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One thing most people do not realize is that Buffett is probably creating a contingency in an event he is no longer around. After Munger’s death and Buffett no

One thing most people do not realize is that Buffett is probably creating a contingency in an event he is no longer around. After Munger’s death and Buffett no longer around, I’d assume a lot of investors would want to pull out at least some of their money. Buffett is probably looking out for BH.

ProjectArcturis 2y ago
If you sell BRK shares, the money comes from the buyer, not BRK itself. It's a corporation, not a mutual fund.
- rafram 2y ago
  They do buybacks pretty regularly, but obviously that’s true in aggregate.
- jjallen 2y ago
  To play devils advocate: if the stock dramatically declines then the next people at the helm could buy back tons of the stock the more cash they have. And to play devils advocate to that: Berkshire probably almost generates cash as fast as they would ever buy back stock.
- darth_avocado 2y ago
  I never said it was a mutual fund. But investors may still pull out money by selling stock. One area where typically this would come into play would be M&A (mostly A for BH). Unless you’re doing an all cash offer, there is an equity component to acquisitions. Lower BRK price would require you to offer up more equity, which is where cash is helpful. Your major investors are protected and you don’t lose out on opportunities. Another place where normal corporations would be affected by stock price is when they want more liquidity for operations via debt. This doesn’t apply to BRK because they already have a massive stockpile of cash. But stock price is not that isolated from company operations if a lot of investors start pulling out money (by selling stock).
jterrys 2y ago
There's been some speculation about recent BH moves into small positions that Munger/Buffet don't traditionally meddle in. So it's kind of assumed that younger guys are taking more of the helm. The problem is their choices haven't been stellar. It's worth noting that Munger's kids are more well off in terms of personal development and career growth compared to Buffet. All of Buffet's kids are basically philanthropists. Why bring this up? Because it brings up some doubts about successorship

ProjectArcturis 2y ago

If you sell BRK shares, the money comes from the buyer, not BRK itself. It's a corporation, not a mutual fund.

rafram 2y ago
They do buybacks pretty regularly, but obviously that’s true in aggregate.
jjallen 2y ago
To play devils advocate: if the stock dramatically declines then the next people at the helm could buy back tons of the stock the more cash they have. And to play devils advocate to that: Berkshire probably almost generates cash as fast as they would ever buy back stock.
darth_avocado 2y ago
I never said it was a mutual fund. But investors may still pull out money by selling stock. One area where typically this would come into play would be M&A (mostly A for BH). Unless you’re doing an all cash offer, there is an equity component to acquisitions. Lower BRK price would require you to offer up more equity, which is where cash is helpful. Your major investors are protected and you don’t lose out on opportunities. Another place where normal corporations would be affected by stock price is when they want more liquidity for operations via debt. This doesn’t apply to BRK because they already have a massive stockpile of cash. But stock price is not that isolated from company operations if a lot of investors start pulling out money (by selling stock).

jterrys 2y ago

There's been some speculation about recent BH moves into small positions that Munger/Buffet don't traditionally meddle in. So it's kind of assumed that younger guys are taking more of the helm. The problem is their choices haven't been stellar. It's worth noting that Munger's kids are more well off in terms of personal development and career growth compared to Buffet. All of Buffet's kids are basically philanthropists. Why bring this up? Because it brings up some doubts about successorship