The Berkshire Beat: January 5, 2024
"People think [Charlie Munger] had a thick skin, but deep down he had a soft heart."
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The latest news and notes out of Omaha…
Late last night, an SEC filing revealed that Berkshire Hathaway purchased 1.1 million shares of Liberty Media SiriusXM (Series A) and 1.66 million shares of Liberty Media SiriusXM (Series C) common stock between January 2-4. Average price of $29.76 per share for both LSXMA 0.00%↑ and LSXMK 0.00%↑ for a total outlay of $82.1 million.
To commemorate the late Charlie Munger’s 100th birthday, Andy Serwer released an interview with Munger’s executive assistant, Doerthe Obert, over at Barron’s. A fascinating peek behind the curtain that sheds some light on what it was like to work alongside the famous polymath. Incredible stuff from start to finish.
“I’ve never met such a focused person,” Obert told Serwer. “You couldn’t interrupt him. He was a perfectionist. He wrote everything out by hand — and revised it and revised it. Once, he drafted something fifty times. His handwriting wasn’t so good, but I had to transcribe it.”
“People think he had a thick skin, but deep down he had a soft heart. He would help people and he did all that philanthropy.”
On Munger inadvertently revealing that Greg Abel will be the next CEO of Berkshire Hathaway: “That was kind of letting the cat out of the bag,” Obert said. “There it was. If you picked it up, fine. If not, too bad.”
“At the end of every year, he would call Warren [Buffett] to review. They talked as friends — and I was touched by that … It’s a big loss for Warren. Those two big brains built Berkshire. There was no acrimony and nobody’s feelings would be hurt. You don’t very often have that.”
On Munger’s final days: “I was at his house opening mail and filing his beloved Value Line. I was helping him get ready to go to Santa Barbara and wished him a nice Thanksgiving.”
“My understanding is [the Munger family] had Thanksgiving and, the next day, his body shut down and they put him in hospital. The warranty on the parts just wears out. He was surrounded by his family. He died peacefully, they tell me.”
Berkshire’s two-year winning streak against the S&P 500 is over. Despite solid gains of 15.8% for the Class A shares and 15.5% for the Class B shares, both groups trailed the benchmark index’s 24.2% mark (not including dividends) in 2023.
How did Berkshire’s largest stock holdings perform last year? Well, the big winners were Apple at +48.2%, Moody’s at +40.2%, and American Express at +26.8%. On the flip side, Chevron (-16.9%), Kraft Heinz (-9.2%), Coca-Cola (-7.4%), and Occidental Petroleum (-5.2%) ended up as laggards. These results do not include dividends paid out to shareholders — just the change in stock price.
But, for the second year in a row, Apple is off to a rough start in 2024. AAPL 0.00%↑ sank 5.5% over the first three business days of the new year — mostly likely as a result of downgrades by Barclays and Piper Sandler.
🤑 The calendar year might change, but one thing never does: a constant stream of dividends rolling into Berkshire HQ. On Tuesday, Warren Buffett and co. collected $4.68 million in quarterly dividends from Paramount Global. Then, on Wednesday, Berkshire may have received as much as $14.2 million from HP. But, if Berkshire sold more shares of HPQ 0.00%↑ during the first half of December, that would mean a smaller dividend check.
BYD sold 526,000 battery-only vehicles in Q4 2023 — setting a new company record and edging out Tesla (which moved an impressive 484,000 vehicles itself) as the best-selling EV manufacturer for the first time ever.
Today, Mike Davis takes over as CEO of Berkshire subsidiary CORT Business Services. “Mike’s wealth of knowledge and leadership experience from within CORT will ensure the company serves its customers’ needs well into the future,” said Greg Abel in a press release. “He has strategic vision and is a passionate, results-driven leader. I look forward to his continued success as CEO.”
And happy trails to former CEO Jeffery Pederson, who is retiring after 12 years in the top spot.
Introducing: A Slow Read of Poor Charlie’s Almanack
Over Christmas, I stumbled upon Simon Haisell’s slow read of War & Peace — in which participants read one chapter of the massive tome each day for a year — allowing them to slowly digest the story and finish the entire book by year’s end.
As something of a slow reader myself, I love the idea — and want to make it a part of Kingswell in the new year. Not every book lends itself to this method of careful study, but one recent release absolutely does: the new edition of Poor Charlie’s Almanack.
So, starting next Friday, I will be writing about my main takeaways and lessons from one particular chapter of the Almanack each week until we’ve worked our way through the entire book. (And I’m hoping that all of you will join in on the fun — reading each week’s chapter and chiming in with your own opinions down in the comment section.)
