like Apple Inc., the Coca-Cola Co., Bank of America Corp. and American Express Co. The company’s portfolio has often been a testament to its confidence in the U.S. market. Speaking on the Acquired podcast in October, however, Munger pointed out that the Japanese investment was a distinctive and lucrative opportunity that couldn't be passed up.
"If you're as smart as Warren Buffett, maybe two, three times a century, you get an idea like that," Munger said on the podcast. He cited Japan's low interest rate environment as a key factor, saying, "The interest rates in Japan were 0.5% a year for 10 years, and these trading companies were really entrenched old companies."
Berkshire Hathaway's strategy involved borrowing money in Japan at a mere 0.5% interest and investing in companies there that offered a 5% dividend yield.
"It was like having God just opening a chest and just pouring money into it," Munger said.
Initially, Berkshire Hathaway declared a $6 billion investment across five Japanese trading houses — Itochu International Inc., Marubeni Corp., Mitsubishi Corp., Mitsui & Co. Ltd. and Sumitomo Corp. Group — in August 2020. That investment has grown substantially and is now valued at approximately $17 billion, thanks in part to both additional share purchases and soaring stock prices of the companies involved.
Munger provided more detail on the mechanics of the investment, indicating it wasn't an overnight success but rather a result of patient, incremental actions.
"The only way you could get it was to be very patient and just pick away at little pieces at a time. It took forever to get $10 billion invested, but it was awfully easy money," Munger said.
In contrast, U.S. interest rates have escalated to over 5% since last spring, adding another layer of context to the wisdom of this Japanese trade.
"We could do that, nobody else could," said Munger, highlighting that Berkshire's strong credit rating gave them access to such favorable borrowing terms in Japan.
In the Acquired podcast interview, the host pointed out a paradox: While Berkshire Hathaway's excellent credit allows it access to low-interest loans, the company's enormous scale makes it challenging to invest sufficiently large sums. In response, Munger agreed, stating, "That's true, but why shouldn't it be hard to make money? Why should it be easy?"
Before the podcast, at Berkshire Hathaway's annual shareholders meeting in May, Buffett shared insights into these investments, noting that the selected companies were "ridiculously" cheap and compatible with Berkshire's long-term vision.
Andrew McCagg of Nomura Asset Management UK Ltd. also offered his perspective on the investment.
"Improving shareholder returns were likely a bigger factor in Buffett's decision to buy Japanese trading houses than some of the other factors," he told Insider via email.
Berkshire Hathaway's Japanese investments, as described by Munger, represent a special kind of opportunity: high rewards for low risk. The investment appears to be a case study in successful financial strategy, blending patient capital allocation with keen market observation.
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>>> Warren Buffett’s Berkshire Hathaway-owned HomeServices of America and two subsidiaries, as well as Keller Williams Realty, were among the other real estate groups the jury found guilty of conspiring. <<<
>>> Realtors found liable for $1.8 billion in damages in conspiracy to keep commissions high
CNN
by Elisabeth Buchwald
November 2, 2023
https://finance.yahoo.com/news/realtors-found-liable-1-8-191400056.html
Washington, DC (CNN) — A Missouri jury on Tuesday found the National Association of Realtors, a real estate industry trade group, and some residential brokerages liable for nearly $1.8 billion in damages after determining they conspired to keep commissions for home sales artificially high.
The lawsuit covered home sales that took place between April 2015 to June 2022.
“We view it as a tremendous day of accountability for these companies,” Michael Ketchmark, the lead attorney for the plaintiffs, told CNN.
Despite the verdict, the matter is still far from being resolved.
“This matter is not close to being final. We will appeal the liability finding because we stand by the fact that NAR rules serve the best interests of consumers, support market-driven pricing and advance business competition,” NAR president Tracy Kasper said in a statement after the verdict was announced.
However, she said NAR “can’t speak to the specifics” to its basis of appeal until it is filed. “In the interim, we will ask the court to reduce the damages awarded by the jury,” Kasper added.
Warren Buffett’s Berkshire Hathaway-owned HomeServices of America and two subsidiaries, as well as Keller Williams Realty, were among the other real estate groups the jury found guilty of conspiring.
A spokesperson from HomeServices told CNN the company is “disappointed with the court’s ruling and intends to appeal.”
“Today’s decision means that buyers will face even more obstacles in an already challenging real estate market and sellers will have a harder time realizing the value of their homes,” the spokesperson said.
Keller Williams did not immediately respond to CNN’s request for a comment.
Ketchmark said groups like HomeServices are claiming this “because they’re desperate to hang on to the system that they have rigged against everyone.”
