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The Rational Walk Profile picture
@rationalwalk
Apr 12 • 4 tweets • 1 min read Twitter logo Read on Twitter
Buffett’s comments about the FDIC are interesting because he’s apparently endorsing unlimited deposit insurance. @BeckyQuick — can you ask him if he supports *officially* lifting the $250K deposit insurance limit explicitly because that isn’t entirely clear.
Buffett wants to deal with moral hazard in banking by really punishing the executives. I don’t think this is realistic. The execs and directors of SVB and Signature will do fine and so will execs and directors of future bank failures.
No ceo is going to end up with a lifestyle similar to an assembly line worker at ford. We might want that to be the case but it ain’t happening in the world we live in.
At a minimum, Director and Officer insurance would need to be abolished in the banking system. #skininthegame

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More from @rationalwalk

The Rational Walk Profile picture
Apr 14
The $BRKB : $BRKA ratio hit 1555 earlier this morning which is very high (B discount of ~3.7%). I think it will drift back close to 1500-1510, so did the trade. Buffett has said the Bs are better buy when discount is more than 1%.
Buffett on A & B classes:
berkshirehathaway.com/brkshareholder…
I've done this before at a BRKB : A ratio of 1525 to 1530. What we have now is extremely high. It is almost certainly not Buffett repurchasing As -- he would favor the Bs at the current discount, if he's buying at all.
Not investment advice, as always!
Read 4 tweets
The Rational Walk Profile picture
Apr 13
$COST membership pays off yet again. Paid $54.99 for this protein powder today at Costco vs. $71.24 at Amazon. Image
I made back my membership fee on the first visit back in October. Since then, I've upgraded to executive membership due to a large purchase and no doubt saved multiples of the $60 base membership fee even though I am not a very big shopper.

rationalwalk.com/observations-o…
As for the protein powder itself ... well, it is about what I would expect but about the only way I can get the level of daily protein that Peter Attia recommends in "Outlive".
Read 4 tweets
The Rational Walk Profile picture
Apr 13
The $BRKB to $BRKA ratio is now ~1543. You could sell a $BRKA, buy 1500 $BRKB and have ~$13.5K in cash.

In practice, this is difficult to do outside of an IRA. I did this some time ago at a slightly less favorable ratio b/c I wanted to do a Roth conversion, but not for a full A.
For those of us with $BRKA in taxable accounts who may want or need to sell at some point, the choice is between liquidating an entire A and paying a big tax bill or converting to 1500 B, well below the market ratio, sucking up that loss and paying less in taxes.
One of several reasons in addition to preserving voting control in the hands of longtime individual shareholders that Berkshire should consider a split of the As so they trade around $10-15K per share. Even $50K (a 10:1 split) would be a big improvement.

rationalwalk.com/the-case-for-s…
Read 5 tweets
The Rational Walk Profile picture
Apr 13
Sometimes rigid rules are the best way to succeed because they remove decision points that, when combined, can become overwhelming.

You lose some flexibility but gain the ability to focus on a smaller subset of decisions that can actually move the needle.
Here is a health related example:

After a recent physical, I resolved to not eat desserts.

Now I identify myself as a person who does not eat desserts. This eliminates the "should I or shouldn't I" decision that used to occur literally hundreds of times per year.
This is the same as identifying myself as a non-smoker. I have not made a *decision* about whether to smoke a cigarette in nearly thirty years. The "occasional" smoker has to make the damn decision a dozen times a day. And most will fail to self regulate sufficiently.
Read 5 tweets
The Rational Walk Profile picture
Apr 12
The Berkshire Class A:Class B ratio is now ~1538 meaning that you can sell one $BRKA, buy 1500 $BRKB and pocket about $12K. This is unusually high. What you give up is voting control, something that individual shareholders don't think much about.
My longstanding concern is that institutions are likely to become the predominant owners of $BRKA shares in the long run. Buffett has instructed executors of his estate to convert to $BRKB prior to distributing shares to charity over about a decade.
Once that process plays out, $BRKA is likely to be highly concentrated in the hands of institutions, many of which are likely to force "ESG" and ruinous cultural changes on the company. One way to avoid this is to split the As, something I now support.

rationalwalk.com/the-case-for-s…
Read 8 tweets
The Rational Walk Profile picture
Apr 12
Buffett's comments on Taiwan Semiconductor and China reveal deep concern, in my opinion. He deflected a question on concern over Apple, commenting on the overall moat and Tim Cook's management skills. $AAPL $BRKA $BRKB
The China situation is not going away and, in my opinion, is set to worsen in a big way over Taiwan.

rationalwalk.com/the-china-ques…
His comments on BYD are also quite clear - he has been selling due to a high valuation, but reading between the lines, I also think political risks might be a factor.

The U.S./China relationship is not good and likely to get worse, much worse, in my opinion.
Read 6 tweets

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