Thanks edfiggy,

Thanks for taking the time to post some highlights from the AM. Keep 'em coming.


-TF

Maybe it was me, but less meeting seemed to be less informative than usual. The questions were not too good, and were repeated. BUFF and Charlie seemed less animated. BUFF ordinarily has half a dozen ideas that he wants to get across, and he does it whether people ask the right questions or not. He'll have charts and graphs ready to illustrate a point. None of that today.

There were 27,000 people in attendance, and it seemed that a good percentage of them stuck it out till the end, instead of wandering out as the day progresses.

By the time the shareholders' meeting was held, and the Darfur discussion occurred, BUFF was clearly tired, and that wasn't just my subjective assessment (I don't think..)

The last several years, I have paid attention to the cordoned off area where th directors etc., sit because they tend to drift off just like the visitors. When the meeting started there were about 48 people in that area, and several were taking notes, including Ron Olson and Bill Gates, and the new director from Yahoo. And they stuck it through to the end, taking notes. Others slept, or left. At one point there were only about 20 people in the area.

BUFF did tease everyone by saying that BRK now has a direct investment in only one foreign currency.....and he will reveal it next year.


The best board of directors that BUFF ever sat on was Data Documents, the predecessor ot FDR. Everyone was heavily invested and involved in it, and he thought that everything they did was aimed at further the business.

There were no hints of pending or interesting deals. Railroads are attractive because they are relatively free of regulatory control, are less elastic with trucking, and have more pricing power. i guess he agrees with the observation this morning in the Wall Street Journal that they are a royalty on globalization. But they have huge capital requirements and can never be a 'Sees' type investment.

At 2:55, BUFF and Charlie were still pounding down the peanut brittle.

World Book used to sell 300,000 encyclopedias a year, and now they are at 20,000. (I was impressed that BUFF would even bother to look.)

Porcupine,

I agree.
Of the 3 AM's I've been to, this one was the least informative....I think he's holding his cards close these days. The questions were also sub-par.

He did answer 1 question that had been on my mind for a long time. How much can Brk buy without driving up the price........he stated 20% of trading volume.

<< How much can Brk buy without driving up the price........he stated 20% of trading volume. >>
Did you see Buffett on CNBC ? He says average into index funds. He may let 2-3 guys run money for 2-3 years and see how they do,2-3 years that's meaningful in old schools new world ? BTW another stupid thing to say from Buffett 20 % whether the stock is rising or falling ? The guy sometimes has no clue he should stop giving the CNBC-D Cup interviews he just hurts the stock.

1. Promoting the use of index funds is in Buffett's interest and ours. Having everyone not compete for undervalued assets is much better than cut throat competition. It's enlightened self-interest also because people with no business background really will do better that way, except they only get excited in buy in periods like the late 1990s when the train has sailed.

2. "How they do" probably does not relate to returns like at Joe's Financial Sucker Co. My guess is it relates to Buffett's in-depth assessment of what they've done and how they've done it, as much or more than returns.

<< How much can Brk buy without driving up the price........he stated 20% of trading volume. >>
Did you see Buffett on CNBC ? He says average into index funds. He may let 2-3 guys run money for 2-3 years and see how they do,2-3 years that's meaningful in old schools new world ? BTW another stupid thing to say from Buffett 20 % whether the stock is rising or falling ? The guy sometimes has no clue he should stop giving the CNBC-D Cup interviews he just hurts the stock.

<<<Of the 3 AM's I've been to, this one was the least informative....>>>

Yes....but the more I read of the meeting, it seemed like the more he had said. I dunno, I took good notes. They just seemed to be hitting their marks.

One observation about the reporting. Several say BUFF expressed no concern that defaults in the subprime mortgage market would cause a disruption in financial markets. Well, yes, but I heard him say that "as long as unemployment and interest rates remain stable....." Of course, those would be the two things that could make the thing tumultuous. Ah well.

do you have more info on data documents?
that was a new superlative

Olson's just trying to impress Gates and bring in some business. That's his rain dance.

SO basically he said nothing new.

I wish he would explain his positions in World Book encyclopedias and Buffalo News.

Sell em and pay down debt! Buy something that will grow!

I'm really sorry to hear Warren's getting tired of the annual meeting, and I can't believe all those directors pretended to be taking notes for all those hours. They'll do anything to act interested, even while Warren and Charlie are acting board. I'd love to go but I called 9 months in advance and the Hilton was sold out already, and the weather's great. Wish you were here.

Oops, I thought this was this year's meeting. I thought it was 2007 today for quite a while. Hmmm maybe I'm getting younger.

Berkowitz talking about $140K value in Barrons.

BRKA is about 28% undervalued based on current price. I think we drift to $3,725 next week.

