u/lavender812 — reddlx

Greg Abel calls CNBC, goes on national Television and essentially says two things; it's important to return money to shareholders, and it's important to let our shareholders know buybacks have resumed. You can watch this video here: https://www.youtube.com/watch?v=CMcgQ4mbc40

Regardless of what you think, the market interpreted this is a strong buy move with the stock price moving up 2% intraday. These prices were executed at an average of $487 in mid March. Given that Abel said himself in the interview above that buybacks will be executed when intrinsic is below market; $487 is a solid floor to where BRK.B sees value in buybacks.

At the AGM, we learned Abel did no buybacks other than the ONE day he was on CNBC. The maximum Berkshire can generally buy is 10% of market cap. The $225M purchased on announcement day was ~10% of float. Essentially they came out guns blazing for 8 hours then stopped entirely, even when the price dipped materially lower; $466ish etc.
New information; eg. the Iran war development can change outlooks, however, it is highly short sighted of a "patient and disciplined" management team to do a complete U-turn on a major policy (10% of float is ~$50B/yr) within 24 hours - especially after being confident enough to announce it on national TV.
Despite this being high confusing, Abel made zero mention or explanation of it at the AGM. A simple one line explanation could have easily covered it. Obviously there was a massive shift in sentiment internally at some point in March.
What's even more surprising is after their core holdings increased in value again (early April), and BRK.B remained suppressed, there were still no buybacks.

TLDR: Do buybacks or wait for an Elephant, I don't care, but as a shareholder, don't go on national TV and tell me you've restarted buybacks when you have no intention to continue them beyond 8 hours, despite better pricing from when you were happy to engage in aggressive buybacks.

I fail to see how above was executed/explained/navigated is anything short of completely confusing and unprofessional. Curious to hear Greg Abel worshippers explain and spin this positively. What am I missing.

Greg Abel: was a bit shaky, fumbling around with words at times, not super well spoken. With no clearly communicated plan, I hope he is still as mentally sharp as when he built BHE. This is definitely a "show me" situation. Abel basically answered no real questions about cash, buybacks, etc. other than repeating the same "we won't rush into anything". I'm not losing sleep over it with him at the helm, but I'm definitely not sleeping as soundly as when Buffet was there right now - not even close.

Katie: Super well spoken, charismatic - very impressed, however, with BNSF consistently ranking 5/6 (in their own slide) on efficiency, there is no doubt BNSF has lagged peers in performance. OR is not the only way to measure performance, but it's big. They appear to be addressing OR now. Maybe previously she simply prioritized growth over OR. Regardless, I was pretty impressed with Katie.

Adam: Well spoken, charismatic, definitely did well with net jets (still remains CEO). Bit of a headscratcher how he's still CEO of net jets and the RMS division - Sounds like he should just do the RMS full time. No real concerns with him, think he'll do great.

Buybacks: What the hell was this? Why did Abel call up CNBC, go on TV, and specifically announce they did ~$225M buybacks only to stop immediately afterwards? I get that things can change, but even if the Iran oil crisis gave them new info, doing a complete U-Turn in 24 hours is incredibly short sighted. Honestly, how this was pitched, especially with the road show to announce it is a major red flag for me for Abel - especially since he made no effort to address it at the AGM. If anything he made it more confusing; mentioning the same old we buy when below intrinsic conservatively determined etc. - so why nothing when it was 465 if 486 was OK? Massive question marks on this whole thing - Why?

Buffet: The GOAT investor. Amazing insight, and one of the best teachers of all time. In his one off interview it's pretty clear his mental capacity is declining. The abrupt CEO transition makes sense last year. Relative to other 96 year olds, Warren is sharp as a tack, but in the investing game, it's not only 96 year olds. He will be missed.

Ajit: Like many of you, we noticed there is a clear neurological issue going on. I wish him the best. Regardless, mentally Ajit is 100% still there - he effortlessly explained the TOKIO deal. I hope he can hang around as long as he is able to as his leadership in insurance (especially during the current soft market) will be critical for the lower management teams. As mentioned the board as discussed contingency plans, but I hope they give the new team as much time with Ajit as possible to learn. Ajit is incredible.