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No. of Recommendations: 38
I took some notes at the meeting but they are by no means complete.
This will be #1

Carol L asked. Do you think Derivitives are appropreate for insurance companies? He said the ones he entered into are O.K because they will never have to post collateral or very little so their will be no impact on financial flexibility. He has received calls from some of the counter parties wanting to shorten the duration and modify the puts. He gave an example of modifing one contract where the term was shortened from 18 years to 10 years and the strike price changed of the s&P from 1514 to 994 for agreeing to modify.

Becky Q asked a question on WFC. Thought the govt made good decisions back in Sept. WFC is a good bank ( he repeated that wfc is a good bank several times throughout the day)

Andy asked Why do you retain a large stake in Moodys. Congress, bankers, everyone made mistakes. We don't tell our investees how to run their business. Rating agencys are still a good business, doesn't require capital and very few doing it and the biz will continue to grow in the future. Bonds will need to be rated

Becky asked why not bring in a CEO now to train with you. He said their would be nothing for them to do sitting next to me. He said the 3 candidates are all internal(BH) currently running major subs and are using their ceo skills now running them and looking for bolt ons.

Andy asked about Ajit. How do you replace him? He talked about how good and smart he was and that he was still very young and that he could not be replaced. (Kind of scarey if something happened to him)

Someone asked about Valuation. He said brk was cheeper at the end of 2008 than 2007 but that was true of alot of stocks. He talked about the two column method to calculate BH value but hinted that underwriting gains understated the value. They are consistantly showing Underwriting gains and he expects them to show underwriting profits in the future unless their is a major cat loss. C.M said that in the future the long term float of BH is a big advantage . C.M also said he wouldn't trade the insurance biz at BH for any other in the world. WEB said that thousands were coming to Geico. They added 505,000 policys in the first 4 months compared to 665,000 all last year. Said they will spend about 800 mil this year on advertizing maybe 1 bil next year. They love spending money. WEB didn't give out a number but said that each new policy holder was very valuble to BH. Said that if they wanted to just maintain the same policy holder level they could probably get by spending about 100 mil on advertizing. C.M said , don't you just love a biz like this.
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No. of Recommendations: 37
Part 2

Becky asked How does BH net worth give you an advantage. He said that WFC had borrowing costs now of 1 1/2% but we have negative. Our advantage is the 58 billion of float.

Someone in the audience asked how Ben Graham would feel about Derivitives. Web said that he would not like them but thought that he would take advantage of clearly mispriced ones.

Andy asked if he thought that he would be dilited in the banks. WEB said that he has no idea but thought that the banks are earning great sums and will build capital rapidly and doesn't see a need to dilute WFC. Said if he could he would like to buy all of WFC and USB. Said when he met with students in early march and they pressed him about WFC that he gave a rare recommendation and said that if he was forced to put all his net worth into one stock if would be WFC.(i don't know if he mean't one stock or bank).

There was a question about BH without him in the future. He said that BH has a very competitive cultural advantage over other companies and that in his opinion will be long lasting. He thought that the cultural advantage they have would be very difficult for any company to even try to duplicate it.

One question from the audience asked him why do you hold forever when things change. WEB said that we don't. We sell things plenty of times. We won't sell any whole purchased subs but we will and have sold stocks of partially owned when we aren't in control. We don't tell investees how to run their companies so when we don't agree or lose faith in management we sell.

Andy asked at what price do you buy newspaper companies. WEB said new paper competitive advantage has been severly changed and doesn't see anything on the horizon to change that. He said he wouldn't buy a pure newspaper company at any price.

Any asked about BYD. Charlie talked the most about this company but was very high on them. Said the CEO started the company with practically no capital and now did 4 bil in biz last year.

Carol asked WEB about losing the AAA rating from Moodys. Said that it won't affect BH because they really don't borrow much except for utilities and not much difference in cost in the one notch downgrade. WEB did actually said that HE WAS Irratated with that downgrade. Charlie said he thought that Moodys would eventually change it back to AAA because they are smart and I'm right. :)

WEB and Charlie also mentioned that when the Corp bond market got way out of wack BH bought and filled up with attractive bond yeilds.

I have been coming to the meetings for about the last 12 years. I thought having the panel ask the questions worked real well. I thought Warren and Charlie looked good and sharp.
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