REFORM COMPENSATION

“I thought it was good. First time writing, he's not going to be as funny ever as Warren, But I think he hit on all of the things he needed to touch on. He paid a nice, brief early tribute to Warren as he should have done, really demonstrated that he's a Berkshire guy. I mean, he gets the culture, he gets the integrity, he gets the value system of the place.”

“But I think to your point about a slow cognitive decline, we talk about tulipomania. This is my roundtable where I've got thirty, thirty two, really my best friends, colleagues, contemporaries, peers in the investment world that I've gotten over the years. ... I've got enough people in my universe that would I believe would be candid and say, Chris, you're starting to slow down. You need to do some you need to think about not being having your finger on the trigger of capital.”

“On 400,000,000,000 of CapEx, if you're writing off the asset over ten years, which is too long, there's a debate over whether it should be three or four years or five or six years. It's not about the debate, it's you're putting depreciation on the income statement, depreciation expense, and it's a real expense, it's a real charge. If your depreciation schedule linearly on a straight line basis is ten years, on 400,000,000,000 of CapEx, that's $40,000,000,000 of depreciation expense.”

“If you take margins down from today's 12.8% to 10, and you're gonna crucify a 26 multiple to earnings. So multiples come in when margins come in. Wall Street Investors in general don't like compressing profit margins and they punish the stocks with lower multiples, lower and lower multiples when margins come in. I think there's a heck of a lot of risk in margins for reasons related to the CapEx, but also reasons related to how the economy is structured and competitive forces.”

“So I come up with when you just do a simple average of my four methods, a progression of 9.3% year over year, which gets you to a little over 1,200,000,000,000, almost 1 and a quarter trillion. My market cap would be intrinsic value and on a per share basis that went from the b shares a year ago were $5.22. I've got them at $5.70 per share now and the a shares are up to 855,396.”

“You could say in the case of the shareholder, those repurchases supported the stocks and that's why we're trading at 26 times earnings today and that's probably the case. But those were dollars that didn't go into reinvestment in property, plant and equipment or acquisitions. That was money that was spent simply levitating a stock to make executives rich, driving up the stock price to higher and higher levels.”

“But it's it's a proxy for it's gonna be a tough hurdle for the aggregate of all of these guys in this arms race because the numbers are just frankly staggering. And I don't see how you've got enough revenue and then profit opportunity to make the whole thing generate a return on capital. Maybe they do, maybe they don't. I don't need to play in the game, but I think it's a tough hurdle.”

“To argue that the high current margins coupled with very high multiples, you can bake in scenarios for each of the five variables and it's really hard to get to more than a 5% return. And depending on where margins and multiples head from here, you can get to a loss for a decade, which is what happened after the 1999 peak.”