|
Post by uncleharley on Feb 27, 2024 2:20:21 GMT
XLF took it on the chin today, down 1.96%. Do you mean XLU??
|
|
|
Post by oldskeet on Feb 27, 2024 18:31:23 GMT
|
|
|
Utilities
Feb 27, 2024 21:38:45 GMT
via mobile
Post by oldskeet on Feb 27, 2024 21:38:45 GMT
Interesting, XLU down 1.96% yesterday and up 1.89% today. Signs of a directionless market. Pretty good swing. OS
|
|
|
Post by chang on Feb 28, 2024 13:37:51 GMT
I hadn't anticipated lawsuits against utilities like this: US Government May Sue PacifiCorp, a Warren Buffett Utility, for Nearly $1B in Wildfire CostsThe U.S. government is threatening to sue PacifiCorp, a unit of Warren Buffett’s Berkshire Hathaway, to recover nearly $1 billion in costs related to the 2020 wildfires in southern Oregon and northern California, though the company is trying to negotiate a settlement.
The potential lawsuits were disclosed in an annual report filed by PacifiCorp’s Iowa-based parent company, Berkshire Hathaway Energy, on Monday — two days after Buffett lamented the disappointing results at the conglomerate's utility division in his annual letter to Berkshire Hathaway shareholders. This new liability comes after the utility already agreed to pay hundreds of millions of dollars in lawsuits related to the fires.
Utilities may not be the best investment for widows and orphans anymore.
|
|
|
Post by mnfish on Feb 28, 2024 14:17:15 GMT
I hadn't anticipated lawsuits against utilities like this: US Government May Sue PacifiCorp, a Warren Buffett Utility, for Nearly $1B in Wildfire CostsThe U.S. government is threatening to sue PacifiCorp, a unit of Warren Buffett’s Berkshire Hathaway, to recover nearly $1 billion in costs related to the 2020 wildfires in southern Oregon and northern California, though the company is trying to negotiate a settlement.
The potential lawsuits were disclosed in an annual report filed by PacifiCorp’s Iowa-based parent company, Berkshire Hathaway Energy, on Monday — two days after Buffett lamented the disappointing results at the conglomerate's utility division in his annual letter to Berkshire Hathaway shareholders. This new liability comes after the utility already agreed to pay hundreds of millions of dollars in lawsuits related to the fires.
Utilities may not be the best investment for widows and orphans anymore. I wonder who the insurance company is? One would assume BRK? From another article "Berkshire Hathaway utility says annual commercial insurance costs recently more than quadrupled to $125 million."
|
|
|
Post by bizman on Feb 28, 2024 18:09:15 GMT
I hadn't anticipated lawsuits against utilities like this: US Government May Sue PacifiCorp, a Warren Buffett Utility, for Nearly $1B in Wildfire CostsThe U.S. government is threatening to sue PacifiCorp, a unit of Warren Buffett’s Berkshire Hathaway, to recover nearly $1 billion in costs related to the 2020 wildfires in southern Oregon and northern California, though the company is trying to negotiate a settlement.
The potential lawsuits were disclosed in an annual report filed by PacifiCorp’s Iowa-based parent company, Berkshire Hathaway Energy, on Monday — two days after Buffett lamented the disappointing results at the conglomerate's utility division in his annual letter to Berkshire Hathaway shareholders. This new liability comes after the utility already agreed to pay hundreds of millions of dollars in lawsuits related to the fires.
