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Pretty good Feature article by Andrew Bary. Cannot wait to see and hear Warren & our Vice-Chairmen commentary next weekend.

“Warren Buffett Is Still at the Top of His Game at 94. Berkshire Hathaway Faces a Future Without Him.”

https://www.barrons.com/articles/warren-buffett-su...

Nothing really new or noteworthy in this piece especially for those of us who closely follow the company. Honestly, when was the last time there was any significant news coming out of Omaha? Been a long time for sure.

No-one is at the top of their game at 94. No-one at all.

Nothing really new or noteworthy in this piece especially for those of us who closely follow the company.

Maybe not, but it gave a good concise summary of all the potential issues that Berkshire investors should be thinking about. If the major ones that he pointed out are not addressed, shareholders have a choice. Vote with their pocketbooks, or say "in Buffet, we trust" and hope for the best.

BuffeTT, of course.

No-one is at the top of their game at 94. No-one at all.

Perhaps, but you can't argue with these results, regardless of age...
"In a year that hasn’t been kind to many big-name stocks, Warren Buffett’s Berkshire Hathaway is standing near the top.
Berkshire shares have posted a 17% return year-to-date, while the S&P 500 index is down 6%."
"Berkshire’s outperformance of the S&P 500 isn’t limited to 2025. Buffett’s stock has tripled the performance of the market over the past year,
and its 185% return over the past five years is more than double the performance of the S&P 500."

"Only when the tide goes out do you discover who's been swimming naked." ~Warren Buffett

https://www.cnbc.com/2025/04/26/warren-buffett-ber...

Nothing really new or noteworthy in this piece especially for those of us who closely follow the company.

Agreed, but I was suprised at how certain the writer seems to be that the Board will declare a dividend when WEB retires. Maybe not immediately, but if he is right, it is in the plan.

This makes sense to me. I was always against dividends. But for the last 2-3 years, I have predicted that the company would shift its strategic focus from capital allocation and acquisitions (WEB's forte) to operational excellence (Greg's forte). I can argue the shift is already underway. WEB built a warchest to give Greg room to manoeuver, and if follows logically that -- in the post-Warren-and-Charlie era -- the Board will no longer assume that HQ can or should invest all the profits back into its existing businesses. And if it is the case that acquisitions will be de-emphasised going forward, and some of the businesses like BNSF and BHE seem to generate more capital than they consume, why not return the excess back to the shareholders?

I know this is an old discussion, and declaring a dividend will change the tax implications of holding BRK for a lot of people, but it also seems naive to think that nothing fundamental will change when WEB leaves. The alternative -- in the absence of compelling acquisitions - is to stockpile cash forever. Which scenario would make most sense to WEB as he comtemplates the future and leaves "instructions" to his successors?

My investment decisions are generally not driven by the market or taxes, so I'm still happy holding BRK, but it is an interesting time for sure. I would welcome thoughts on the above.

abromber

The alternative -- in the absence of compelling acquisitions - is to stockpile cash forever.

I would be extremely surprised at a dividend any time soon.

Nothing wrong with "merely good" acquisitions, which is what I expect.
It's amazing how well even a very average set of stocks can do if you manage merely to avoid some of the really bad picks: those unduly likely to fade or fail. I think it's fair to say that most investors don't even really try.

Jim

<<<<People panic at the drop of a hat.>>

Not over weeks and months. There’s usually a valid reason: bad macro numbers, political anxiety, international conflicts, etc etc..

Day to day absolutely, though, agree.

There isn't much new in the article. But I think this part of the article was not well thought out:
Investment managers Todd Combs and Ted Weschler, who now run about 10% of Berkshire’s $300 billion equity portfolio, could take over the whole thing. It remains to be seen which role Abel will play with the equity portfolio.

Warren said this during 2024 annual meeting when he said Greg should take over the management of the equity portfolio as well:
But I would say that if I were on that board and were making the decision, I would probably, knowing Greg, I would just leave… I would leave the capital allocation to Greg. And he understands businesses extremely well. And if you understand businesses, you understand… you understand common stocks. I mean, if you really know how business works, you are, you are an investment manager. How much you manage, maybe just your own funds or maybe other people’s [funds]. And if you really are primarily interested in getting assets under management, which is where the money is, you know, you don’t really have to understand that sort of thing.

