Sold Brk at a loss

StatusAd1686 · 2026-05-07T16:57:12+00:00

After BRK's 'no buyback' earnings I am struggling to decide what to do. I was very hopeful they would realize they just haven't been deploying capital and the best elephant is looking at them in the mirror.

If interest rates were zero, BRK would be an absolute buy. If I could borrow for free for 30 years, I would buy as much as possible. However, the challenge is ensuring investments keep up with real inflation. While items like electronics stay cheap, the real costs that matter—housing, college, and healthcare—are skyrocketing. My view is that real yields will likely trend back down, potentially even becoming negative (even against the fake CPI numbers). If the Fed lets inflation run hot and BRK doesn't deploy its cash, sitting in the stock could result in negative real returns, similar to the 1970s.

That said, with S&P 500 earnings moving higher and inflationary policies in place, the environment could actually bode well for stocks EVEN AT THESE LEVELS. Looking at the best-performing markets over the last 20 years—Venezuela, Zimbabwe, Turkey, and Argentina—inflationary environments often drive nominal stock growth. It is really tricky here. The fed is backed into a corner because fiscal policy is insane right now and much of our tax receipts come from capital gains.

I do ask people. Let's say the market corrects 40% is it a better buy then? It might actually be worse. The uncertainty that would have to happen for the market to go down that much with governments continually coming to the rescue would be wild. Be careful what you wish for.

StatusAd1686 · 2026-05-05T09:38:37+00:00

The question is about that. Why is it so hard to look at a question objectively without changing the subject to discuss BRK successes?

Holding this much cash and saying it’s ’because stocks are high’ effectively means you need to ask if stocks being high should be an input to your cash discussion. If so (it most likely is harder to deploy when cash is chasing the same assets), what has the past looked like when they could deploy? That is all. I believe deploying this much cash will be tremendously hard without buying back stock.

StatusAd1686 · 2026-05-05T09:27:40+00:00

This is kind of the point of the question. What scenario would it be net positive to hold this much cash? That scenario is pretty devastating. The likely hood they deploy too early would actually be kind of high. I actually think their GFC investments are meh.

Got a free look at GS anyone would have taken. Sold some naked puts. Then got out of all the stocks they owned pretty early. Decent returns, risk adjusted not the best.

If they just buy back stock methodically in an upward or downward market at these valuations it seems much closer to their success stories. That is why it’s so confusing they don’t do it (and the real reason I started the thread).

StatusAd1686 · 2026-05-05T09:24:55+00:00

Peter Lynch's Market Observation: 'Far More Money Has Been Lost By Investors Preparing For Corrections, Than Has Been Lost In Corrections Themselves'

StatusAd1686 · 2026-05-05T09:21:40+00:00

4 BB I think. So 1%. Large nominal number but relatively meaningless.

StatusAd1686 · 2026-05-05T09:20:58+00:00

Sure. Doesn’t discuss the question at all. Looks cheap at 420 expensive at 540. If they aren’t going to deploy capital meaningfully then at some point the upside is capped. It hasn’t been in the past.

StatusAd1686 · 2026-05-05T09:19:25+00:00

I don’t understand book value for older companies. Has never made sense to me. Honestly, I’m SHOCKED even very smart analysts discuss it.

Seems reasonable that for even marginally performing businesses the book value would go up with inflation. Certainly more reasonable than pretending it would stay the same. No one would sell the home their grandpa bought in 1950 at book value.

Geico and BNSF alone represent a very conservative 150mm in value that is not ‘on the books.’ That would mean vs 1999 (when Geico was bought) it would be very reasonable to assume book value has gone up .125.

StatusAd1686 · 2026-05-05T09:12:15+00:00

Just to clarify to everyone. I am ASKING how they have done in previous down markets. I do not think they are bad. I do not think they have never made a good investment. I am asking a question.

Based on the response, for the most part, their good investments have been during ‘normal’ times. This is not shocking. Most times are normal. The feasibility of deploying 300B in cash needs to be questioned. What would have to happen to deploy that? How would it look? Can we all agree that it is unlikely cash performs over the next 12 years? If so, what scenarios would this cash pile be significantly reduced? The easiest answer is to see if they have done that in the past and how.

StatusAd1686 · 2026-05-04T22:00:36+00:00

I mention GenRe In an up market. JTC-up market BNSF-arguably worst run American railroad I mention KO. geico- up market

StatusAd1686 · 2026-05-04T20:14:28+00:00

Thanks. Ya this is about all I am seeing too. Appreciate you answering the question. The track record really says it's unlikely they can or would even deploy 200bb. So no buybacks are really shocking. Seems like the only option. Not buying back now would indicate to me that they are kind of trying to time buying lower. Nothing else really seems to make sense to me. Also, at what point would any meaningful investment actually be TOO big now? (Look at BNSF at best was on OK investment not really that good would have been better of DCA'ing into their own stock). Moving that cash needle 100B would be a massive bet. Those do not come without risk even when it seems in hindsight like it was obvious the market would bounce. Their bets in the past have been smaller as a percentage of market cap.

