Warren Buffett was interviewed for three hours by Becky Quick on CNBC from Tokyo on April 12, 2023 (6 am -9 am ET)
Q1 2023 hedge fund letters, conferences and more
These are 10 highlights:
(1) Warren Buffett (Berkshire Hathaway) made his initial investments in 5 large Japanese trading companies in August, 2020 since they were selling at a “ridiculous price relative to interest rates at that time”. Berkshire took a 5% stake in each and pledged not to ago above 9.9% without the consent of the boards of directors. Berkshire now owns 7.4% of each. It was financed with Japanese Yen bonds to insulate Berkshire from exchange rate risk. Berkshire will hold them for the next 20 years. Their earnings yield is 14% including dividends and growth.
(2) Greg Abel visits each of Berkshire’s businesses and is tougher than Warren in getting things done. He put $100 million of his own money into Berkshire at market prices (not stock options).
(3) The new CEO at Pilot Company, Adam Wright, was brought in by Greg Abel from Berkshire Hathaway Energy. https://www.knoxnews.com/story/money/business/2023/04/10/pilot-flying-j-new-ceo-after-warren-buffett-berkshire-hathaway/70085946007/
(4) Buffett was critical of banks not matching assets and liabilities and their related accounting practices. He sold a number of banks recently after holding them for 25 years. But he likes Brian Moynihan of Bank of America and plans to hold his large stake in the company.
(5) No depositors will lose their money in any bank over the next year even for deposits greater than $250,000. Shareholders and bondholders will not be protected when banks fail. The CEOs will lose their jobs. There should also be consequences for directors such as giving back their compensation.
(6) Jay Powell is doing an excellent job as did Paul Volcker (in 1979-82).
(7) Quoting President Franklin D. Roosevelt: “There is nothing to fear but fear itself.” Per capita GDP has increased 7 fold in his lifetime (92 years). This never happened before in the history of the world.
(8) With respect to inflation, he is more concerned about fiscal policy than monetary policy.
(9) Bitcoin is a gambling token and it doesn’t have any intrinsic value. But that doesn’t stop people from wanting to play the roulette wheel.
(10) Berkshire sold Taiwan Semiconductor because of geopolitical risk.
