| Author | Source |
|---|---|
| u/SoulSolus |
This is it. Game ends. I win.
Let me preface: I have been trying to crack this code for 3 days now. And after the Bill Gates divorce, I got on the right track all because of his relationship with Buffet. But it was always just out of reach of the right ideas. Without further ado. Thank you to all the apes who kept asking questions, kept making me question it in the comments. This is how great ideas are made by design.
The Achilles heel of Berkshire Hathaway: JP Morgan & Chase. & Berkshire Assurance (A government bond insurance company/their insurance float and basically insurance altogether. If this were to fail, Berkshire fails. (Tl;DR btw)
A small list:
Berkshire Hathaway GUARD Insurance Companies.
Berkshire Hathaway Specialty Insurance.
Applied Underwriters.
Gateway Underwriters Agency.
GEICO.
General RE.
MedPro Group.
National Indemnity Company
Here’s how I reached this conclusion, it was handed to us on a silver… no, a GOLDEN platter. I am going to try to do this, quick & dirty, nice and concise.
This is the third time I will be posting this. But this time I am 98% confident I have almost every piece to this puzzle and can at least make out a pretty clear picture. But anyone who thinks they have even the slightest grain to offer, I will take it, it doesn’t matter how many times I have to rehash this to get it PERFECT.
Again I’ll reiterate this same little Motley Fool article that piqued my interest in how Berkshire works.
“Then there’s perhaps the most overlooked (but most important) nuance of the Berkshire Hathaway portfolio – it’s not all stocks. The fund only owns about a quarter of a trillion dollars’ worth of the same equities any other investor can own. But it’s got around twice that amount’s worth of privately owned, cash-generating companies like See’s Candies, Duracell batteries, GEICO auto insurance, Pampered Chef kitchenware, Acme bricks, and more. These are makers of consumer goods that people tend to buy over and over again.
This is the sort of flexible, cash-driving portfolio that allows any manager to prioritize bigger-picture value creation. Not only does Berkshire not have to worry about stock price volatility for those organizations, it can buy, sell, and manage companies as needed so retirees don’t have to worry about doing the same.” -The Motley Fool
(I keep my friends close but my enemies closer)
And this is amazingly reflected in this chart. Not only that, here is from my other post some of the conclusions I drew.
So Why?
Well… Let me let Buffet himself explain EXACTLY in detail how he makes his money. By the way this guy may be the greatest holder of unrealized gains as he holds an iron fist of his own shares.
Here’s Buffett on the float:
“Insurers receive premiums upfront and pay claims later. … This collect-now, pay-later model leaves us holding large sums – money we call “float” – that will eventually go to others. Meanwhile, we get to invest this float for Berkshire’s benefit. …
If premiums exceed the total of expenses and eventual losses, we register an underwriting profit that adds to the investment income produced from the float. This combination allows us to enjoy the use of free money – and, better yet, get paid for holding it. Alas, the hope of this happy result attracts intense competition, so vigorous in most years as to cause the P/C industry as a whole to operate at a significant underwriting loss. This loss, in effect, is what the industry pays to hold its float. Usually this cost is fairly low, but in some catastrophe-ridden years the cost from underwriting losses more than eats up the income derived from use of float. …
Our float has grown from $16 million in 1967, when we entered the business, to $62 billion at the end of 2009. Moreover, we have now operated at an underwriting profit for seven consecutive years. I believe it likely that we will continue to underwrite profitably in most – though certainly not all – future years. If we do so, our float will be cost-free, much as if someone deposited $62 billion with us that we could invest for our own benefit without the payment of interest.
Let me emphasize again that cost-free float is not a result to be expected for the P/C industry as a whole: In most years, premiums have been inadequate to cover claims plus expenses. Consequently, the industry’s overall return on tangible equity has for many decades fallen far short of that achieved by the S&P 500. Outstanding economics exist at Berkshire only because we have some outstanding managers running some unusual businesses.”
Source:Â https://www.npr.org/sections/money/2010/03/warren_buffett_explains_the_ge.html
This is a letter to his shareholders (as per Bury’s book recommendations above)
Yeah those are some unusual businesses alright. Like Citadel who we’ve read enough DD about to know that they short things into the ground and never even pay tax on the earnings and then hold big positions, like this
https://fintel.io/so/us/brk.b/citadel-investment-advisory-inc
So what was the whole thing that really set me off though?
