More On Buffett -- February 28, 2021

Before I get started, and before I forget:

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Updates

Later, 8:39 a.m.: I highly recommend investors sign up forYahoo!Finance Morning Brief. This is today's web version. After reading the two WSJ articles linked below, this article on WB appeared in my "Morning Brief": no such thing as 'too much': Warren Buffett quotes Mae West in defense of stock buybacks. It turns out: that link takes you to six more linked stories. Let's look at just one excerpt regarding buybacks:

According to Buffett’s logic, the buybacks were conducted to “enhance the intrinsic value per share for continuing shareholders and would leave Berkshire with more than ample funds for any opportunities or problems it might encounter.”

He blasted companies who repurchase stock “at simply any price,” calling that strategy “embarrassing” and just the opposite of what Berkshire likes to do.

He cited Apple’s stock — which he first purchased in late 2016 at a cost of $36 billion — as an example where his approach paid literal dividends. By July 2018, Berkshire held over a billion split-adjusted shares of the iPhone maker, or 5.2%, at a cost of $36 billion.

“Since then, we have both enjoyed regular dividends, averaging about $775 million annually, and have also — in 2020 — pocketed an additional $11 billion by selling a small portion of our position,” he wrote.

“Despite that sale — voila! — Berkshire now owns 5.4% of Apple,” Buffett declared. And because Apple continually bought back its own stock, that’s increased the value of Berkshire’s holdings, and helped boost shareholder value.

“Because we also repurchased Berkshire shares during the 21⁄2 years, you now indirectly own a full 10% more of Apple’s assets and future earnings than you did in July 2018,” the investor said.

“The math of repurchases grinds away slowly, but can be powerful over time. The process offers a simple way for investors to own an ever-expanding portion of exceptional businesses,” he added.

Original Post 

More -- but the same -- on Berkshire.

See this note from yesterday.

Now, today, these notes from The WSJ article on Buffett and Berkshire Hathaway today.

Observations:

• Warren Buffett consistently and routinely chastises other companies for stock buybacks. This past year, BRK bought back a record $25 billion in its own shares; he defends. Fell on deaf ears. Mine.
• again, the adulation Buffett gets: this was a very, very long article, but it wasn't until the penultimate paragraph that we read that BRK-A shares appreciated 2.3% in 2020; compare to the S&P 500: 16% in a booming stock market;
•  the fact that BRK-A did so poorly speaks volumes about where investors/traders are putting their money; not in BRK
• one does have to wonder; his fourth-quarter profits rose nearly 23% and his shares languish; without question, these are shares every investor should accumulate for the long haul
• Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.
• He admits he blew it on Precision Parts; he is too hard on himself; I was too hard on Buffett for blowing it on Precision Parts; this was related more to Covid-19 than anything else and completely unpredictable; a "black swan"; I take back my comments regarding Buffett and Precision Parts
• I started out this note with a negative tone; after going through the article, and thinking about it, again, I apologize. I now appreciate Buffett more than ever. Seriously. I'm not being sarcastic.
• Any "fund" that can increase its profits by almost 25% quarter-over-quarter and yet not attract buyers? The losers are the investors who don't accumulate shares in BRK; over time this will take care of itself
• BRK-A's P/E: 16
• most recent price: 368K
• one-year target: 404K
• BRK-B's P/E: --
• most recent price: 240
• one-year target: 260