Berkshire Q1 Earning Release
In this blog, we have analyzed Berkshire quite a few times, especially as a stock that has been undervalued and as a good buy. Now, that the Berkshire faithful are getting ready to celebrate another annual meeting at the woodstock of capitalism in Omaha, Nebraska, the Q1 results are out. Let us go through some of the numbers.

Berkshire is a conglomerate with many old economy industries varying from candies to carpets and paint. It also does a significant portion of its business in insurance. Berkshire is run by the iconic figures Warren Buffett and his pal Charlie Munger.

Let us briefly look at the earnings in Q1. The total income after taxes in Q1 was 2.595 billion. This compares to earnings of 2.313 billion in 2006. The year over year increase is 12.19%. In the quarter, the cash flows from operating activities was 4.625 billion dollars compared to 2.359 billion dollars in 2006. 5.3 billion dollars worth of equity securities were purchased in the quarter. Despite the heavy buying, total cash on the balance sheet increased by 1.5 billion dollars.

The Equitas deal also closed in the quarter which added 7+ billion dollars of float to the balance sheet. Berkshire provides an additional 5 billion dollars of coverage expected to be paid out in the course of next forty years. The name of the game here is to make money on the float before the time comes to pay out. The pay out period is expected to be upto 40 years. The company also boosted the loss reserves to conservatively account for the deal.

In Q1, the revenues from operating businesses increased by 47% compared to Q1 of 2006. The earnings from operating businesses increased by 25% in one year. The increase in profits by operating subs with old line businesses would put the dot coms and internet companies to shame.

Given the rise in SP500 since April ( after the quarter close ) of about 5%, one can also expect Berkshire's equity position to also have improved in the same period by a similar or higher percentage. The book value for Berkshire is about 110 billion dollars at the end of Q1 and the overall market cap of the company is only 165 billion dollars. While Berkshire's value has increased, its stock price has dropped in the year. One can expect the stock price to rally at some point in the year.

My estimate of Berkshire's intrinsic value is 139,000 dollars/class A share. The stock is selling at a discount of 27% to its intrinsic value and looks like a good buy at current prices.

OK.
With these qualifications: Insurance written will decrease strongly; companies that are homebuilding-related (quite a number of them) are not looking ahead at profits and the stock market is at record highs that may not be sustained. So, looking back at the last Q may be a prettier picture than looking ahead at the next one.

Berkshire halves hurricane exposure
Unwilling to accept under-priced storm risks, Buffett says
By Alistair Barr, MarketWatch
Last Update: 7:56 PM ET May 6, 2007

OMAHA, Neb. (MarketWatch) -- Berkshire Hathaway, one of the world's largest reinsurers, has cut its exposure to hurricane losses by roughly half this year because catastrophe reinsurance prices have fallen, Chairman Warren Buffett said on Sunday.
"We will be less of a player this year," he said during a press conference in Omaha, Neb.
After record losses from Hurricane Katrina and other storms in 2005, catastrophe reinsurance prices surged and Berkshire took advantage by underwriting lots of risks other reinsurers were shying away from. But since then, lots of new capital has come into the catastrophe market, increasing competition and depressing prices.
"We're willing to lose a little more (from big hurricanes) each year," Buffett said on Sunday. "But our unwillingness to take lower prices hasn't changed."

Can stockholders propose an issue to vote on? I vote that Warren take a 10,000 dollar year raise. He is, after all, owed that much for all that he has done for we shareholders.
This is, of course, totally tongue in cheek, as is most of Warren's performances at the rally for the masses.

If you're a foreigner you DON'T need to buy this stock...especially as Buffett is the first one to moan about the direction of the USD which sucks for foreign investors in US stocks. So far this year (and most years since 2000) my currency gains have wiped out any material gains in BRK stock and I'm sure many other countries are suffering the same crap. Pretty soon though the currencies stop rising because the trade deficit gets affected by the currency values and things start to look good again (Our own exports have dropped dramatically and our imports have gone nuts in the last couple of years). Right now our currency's sitting round 20yr highs mostly brought upon by rising commodity prices but commodities have a funny life of their own. As one intelligent poster on another board mentioned. There are two things to remember about commodities.

1) They generally can't rise much more than a reasonable margin above the cost of production

2) The best cure for high commodity prices...is high commodity prices.

With our currency trading a nut levels and our Aussie share market at record p/e levels (which make some of the comparative US stocks look darn right cheap) I'd say it won't be long before there is a change.

As I said before the US trade deficit might be a problem right now but give a couple more years of rising international currencies and it'll sort itself out.

Those annoying refugees and their silly dying children. Don't they know we have important things to do with our money?

I told you... I used to own BRKA. I love the company... I sold my shares this fall @ $4,800... and plan to buy after the correction.

Nice job davidyab.

<< WEB does not expect subprime to be a big problem. Not affecting BRKA. Securitization enhancing the problem per WEB. >>
Did he really say this ? People in danger of losing their home buy new carpet, paint, furniture etc ?