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Berkshire Meeting Notes Part II

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May 05, 2012 – Comments (0)

Wind and Solar

Subsidies and sustainable energy policy…how do we move forward? Berkshire has bigger wind investments than solar. Federal subsidies make wind projects work; they wouldn’t work without the subsidy, period. The math doesn’t add up. This has encouraged Federal subsidies for wind. Solar projects involve some very long commitments and again these numbers don’t add up without the subsidies. Wind still offers many challenges (like when it doesn’t blow). But ultimately these cleaner technologies simply cannot work at present without subsidies which makes them tough to implement in the short-run, but there are still long-term possibilities that are worth pursuing; that’s why they pursue them. Berkshire has a distinct competitive advantage in that they pay lot of federal income tax; as such, they get significant tax credits for these types of investments.

Berkshire Stock and Buffett Tax

Is all the talk of the Buffett Rule capping the stock? Buffett says he doesn’t think so. He doesn’t know of the politics of his Big Four CEOs for example. He doesn’t think that what Buffett has to say about opinions on taxes for example should concern someone on whether or not they would buy Berkshire stock. There are many different companies that make up Berkshire, not all see eye to eye and they don’t even know where everyone stands on every (or any) issues. If this kind of talk steers people away from purchasing Berkshire stock, well he finds that to be rather silly.

Acquisitions

Splitting the stock, using the stock to purchase acquisitions. It is situational for sure, but the $20 billion threshold comes in to play here. He can sell stocks that they own, but it depends on what the better situation for Berkshire is. He doesn’t want to sell the stocks that are still tremendous value creators and doesn’t want to go below the $20 billion threshold, so the acquisition will need to be worth issuing stock in order to consider it.

Health

“I feel great. I love what I do. I work with people I love.” – Warren Buffett

He isn’t taking this lightly, but by the same token he say “In all seriousness, it’s a non-event.” The med center is two minutes from here and he is in good hands. Munger makes the funny joke that he resents all the sympathy and attention WEB is getting. He probably has more prostate cancer than WEB. Everybody laughs.

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