Utilities may not be the best investment for widows and orphans anymore. Given Buffett's comments in his letter and the fact that his designated successor Greg Abel is the head of BHE and matriculated through the original MidAmerican Energy, it will be interesting to see if they go deeper on their outlook for Utes at Berkshire-palooza in May. BHE is a big part of Berkshire and where they have been investing Capex like crazy over the years. The question swirling in my head is whether Buffett is likely to stop investing new capital in BHE and let it shrink in size in terms of its overall business mix going forward? And if so, isn't Greg Abel perhaps a curious choice to be the successor CEO since that's his wheelhouse and presumably he has been one of the architects of their growth-utility strategy? And/or is he flexible enough to turn off the capital allocation lever there if the forward returns are unattractive, kind of like Ajit Jain has done with the insurance operations? Then again, maybe this is just Buffett giving a "warning shot" to regulators that there is a point at which they won't be conscripted into a profitless Green buildout? And the potential implications for the country for widespread uneconomic investment needed to keep up with Green mandates is unattractive at the least, and potentially nightmarish at best. Makes one more easily imagine future winter blackouts where lots of people freeze to death, and/or the gov't may need to nationalize the utilities and put their debt on the gov't balance sheet? I thought the Warmists would have a bit more common sense than that, to at least allow the buildout to be complete before they started demagoguing the capitalists who would finance it. I guess assuming common sense in anyone in public life these days is asking way too much. And maybe higher interest rates are a forcing function, where with ZIRP there was more of a free lunch that everyone could get what they wanted, and now someone is going to get squeezed. I'm not unhappy to leave issues like this to guys like Giroux to handle. It's awfully hard for me to see how I'm going to successfully invest in utilities if even Warren Buffett can't figure it out. So all eyes and ears will surely turn to Omaha for Warren to expand on this. EDITED TO ADD: It just occurred to me that most or all of these concerns were raised by R48. Kudos to him for seeing things more clearly than I apparently did.
|
|
|
Post by chang on Feb 28, 2024 20:02:02 GMT
It's awfully hard for me to see how I'm going to successfully invest in utilities if even Warren Buffett can't figure it out. So all eyes and ears will surely turn to Omaha for Warren to expand on this. Well said.
|
|
|
Post by retiredat48 on Feb 29, 2024 0:09:13 GMT
bizman,...who posted: "EDITED TO ADD: It just occurred to me that most or all of these concerns were raised by R48. Kudos to him for seeing things more clearly than I apparently did." Thanks bizman...just trying to help. R48
|
|
|
Post by bigseal on Feb 29, 2024 16:26:00 GMT
I hadn't anticipated lawsuits against utilities like this: US Government May Sue PacifiCorp, a Warren Buffett Utility, for Nearly $1B in Wildfire CostsThe U.S. government is threatening to sue PacifiCorp, a unit of Warren Buffett’s Berkshire Hathaway, to recover nearly $1 billion in costs related to the 2020 wildfires in southern Oregon and northern California, though the company is trying to negotiate a settlement.
The potential lawsuits were disclosed in an annual report filed by PacifiCorp’s Iowa-based parent company, Berkshire Hathaway Energy, on Monday — two days after Buffett lamented the disappointing results at the conglomerate's utility division in his annual letter to Berkshire Hathaway shareholders. This new liability comes after the utility already agreed to pay hundreds of millions of dollars in lawsuits related to the fires.
Utilities may not be the best investment for widows and orphans anymore. Given Buffett's comments in his letter and the fact that his designated successor Greg Abel is the head of BHE and matriculated through the original MidAmerican Energy, it will be interesting to see if they go deeper on their outlook for Utes at Berkshire-palooza in May. BHE is a big part of Berkshire and where they have been investing Capex like crazy over the years. The question swirling in my head is whether Buffett is likely to stop investing new capital in BHE and let it shrink in size in terms of its overall business mix going forward? And if so, isn't Greg Abel perhaps a curious choice to be the successor CEO since that's his wheelhouse and presumably he has been one of the architects of their growth-utility strategy? And/or is he flexible enough to turn off the capital allocation lever there if the forward returns are unattractive, kind of like Ajit Jain has done with the insurance operations? Then again, maybe this is just Buffett giving a "warning shot" to regulators that there is a point at which they won't be conscripted into a profitless Green buildout? And the potential implications for the country for widespread uneconomic investment needed to keep up with Green mandates is unattractive at the least, and potentially nightmarish at best. Makes one more easily imagine future winter blackouts where lots of people freeze to death, and/or the gov't may need to nationalize the utilities and put their debt on the gov't balance sheet? I thought the Warmists would have a bit more common sense than that, to at least allow the buildout to be complete before they started demagoguing the capitalists who would finance it. I guess assuming common sense in anyone in public life these days is asking way too much. And maybe higher interest rates are a forcing function, where with ZIRP there was more of a free lunch that everyone could get what they wanted, and now someone is going to get squeezed. I'm not unhappy to leave issues like this to guys like Giroux to handle. It's awfully hard for me to see how I'm going to successfully invest in utilities if even Warren Buffett can't figure it out. So all eyes and ears will surely turn to Omaha for Warren to expand on this. EDITED TO ADD: It just occurred to me that most or all of these concerns were raised by R48. Kudos to him for seeing things more clearly than I apparently did. I think David Giroux is an outstanding PM but he has been wrong about utilities for quite a number of years. Recall an interview with him a few years ago when he said if he had to make one pick over the next number of years it would be XLU. Talk about being wrong. As good as he his, he isn’t always right…..no one is.
