00:00He was the CEO as of the fourth quarter, so these moves that we're looking at in the 13F
00:05took place in the fourth quarter of last year. To be totally fair, he's been stepping back. He
00:11probably wasn't behind a lot of this anyway, but this is actually the last quarter that you could
00:16even attribute these things to him. He remains chairman, so you never know. He'd be looming
00:20behind the scenes, but his last quarter is CEO. And the thing about his investment in Apple was
00:25that he famously said he was only investing in things that he understood and that typically
00:30did not include technology companies. But Apple, I guess he saw more as a consumer company than
00:35anything else. Yeah, I think so. And I think his thing was moats, right? And probably still
00:41is, but the iPhone moat and the infrastructure built in, I think those were appealing things.
00:46They have been pairing that investment, as we know. Part of that, and it's kind of a twist
00:53because he had said this at the annual meeting a couple of meetings ago, that it was a kind
00:58of tax reasons, that they had these huge unrealized gains in there. And he thought taxes would be
01:03going up. Now, they're certainly not going to go up under the current administration kind
01:07of anytime soon, but Buffett is always long-term thinking. So I think that's what he was looking
01:12at is we've got tens of billions of dollars of unrealized gains that will be taxed. And I think
01:17it does still hold true that in 10 years from now, probably the corporate tax rate could be
01:22higher. And that was his concern. And part of the reason they were taking down those big gains in
01:27those big positions. The conglomerate also cut its Amazon stake by 75%. They did. So Amazon,
01:35they initially got into Amazon in 2019. That was one of his investment deputies, I think, brought it to
01:40him then. Again, also like tech, but a retailer, right? That position we calculated was up about 130 to
01:50140% over the time they hold it. Nice, but kind of in line with the S&P 500. So
01:57it didn't really
01:58outperform. So I think it was kind of taking some money off the table. They sold, I believe, like
02:031.7 billion worth of that stock, cutting most of the position. So that one, I think, was probably
02:09company-specific. Didn't really outperform. They bought 4 billion of Alphabet last quarter. So the kind
02:15of tech aversion, you know, may be changing over time. What did he increase stakes in?
02:21So two big ones, Chevron and Chubb. So Chevron is their fifth biggest holding, I think.
02:29They, interestingly, I don't know if they were kind of betting on U.S. intervention in Venezuela,
02:36which happened kind of after the quarter. So you can't say that like Maduro got taken out and this
02:40stuff happened and they did it and reactions did it before, but maybe they were reading the tea
02:43leaves there. I don't know. It's a big holding for them. I think the kind of geopolitical energy
02:51play makes total sense. The other one is Chubb, which, you know, I don't want to get too excited
02:56thinking about an insurance mega deal here, but they are now the second, well, they've been the
03:04second largest holder of Chubb stock. Chubb makes total sense. It is, in our view, a BI, a cream
03:10of the crop insurance company, global reach, still growing nicely, great management. Like
03:16it's a company that Berkshire would want to own. Now Berkshire's got their own massive insurance
03:21business. The interesting thing is you've got two massive insurance businesses. They're
03:25actually quite complimentary if one were to want to put them together. So the Berkshire
03:30business, very big personal auto and Geico, very big reinsurance, kind of global, global
03:35reinsurance. Those are two businesses that Chubb is not really in. There's some overlap
03:41in the kind of US specialty businesses that they're both in, but it would be phenomenally
03:48complimentary of those two businesses. I think there's probably a lot of hurdles to some sort
03:53of, you know, total deal there. Chubb's market cap is 130 billion. Berkshire has 300 billion
04:00of cash, so they theoretically could buy Chubb in cash if they wanted to. But I think it's
04:05probably some cultural issues and would Chubb really want to sell is the other thing. But
04:10you know, it is something it, as a stock, something Berkshire would want to own.
04:14Is that a strategy that Berkshire actually follows through on where it starts off with
04:18a stake and then eventually decides, you know what, we're just going to buy the whole thing?
04:21Scarlet, yeah, they do do that. So I think with Burlington Northern, which is a little bit
04:25before time when they bought it, they did things like that where they acquire the public stake
04:29and then they build it over time. That's why there was a lot of speculation about Occidental.
04:33Buffett then came out and threw cold water on it saying that, but it seemed like it was
04:36going along with their playbook of huge acquisitions that they made before.
04:40Right. Now that Warren's out, can we have a serious discussion about a dividend?
04:44We can, I think. You know, we'll get you on the phone with Greg Abel and see what he says.
04:49But, you know, I think our take has been in the early years, Abel will probably adhere to
04:58the ethos of Berkshire. And I don't think he's going to come in and start breaking down walls.
05:02I don't think anyone would like to see that, especially if Buffett's still there.
05:06And they have tremendous excess capital. Buffett is praised Abel as being a great capital allocator,
05:13great capital manager. And they've also said, we literally can't, there's so much money,
05:17we can't put it to work in a reasonable way.
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