Halls of Shrewd'm / US Policy❤
No. of Recommendations: 3
Warren deployed more than 50 billion during 2020 and 2021 repurchasing berkshire stock, by my eye those purchases have outperformed the SPX quite handily.
No. of Recommendations: 14
The buybacks do stack up over time.
Since the buybacks really started mid 2018 they've bought back 208781 A share equivalents at a weighted average price of $371207. But because of inflation that's not a very meaningful number.
The weighted average price paid has been $428,502 in today's money (using CPI 313.049), and today's price is certainly much higher than that. Viewed as a trade, the mark to market profit to date is (after inflation, but ignoring tax) $52.58 billion.
I suppose one could try to look for a more depressing way to look at it.
Ummmm....
During the BNSF purchase, Berkshire issued 94,915 A-share equivalents. All the buybacks from August 2018 up to some time in December 2020 were "undoing" that issuance, at an average price paid of $303956, total $28.85 bn.
The stock price was $111,500 at the time of the BNSF deal closing, so the market value of those shares at the time was $10.58 bn, the headline number for that portion of the purchase.*
So, our depressing view: the BNSF purchase ultimately cost $18.27bn more than it "appeared" to cost at the time. To someone trying to diss Berkshire, for two and a half years all the buybacks were just the horrendous cost of undoing the excessive share issuance done early.
Lots of things wrong with that logic, of course...Berkshire had the use of the $28bn for quite a while, and there is no inflation adjustment, and everybody knew the shares were undervalued at the time of the BNSF purchase but that was the cost of getting the deal done. Personally I estimated that at the time they were worth $2.9bn (28%) more than the market price on closing day.
Jim
* in case anybody is interested, the three parts of the BNSF purchase price were, in billions:
10.579 Then-current market value of shares issued
6.586 Cost of original shares, 76,777,029@85.78 see 2009 AR
15.870 Cash cost of remaining shares
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33.035 Total unleveraged cost, with issued shares at market value
-8 financing
25.035 Total leveraged/out-of-pocket cost, with issued shares at market value
I haven't checked lately, but I believe the dividends to date from BNSF exceed both of those purchase cost totals?
No. of Recommendations: 2
"* in case anybody is interested, the three parts of the BNSF purchase price were, in billions:
10.579 Then-current market value of shares issued
6.586 Cost of original shares, 76,777,029@85.78 see 2009 AR
15.870 Cash cost of remaining shares'
good morning, I'm sure that you recall back then a certain American fool was pounding the table to authorize a buyback at material discounts to IV and to at least buyback the shares issued in this transaction. Did any of the experts agree with me? Thank you, your American pal, HC. Pickleball time, have a grand day.
No. of Recommendations: 5
These are my actual purchases, the 'SPX Ann' column is how the SPX Total return index has done, so including dividends. The far right column is showing Berkshire relative performance versus the total return index, a negative number shows market has beaten Berkshire. My point in showing this, is that I based a lot of my buying in the last bunch of years to basically buy at or around and even below some of the repurchase prices. This clearly shows, to me anyway, that Warren deployed a ton of cash at what you may consider to be market beating performance.
Purchase Date Brk Ann SPX Ann
12/31/2012 15.07% 14.64% 0.43%
4/5/2013 13.81% 14.08% -0.27%
9/9/2013 13.57% 13.81% -0.25%
12/30/2013 13.46% 13.14% 0.32%
2/7/2014 14.19% 13.52% 0.66%
3/3/2014 13.84% 13.30% 0.54%
2/11/2016 16.35% 16.15% 0.20%
12/18/2020 21.37% 13.74% 7.63%
12/18/2020 21.37% 13.74% 7.63%
12/21/2020 21.28% 13.89% 7.38%
3/2/2021 18.56% 12.86% 5.70%
11/26/2021 19.11% 9.42% 9.69%
11/26/2021 18.83% 9.42% 9.41%
11/30/2021 19.82% 9.70% 10.12%
11/30/2021 19.44% 9.70% 9.75%
6/16/2022 26.71% 23.59% 3.12%
6/22/2022 27.32% 22.35% 4.97%
9/7/2022 28.49% 21.26% 7.23%
9/23/2022 32.00% 26.57% 5.43%
10/11/2022 32.89% 29.27% 3.62%
2/13/2023 27.50% 24.29% 3.21%
2/13/2023 27.53% 24.29% 3.24%
2/16/2023 28.77% 25.35% 3.42%
2/24/2023 30.29% 28.18% 2.11%
3/3/2023 29.41% 27.70% 1.71%
3/10/2023 31.78% 31.49% 0.29%
3/15/2023 33.81% 31.09% 2.72%
No. of Recommendations: 2
good morning, I'm sure that you recall back then a certain American fool was pounding the table to authorize a buyback at material discounts to IV and to at least buyback the shares issued in this transaction. Did any of the experts agree with me? Thank you, your American pal, HC. Pickleball time, have a grand day.
There is only one expert whose opinion matters...