Just a happy little accident that I didn’t even notice I made myself.
You’re going to laugh when you read what I wrote (#boycottcoke as per Burry again):
“Let’s look at Coca Cola,
As of most recently, Coca Cola is Berkshire’s 3rd highest holdings composing roughly 8% of it’s portfolio. For such a prolific company I find it interesting that just as of most recently, from April 28th-May 5th they have issued Debt Tender Offers.
Better yet,
“The Offers will expire at 5:00 p.m. (New York City time) on May 5, 2021 with respect to any Offer (as the same may be extended with respect to such Offer, the “Expiration Date”). Tendered Notes may be withdrawn at any time prior to 5:00 p.m. (New York City time), on May 5, 2021 with respect to each Offer (as the same may be extended with respect to any Offer, the “Withdrawal Date”), but not thereafter, except as required by applicable law as described in the Offer to Purchase.
Source:https://finance.yahoo.com/news/coca-cola-company-announces-pricing-181500128.html
Now in my previous post, I alluded to this being like in the movie *margin call where they are selling crap to the people who already buy from them at a discount because who the hell else is going to buy it. But it’s Coca Cola! Why would they do that!? Well there are a couple of things interesting about this date.
See what I’ve prefaced in the past few days is that when Citadel et Al. that own parts of Berkshire Hathaway fall and have to liquidate their positions. Berkshire will be exposed to a sell-off. Not only that but Buffet as per the Motley Fool, challenged anyone to come try and short his stock as of February this year. I think this was a big bluff on his part and that he is quaking in his boots. Edit addition: Maybe so much so he would be willing to sacrifice coke’s reputation to try and prop up Berkshire? Addition to the addition: thanks to u/CookShack67 , “According to SEC filings, Melinda Gates is now one of the largest shareholders in Coca-Cola KO, +0.14% bottler Coca-Cola Femsa SAB”. New Edit: This was recent news and we will see where it goes from here. If my initial thoughts are true and Burry’s boycott not unfounded then… You can draw your own conclusions with the below.
But let me finish the thought on Coke as per the source,
this right here pay attention
“We have retained BofA Securities, Inc. (“BofA Securities”), Citigroup Global Markets Inc. (“Citi”), J.P. Morgan Securities LLC (“J.P. Morgan”), and J.P. Morgan Securities plc (“JPM London”) to act as the Dealer Managers in connection with the Offers (collectively, the “Dealer Managers”). “
What? Hasn’t BofA had terribly large sell-offs? J.P Morgan. Funny Pretty sure if you check: https://hedgefollow.com/funds/Berkshire+Hathaway
Oh wow. Look They dropped J.P Morgan a while ago 100% Change 967.27k, to zero. Along with Pfizer, PnC Financial, M & T bk and Barrick Gold corp.
I mean, in a way, we knew all of this.So Coca Cola… Not looking good. But hey, I could be wrong. I accept that. But wait there is something else about these dates..
GME Chart
“On April 28th we saw the GME price peak up @ 178.58 and then May 5th it bottomed out @ 159.48 and lower in AH, currently upward trending in pre-market as I write (7:59AM May the 7th). Seems a little too coincidental… Could it be that someone, some people got or are getting that special call real soon? Who knows. I just know to Hodl. As per Bodson in yesterday’s hearing we know for sure at least that, they certainly got no call in January.
Did you catch that?
If you didn’t let me explain. They are finished, caput wanted nothing more to do with JP Morgan. I literally called them out, and Bank of America out and didn’t even recognize what I was doing.
April 16th
JP Morgan issues junk bonds https://www.pionline.com/markets/jp-morgan-sells-13-billion-bonds-largest-ever-bank-deal
BofA issues Junk Bonds
BofA one of Berkshires Biggest Holdings and JP Morgan whom used to be:
Berkshire cut its holdings of JPMorgan from 22.2 million shares, worth more than $2 billion, to less than 1 million shares, worth less than $100 million. That’s down even more since the end of 2019, when Berkshire owned more than 59 million shares of JPMorgan, valued at nearly $8.3 billion.