“They made that same argument in court for the last couple of weeks and it took a jury all of two and a half hours to disregard it,” he said.
Appeals process could be protracted
The appeals process could take up to three years, said Jaret Seiberg, a housing policy analyst at TD Cowen. The losing party he said will likely attempt to have the case tried by the Supreme Court.
But Tuesday’s verdict does not mean “buyer commissions are a thing of the past,” he said.
The judge presiding over the case will have to decide the scope of the injunction, which could end up amounting to “minor tweaks” to the current commission-sharing system. “If that is the case, then the impact may be limited as we expect most brokers will continue to offer commission sharing to boost interest in the property,” Seiberg. added.
Minutes after Tuesday’s victory, Ketchmark filed a new class-action lawsuit against real estate companies including Douglas Elliman, Compass and Redfin. The new suit also alleges the companies violated antitrust laws by conspiring to keep commissions high.
Douglas Elliman and Compass declined to comment on the new case. Redfin CEO Glenn Kelman labeled it “a copycat lawsuit.”
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Berkshire first started buying Apple stock in 2016 and is now its largest individual holding ($162 billion) by a wide margin...
By: Charlie Bilello | November 5, 2023
• Berkshire first started buying Apple stock in 2016 and is now its largest individual holding ($162 billion) by a wide margin...
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Here's how much cash Warren Buffett and Berkshire Hathaway $BRK.B have had every Q2 since 1992
By: Evan | November 4, 2023
• Here's how much cash Warren Buffett and Berkshire Hathaway $BRK.B have had every Q2 since 1992
1992: $831M
1993: $1.4B
1994: $186M
1995: $1.9B
1996: $819M
1997: $537M
1998: $6.9B
1999: $6.5B
2000: $36.7B
2001: $59.6B
2002: $66.1B
2003: $39.3B
2004: $43B
2005: $46B
2006: $42.3B
2007: $47.1B
2008: $33.4B
2009: $26.9B
2010: $34.5B
2011: $34.8B
2012: $47.8B
2013: $71B
2014: $91.1B
2015: $93.4B
2016: $109.5B
2017: $109.3B
2018: $103.6B
2019: $128.2B
2020: $145.7B
2021: $149.2B
2022: $109B
2023: $157B
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If Warren Buffett and Berkshire Hathaway's $BRK.B cash pile was the market cap of a stock it would be the 68th largest public company in the world
By: Evan | November 4, 2023
• If Warren Buffett and Berkshire Hathaway's $BRK.B cash pile was the market cap of a stock it would be the 68th largest public company in the world
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Buffett's Berkshire posts bigger loss as stocks fall; operating profit sets record
By: Investing | November 4, 2023
(Reuters) -Warren Buffett's Berkshire Hathaway (NYSE:BRKa) Inc on Saturday posted its first overall quarterly loss in a year as the prices of Apple (NASDAQ:AAPL) and other stocks it owns fell, but said improved results from insurance helped boost operating profit to a record.
Rising interest rates boosted yields on Berkshire's vast U.S. Treasury bill holdings above 5%, while fewer car accidents and a quiet Atlantic hurricane season respectively bolstered the Geico car insurer and reinsurance businesses.
Berkshire nonetheless signaled it remains cautious about stock valuations and the market environment.
The Omaha, Nebraska-based conglomerate's cash stake swelled in the third quarter to a record $157.2 billion, as Berkshire sold $5.3 billion more stocks than it bought and slowed repurchases of its own stock, buying back $1.1 billion.
Berkshire also reported signs of caution among consumers.
It said its BNSF railroad shipped fewer consumer goods, while lower homebuying hurt its namesake real estate brokerage and Clayton Homes unit, and sales of Forest River RVs and apparel from units such as Fruit of the Loom also fell.
Jazwares, a toymaker that makes the popular Squishmallows and which Berkshire bought one year ago, helped offset those declines, generating $469 million of revenue in the quarter.
Investors watch Berkshire closely because its results often reflect broader economic trends, and because of the 93-year-old Buffett's reputation as one of the world's greatest investors.
BIG SWINGS
Berkshire's third-quarter net loss more than quadrupled to $12.77 billion, or $8,824 per Class A share, from $2.8 billion a year earlier.
Results included $23.5 billion of losses from investments, primarily reflecting a 12% decline in the stock price of iPhone maker Apple, in which Berkshire had owned a $177.6 billion stake.
Berkshire's net results swing widely from quarter to quarter because accounting rules require the company to report investment gains and losses even if it buys and sells nothing.
Buffett says the volatility is usually meaningless, and Berkshire appears to have kept its Apple stake.