But that’s not the case with Ted or Todd, obviously. But I think the responsibility ought to be entirely with Greg. The responsibility has been with me, and I farmed out some of it. And I used to think differently about how that would be handled, but I think the responsibility should be that of the CEO. And whatever that CEO decides may be helpful in effectuating that responsibility. That’s up to [him or her] to decide at the time they’re running the money.

I would be extremely surprised at a dividend any time soon.

I would also be quite surprised. For a few reasons:
1. There are MANY very long-term holders that specifically do not want that part of their portfolio to generate any current income.
2. Included in 1 above, there are many who intend to donate (a la Gottesmann) their entire holding upon death. And they don't want it continually diluted by dividends and associated taxes each year until then.
3. There are precious few investments out there that can produce only capital gains (when the holder chooses to do so) and no unexpected (or expected) current taxable income. Many people who seek that characteristic specifically choose Berkshire for it.
4. It won't solve the cash "problem". Even if a dividend of say 3% were distributed each year, that would only amount to about $30B. Annual operating cash flow is close to that. So maybe $330B cash would drop to $325B cash after a year, to $320B after 2 years, etc.
5. A special one time dividend would wreak havoc for many people. I don't see that happening.

Nothing wrong with "merely good" acquisitions, which is what I expect.

I suspect that WEB looks at it like this - as long as T-bills yield is higher than earnings yield on the S&P500, may as well stick with T-bills for un-deployed cash. When interest rates start going down (probably during next recession), then there are a few choices:
1. Find interesting and fairly valued companies and buy them. Maybe Chubb. Maybe Occidental. Etc.
2. Or buy shares in "merely good" companies. Perhaps add to current positions a bit, and perhaps add some others.
3. Buy the S&P500 as the interim holding (instead of T-bills) and sell [part of] it if something really good, and big, comes along.

I suspect that WEB looks at it like this - as long as T-bills yield is higher than earnings yield on the S&P500, may as well stick with T-bills for un-deployed cash. When interest rates start going down (probably during next recession), then there are a few choices:
1. Find interesting and fairly valued companies and buy them. Maybe Chubb. Maybe Occidental. Etc.
2. Or buy shares in "merely good" companies. Perhaps add to current positions a bit, and perhaps add some others.
3. Buy the S&P500 as the interim holding (instead of T-bills) and sell [part of] it if something really good, and big, comes along.

It should be noted that Mr Buffett has said that the even if T-bill yields were low it would not change the fact that he'd be holding so many of them them. i.e., the currently high yields on T-bills are not a factor determining how many Berkshire holds, they just make the chosen situation more pleasant. So a fourth option would be "keep holding T-bills even at low rates until some better opportunity comes up".

Historically there has always been another opportunity coming along soon enough to make the wait worthwhile. Given the difficulties of allocating a half trillion in a hurry, in future the opportunity may be merely "good enough". Which would, tautologically, be good enough.

Jim

you dont think he might have been shopping in europe recently ? he did shop in israel once...

...might have been shopping in europe recently ? he did shop in israel once...

When prices get cheap, perhaps.

Given the many opportunities that Berkshire has had to buy European equities in the last several decades, it seems that there is some hesitation on the part of management. The ratio of rewards to capital versus the other stakeholders (labour and government) has historically been lower in Europe. Shareholders tend to get more of the pie in common law countries, perhaps.

Jim

An idea I've thought of before, I don't know if any companies do anything like this:

- declare a "dividend" each quarter but don't pay it out, just keep a record of the cumulative amount

- do weekly buybacks according to some mechanical rule, e.g. spend 2% of the pot each week, but only if the share price is less than the 200 day SMA (maybe plus 5% or something)

I started doing a spreadsheet to check if this would work, i.e. the buybacks would be at a noticeably lower average price than if they were simply done every week but I haven't got it right yet. Could be a problem with this approach, but me screwing up the spreadsheet is just as likely.

SA

It should be noted that Mr Buffett has said that the even if T-bill yields were low it would not change the fact that he'd be holding so many of them them. i.e., the currently high yields on T-bills are not a factor determining how many Berkshire holds, they just make the chosen situation more pleasant. So a fourth option would be "keep holding T-bills even at low rates until some better opportunity comes up".