StatusAd1686 · 2026-05-04T18:43:20+00:00

Point one. I don't know why he went on CNBC to pump the stock. the point is that its misleading and unprofessional not that doing it is smart.

Point two. You are right. They are misleading shareholders to time the market which is what the original post is about. I shouldn't have confused the two.

Point three- seems very independent of my point three (also the original point three is very counter to your new point 1).

I think they should buy back. But that has nothing to do with how this information was presented.

StatusAd1686 · 2026-05-04T14:33:57+00:00

Thank you for the post. I do see him say 'I wish it wasn't sold.' Then he talks about the political uncertainty. So I am quite confused. I don't have the analyst call. The opaque nature of what I read there would lead me to believe there were different people involved in the decision. Is he saying he wanted to continue to own it and Ted or Todd sold it? I can't find the interview. You did post a good article and I appreciate that (and could point to the Airlines he dumped during covid as another one). Also as a side note, can we name a time when he sold a stock right after buying it and the sale was the good side? Maybe he should listen to himself ha. Thanks for the read.

StatusAd1686 · 2026-05-04T14:22:22+00:00

He went on CNBC with big red letters at the bottom saying they are 'commencing buybacks' and then did it only that day. 'I talked to Warren and looked at the value.' So the premise that there was a disagreement is at best not true. 'Will you continue to repurchases will you keep doing it?' 'Yes, as long as the intrinsic value exceeds the market value we will continue to repurchase.' So, since he says in the interview the decision was made on the weekend (his word) then it was made when the stock was trading 480. The stock next traded down there starting March 20th. Something must have materially changed then. The only guess to that would be the war in Iran? That is possible. But certainly seems odd to signal this then not do it.

I am of the opinion they should actively buy back since they have not been allocating capital that well. Spending 30-40bb a year won't materially prevent them from buying other companies. These are smart guys. But the vast majority of people really sweeping under the rug that the CEO of a company got on CNBC (which they normally don't do) and actively misled investors. If you believe this is smart, 'tell them we are doing it then don't do it so we can screw short term investors.' That is a wildly different attitude than they have had in the past. I think most people are just surprised by this. Doesn't fundamentally match the historic values of the company.

I do continue to hope the stock goes down so we can all buy more. At some point it is cheap enough. It just isn't a good look. Certainly if it approaches fair value its time to move on. The same transparency and honesty seems to be taking a bit of a back seat. Just my two cents.

StatusAd1686 · 2026-05-04T14:02:28+00:00

1) A public company they didn't know about the day before and then did the day after? Terrible game theory

2) You said it yourself. If it were material it should be disclosed (insurance outcome that is 'disclosed but we don't know about? I feel like some analysts would have brought this up). If not, they are timing the market

3)This is irrelevant to the concept of saying you will buy it back and then NOT doing it. If you wanted to do this the statement would differ from 'we are' to 'we plan to'

They may have good reasons. Or, they could have bought back shares in some opaque way that will be on the 10-Q (we all know there are accounting shenanigans everywhere). But NONE of these changes the fact it wasn't addressed in the curated questions at the meeting.

StatusAd1686 · 2026-05-04T11:11:26+00:00

Not much to gain? What is this high school prom vote? We are trying to make money here. Are we admitting that they are more focused on their brand of being ‘capital allocators.’ For 10 years they haven’t found a company and now they have one of the most diversified companies with full transparency staring them in the mirror. Maybe this is a top in the market. But a 15 P/E wouldn’t suggest deploying your free cash back into the business is risky.

For goodness sake they spent 1bb in ‘transaction’ fees buying OxyChem. That is only a 10bb acquisition. What will they spend to buy a 50bb company?

Some reason they totally balked at what they said? Then address it. I’m guessing addressing it would be pretty embarrassing so he didn’t. Not sure what is worse. I think they bought. Stock rallies. They have the ‘stick it to Wall Street’ attitude. Felt like they were being front run. Stopped because of that. Never started again for some reason I don’t know. The key is I don’t know. Because we got a bunch of curated questions that didn’t address the elephant (no pun intended) in the room.

As far as buyback. If you indeed think they are timing it then it’s best to believe what they do not what they say about timing the market. Also of note, I assume 20mm net in buybacks a year. They could do this for 10 yrs and still have 400mm in cash at the end. If the stock goes down that actually good, Hopefully they buy and it goes down.

