I arrived at similar conclusions when I looked at the filing this morning. I think that there has been a severe permanent impairment of value of BHE in Buffett’s eyes. Given his longstanding relationship with Walter Scott, I’m sure that he tried hard to come up with a figure that was fair to Berkshire and the Scott family. The fact that he was willing to issue Berkshire shares is also revealing in terms of his view of Berkshire’s intrinsic value. I’m looking forward to the 10-Qs about six weeks from now!
My only 2 cents would be that Buffett may have "grossed up" the payment of Abel's interest to allow him to cover capital gains tax. In the case of the Trust, there was probably minimal capital gains tax consequences since they received a stepped-up basis upon the death of Walter Scott.
No, I don't think he'd overpay for Greg's interest just to take care of his taxes. That would disadvantage BRK shareholders, something Buffett wouldn't do.
I arrived at similar conclusions when I looked at the filing this morning. I think that there has been a severe permanent impairment of value of BHE in Buffett’s eyes. Given his longstanding relationship with Walter Scott, I’m sure that he tried hard to come up with a figure that was fair to Berkshire and the Scott family. The fact that he was willing to issue Berkshire shares is also revealing in terms of his view of Berkshire’s intrinsic value. I’m looking forward to the 10-Qs about six weeks from now!
Good work. I think the problems with BHE are often overlooked. These problems also apply to many other utility companies as well.
My only 2 cents would be that Buffett may have "grossed up" the payment of Abel's interest to allow him to cover capital gains tax. In the case of the Trust, there was probably minimal capital gains tax consequences since they received a stepped-up basis upon the death of Walter Scott.
No, I don't think he'd overpay for Greg's interest just to take care of his taxes. That would disadvantage BRK shareholders, something Buffett wouldn't do.