I suspect that Buffett was mostly referring to the "base" $50-100B that he wants to keep in cash at all times. That cash will stay in short-term T-bills at any interest rate. The purpose, as stated many times, is such that Berkshire can weather any grave emergency (massive insurance claims, some other calamity, etc). I don't think he was specifically referring to the additional $200-300B of cash that mostly comes from realized gains and is to be reinvested someday.

Furthermore, I think that when the S&P500 earnings yield becomes higher than T-bill rates (enough higher to make a difference), that is indeed the "better opportunity". I think Buffett usually compares the 10 year treasury rate to company earnings yields, but a similar principle could easily apply to T-bills.

I suspect that Buffett was mostly referring to the "base" $50-100B that he wants to keep in cash at all times. That cash will stay in short-term T-bills at any interest rate...

That certainly wasn't my memory of the comments in question, which were about the Apple and BofA sales and the consequently enlarged cash pile. But my memory is fallible and I have no link.

Jim

An idea I've thought of before, I don't know if any companies do anything like this:

- declare a "dividend" each quarter but don't pay it out, just keep a record of the cumulative amount

- do weekly buybacks according to some mechanical rule, e.g. spend 2% of the pot each week, but only if the share price is less than the 200 day SMA (maybe plus 5% or something)

Why would any company do this? What would it accomplish?

People who want a dividend want the cash. They also do not want to sell any shares to get cash, they want the company to give them the money.

But my memory is fallible and I have no link.

Heh, same here! I searched for direct quotes by WEB on the subject and found the direct quote comparing the 10-year treasury yield to stock earnings yield a few times. But I found no direct quote regarding the much larger amount of cash after disposing of large positions.

People who want a dividend want the cash. They also do not want to sell any shares to get cash, they want the company to give them the money.

This is not *always* the case. For years, Banco Santander had a high dividend which each shareholder could elect to take in cash or in newly issued shares. It was quite popular, until the Spanish government decided it was working too well as a way for non-Spanish holders of the stock to avoid the withholding tax on dividends.

I doubt Berkshire could get away with it, but it would make a lot of people happy. There is long term slow dilution from the newly issued shares, but correspondingly less cash leaving the building compared to a "normal" dividend, which can be allocated without tax consequences for a future return.

Jim

Mark and Jim, I think this is the discussion you're looking for from the morning session of the 2024 Annual Meeting. Buffett did say even if T-bill yields were lower, it would not change the fact that he'd be holding so many of them. He was referring to the entire cash pile based on current opportunities (or lack thereof).

BECKY QUICK: This question’s from Johan Heylen, who writes, “You’re sitting on a 168 billion of cash, which you told us today is now more than 182 billion dollars.” His questions are, “One, what is Buffett waiting for? And two, why not at least deploy some of it?”

WARREN BUFFETT: Well, I think that’s pretty (laughs) easy to answer.

I don’t think anybody sitting at this table has any idea of how to use it effectively and therefore we don’t use it and we don’t use it now at 5.4 percent, but we wouldn’t use it if it was at 1 percent.

Don’t tell the Federal Reserve that -(laughter) prefer it.

But the we don’t we only swing at pitches we like. And if anybody tried to swing at every pitch or felt that because they hadn’t swung at a pitch for the last two pitches they ought to swing at the third one or something like that, it’s just there are times and obviously but I would say this.

I would not like to be running 10 billion now. Ten million I think we could I think Charlie or I could earn high returns on, because I think there are just a few things that happen on a very, very small scale.

But that if we had 10 billion, we wouldn’t I wouldn’t basically see many more opportunities than we’ve found.

Now, it’s true that something like Japan we could’ve done if the company had had a 30 or 40 billion and we’d make we’d have had great returns on equity.

But if I saw one of those now, I’d do it for Berkshire.

You know, it isn’t like I’ve got a hunger strike or something like that going on. It’s just that they things aren’t attractive. And there is well, there are certain ways that can change, and we’ll see whether they do.

https://buffett.cnbc.com/video/2024/05/06/morning-...

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