Invite ye felawes and frendes desirous in gold to enter the gates of Shrewd'm, for they will thanke ye later.
- Manlobbi
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 1
is currently suffering from a lack of demand for the common. By year end I believe that if demand doesn't increase Buffett will declare a .75 cent a quarter dividend perhaps even 1$$.
There is another critical issue to consider that I haven't brought up. I'm going to run it by two old timers who have writing and computer skills that I don't, who no longer post for various reasons. Let's see what they think about this issue which I believe is very material. Off to the pool, later.
No. of Recommendations: 4
By year end I believe that if demand doesn't increase Buffett will declare a .75 cent a quarter dividend perhaps even 1$$.Why? Buffett has never shown interest in supporting the stock price. I don't expect Greg will be any different.
Berkshire Hathaway (BRK.B) PB Ratio:
https://www.financecharts.com/stocks/BRK.B/value/p...Set it to 20 years. Average P/B 1.44
1.44x $303.37 = $437
No. of Recommendations: 13
By year end I believe that if demand doesn't increase Buffett will declare a .75 cent a quarter dividend perhaps even 1$$.
Buffett does not care about increasing demand for Berkshire common. Doing so would be short-term thinking and against much that Buffett has done and taught for decades. Dollars to donuts Abel agrees, which makes me very happy.
No. of Recommendations: 1
" Why? Buffett has never shown interest in supporting the stock price. I don't expect Greg will be any different."
The reason many sharp old timers no longer post is they believe this is like a cult. I'll direct my questions to Jim tho anyone is free to opine.
When Buffett finally authorized the buyback WHY did he include the 1.1xs BV limit knowing the stock would quickly trade above the limit?
Did Buffett think that if he didn't impose a very tight limit he might get wildly irrationally exuberant and grossly overpay for brkb?
OR, did he get tired of watching the foundation's sell his life's work near BV, which he thought was too cheap?
Can you please provide a list of the companies that have initiated a buyback in the past 50 years with a very tight buyback limit?
I'm open minded, convince me that Buffett had a serious interest in buying back brk at that time and seriously thought that brkb would trade size below 1.1 XS Bv.
He raised the buyback limit to 1.2 xs BV, to further goose the stock higher to benefit the foundations which enjoyed higher proceeds from sales as a result. His primary interest was to paint a larger canvass, got to shrink the float.
Thanks to anyone kind enough to respond with a little critical thinking. hc, who hasn't been banned here yet!
No. of Recommendations: 1
No idea when it will happen but it is near certain that a dividend will eventually be announced...more likely that Greg will at that time be the CEO. At the next annual meeting If BRK is still holding $300+ billion in cash one can only imagine the barrage of capital allocation questions that are going to be asked. What will also be interesting is if there will be some accountability as to who is buying what stock and what that person's performance has been. How much $ do we want Ted and Todd to be able to invest?
No. of Recommendations: 1
" What will also be interesting is if there will be some accountability as to who is buying what stock and what that person's performance has been. '
I raised that issue ten years ago, at the very least Buffett should disclose which trades are is. Thank you.
No. of Recommendations: 0
" How much $ do we want Ted and Todd to be able to invest?"
Care to speculate why Buffett refuses to disclose which trades are hiS? Thank you.
No. of Recommendations: 7
I'll direct my questions to Jim tho anyone is free to opine.
When Buffett finally authorized the buyback WHY did he include the 1.1xs BV limit knowing the stock would quickly trade above the limit?
I'm not Jim. But I'll point out that Buffett did not know what the stock price would do in the short term, as he has repeatedly and consistently said over many decades. One might have made an educated guess but one could not know.
Two reasons he may have set the 110% of BV upper limit for repurchases:
1) He wanted any partners who were considering selling their shares to know that he thought they would be selling too cheaply at less than 110% of BV.
2) He wanted any partners uninterested in selling (actually, all partners) to know that he had their backs when making capital allocation decisions that would benefit continuing partners.
No. of Recommendations: 8
I'm open minded, convince me that Buffett had a serious interest in buying back brk at that time and seriously thought that brkb would trade size below 1.1 XS Bv.
He raised the buyback limit to 1.2 xs BV, to further goose the stock higher to benefit the foundations which enjoyed higher proceeds from sales as a result. His primary interest was to paint a larger canvass, got to shrink the float.
Thanks to anyone kind enough to respond with a little critical thinking. hc, who hasn't been banned here yet!
Don't know why you think you might get banned. For being controversial in your opinions on Berkshire?
How about this: I think Berkshire is currently highly priced and I would not buy. Not popular, but I won't get banned.
Before 2018, Buffett was not trying to buy back in quantity or goose the stock price.
IIRC, the raise to 1.2x in December 2012 was to buy from the estate of a deceased long-time shareholder. Berkshire ended 2012 at P/B of 1.17
No. of Recommendations: 1
" Don't know why you think you might get banned. For being controversial in your opinions on Berkshire?
How about this: I think Berkshire is currently highly priced and I would not buy. Not popular, but I won't get banned."
Good morning, were you not on the old Fools board?
No. of Recommendations: 2
Good morning, were you not on the old Fools board?
I was.
No. of Recommendations: 1
“ I was “ Well didn’t I disappear? I’ll stipulate right now that unless our host asks me to stop posting, I will be here. I don’t run and hide from my calls. Did you think my calls and questions were outrageous and out of line back then? Thank you.
No. of Recommendations: 3
<<<<Two reasons he may have set the 110% of BV upper limit for repurchases:
1) He wanted any partners who were considering selling their shares to know that he thought they would be selling too cheaply at less than 110% of BV.
2) He wanted any partners uninterested in selling (actually, all partners) to know that he had their backs when making capital allocation decisions that would benefit continuing partners.>>>>>
Add to the list,
3) He laid out the discipline / framework for stock buybacks for the long term. 1.1x or 1.2x or 1.Xx are less relevant than the fact that the a~la~carte menu options for capital allocation in the coming decades MUST include buybacks. As much as he despises the white flag of capital allocation it represents. Between 2020 and 30, more capital would have to be allocated than during 1965-2020. Making it easier, if that is even possible, for Abel. Buybacks represents a mistake avoidance tool, sadly. Poor fella.
4) At that time, it made sense to buyback at 1.Xx as the bias was to go the captive capital / whole ownership way - think BHE, PCP et al. As stated in several letters, Buffett pointed out the coming gradual(very slow) widening between IV and BV due to accounting treatment. But the jury is out on that approach; things have changed. In a bad way for Omaha. Most notably the setbacks to BHE’s pipeline muddied by fires and kill-the-company regulatory environment. And the deal pipeline drying out thanks to those pesky PE’s.
5) Buffett’s die-with-zero plan meant that the 31% stake he held would, in due course, end up in the hands of strangers. This ownership dilution baggage opens up shareholder activism. Retiring shares is a partial countermeasure.
6) Munger and the board forced Buffett’s hand in announcing the buyback as a very large, one-time load-the-truck-opportunity in preparation of the sad day to come.
No. of Recommendations: 1
“ 1) He wanted any partners who were considering selling their shares to know that he thought they would be selling too cheaply at less than 110% of BV.“ Wouldn’t it be nice to ask Buffett , what did you and munger estimate IV to be at the time you stipulated a 1.1xs BV limit? Thank you.
No. of Recommendations: 4
Wouldn’t it be nice to ask Buffett , what did you and munger estimate IV to be at the time you stipulated a 1.1xs BV limit?
You may know this, but they never stated their IV estimates when asked. But if you'd asked them your question, they may have let slip the following answer: "More."
