Could fall 2%, 3% a year,” or whatever it was. I just marvel at the artistry of it.Īlex: I like the float comment, 2011, 2012, “Hey, probably won’t grow from here.

So, you could think about that as an interest-free, no expiration, non-callable loan from the US government of $77 billion that they’re running with. And then, something else you don’t really talk about much is the deferred tax liability is $77 billion. So, they want them to have some debt because it lowers the cost of capital for these companies.īut then, the insurance side of things in corporate level, they’ve got $46 billion. The commissions that they operate under want them to have debt to lower the cost of capital that they are then paying on for when they figure out how much to pay like a return on equity for them. But they’ve got, let’s say, what is it, $76 billion at the railroad in debt, $46– at railroad and energy. It’s just amazing to watch a master at work. His dollars translated into– He just knows how to play this game so well. Jake: He executed it when the yen was especially weak. Tobias: Who took the other side of that trade? Some of it, the Japanese stuff, the yen is zero forever. Right now, I think the average is around the 3%, and it’s all long dated, fixed. That’s something that I think that’s really missed when you look at the capital allocation of Berkshire. Jake: Now, their use of debt is masterful. During their latest episode of the VALUE: After Hours Podcast, Morris, Taylor, and Carlisle discuss Warren Buffett’s Masterful Use Of Debt.

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