|
|
|
Post by bizman on Feb 29, 2024 18:32:19 GMT
Given Buffett's comments in his letter and the fact that his designated successor Greg Abel is the head of BHE and matriculated through the original MidAmerican Energy, it will be interesting to see if they go deeper on their outlook for Utes at Berkshire-palooza in May. BHE is a big part of Berkshire and where they have been investing Capex like crazy over the years. The question swirling in my head is whether Buffett is likely to stop investing new capital in BHE and let it shrink in size in terms of its overall business mix going forward? And if so, isn't Greg Abel perhaps a curious choice to be the successor CEO since that's his wheelhouse and presumably he has been one of the architects of their growth-utility strategy? And/or is he flexible enough to turn off the capital allocation lever there if the forward returns are unattractive, kind of like Ajit Jain has done with the insurance operations? Then again, maybe this is just Buffett giving a "warning shot" to regulators that there is a point at which they won't be conscripted into a profitless Green buildout? And the potential implications for the country for widespread uneconomic investment needed to keep up with Green mandates is unattractive at the least, and potentially nightmarish at best. Makes one more easily imagine future winter blackouts where lots of people freeze to death, and/or the gov't may need to nationalize the utilities and put their debt on the gov't balance sheet? I thought the Warmists would have a bit more common sense than that, to at least allow the buildout to be complete before they started demagoguing the capitalists who would finance it. I guess assuming common sense in anyone in public life these days is asking way too much. And maybe higher interest rates are a forcing function, where with ZIRP there was more of a free lunch that everyone could get what they wanted, and now someone is going to get squeezed. I'm not unhappy to leave issues like this to guys like Giroux to handle. It's awfully hard for me to see how I'm going to successfully invest in utilities if even Warren Buffett can't figure it out. So all eyes and ears will surely turn to Omaha for Warren to expand on this. EDITED TO ADD: It just occurred to me that most or all of these concerns were raised by R48. Kudos to him for seeing things more clearly than I apparently did. I think David Giroux is an outstanding PM but he has been wrong about utilities for quite a number of years. Recall an interview with him a few years ago when he said if he had to make one pick over the next number of years it would be XLU. Talk about being wrong. As good as he his, he isn’t always right…..no one is. bigseal , you are 100% right. And it's even worse than that. Even the greatest investor in history, Warren Buffett, has by his own admission made a rather large mistake there that surely dwarves Giroux's results at least in dollar terms, in the same area. Peter Lynch said, if you're good in investing you're right 6 times out of ten, nobody's right 9 times out of ten. My point is not that anyone knows everything. It's just that if Giroux and Buffett can't win in that area, I surely have no hope of coming close. And I presume with greater resources, they should be better placed than me to change their minds or reallocate capital to more attractive areas. Or contrarily, to find exceptions that I'm incapable of finding. But I don't think anyone knows the future, it's just about subjective probabilities and risk management. Which is why I will be glued to Warren's comments about utilities in May, given his remarks in his letter. This could be a sea-change moment if he really means what he said about the compact between investors and regulators being increasingly ruptured going forward in utilities.
|
|
|
Post by anitya on Mar 1, 2024 3:52:47 GMT
Giroux launched two other funds (TCAF and a conservative allocation fund) in the past few months and went around giving a ton of interviews to market these two funds.