Why start with Poor Charlie’s Almanack?
1. The full book is available to read for free on the Stripe Press website. No need to run out and purchase a copy if you’d like to follow along. Even better, the website edition is spectacular. Lots of archival photographs and exhibits to accompany the text — as well as other fun easter eggs, too.
John Gruber at Daring Fireball put it this way: “Stripe has also made the entire book available on this marvelous website. The site is beautiful, fun, and clever … Compare the Kindle preview of Poor Charlie’s Almanack to the website edition. It’s like comparing a matchbook to a blowtorch. With the e-book editions — Kindle, Kobo, Apple Books, whatever — you can merely read these books. With the web editions, you experience them.”
I own a digital copy of the book — and Gruber is right. The Stripe Press website edition just might be the definitive way to read this gem.
2. Over many years of reading, I’ve noticed that I don’t retain knowledge half as well from a page-turner that I tear through in one weekend as compared to a “tougher” book that I take my time with and really savor all of its details and lessons. And Poor Charlie’s Almanack, which is heavily based on speeches delivered by Munger throughout his life, deserves that latter treatment.
The tentative schedule — listed below — might seem a tad slow and unambitious. But that’s the point. I want to take this read very slowly and allow ourselves the time to peer deeply into each aspect of Munger’s teachings. I like powering through a good book as much as the next person, but Poor Charlie’s Almanack demands careful attention and reflection.
3. And, of course, the recent death of Charlie Munger has put me in the mood for a steady dose of his wit and wisdom.
The Slow Read Schedule
Each Friday, right here in the middle section of The Berkshire Beat, I will post my thoughts on that particular week’s chapter. I will also cross-post it on X/Twitter later the same day. So please feel free to follow along in whichever way that you prefer.
January 12 — Forewords, Rebuttal, and Introduction
January 19 — Chapter 1
January 26 — Chapter 2
February 2 — Chapter 3
February 9 — Talk 1
February 16 — Talk 2
February 23 — Talk 3
March 1 — Talk 4
March 8 — Talk 5
March 15 — Talk 6
March 22 — Talk 7
March 29 — Talk 8
April 5 — Talk 9
April 12 — Talk 10
April 19 — Talk 11
April 26 — Wrap-Up
If all goes well, we should have the whole book wrapped up just in time for the Berkshire Hathaway annual meeting — which seems fitting.
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More Must-Reads
Other awesome things that I read this week…
Lessons I Learned The Hard Way Rob Henderson || The Free Press
“When seeking advice, ask people in a different life station than you — ahead or behind, older or younger. People in the same position are often biased by envy, and this can color the advice they give.”
A Seamless Web of Deserved Trust The Rational Walk
“The purchase of See’s Candies by Blue Chip Stamps in 1972 was not the first deal Warren Buffett and Charlie Munger invested in together, but it might have been the point at which the two men developed a truly seamless web of deserved trust. Mr. Munger is widely credited with convincing Mr. Buffett to pay more than he was comfortable paying for See’s. There is no doubt that trust played a big role in getting the See’s deal to the finish line.”
Active vs. Passive Learning (Morgan Housel)
“If you study broadly enough, you’ll see how interconnected every field is — many fields fall under an umbrella of ‘how the world deals with uncertainty and competition’. If you find something that is true in more than one field, you’ve probably uncovered something particularly important. The more fields it shows up in, the more likely it is to be a fundamental driver of how the world works.”
Active Patience (Ian Cassel || MicroCapClub)
“The longer I invest, the more I realize you get 1-2 great opportunities every few years. The rest of the time is spent wondering if you will ever get another great opportunity again and convincing yourself to own mediocre opportunities while you wait. Mediocrity is the price you pay for impatience.”
Nintendo’s Design Guru Shigeru Miyamoto: “I Wanted To Make Something Weird” (Keza MacDonald || The Guardian)
“Attention to detail is something that Nintendo is very much known for. Where other video game companies rush games out on a shareholder-pleasing schedule, Nintendo has always been happy to take its time; a major new Mario or Zelda game will come out maybe every five years — but when they do arrive, they tend to be excellent. And, as Miyamoto points out, you can sell an excellent thing forever: 1985’s original Super Mario Bros. has been re-released several times and has sold more than 60 million copies. You can still play it on Switch.”
Although not my business, it is good to know that Charlie didn’t see whatever it was coming and was not suffering with some terrible drawn out illness.
Love the idea of slow reading a book.