The fund is now over 8 percent cash. I have a hunch a tender offer may happen the first half of 2024. 20 percent of the issued and outstanding at a three percent discount to NAV. Just a guess we shall see. Happy healthy holidays all. Hc
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Here is the NAV and price discount. So the discount always existed. What is the catalyst that is going to drive the fund managers to redeem? Remember when the fund managers redeem, that reduces the fund size and the fees they earn. So unless you have a catalyst or an activist with a huge position there is no reason to believe…
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Stewart Horejsi is now 86. He retired from his role as a portfolio manager and chief investment officer last year. The fund has historically had a large discount to nav, but 20 percent plus is a bit higher than normal. During the past five years fees and expenses are down over 50 percent, clearly, maximizing fee income, is not the objective. I don’t recall the cash balance ever being over 8 percent. A 10 percent tender would be easy , 20 percent would take more leverage. How much brka would Buffett buy at a 20 percent if he could? Stew might be looking to do some estate planning , most of his wealth came from being a buyer of brka starting many decades ago. Will he feel the same about so much exposure to brka once Buffett and Munger pass? We shall see ??
Do we know his net worth is in the fund? The nature of close end funds are that money is locked.
His net worth exceeds the market cap of the fund. It’s likely he has serious LT gains in the brka he might own in his personal account for decades. I don’t recall the regs with respect to a , control person, in a publicly traded fund, selling his private holdings, in the funds 35 percent holding? This might be complicated, I’m too lazy to research it. He might be able to sell his personal holdings to diversify away from his concentration in brka?
You are confusing his personal stake and the closed end funds ownership. Your original thesis in 2024 they are going to redeem has no basis and just a hunch. Closed end funds are trading at discount because the investors in those asset class primarily invest for “income”, i.e., dividend income and with higher interest rate the fund has to move significantly up with NAV and still the discount may persist.
I wonder how many old timers are out there like Stew? Over 80 years old who have held Brk for over 30-40 years? Many lessons can be learned or confirmed by his story. Slow and steady wins the race. An early investor in Warren Buffett's Berkshire Hathaway is now worth $3 billion – and joined the Forbes 400 this year
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The key is not “slow and steady”.
The key is “how to identify” a young company that will grow fast over the next 30-40 years. BRK in its youth was a fast grower.
Very few companies today.
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Think back 10-15 years ago. How many of the most respected hedge funds and stock pickers, blew up ? 80 percent or more? IF it was possible to identify fast growers, many more would be doing it. Guys like Ron Baron are hard to find. Ron never buys bonds and rarely has much cash. Buffett has held way too much cash for at least 15 years. It took way too long to authorize the brk buyback as you well know. Happy holiday bud.
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1 Berkshire Hathaway, Inc. Class A $561,185,200 30.23%
2 JPMorgan Chase & Co. $160,450,240 8.64%
3 State Street Institutional U.S. Government Money Market Fund $141,026,650 7.60%
4 Berkshire Hathaway, Inc. Class B $124,200,000 6.69%
5 Yum! Brands, Inc. $107,721,900 5.80%
6 Enterprise Products Partners LP $97,747,000 5.27%
7 Microsoft Corp. $75,782,000 4.08%
8 NRG Energy, Inc. $72,956,000 3.93%
9 Stanley Black & Decker, Inc. $61,812,000 3.33%
10 Cisco Systems, Inc. $59,991,200 3.23%
11 Cohen & Steers Infrastructure $58,987,500 3.18%
12 Intel Corp. $53,640,000 2.89%
13 Charles Schwab Corp. $45,990,000 2.48%
14 Evercore, Inc. $44,265,000 2.38%“”
The top ten holdings are now 91 percent, as of NOV 30th. 37 percent brk, 7.6 percent cash. If, IF, the controlling family wanted to sell the entire fund to Buffett at say a 5-8 percent discount, Buffett could do it from the petty cash account, 1.8 billion to 2 billion or so. Clearly Buffett would love the portfolio and the control poppa is friends with Buffett. Meanwhile the 4 percent
distribution in my IRA covers my RMD, required minimum distributions, for our foreign friends. TO REPEAT, don’t look at historical return comparisons, the fund had a 2.5 % expense ratio for over a decade, those days are gone. Disclosure, I have no contact with anyone at STEW or any of the control family members. Just sharing the best case scenario. Happy healthy New Year to all.