A few quick obversions from the $BRKA annual.
1) Total cash declined by $638 million from 9/30, not by $7.4 billion as is widely reported. A $6.8B payable for T-bills purchased at 9/30 means cash was never $145.7B. Y/Y cash increased by $10.3B. 1/
1) Total cash declined by $638 million from 9/30, not by $7.4 billion as is widely reported. A $6.8B payable for T-bills purchased at 9/30 means cash was never $145.7B. Y/Y cash increased by $10.3B. 1/
2) BRK sold a net $2.4B in common stocks during the quarter and $8.6B for the year. $AAPL was an $11B trim. I don’t like the language about Apple as the “third most valuable asset.” I prefer the language about “pocketing $11 billion by selling a small portion of our position.” 2/
At high prices let’s keep the $11B “small” Apple sales coming.
3) Share repos totaled $24.7B for the year, $9B in 4Q. Subsequent purchases through February 16 reduced the share count by an additional 0.8%. A rising price is not slowing the pace of buying. 3/
3) Share repos totaled $24.7B for the year, $9B in 4Q. Subsequent purchases through February 16 reduced the share count by an additional 0.8%. A rising price is not slowing the pace of buying. 3/
Depending on the pace of repos & the share price, ongoing $3B/monthly buys would shrink shares out by >6.5% in 2021. The monthly clip of buys has been steady for 9 ½ months. Worth watching. My hope is the stock stays cheap. Not sure many people get this. Most want stocks up. 4/
4) Headcount down 7%, 28K to 360K,(ex BH Media/Buffalo News). Growth logically in growing subs – Clayton, Forest River, MiTek, GEICO, BH Specialty. Precision cuts–nearly half the net decline. The letter mentioned headcount but not cuts. We’ll see how many jobs actually return. 5/
5) Policies-in-force at GEICO grew 4.6% y/y and by less in 4Q. $PGR is growing nearly 2x as fast. GEICO lost market share to Progressive. Needs fixing.
6)Total debt increased by $9.2B during 4Q. Berkshire continues to lengthen maturities at extremely favorable interest rates. 6/
6)Total debt increased by $9.2B during 4Q. Berkshire continues to lengthen maturities at extremely favorable interest rates. 6/
Overall lots to like on the capital allocation front. If Berkshire’s pivot to meaningful repurchases proves durable, everyone is encouraged to sell their undervalued shares! 7/7 END
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