No. of Recommendations: 1
A response to the buyback questions several of us have had over the decades, which some of you might find helpful. This from an old poster who no longer wishes to post here but has added tremendous value over the decades so to further this discussion, with my response.
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Alex Morris has a section on Buffett’s comments on repurchases in his book, “Buffett and Munger Unscripted” which has categorized excerpts from the annual meetings. The section on repurchases of Berkshire stock is on pages 107-112 and many times he touches on the idea that he doesn’t want shareholders selling back to the company unless they have all the information he’d want if he was in their shoes, or words to that effect. But I don’t see anything that categorically said that he would be taking advantage of the seller at any price. Perhaps he said it and Alex didn’t include it but the book is quite thorough in general. It does confirm his extreme reluctance to do repurchases especially prior to 2011 when the (ridiculously low) limit of 1.1x BV was first introduced. I wish he had been more aggressive. At around the same time I believe he was buying IBM! But hindsight is 20/20."
OK, the point is every fully reporting public company has met the requirement to keep the public informed. The company's lawyers keep insiders informed with respect to when insiders can sell, if they wish, without a 10b5, and when the company can buy back stock, IF, an authorized buy back is in place. During the time period of 2000-to 2010ish Buffett had no interest in reducing the issued and outstanding. He didn't even buy back stock used to complete the railroad acquisition. At the very least brk should have had the, right of first refusal on all Gates Foundation sales, and disclosed it in the Buffett donation letter of June 2006. Very odd indeed, and a HUGE unforced error.