(thank you again our great friends form the FOOL:Â https://www.fool.com/investing/2021/01/11/is-jpmorgan-chase-still-a-warren-buffett-stock/#:~:text=Berkshire%20cut%20its%20holdings%20of,valued%20at%20nearly%20%248.3%20billion.)
And then to ZERO.
But what really caught my eye? It was coke in just that little week, more trash debt tender offerings, desperation. So what I wrote wasn’t complete trash. The moment they were offered the price of GME started to inflate a little and just like in margin call as they loaded all their friends with the dog shit bags for Cents on the dollar, they took their little cash to push GME back down. Their backs are literally against the wall if I’m right. And I think I am.
And Warren, why do you hate JP Morgan so much? You used to be best friends, Berkshire, JP and AMAZON. America was going to have a Haven for health care Insurance (#Boycott Amazon)
[January 4th this year so the break up is still fresh :( ] JP went on a little solo adventure and kinda goofed up the entire system.
As for #boycottMLB #BoycottFacebook, My assumptions are Steve Cohen and Melvin but with the information above we have all we need. So I don’t see a need to go there (yet).
This is why BlackRock was arguing with Buffet about ESG and greater transparency.
https://www.gobyinc.com/esg-solutions/the-esg-reporting-matrix/Â ( a better understanding of ESG)
https://www.livemint.com/companies/people/blackrock-at-odds-with-warren-buffett-s-berkshire-hathaway-over-disclosures-11620323632301.html (the details of why they are at odds)
Because BlackRock knows, just like I’ve been posting for days now. That once the hedge funds and ANYONE who shorted GME has to cover and force liquidate. Berkshire will plummet & it is Infinite exposure. The Jig will be up. In this multi tiered berkshire class A and Class b a stock of a stock scheme. All of them have to liquidate their positions in Berkshire and if I’m understanding some of the insurance policies correctly, the debt obligations are going to be so much worse than 2008. You can literally go through the Berkshire’s list of insurances to get an idea.
Citadel with their , slowlyyyy slipping away
BlackRock
Big Mad. Now I realize they are just hedged sadly with us.
And I could just keep pulling up 13Fs all day (like Vanguard right off the top of my head) holding Berkshire. Link them in the comments down below.
It’s not just a house of cards falling, but the entire Shire.
Edit: I have removed the political reference, I simply thought it was interesting. I am not even from the U.S so it did not pertain to me., It in a way detracts from the importance of this for some who cannot keep their minds out of political headspaces and I believe distracts from the importance of this post overall.
And Bill, oh my god Bill Gates, the desperate divorce to move assets and try to protect. His portfolio is somewhere around 45% last time I checked. He owns so much of this shit, he is poised to lose grandly. (you can see my older post for all the Bill Gates stuff I came up with).
If I missed anything, I’ll come back to it. Oh and this?
it’s 9:05pm as of posting, AH ended there though.
This ain’t no glitch. So stop, I thought you guys knew better than to listen to the media. Literally EVERYTHING they’ve said to date is a lie. I also disproved it in my previous post
From August 19 2015 the computers had no trouble seeing above 1 million even though that too was a glitch. So that is crock. Whatever is making it glitch can’t be good. Also if you look at my Tinfoil legends post, look at my chart analysis of Berkshire for crashes of 1998,2008,feb 2020. Basically, I assume feb.2020 was so bad because they didn’t see it coming, but now I can also add that they literally could have lost everything if that buy button didn’t get turned off. Ironically now, they will lose more than everything because I have a floor. And it is really, really high with all these contributors.
This of course is still all my opinion and what I speculate to be correct, and some of it could be wrong, all of it could be. But I don’t think so this time. In a matter of fact, I’m hoping someone here proves this stuff wrong. I am always willing to keep improving it until it is PERFECT.
I am not a financial advisor and there is no financial advise. This is all for educational purposes that I did this research and am simply sharing my findings.
Which initially I never had planned to even go further than examining the Gates Divorce. This is simply information I stumbled upon while doing my due diligence as an investor.
Disclaimer(s): I assume no responsibility with how this information is used I am my own independent actor in all of this as an investor in gamestop.
I am also pretty messy so I’m sure this could be neater, but that’s just how I am. Sorry. I want to go play video games now.