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Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 213624  
Subject: Volume Date: 12/13/2012 2:01 PM
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I was just checking the volume from yesterday for the A's and B's.
Obviously a lot of people traded on the news, but one can not help but wonder if Berkshire was itself a buyer.
The stock price was below the new buyback threshold at a few times during the day.

Ignoring the background rate of trading, the dollar value of the amount
by which yesterday's volume exceeded its three month average was $952m.
Wouldn't it be nice if, say, 2/3 of that were buybacks?
Not likely, but hey, a guy can dream.

The price has been below the threshold much more of the day today.
But the volume looks like it will be only $50-100m above average.

Jim
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Author: eurotrash01 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 196909 of 213624
Subject: Re: Volume Date: 12/13/2012 2:45 PM
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I'd guess WEB would wait a day to begin buying shares to allow the news to circulate. Old School. Probably more hedge fund buys yesterday gaming the floor than purchases by BRK itself...unfortunately.

Shrink That Canvas'ly Yours,


eurorubic

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Author: LONGREITS Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 196911 of 213624
Subject: Re: Volume Date: 12/13/2012 3:10 PM
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What percent of daily volume can we take down without affecting the mkt price - 25 percent?

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Author: VUCommodore Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 196913 of 213624
Subject: Re: Volume Date: 12/13/2012 3:23 PM
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"What percent of daily volume can we take down without affecting the mkt price - 25 percent? "

Well, strictly speaking, the answer is zero.

Snarky answer aside, you really can't pinpoint an amount. Even tiny purchases have tiny effects on the market price. The size of the impact is proportional to the size of the purchase. Certainly if you took down 20% of the volume you would have some impact, and taking down 25% of the volume would have a little bigger impact.

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Author: DrtThrwingMonkey Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 196914 of 213624
Subject: Re: Volume Date: 12/13/2012 3:24 PM
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I'd guess WEB would wait a day to begin buying shares to allow the news to circulate. Old School.


You'd think so, but then again, remember back to last September.

September 26, 2011
Berkshire Hathaway Authorizes Repurchase Program
Omaha, NE (NYSE: BRK.A; BRK.B)—Our Board of Directors has authorized Berkshire
Hathaway to repurchase Class A and Class B shares of Berkshire at prices no higher than...


Then from the Q3 10Q:

The following table presents information with respect to Berkshire’s repurchases of Class A and Class B common stock from September 26, 2011 through September 30, 2011...

They bought back about 250,000 B equivalents in those 5 days, at an average B price of $71.45, i.e. aboout $20 million worth, with another $50 million in the first days of October, and then the canvas snipping stopped abruptly, with share prices above the magic 110% BV level. I can't be bothered to root around, but I think I remember Buffett on TV on the morning of the repurchase announcement, and he mentioned (if memory serves) that he'd bought some already.

Plus, although I am generally happy about the new, relaxed repurchase rule, I think some of the critics are right to quibble about how it was carried out. Once you realize your criterion makes no sense, it seems to me you should say that you will adjust it (or better still, abandon it, and just announce you will repurchase when this provides net benefit to shareholders), and to be really Old School about it, signal this change a few weeks or months in advance, so that smaller outgoing investors who are not chummy with the boss get the same good price.

Sometimes I think we read too much into these decisions and their announcements, when the simple answer is just that it seemed like a good idea, so they did it, without beating around the bush. Maybe this was another bathtub idea, but it seems that if there were no urgent tax considerations for Mr Ueltschi's estate (and it seems there weren't), maybe it could have been done with a little less haste.

Regards, DTM

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Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 196919 of 213624
Subject: Re: Volume Date: 12/13/2012 4:27 PM
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...but I think I remember Buffett on TV on the morning of the
repurchase announcement, and he mentioned (if memory serves) that he'd bought some already.


IIRC that interview was a day or two later—he said it took a while to get the paperwork in place.
When asked when they'd start buying, he said they had already.

Jim

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Author: spirach2 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 196933 of 213624
Subject: Re: Volume Date: 12/14/2012 12:57 AM
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I'd be happy if BRK turns out to be buying BRK, but shouldn't we ask the same question about those purchases that you ask about Tilson's?

Isn't it a little goofy to be applauding open-market purchases at 1.19 BV, when we could've been buying for much of the last year at 1.13 or so??

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Author: spirach2 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 196934 of 213624
Subject: Re: Volume Date: 12/14/2012 1:44 AM
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On further consideration, I guess it's fairly complicated.

To buy it at 1.13, he would've had to change the buyback limit, and would've had to publicly disclose that beforehand,... which probably would've goosed the stock price rather quickly.

It might, however, be another indication that perhaps the buyback proposition wasn't really formulated in an optimal way in the first place.

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Author: commoncents33 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 196935 of 213624
Subject: Re: Volume Date: 12/14/2012 3:31 AM
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To buy it at 1.13, he would've had to change the buyback limit, and would've had to publicly disclose that beforehand,... which probably would've goosed the stock price rather quickly.





I understand why Buffett feels the moral obligation to inform his "partners" before the buybacks (though I completely disagree...it punishes the remaining in favor of the exiting).

But I don't see why Berkshire has a legal obligation to inform the shareholders about any buy back levels. I've never heard any other corporation do that. They simply announce that their board has approved $X for share buybacks, then they buy it whenever they want and at whatever price they want. Why is this different?

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Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 196936 of 213624
Subject: Re: Volume Date: 12/14/2012 4:42 AM
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Why is this different?

One might speculate that the goal isn't really to do all that many buybacks,
since they are unlikely ever to be able to do a meaningful number.
Rather, it does have the effect of herding the stock price a wee bit
closer to fair value. As Mr Buffett has long suggested, the most
appropriate stock price is the one that's closest to fair value, allowing
all shareholders a chance of getting returns that match the performance
of the underlying business during the period of their ownership.
Things were just plain getting out of hand in terms of undervaluation.

Jim

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Author: DrtThrwingMonkey Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 196942 of 213624
Subject: Re: Volume Date: 12/14/2012 8:59 AM
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IIRC that interview was a day or two later—he said it took a while to get the paperwork in place.
When asked when they'd start buying, he said they had already.



Your memory is better than mine:

The big question when Warren Buffett’s Berkshire Hathaway announced a nearly unprecedented stock buyback on Monday: Would the company actually follow through with it?

Today [Friday, Sept 30] on CNBC, Buffett said Berkshire already has started buying back stock.


Anyways, this time, the paperwork didn't take as long: the buyback was SIMULTANEOUS with the authorization!

Regards, DTM

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Author: DrtThrwingMonkey Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 196943 of 213624
Subject: Re: Volume Date: 12/14/2012 9:05 AM
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Here's a journalist not taking any chances:

According to a press release announcing the repurchase, Berkshire is buying shares back at $131,000.00, or roughly $1.2 billion.

But the 120 percent of book value figure appears to be an increase from levels previously stated in Berkshire's 2011 annual letter for a buyback bogey.

In February, Buffett said he will consider buying back Berkshire shares so long as the company's stock trades at less than 110 percent of its book value. Tuesday's repurchase indicate an increase in Berkshire's rules and might reflect the notion that valuation multiples the legendary value investor uses are on the rise.

http://www.cnbc.com/id/100306555

Yes, 120 certainly does appear to be higher than 110.

Regards, dTM

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