2023 Annual Report

Just in case someone is not aware…Here’s the 2023 letter and annual report.


The takeaway for me is, Insurance carried the day, railroad and BHE saw y-o-y earning declines and WEB is warning BHE, not sure whether he is warning shareholders or the regulators. Just to unpack a bit, insurance gains are cyclical, and probably go down next year. So it is concerning that BSNF and BHE are struggling.

May be the current strength in Berkshire is an opportunity to sell or do covered call.

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I came out appreciating simplicity of Mag 7 business even more except Tsla.
His view of innovation is and was wrong. These guys compound effortlessly and TAM keeps expanding.


My quick and dirty 5 grove estimate is: $411. Basically in a range of fully valued.

I did add back $1.7 BB for the utility reserve which I view as one-time in nature for the fire. Less if you use the actual number. Of course if you normalize enregy and BNSF you might ghet a similar or slightly better number.

Grove 1 - $164.27
Grove 2 - $139.15
Grove 3 - $ 18.06
Grove 4 - $ 71.34
Grove 5 - $ 17.81


Agree with this.

I knew BNSF was perennially low growth, highly capital intensive. I was hoping that Abel was get some more juice from BHE.

Buffett: But the regulatory climate in a few states has raised the specter of zero profitability or even bankruptcy (an actual outcome at California’s largest utility and a current threat in Hawaii).

On the other hand the electricity demand is going to skyrocket as EVs and AI chips get more and more hungry.

BHE is floundering. Hope regulators take note.

BNSF is a toll road, with an unassailable moat. Nobody is building more freight railroad paths through the suburbs to the coast of California, and shipping by truckload vs rail (not to mention air) is vastly more expensive in those volumes. It may be a low margin business, hampered in part by regulation, but it will produce results practically forever, or at least until we stop importing stuff from the Far East, which in my view, is “never.”


Here is the reality. Railroad is NOT a good business. Revenues are not growing, Costs are increasing and Regulators are breathing down their neck. Public is mad that fat cats of railroads spill toxic stuff and don’t pay.

Here is BHE’s unravelling