No material surprises

a) Apple sale - Buffet continued sales that began in Q1 at higher prices. During annual meeting I believe he made a flippant comment about cash rising above $200 BB. So I had already assumed more apple sales. I would expect, based on the current price that we will see another large sale in Q3.

b) Operating businesses earned a similar but slightly higher amount than Q1. Mostly within reasonable expectations. I would observe that in the rail space earnings have been relatively flat for competitors and their stock (at least in the case of NSC) have rallied nicely. So I think the market will be OK with the performance of BHE & BNSF.

c) Major recent surprise for me is BAC sales, but we know this from other filings, that Buffet has been willing to continue to sell BAC below $40? Just don't exactly know why or how low he will keep selling. We shall see if his appetite for selling stops after Tuesday.

d) Initially the substitution of cash for equities at 5.25% Treasuries will improve operating earnings. In Q2 operating earnings were at a $46 BB clip. While I update my model for the traditional 4 grove analysis and get a range of $430 to $460 per B share. Using a simpler P/E methodology on current annualized Q2 operating earnings you get a P/E of 20 even without accounting for the equities (which do pay dividends so part of their income is included in operating earnings). I assume since you get interest on the cash that they are implied to some extent in the traditional P/E analysis.

e) I assume as rates decline that operating earnings growth will slow or go negative at some point. Similar to NII issues for banks. But we are unlikely I think to see ST treasuries below 3.5% vs the sub 1% a few years ago.

f) I think it is going to be hard to spend $250 or soon to be $300 BB (assuming sales of APPL & BAC plus $10 BB a quarter in operating cash).