Invest your own money, let compound interest be your leverage, and avoid debt like the plague.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 1
Approximately $4.4 billion was used to purchase shares of Class A and Class B common stock during the first quarter of 2023. On March 31, 2023, there were 1,450,152 Class A equivalent shares outstanding.
At March 31, 2023, insurance float (the net liabilities we assume under insurance contracts) was approximately $165 billion, an increase of approximately $1 billion since yearend 2022
No. of Recommendations: 5
I'm glad to hear they have been repurchasing shares, seems like a good use of that cash pile, in the absence of a lot of other opportunities.
And more float is always good, although it would be even better if there were lots of opportunities for using it.
I hope they also talk about how fixing GEICO is going, and whether they intend to buy more Occidental (although I'm pretty sure they won't say), and how Precision Castparts is doing, and Rational's question, how they will deal with the disappearance of Buffett's controlling stake, as 5% is given away every year.
In a way, it's too bad so many questions are about politics, the general economy, living a good life, etc. The questions about Berkshire's business are few and far between.
dtb
No. of Recommendations: 8
I get $232 per B share for Book Value. Nice to see it above the peak book value to date.
No. of Recommendations: 3
I get the same ($231.95), with BRK shareholder equity at $504,554, and outstanding A shares at end of quarter at 1,450,152.
That's a sizeable increase, bigger than I was expecting (due to the jump in the Railroad, Utilities and Energy segment).
No. of Recommendations: 5
That's a sizeable increase, bigger than I was expecting (due to the jump in the Railroad, Utilities and Energy segment).
I agree. I was only forecasting $230.45 for Q1 BV based on normal ops earnings and the expected increase in the equity holdings.
RationalWalk did a nice review of the quarter on Twitter that sheds some light on the differences. There was a step up in the original Pilot purchase to the price paid at end of Jan. that seems to have contributed about $1 increase to BV. They also sold about $6B of CVX. The insurance ops seemed to have had a larger than usual underwriting profit as well.
The BNSF performance, consumer manufacturing and awful numbers at BHE all seem to point to a struggling retail consumer business here in the US. Not surprising and rhymes with what I'm seeing in my day job as well.
Jeff
No. of Recommendations: 0
So current book is 1.4, average last 5 years 1.35. fairly valued?
What's with the two signs available for sale and held to maturity. Call for businesses to buy?
No. of Recommendations: 3
What's with the two signs available for sale and held to maturity. Call for businesses to buy?
Warren said he and Charlie knew there would be questions asked about banks (so they had the signs prepared in advance)
In Republic's case, he said if one simply looked at their 10-k, one could see the problem!
No. of Recommendations: 1
I get the same ($231.95), with BRK shareholder equity at $504,554, and outstanding A shares at end of quarter at 1,450,152.
Thanks for posting the numbers. Nice to have confirmation.
One thing I noticed, in this 1st Q report they list 4th Q 2022 shareholder equity as $473,424. That's a little different than was listed in the annual report, $472,360. So I guess a little adjustment? Is that common? I'm new to reading these reports.
John
No. of Recommendations: 5
1st Q report they list 4th Q 2022 shareholder equity as $473,424. That's a little different than was listed in the annual report, $472,360.
Yes, that's supposed to happen. You can think of the shareholder equity as the size of our pizza. The number of shares outstanding is the number of slices. Most companies put a lot of focus on the size of this pizza, but some keep slicing the pizza into ever smaller slices so that your own slice doesn't grow. Berkshire is focused on growing per share value, so their focus is growing the size of your individual slices.
At its most basic calculation, you take the Assets (trains, factories, cash, power plants), and subtract the liabilities (things like debt, money owed to employees). The remaining money is shareholders equity.
No. of Recommendations: 9
One thing I noticed, in this 1st Q report they list 4th Q 2022 shareholder equity as $473,424. That's a little different than was listed in the annual report, $472,360. So I guess a little adjustment? Is that common? I'm new to reading these reports.
It's not terribly common, no. You'd expect that the 12/31/2022 balances originally reported in the year-end 2022 10-K would be the same 12/31/2022 balances reported (for comparison purposes) in the 3/31/2023 10-Q.
In this case, the Statement of Shareholders' Equity would point you in the right direction. What you see there for the various Equity accounts are the following line items:
Balance at December 31, 2022 as previously reported
Adoption of ASU 2018-12
Balance at December 31, 2022 as revised
The item in bold is the key - they adopted a new accounting pronouncement in the first quarter of 2023, which caused them to remeasure certain liabilities on a retroactive basis.
If you go to the footnotes, you'll see a fuller description in Note 2:
We adopted Accounting Standards Update 2018-12 'Targeted Improvements to the Accounting for Long Duration Contracts' ('ASU 2018-12') as of January 1, 2023, which modifies the accounting, reporting and disclosures related to long duration insurance contracts and most significantly the measurement of our long duration life, annuity and health benefit liabilities. ASU 2018-12 was applied retrospectively to contracts in-force beginning as of January 1, 2021 (the 'transition date'). The Consolidated Financial Statements for 2022 and 2021 were revised to reflect the effects of the adoption of ASU 2018-12. As of the transition date, the after-tax impact of changes in cash flow assumptions were recorded in retained earnings and the after-tax effect of changes in discount rates assumptions were recorded in accumulated other comprehensive income. The effects of the adoption of ASU 2018-12 on our Consolidated Financial Statements as of January 1, 2021 and for the years ending December 31, 2022 and 2021 are included in Part II, Item 5 of this Report.
No. of Recommendations: 0
The item in bold is the key
Thank you for the detailed response!
John