The problems with utilities are centered around transmission and supply to end user. How about focusing on utilities that supply to generators and those that just generate and nothing else? Is there an ETF that fits this description?
|
|
|
Post by catdog on Mar 1, 2024 17:02:47 GMT
Going slightly off track here, but take a look at Dominion Energy, (D). Political drama has always surrounded them and they are pushing hard to green energy. Gas and Electric provider to Virginia and many surrounding states. Share Holder meeting today and stock is down 6.5%. I have watched for quite a while, but never owned.
catdog
|
|
|
Post by bigseal on Mar 1, 2024 19:29:56 GMT
Going slightly off track here, but take a look at Dominion Energy, (D). Political drama has always surrounded them and they are pushing hard to green energy. Gas and Electric provider to Virginia and many surrounding states. Share Holder meeting today and stock is down 6.5%. I have watched for quite a while, but never owned. catdog What do you mean by “political drama has always surrounded them”? I don’t think that has always been the case.
|
|
|
Post by win1177 on Mar 1, 2024 21:00:38 GMT
Going slightly off track here, but take a look at Dominion Energy, (D). Political drama has always surrounded them and they are pushing hard to green energy. Gas and Electric provider to Virginia and many surrounding states. Share Holder meeting today and stock is down 6.5%. I have watched for quite a while, but never owned. catdog As far as “political drama”, I can add a little to the story. South Carolina Electric and Gas (SCEG) was a very successful and profitable utility here in S.C. But several of their top executives stuck with a flawed design when SCEG proposed building the first “new” nuclear reactor in Jenkinsville, SC. This was in spite of warnings from some experts about the design, cost over-runs, safety, etc. etc. When SCEG was ultimately “exposed” for the poor design, cost-overruns, etc., a LOT of people lost their jobs, as well a lot of their investment money. ALOT of “anger” here in South Carolina, and (fortunately, IMHO), several of those “executives” are now in prison. When D came in and bought SCEG (for a pretty low price), I think some of that anger was transferred to Dominion. Since D bought SCEG, the stock has done pretty poorly. Down -8% for one year, down -6.2% for 3 years, and down -3.3% for 5 years!!! Reduced their dividend, now undergoing a “strategic review”, and other signs of a struggling company. Many investors have NOT been “happy” with Dominion, and their poor performance, to say the least. We used to own SCEG, and later got stock in D when the merger (rescue of SCEG) went through. SCEG wound up being destroyed as a going concern by several of their top executives, when they were trying to build the first “new” nuclear plant in many decades. We’ve “added” several times to our Dominion position, but are “underwater” on the position, except for our initial stock which has a VERY low cost basis from old SCEG position. So I’m “frustrated” with the company myself, and have a limit sell order in for our higher cost basis positions. The company is pretty good, good work culture, reliable and relatively “cheap” power, etc. I may get back in at a lower price. Win
|
|
|
Post by retiredat48 on Mar 2, 2024 0:41:46 GMT
win1177 ,...thanks for sharing, and insight. Reminds me of why I have not bought an individual stock in over 55 years! Often tempted, never bit. Encourage all younger investors to eliminate the single stock risk from their investing; not necessary for success. R48
|
|
|
Post by win1177 on Mar 2, 2024 2:54:22 GMT
win1177 ,...thanks for sharing, and insight. Reminds me of why I have not bought an individual stock in over 55 years! Often tempted, never bit. Encourage all younger investors to eliminate the single stock risk from their investing; not necessary for success. R48 Probably why I should STOP buying individual stocks! I’ve had some that have literally rocketed up (AAPL, MSFT, XOM, LOW, MCHP, COST, JNJ, etc.), I’ve also had some that fell. I’m slowly switching over to more index funds. Win
|
|
|
Post by FD1000 on Mar 2, 2024 23:27:16 GMT
win1177 ,...thanks for sharing, and insight. Reminds me of why I have not bought an individual stock in over 55 years! Often tempted, never bit. Encourage all younger investors to eliminate the single stock risk from their investing; not necessary for success. R48 Probably why I should STOP buying individual stocks! I’ve had some that have literally rocketed up (AAPL, MSFT, XOM, LOW, MCHP, COST, JNJ, etc.), I’ve also had some that fell. I’m slowly switching over to more index funds. Win You can do both. My friend real story is a good example how to do that. In the early 90s he bought 10 stocks and invests $3K in each, 9 were average or worse, MSFT made him over 1.5 million. Other than that he invested in the SP500 every month thru his 401K.
