Buffett Berkshire Hathaway Annual Letter for 2022

February 26, 2023 at 1:48 pm

Warren Buffett released his annual shareholder letter for Berkshire Hathaway this weekend. It's shorter and less ambitious than it has been in past years, perhaps because Buffett, at age 92, is slowing down a bit. It's worth a look nonetheless for at least two policy-relevant pieces.

The first is a discussion of stock buybacks, which the New York Times Company has an editorial position in favor of making illegal even as the Times Company is engaged in buying back its own stock. In his State of the Union address, President Biden proposed to quadruple the tax on stock buybacks, a tax that didn't even exist until Biden and Democrats in Congress imposed it.

Here is how Buffett puts it:

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Maimonides Salaries

February 26, 2023 at 9:16 am

A New York Times news article about Maimonides Medical Center in Brooklyn reports that the hospital's chief executive, Ken Gibbs, "earned $3.2 million in 2020...Mr. Gibbs' 2020 earnings included a one-time payout; he earned $1.8 million in 2021 and 2022, the hospital said." The same article includes a reference to "Dr. Jacob Shani, the chairman of the hospital's heart and vascular center and its highest paid employee, with an annual salary of $3.5 million in 2020."

The same article reports that the hospital has "weak finances," including "a $145 million operational deficit in 2021." It says "Maimonides is a safety-net hospital that mostly treats people with Medicare or Medicaid."

It's an interesting business where a money-losing, nonprofit government contractor can pay out compensation at those levels.

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Tom Donahue, Morris Amitay

February 22, 2023 at 8:03 am

Two Democrats who helped win the Cold War and support an active, pro-freedom American foreign policy, Tom Donahue and Morris Amitay, are the subject of my column this week. It appears in the New York Sun under the headline, "Celebrating Two Heroes of the Cold War Who Freed Millions from Communism."

I didn't mention it in the column, but I came to know both these men while serving as the Washington correspondent of the Forward from 1995 to 1997. They were both extremely gracious and generous with their time and help, which is noteworthy given they were both senior figures at the time and I was a young journalist new to Washington and to the labor and foreign policy beats.

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New York Times Stock Buyback

February 9, 2023 at 10:18 am

A news article in today's New York Times reports, "The Times announced on Wednesday that its board had approved a new $250 million Class A share repurchase program. The board approved a separate $150 million in stock buybacks last February. So far, the company has repurchased $112 million in shares."

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Recent Work

February 8, 2023 at 7:59 pm

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Carlyle Group

February 7, 2023 at 9:29 am

From a New York Times news article on Lloyd Blankfein's former Goldman Sachs colleague Harvey Schwartz taking over Carlyle Group: "Mr. Schwartz could earn up to $180 million over a five-year-period, if the stock outperforms most of its publicly traded competitors, Carlyle said in a filing Monday. That would come on top of an annual salary of $1 million and a bonus of up to $6 million a year."

When the urge to buy an individual stock hits me I usually try to lie down and wait until it passes, but given the incentives, it sure is tempting to bet on Schwartz to do what he needs to do to get the $180 million. Carlyle is now trading at a trailing price/earnings ratio of 7.9 and a forward annual dividend yield of 3.48 percent, according to Yahoo Finance.

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2023 Market Outlook

January 15, 2023 at 8:57 am

Newsmax has posted my column on the 2023 stock market outlook. It includes a couple of paragraphs that were not in the New York Sun version of the column. The headline is "Market May Surprise on the Bullish Side in 2023."

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David Brooks and Bret Stephens on the GOP's Future

January 15, 2023 at 8:45 am

The New York Times has a conversation between David Brooks and Bret Stephens on the future of the Republican Party. It's uneven but worth a look. Highlights:

[Brooks:] Size-of-government arguments are going to be less salient. Values, identity and social status issues will be more salient. I think the core driver of politics across the Western democracies is this: In society after society, highly educated professionals have formed a Brahmin class. The top of the ladder go to competitive colleges, marry each other, send their kids to elite schools and live in the same neighborhoods. This class dominates the media, the academy, Hollywood, tech and the corporate sector.

Many people on the middle and bottom have risen up to say, we don't want to be ruled by those guys. To hell with their economic, cultural and political power. We'll vote for anybody who can smash their machine. The Republican Party is the party of this protest movement.

