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- Manlobbi
Halls of Shrewd'm / US Policy
No. of Recommendations: 3
Andrew Bary on 13-F:
The bulk of the Berkshire holdings of under $5 billion likely are Weschler investments. They include Davita ($4 billion) and Sirius XM Holdings ($3 billion), both of which he owns personally. Other possible Weschler investments are Kroger ($3.6 billion) and Capital One ($1.3 billion).
Berkshire’s new investment in Delta likely was a Weschler investment. The size of it exactly matches the increased authority of about $3 billion that he got this year as his responsibility went to 6% of the portfolio from 5%, based on Abel’s comments in his annual letter around March 1. Weschler has a value bent, and Delta is the industry leader valued at around 10 times earnings.
https://stocks.apple.com/AmL07CtxdTuG1_IHbXJBDmw
No. of Recommendations: 6
Delta owns its own refinery, so in a prolonged period of high fuel prices it won’t be as badly hurt as its rivals. Also widely regarded as the best managed of the US airlines.
Its partnership with Amex, though imitated by other airlines, is widely regarded as the best in class.
2025 Total: $8.2 billion in cash remuneration, driven by double-digit co-branded card spending growth and 1+ million new card acquisitions.
2026 Q1: American Express remuneration topped $2 billion for the first quarter alone, representing a 10% increase compared to the previous year.
Profitability: This partnership is highly lucrative for the airline, as a significant portion of this revenue translates directly to high-margin free cash flow.
No. of Recommendations: 6
"Delta owns its own refinery, so in a prolonged period of high fuel prices it won’t be as badly hurt as its rivals. Also widely regarded as the best managed of the US airlines.
Its partnership with Amex, though imitated by other airlines, is widely regarded as the best in class.
2025 Total: $8.2 billion in cash remuneration, driven by double-digit co-branded card spending growth and 1+ million new card acquisitions.
2026 Q1: American Express remuneration topped $2 billion for the first quarter alone, representing a 10% increase compared to the previous year.
Profitability: This partnership is highly lucrative for the airline, as a significant portion of this revenue translates directly to high-margin free cash flow."
It is strange in that I was just talking to some people at Delta a few weeks ago about this. One of the phrases that kept coming up in our discussions was that "Delta wasn't really an airline. It was a credit card company that owned planes for its customers to spend on."
I was turning that over in my mind for the past few weeks and was considering investing in Delta but I had not yet done so simply because despite the phrase, it is really hard to get over my aversion to investing in airlines. I don't think I will invest in Delta because I am smart enough to figure out the implications of investing in a credit card company that owns and operates airplanes, but I wouldn't be surprised if people smarter than me could get comfortable with it.
No. of Recommendations: 6
No. of Recommendations: 8
Google starting to be noticeable & newest member of the Big 5.
It is indeed a bit of a mystery, in a way.
I tend to agree with the recent comment that the investment in Alphabet is too big to be a subordinate, so it's reasonably likely that it's Greg's (first?) pick, perhaps with a grudging nod from Mr B.
I have been a long term fan, and have made a lot of money on it so far, but the thing that's strange is that the valuation certainly isn't compelling recently.
Alphabet spends variable amounts on various things from year to year so earnings are a bit bumpy, so I have historically looked at price-to-sales as the quickest stable yardstick, bearing in mind the assumption that a slow long term down trend makes sense. In the last decade or so, the P/S ratio has oscillated in the 4.5 to 8.0 range. Always rich in that sense, but historically purchases in the <6 range have done very nicely reasonably quickly.
With the wild growth of capex recently among the MAMA stocks (Meta, Alphabet, Microsoft, Amazon), there is a case to be made that it's a business that is becoming very much more capital intensive, so return on assets can be expected to fall for a while. This tends to pull down the net margin and P/S ratios, as a crude rule of thumb.
So, the mystery is a big purchase now. P/S today is 12.3: ouch, relative to history even for them. If that history is a rough guide but the business economics and the historical valuation range are roughly unchanged, that's a very unlucky entry. If the expected long term trend of lower profits per dollar of revenue comes true, then it's even worse.
Of course, as others noted, they didn't buy at today's price. But still, it hasn't been an obvious timely buy at any 2026 valuation level.
The business is likely to do very well in the long run from here, even if valuations are a bit higher than usual, which might be just fine for Berkshire. "Great business at fair price" works, so "great business at not too painful" price might work too. That being said, I recently closed the last of my position recently (at $381-ish) on the simple reasoning that there is no statistically likely return to be had within a year or two, and other better opportunities might come up. There are some vague reasons to suspect that global equity markets might be a target rich environment at some point in the next 12-18-24 months. Ah, for a golden fish in a barrel.
Jim
No. of Recommendations: 8
I was turning that over in my mind for the past few weeks and was considering investing in Delta but I had not yet done so simply because despite the phrase, it is really hard to get over my aversion to investing in airlines. I don't think I will invest in Delta because I am smart enough to figure out the implications of investing in a credit card company that owns and operates airplanes, but I wouldn't be surprised if people smarter than me could get comfortable with it.That's how all of the major airlines work. They make most of their money selling frequent flier miles to banks. They fly airplanes at a slight profit or maybe break even in order to create demand for their frequent flier miles.
Delta's market cap is $46 billion. Its frequent flier program is valued at $31 billion.
https://www.prnewswire.com/apac/news-releases/delt...
No. of Recommendations: 0
I don't think I will invest in Delta because I am smart enough to figure out the implications of investing in a credit card company that owns and operates airplanes, but I wouldn't be surprised if people smarter than me could get comfortable with it.
Many years ago I had a meeting with a stockbroker to discuss my portfolio and decide if I wanted to invest with him. My holdings were mostly Motley Fool screens.
He looked it over and said "This looks fine, except for this one thing here." Pointing to the United Airlines position (which I had received from my father).
"Everybody looks at airlines and thinks they look like a good investment. Everybody makes that mistake, then they get burned. Never buy an airline stock."
He went on to say "I can't do anything for you, your portfolio looks fine."
No. of Recommendations: 2
WSJ had a story on Berkshire's Delta buy...
"Buffett told The Wall Street Journal on Monday that he wasn’t involved in Berkshire’s new Delta position. But he said he gave other investment ideas to Abel, who took over as CEO in January and has oversight of the firm’s enormous stock portfolio."
No. of Recommendations: 2
WB is washing his hands of that one. Don't blame him.