|
|
|
Post by yogibearbull on Mar 2, 2024 23:53:58 GMT
win1177 , you can replace those stocks with sector ETFs - market-cap based or equal-weight. This is done easier in tax-deferred/free a/c; tax considerations apply in taxable a/c. Specifically, look at tech XLK/RSPT, energy XLE/RSPG, healthcare XLV/RSPH, consumer-discretionary XLY/RSPD. This being a utilities thread, I may also mention XLU/RSPU. Keep this in mind for TLH swaps too. ybbpersonalfinance.proboards.com/post/1097/thread
|
|
|
Post by win1177 on Mar 3, 2024 21:23:46 GMT
win1177 , you can replace those stocks with sector ETFs - market-cap based or equal-weight. This is done easier in tax-deferred/free a/c; tax considerations apply in taxable a/c. Specifically, look at tech XLK/RSPT, energy XLE/RSPG, healthcare XLV/RSPH, consumer-discretionary XLY/RSPD. This being a utilities thread, I may also mention XLU/RSPU. Keep this in mind for TLH swaps too. ybbpersonalfinance.proboards.com/post/1097/thread Thanks Yogi! I’m going to look at doing this slowly over time. Most of our accounts are taxable brokerages, so I’ll be limited due to tax considerations. But going to slowly head in that direction. Win
|
|
|
Post by bizman on Mar 5, 2024 20:27:20 GMT
Here's an interesting tidbit about how Nvidia GPU's may not be the constraint on AI, it may be power. What a crazy time with massive new demand scheduled to come on over the next decade for electric cars and data centers at the same time regulators are getting much less friendly with the utilities that must finance the new generation (unless the data centers are going to build their own power plants on site). Will be fascinating to see how this all shakes out. It almost makes me think Warren may be talking utilities down so maybe he can bag an elephant at a fire sale. Almost. "Energy is as big of a constraint on AI as GPUs...
As we noted last week, there will be many indirect plays for investing into AI growth. Energy needs and availability will be a massive one. Just go and drive by a new or expanding data center in your city and look at all the external power infrastructure that is being built around the building. I drive by one every day to the office and it is insane. 'Now, the constraint is that you'd think, well, somebody needs to call up Jensen and beg for GPUs. Let's say we can figure out how to do that. Maybe we know somebody who knows Jensen. Okay, the hard part is we can't get power. So I think the constraint on this going for everybody sees with the constraint is availability of GPUs. I think it's straight on this soon is going to be the availability of power. You cannot get power to build the data center in Silicon Valley. You know this, right? Northern Silicon Valley is PG&E, which is, I have no comment on that. And Southern Silicon Valley is some other power company. I know not what, but they will not give you power for a data center. So I think this GPU constraint is ephemeral as soon as it's going to be power.' - C3.ai CEO Thomas Siebel 'Boston Consulting Group believes that AI and regular data center demand will grow to 7% of total electricity demand by 2030. To put this in context, this is the equivalent of the electricity used for lighting in every home business and factory across the United States. It's a huge amount of energy. Most traditional data centers that were built 10 years ago were 10 megawatts or less. Today, it's not uncommon to see 100-megawatt data centers. And with our clients, we're talking about data centers that approach 1,000 megawatts. And they require 24/7 power. This is something that doesn't get talked about enough in my opinion ' - Constellation Energy CEO Joseph Dominguez" From: Weekly Research Briefing: Zooming Out of Frame by Blaine Rollins of Hamilton Lane LINK
|
|
|
Post by retiredat48 on Mar 5, 2024 22:22:34 GMT
bizman , chang,...there are articles about data center owners generating their own power via on-site nuclear power plants. Uranium hitting new recent highs in prices. Go Cameco Corp. Maybe Chang and I need to dust off our Naval Nuclear Power Submarine days, and get back working! More fun now that Admiral Rickover is not around. R48
|
|