FRI, NOV 01, 2024

WARREN BUFFETT WATCH

Sirius XM stake tops 33%

Warren Buffett's Berkshire Hathaway now owns one-third of Sirius XM Holdings, the satellite radio provider that was split off by John Malone's Liberty Media in September.

In a filing yesterday, Berkshire reports buying another 2.2 million shares for $60.7 million on Tuesday, Wednesday, and Thursday. That's an average price of $27.24 per share.

It spent a total of almost $190 million on SIRI shares in October.

As of yesterday, it owned 112.5 million shares valued at $3.1 billion based on today's close of $27.65.

Last December, Liberty announced plans to combine Sirius XM and two tracking stocks to form a new public company.

At the end of last year, Berkshire already owned almost $1.9 billion of SIRI and the tracking stocks.

Between early January and early May, Berkshire bought another $1.2 billion worth of the tracking stocks.

Those purchases were seen as a way to profit from a disparity between the value of the tracking stocks and the SIRI shares holders would receive.

Now it appears Berkshire may be optimistic about the company's prospects on a fundamental level.

Not everyone agrees. The stock is down almost 39% over the past year amid a decline in subscribers.

Berkshire's Apple stake will be focus of tomorrow's Q3 financials

Berkshire Hathaway will release its third quarter financial results on its website tomorrow morning around 8 AM ET.

The primary point of interest is likely to be the September 30 market value of Berkshire's stake in Apple, which will reveal whether Buffett continued to sell shares during the third quarter.

Berkshire cut its Apple stake by almost 13% in the first quarter of this year, then slashed it by another 49% in the second quarter.

It owned exactly 400 million shares as of June 30, a "round number" that suggested to some the selling had ended.

Customers walk past an Apple logo inside an Apple store at Grand Central Station in New York, August 1, 2018. REUTERS/Lucas Jackson/File Photo

(The most recent disclosure of Bank of America stock sales was in early October, so the value of the holding on September 30 will not reveal if Berkshire has continued to sell after its stake fell below 10%, relieving it of the obligation to promptly report additional moves.)

We'll also be looking to see the extent of Berkshire's stock buybacks, which have slowed as its shares have gained, and the size of its cash pile, which was a record $277 billion as of June 30.

Operating earnings, which don't include paper gains or losses on its equity holdings, are expected to drop 1% to $10.5 billion according to the FactSet consensus, in part due to insurance losses from Hurricane Helene and other storms.

Tidal files for first leveraged Berkshire Hathaway ETF

The preliminary prospectus for Tidal Trust's Kick BRK 2X Long Daily Target ETF (BRKX) says it will seek "daily leveraged investment results of two times (200%) the daily percentage change in the share price" of Berkshire's Class B shares (BRK.B) using derivatives.

The key word is "daily."

The fund is only trying to double BRK.B's return for a single day. Investors who hold the ETF for more than one day may get a return that is more, or less, than double the return of the stock over the same period.

The more volatile the stock, the greater the disparity.

(Bloomberg's Matt Levine offers an extensive explainer of the risks of leveraged ETFs in his excellent Money Stuff column.)

Hence the warning in the prospectus that "investors should not plan to hold shares of the Fund unmonitored for periods longer than a single trading day."

It also warns the ETF is "designed to be utilized only by sophisticated investors, such as traders and active investors employing dynamic strategies."

BUFFETT AROUND THE INTERNET

Some links may require a subscription

Barron's (subscription): Wells Fargo, Capital One, and Other Value Picks From a Berkshire Board Member

Inc.: Warren Buffett Said What Separates Successful People From Everyone Else Comes Down to 3 Words

HIGHLIGHTS FROM THE ARCHIVE

Rich people can get 'antagonistic' toward others (1995)

Warren Buffett talks about how wealthy people need to check themselves against emotions like hatred and envy.

BERKSHIRE STOCK WATCH

Four weeks

Twelve months

BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Nov. 1, 2024

Berkshire's top holdings of disclosed publicly traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.

Holdings are as of June 30, 2024 as reported in Berkshire Hathaway's 13F filing on August 14, 2024, except for:

Bank of America, which is as of October 15, 2024
Mitsubishi, which is as of June 12, 2023. Tokyo Stock Exchange prices are converted to U.S. dollars from Japanese yen.

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTS

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.)

If you aren't already subscribed to this newsletter, you can sign up here.

Also, Buffett's annual letters to shareholders are highly-recommended reading. There are collected here on Berkshire's website.

-- Alex Crippen, Editor, Warren Buffett Watch

900 Sylvan Avenue, Englewood Cliffs, NJ 07632

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