Starting Tomorrow, There Should Be A Gazillion Articles With Regard To BRK's Annual Report -- May 5, 2024

Locator: 47065PARAMOUNT.

Additional posts since original post.

May 6, 2024: Buffett has made a lot of huge mistakes, most of which Becky Quick and almost everyone else ignores. I no longer care but it's quite obvious. One of the most recent example? TSM. Here's one link; many more links available if one cares to look. Another one: selling 13% of his AAPL holdings in 1Q24. There were other ways to accomplish his goal without selling AAPL. A third huge mistake for which took full blame: Paramount. Behind the scenes not getting much attention: Geico is struggling. Progressive is eating Geico's lunch. BNSF is performing much worse than UNP and facing some bad news out of California. He plans for utilities and forest fires is a mess. But at least he's keeping KO, a non-growth company, and AMEX.

Original Post

I'll start with this. Somewhat related to the Paramount story ... but very slightly related ..,

With regard to streaming and sports, my pet peeve is when a golf tournament televised by several different outlets sequentially, when coverage on one outlet ends but the sports event continues, the "parent" unit does not automatically move the viewer to the new outlet.

Most common example: PGA golf tournaments on the week begin coverage with Golf Channel, then move to ESPN and then finally to the major network, such as NBC. When the coverage ends over at Golf Channel, I'm not brought over to ESPN automatically. I have to spend the next few minutes trying to find where the tournament is being covered. And then it happens again when prime time coverage begins.

During the process of switching, I note that the NASCAR race has begun and instead of continuing with the golf tournament, I move over to the NASCAR race.

AI should fix that. I'm hoping that soon than later, AI knows more me than I know about myself and automatically find the "network" I want to watch, and then schedules my next day's activities. 

For example, AI should know that my car inspection is due; AI should put that on my calendar and should call Firestone to make the appointment, and simply notify me when that is done. AI should also know my state property taxes are due this month, and should automatically pay the bill. 

There's so much AI has yet to learn.

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Piling On

Remember this post? Link here. At that post:

The link took you to this article.

Also, this post, exactly one year ago: 

So, was it his underlings, or Buffett himself?

 

Buffett's first rule of investing: don't lose money.

It was about that time I did a deep dive on streaming -- since I knew nothing about it -- and never saw the value of Paramount. 

The biggest problem? Buffett talks a lot about the important of "moats." Paramount absolutely had no moats. I can't think of any sector that has more competition for eyeballs.

For me, when considering an investment, there are so many opportunities. When I find something interesting, I draw up a list of at least ten alternatives, and then run through them as if it were the March Madness NCAA basketball brackets. The last decision is a binary decision, and if, in this case, Paramount made it to the finals, it would have been up again something like Netflix or Hulu-Disney or even Warner Bros Discovery (HBO). 

When one comes up with that binary decision, it's interesting to examine. 

Some time ago I said there were only three things customers use to decide which streaming services to subscribe to: ease of use, content, and cost.

East of use: no longer an issue. 

Cost: no moat.

Content:

Google: what does Paramount offer for content?

Now google: what does Hulu offer for content?

And that would have been a binary decision.

In addition, there was already a company with MOJO backing / owning HULU: Disney. Iger and Buffett would have made quite the duo.

I assume it was the a) dividend; and, b) takeover possibilities. But when I look at Buffett's equity portfolio and his annual letters, I get no indication that Buffett buys things with hopes of another investor coming in later to buy something Buffett has bought. I can't think of even one case.

So, for Paramount, it was growth and the dividend.