Possible Berkshire Repurchases, Munger at Redlands

Published on July 15, 2020

Wednesday, July 15, 2020
Volume 1, Issue 30

Buffett’s SEC Filing Implies Repurchases

On July 8, Warren Buffett submitted a regulatory filing to document his annual contributions of Berkshire Hathaway stock to several charitable foundations. The filing included the total number of shares Buffett held as of July 8 along with the percentage of economic interest of Berkshire he controlled as of that date. Sharp-eyed investors and journalists noted that the disclosure implied that Berkshire has been repurchasing shares.

Here’s a summary of the facts in the filing and the inferences that we can make regarding the number of shares outstanding as of July 8:

  • Buffett owned 248,734 A shares and 10,188 B shares as of July 8. 
  • Each B share has 1/1500 of the economic rights of an A share. 
  • Therefore, Buffett owned 248,740.8 Class A equivalents as of July 8. 
  • Buffett’s ownership was 15.54% of the economic interest of the company.
  • This implies 1,600,649 Class A equivalents were outstanding as of July 8.
  • There were 1,620,023 Class A equivalents outstanding as of March 31.
  • 19,374 fewer A equivalents were outstanding on July 8 than on March 31.

This news was somewhat surprising given the very cautious tone expressed by Warren Buffett during the annual meeting on May 2, which I discussed in the May 6 issue of Rational Reflections.

Earlier this week, I posted an article going into more detail regarding the likely repurchase activity and what it might imply regarding Buffett’s outlook for Berkshire and the overall economy:

Read Buffett’s SEC Filing Implies Repurchases on The Rational Walk

Charlie Munger Speaks at Redlands Forum

Jason Zweig’s latest email newsletter included a link to an interview of Charlie Munger that took place at the Redlands Forum on January 29. The interview began with a discussion of local real estate issues but the conversation soon turned to general subjects regarding business and life. 

At around the 51 minute mark, the discussion turned to Berkshire’s investment in Occidental Petroleum and the Permian Basin. It’s particularly interesting to listen to that part of the discussion in light of what subsequently took place when the oil price collapsed just weeks later. Berkshire’s Occidental investment was briefly discussed in the March 11 issue of Rational Reflections.

As an alternative to the YouTube video shown below, readers may be interested in a written transcript synchronized to the video.

Interesting Links

How Did the Atlantic Coast Pipeline Project Collapse? In this NPR Full Disclosure podcast published on July 8, host Roben Farzad interviews two key players who had a role in bringing about the cancellation of the Atlantic Coast Pipeline project. Also see last week’s newsletter for more on pipelines. (NPR)

Matt Ridley: How Innovation Works, Part 1, July 9, 2020. Silicon Valley entrepreneur Naval Ravikant interviews Matt Ridley regarding his recently published book, How Innovation Works. Ridley is the author of many books including The Rational Optimist which I reviewed in 2010. (Naval Podcast)

Anthony Fauci: ‘We are living in the perfect storm’ by Hannah Kuchler, July 10, 2020. Dr. Fauci has been head of the National Institute of Allergy and Infectious Diseases for 36 years and, until recently, was in the President’s inner circle regarding the COVID pandemic. Free to read for non-subscribers. (FT)

Even Without a COVID Vaccine, There’s Reason for Hope by William Haseltine, July 8, 2020. A number of drugs can help us bridge the gap between where we are today to the point where we have a viable vaccine. (CNN)

Tyson Turns to Robot Butchers, Spurred by Coronavirus Outbreaks by Jacob Bunge and Jesse Newman, July 9, 2020. COVID is prompting meat-packing plants to pursue automation. This could be seen as progress but the $16/hour jobs in mostly rural locations might be difficult to replace. (WSJ)

U.S. Town Issues Wooden Currency For Coronavirus Relief by Gregory Scruggs, July 9, 2020. Residents of Tenino, Washington are eligible for up to $300 in wooden banknotes each month to spend at local businesses. (Reuters)

Weaponized Silence: The Worst Form of Quiet by Lawrence Yeo, July 8, 2020. Weaponized silence is deceptive. It often masquerades as a passive retreat from conflict, but in reality, it is a tool of destruction. (More to That)

Every Situation Has Two Handles. Which One Will You Grab? by Ryan Holiday, July 7, 2020. “When I look at the last three months, I don’t grab onto the things that were taken from me. I could grab on to blame or despair. I could grip the anger and frustration and impotence. I could even latch onto some pretty valid excuses to sit around and wait for all the chaos to pass, or I could look at what I’ve been able to accomplish despite a quarantine and the obstacles it has presented.” (RyanHoliday.net)

What Risk Isn’t by Nick Maggiulli, July 14, 2020. The difference between volatility and risk from the standpoint of an investor. (Dollars and Data)

Lebanon: From Ponzi to Antifragility by Nassim Nicholas Taleb, July 10, 2020. Taleb provides his views on recent political events in Lebanon. (Medium)

Morning in a Pine Forest

There are several Twitter accounts that post famous works of art. After following Vincent van Gogh and Pablo Picasso, I stumbled upon Morning in a Pine Forest by Ivan Shishkin, a nineteenth century Russian landscape artist who I was not previously familiar with. His work is stunning.

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Possible Berkshire Repurchases, Munger at Redlands