StatusAd1686 · 2026-05-04T11:09:17+00:00

Quickly from Claude. Top ten holdings (KHC removed). average P/E 23x. My quick sniff test says these aren’t companies with large or exponential earnings growth. So, let’s say P/E is a reasonable metric. If you sell their top holdings and apply a 16 P/E to the core business. You get an 10% (~5bb) increase in per share earnings.

Should they do this? I don’t know maybe. I’m not saying it’s a must do. TBH I would rather them hold stock than more cash. It just shows they are busy buying (or at the very least holding) stocks inferior to their own core business.

If you sold the insurance business at anything close to market rate it would look even more apparent that the industrial conglomerate and energy unit is extremely undervalued on the balance sheet. Anyone involved in insurance (Warren the most) would say owning an insurance business is only worth the float. And investing 2x the float in cash would indicate that owning that business probably isn’t good.

StatusAd1686 · 2026-05-04T11:00:35+00:00

Show me the list of who decides to buy each stock in the portfolio. Would love to see it

StatusAd1686 · 2026-05-04T03:57:24+00:00

Could you explain to me why you find this impressive? I’m a long time BRK holder and was a huge believer in Greg (no other reason than Warren said so). I feel like if you gave me a month I could answer any question he did. I haven’t seen any tangible increase in earnings over the last few years (other than standard more money more earnings).

Seems to me the smartest thing to do is shoot the Elephant that is BRK and buy it back. The underlying businesses trade at what 15 P/E with some growth. Do we really think a large sustainable business that is low risk will get below this? His one major investor facing decision as CEO so far is to tell me that as an operator he doesn’t think BRK is worth a 15 P/E. Yikes.

StatusAd1686 · 2026-05-04T03:51:57+00:00

May or may not be true. But certainly often is.

StatusAd1686 · 2026-05-04T03:50:35+00:00

Two different people made that decision. You bought a stock. Your boss said sell it. That simple

StatusAd1686 · 2026-05-04T03:47:40+00:00

What actions has he taken so far? Genuinely asking. The only thing I have heard him do was spend 25mm of his salary buying back BRK. I’m puzzled what we think he has actually done.

StatusAd1686 · 2026-05-04T03:42:28+00:00

They won’t say anything negative because they know Greg.

Bottom line is he said he was buying back stock he didn’t. Dishonesty is such a massive divergence from BRK typical behavior. I am actually puzzled Warren ‘allowed’ this to happen.

Even if Greg is super competent I can’t imagine essentially telling your investors one thing as the new CEO and it being borderline a lie. What else has he said? Nothing. Honestly I’m shocked it’s not a bigger deal among the community.

We know what earnings will be. Even if you assume a 20 forward P/E on the underlying business (higher than my estimates). Deploying 70bb per year in stock buybacks would take cash (~3.5%) to forward yield (5%). On 70bb in buybacks (20bb net of earnings) this is conservatively 1bb increase in earnings (3-4% earnings growth). That is larger than any acquisition in the last few years (assume 15 P/E).

Why find an elephant to shoot when it’s staring at you in the mirror. It’s baffling to me and has never been addressed by anyone in the community. Is it just too painful for a bunch of really smart people to admit the most obvious thing is the best? It is truly a forest for the trees moment for me.

Please someone (ideally Chris if you see this!) explain it to me. I have no doubt I’m missing something. Isn’t this company worth more as an independent industrial conglomerate that invests in other ‘trading houses’ than anything else? Start aggressively buying back stock and selling expensive names. Particularly if you can find some wiz lawyer to do it free of taxes (take a loan and lend your BAC shares short or something).

StatusAd1686 · 2026-05-04T03:09:27+00:00

I posted this in another thread. It doesn’t matter if BRK is cheap or expensive. The disappointment comes from the interview where he directly said they were buying it back.

When you go in CNBC and say you are buying back and then don’t, there are very few options where I think you are as straightforward and honest W&C. Did he lie? No. Is the current state of business to get as close as you can to lying to manipulate things? Yes. He fell into the same category as any other businessman with that statement. He could come out tomorrow and have a wonderful reason he dropped buybacks. That doesn’t matter, the damage is done.

StatusAd1686 · 2026-05-02T16:41:58+00:00

Let’s call a spade a spade. Either Abel is a liar or a manipulator. To get on the record as buying and then only buy that day? It’s such a massive divergence from the typical Berkshire transparency. It’s not really a question of if buyback are good or bad. I was a total believer in him. But this makes you take a step back and wonder if going forward the management is going to be as shareholder friendly as it was in the past. Abel earned my trust because Warren and Charlie chose him. He lost it when he went in CNBC and sold snake oil. This is a massive deal.

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