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More Skepticism of Recession

January 6, 2023 at 8:09 am

From the front of the business section of today's New York Times (January 6, 2023):

a budding crop of economists and major market investors see a firm chance that the economy will avoid a recession, or scrape by with a brief stall in growth, as cooled consumer spending and the easing of pandemic-era disruptions help inflation gingerly trend toward more tolerable levels — a hopeful outcome widely called a soft landing.

"The possibility of getting a soft landing is greater than the market believes," said Jason Draho, an economist and the head of Americas asset allocation for UBS Global Wealth Management. "Inflation has now come down faster than some recently expected, and the labor market has held up better than expected."...

"It's 50-50, but I have to take a side, right? So I take the side of no recession," said Mark Zandi, the chief economist at Moody's Analytics. "I can make the case on either side of this pretty easily, but I think with a little bit of luck and some tough policymaking, we can make our way through."

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Kevin McCarthy

January 4, 2023 at 9:59 pm

Two from the archives that might be useful context for those following with interest the difficulty Kevin McCarthy is having sealing the speakership of the House:

1) Our 2010 review of "Young Guns: A New Generation of Conservative Leaders," by Paul Ryan, Eric Cantor, and Kevin McCarthy. The review concluded: "These guys are, after all, politicians, a fact that occasionally shines through. Mr. McCarthy was elected to Congress in 2006 after the retirement of his 'mentor and friend,' Bill Thomas, for whom Mr. McCarthy had worked for 15 years starting at age 22. Mr. Thomas had served 28 years in Congress, which makes the complaint elsewhere in the book, directed at Democratic House committee chairs, that 'the people who are making the nation's energy and tax policy for America's small business haven't been in the private sector for over three decades,' ring a bit hollow."

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Byron Wien on 2023 and 2009

January 4, 2023 at 9:20 pm

The photo cutline on my January 2 New York Sun column accurately described the column's contents: "Hardly anyone is saying this publicly, but the stock market could be in for a repeat of the 2009 rebound."

Lo and behold, January 4 at noon, the vice chairman of $951 billion asset manager Blackstone, Byron Wien, and Joe Zidle, Chief Investment Strategist in the Private Wealth Solutions group at Blackstone, released their "Ten Surprises of 2023."

From the release: "Byron defines a 'surprise' as an event that the average investor would only assign a one out of three chance of taking place but which Byron believes is 'probable,' having a better than 50% likelihood of happening. Byron started the tradition in 1986 when he was the Chief U.S. Investment Strategist at Morgan Stanley."

Surprise number 4 on the Wien list is "Despite Fed tightening, the market reaches a bottom by mid-year and begins a recovery comparable to 2009."

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Market May Surprise on Bullish Side in 2023

January 2, 2023 at 4:30 pm

What the U.S. stock market will do in 2023 is the topic of my column this week. Please check out the full column in the New York Sun ("Happy New Year — 2022 Was the Worst Year for Stocks Since 2008/History suggests this could lead to an upswing in the year just begun.")

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NPR Turns Naps Into Attack on Capitalism

December 28, 2022 at 8:40 pm

National Public Radio's "All Things Considered" devoted eight minutes this week to having Shereen Marisol Meraji interview Tricia Hersey, the author of Rest Is Resistance. From the transcript:

HERSEY: Rest is a form of resistance because it pushes back and disrupts white supremacy and capitalism.....

MERAJI: I really want to talk more about tenet No. 1 - rest is a form of resistance because it disrupts and pushes back against capitalism and white supremacy....

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New York Republican Boom

December 25, 2022 at 9:56 am

Even the New York Times acknowledges in a news article: "Across New York City, where Democrats outnumber Republicans seven to one, there are signs of Republicans making inroads. In the most recent midterm elections, every county in the city voted more Republican than it did in the 2020 presidential election, and three Democratic members of the State Assembly lost to Republicans in South Brooklyn."

The Times highlights Ari Kagan, a New York City Council member who, like Senator Sinema, is leaving the Democratic Party:

Mr. Kagan said that he believed that the Democratic Party, especially in New York, had drifted too far to the left.

"It's not me leaving the Democratic Party," Mr. Kagan said. "The Democratic Party started to leave me."

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Michael Bloomberg's Best Revenge

December 23, 2022 at 8:56 am

Senator Elizabeth Warren's upcoming reelection race is an opportunity for Mayor Bloomberg to exact retribution for her attack on him in the 2020 presidential campaign, I write in my column this week. Please check out the full column at Newsmax ("How Bloomberg Has a Chance Against Warren for '24") and at the New York Sun ("Elizabeth Warren's 2024 Campaign Is Mike Bloomberg's Best Opportunity for Revenge").

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