Operating profit rose 41% to $10.76 billion, or $7,444 per Class A share, from $7.65 billion a year earlier.
Insurance operations generated $4.89 billion of profit, up from just $336 million a year earlier, when it lost $2.7 billion from Hurricane Ian alone.
WILDFIRE LOSSES
Among other businesses, BNSF, which often accounts for about one-fifth of Berkshire's operating profit, saw net income fall 15% to $1.22 billion.
Profit from Berkshire's energy businesses slid 69% to $498 million, as the PacifiCorp utility forecast more losses from litigation over wildfires in the western United States.
Berkshire said it could not predict the impact on its HomeServices of America unit of an Oct. 31 jury verdict awarding home sellers $1.78 billion over an alleged conspiracy among several defendants to inflate broker commissions.
It also said geopolitical risks around the world could affect future results, though its IMC metalworking unit, which makes many of its products in Israel, has yet to be affected by the war between that country and Hamas.
Buffett has run Berkshire since 1965. His $117.5 billion net worth ranks fifth worldwide according to Forbes magazine.
Berkshire shares are up 14% this year, matching the Standard & Poor's 500.
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Uncle Warren Plays Hardball and perhaps Pilot really screwed up to the tune of billions.
"Truck Stop’s Suit Against Berkshire Challenges Buffett’s Good Guy Image"
"Warren Buffett has long championed Berkshire Hathaway as the best home for sizable private companies seeking a buyer, saying that the conglomerate would treat them like fine art and never sell them, a contrast with more rapacious private equity purchasers.
So it comes as a surprise that truck-stop operator Pilot is suing Berkshire Hathaway (ticker: BRK.B), claiming that Buffett’s company is using accounting adjustments to potentially shortchange the family that formerly controlled it.
Knoxville-based Pilot was owned by the Haslam family until it sold an 80% stake to Berkshire Hathaway in two stages in 2017 and early 2023 for a total of $11 billion, with $8.2 billion paid in the second tranche for 41.4% of the business.
It was Berkshire’s largest purchase of a private company during Buffett’s 62 years at the helm."
https://www.barrons.com/articles/buffett-berkshire-hathaway-stock-suit-036b3618
"Pushdown Accounting: Definition, How It Works, Example"
"Pushdown accounting is a bookkeeping method used by companies to record the purchase of another company. The acquirer’s accounting basis is used to prepare the financial statements of the purchased entity. In the process, the assets and liabilities of the target company are updated to reflect the purchase cost rather than the historical cost.
This method of accounting is an option under U.S. Generally Accepted Accounting Principles (GAAP) but is not accepted under the International Financial Reporting Standards (IFRS) accounting standards."
https://www.investopedia.com/terms/p/push-down-accounting.asp#:~:text=Pushdown%20accounting%20is%20a%20method,to%20reflect%20the%20purchase%20price.
I want to plunge into that disagreement when I get some time. Buffett can get nasty when he thinks someone is trying to "pull something." OTOH I can see where legitimate differences of opinion can arise over accounting and contract wording. .
Agree. Very interesting, as is the fact that the Haslam family is now suing WB and BRK over the accounting method(s) used to value their final 20% in the end sale to BRK.
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BERKSHIRE HATHAWAY INC.
Charles Munger (Charlie), BRK Vice Chairman Warren Buffett, BRK Chairman/CEO Photo circa 1970
Berkshire Hathaway, Inc NYSE Symbols: BRK-A Class A shares BRK-B Class B shares | Berkshire Hathaway, which began in 1839 as a textile mill, neared collapse in 1962 when 32-year old Warren Buffett started buying control in the belief the company could be saved. Buffett initially maintained Berkshire’s textile business, but by 1967, he was expanding into other investments. Berkshire bought stock in the Government Employees Insurance Company (GEICO) that now forms the core of its colossal insurance operations. Other early acquisitions included See's Candies, Blue Chip Trading Stamps and Dairy Queen. BRK moved from the OTC to the NYSE in 1988. Today Berkshire is a combination of 66 wholly owned subsidiaries such as the BNSF Railroad and 47 passive minority investments, notably its huge stake in Apple. As of 2021, BRK has a market cap of >$600 billion and 360,000 employees. Berkshire Hathaway is the nation's 7th largest business. |
Useful Links Berkshire Subsidiary Companies Buffett's Famous Annual Letters BRK Portfolio Tracker CNBC Buffett Archive http://www.BerkshireHathaway.com/ Buffett's office in Omaha. His desk has no computer Headquarters Address:: 3555 Farnam Street Omaha, NE 68131 b | |
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