Hesterfield Insights

Building wealth requires unconventional insights. Not investment advice

[Hesterfield Insights @Hesterfield_]

The jones act will forever be the dumbest thing we do to ourselves

If the result of the Iran war is the permanent end to the jones act, that will pay 10 fold for any costs the war has borne on us through temporary energy costs

[Committee on Transportation and Infrastructure @TransportDems]

The Jones Act is the bedrock of the U.S. maritime and shipping industry.

@TransportDems are protecting American-made ships and jobs as costs continue to rise from the Administration’s war with Iran.

[Hesterfield Insights @Hesterfield_]

One thing that’s been bothering me about people complaining about equity raises, if the returns are good you should want it.

Best business is one that can reinvest tons of capital at a high rate of return. If you can invest infinite money, it makes sense to raise the money via equity, it’s not dilutive to earnings if you get excellent returns.

There is added risk to the equity because we don’t know the incremental ROIC on these investments. But it’s not a bad thing to do for existing equity holders if returns are there.

$googl $orcl $meta $smci

[Hesterfield Insights @Hesterfield_]

$casy has got to be one of the strangest valuations in the market right now. 4 handle on the forward earnings multiple. Realistically can’t grow earnings in the 20% range ever.

Earnings multiple lived right around 20 for 15 years. All of a sudden we are looking at 40.

Operating margins have improved and are at highs. But probably doesn’t warrant the multiple it has now. You need margins to basically double again for it to make any sense.

Shoutout to existing shareholders, always love multiple expansion on holdings.

[Hesterfield Insights @Hesterfield_]

I think at this point it’s clear their reported inventory numbers were lower than what they actually had. Why buy $100 oil when you can use up the $60 oil you bought over the last few years. Not like China is reducing imports out of the goodness of their heart.

China and reliable data very rarely overlap.

[Hesterfield Insights @Hesterfield_]

@Investor_NICK_ Has anyone been able to source that quote? Everyone always claims he said it but I have never found the source.

Investing on technicals seems antithetical to everything Charlie has ever said.

[Hesterfield Insights @Hesterfield_]

They bought the See’s candies, Amex, Coca Cola because they were high return on capital at reasonable prices.

They have absolutely said their favorite business opportunities is one that can reinvest endless amounts of capital at high rates of return. So long as the high rates of return leads to real fcf and not just ebitda where you need to reinvest all the CFO to cover depreciation.

There just aren’t many businesses that they felt was in their circle of competence, could reinvest a lot of capital at actual high levels of return, and was priced low enough to purchase. Becasue of their extremely low risk tolerance, it’s hard to find something that meets the first 2 criteria while also being priced low enough for them to feel comfortable they won’t lose money over a long period of time.

[Hesterfield Insights @Hesterfield_]

I’m sure Greg talked to Warren about it. But this is 100% a Greg call. Good decision or bad, time will tell. But it ain’t Warren.

[Hesterfield Insights @Hesterfield_]

After reading the reaction of the avg person on the $brk $googl deal I come away with one major question.

How long will Warren get credit or blame for Berkshire moves? I’m sure it’s for clicks and algo but damn.

He has made it more clear than any executive in history that he delegates to the level of abdication and he wants Greg to have complete and total control of Berkshire capital allocation decisions now that he’s CEO.

[Hesterfield Insights @Hesterfield_]

@ohcapideas The $googl purchases, oxy chem, tokio marine, Taylor Morrison. Greg is swinging.

Unless it’s equivalent to pro sports new owner syndrome where you over do it to start trying to prove something, it looks like Greg might try to work down that $brk cash pile

[Hesterfield Insights @Hesterfield_]

80B cap raise by $googl may have been the last thing I ever expected to see.

Also that’s one way to up your exposure to Google by 50% if you’re $brk

Greg is swinging that’s for god damn sure. Can’t say he’s just resting on cash.

[Hesterfield Insights @Hesterfield_]

Makes sense they are increasing production given how hedged they are. They increased hedges pretty significantly in q1 and I assume continued through q2.

Aren’t (and shouldn’t) raising the div and can’t pay down fixed debt at par until sept 28. May as well spend the money instead of letting it pile on the balance sheet.

Already spending $5m/month on buybacks so unless they really want to slam on that, makes sense to push the prod button.

[Hesterfield Insights @Hesterfield_]

Also, there will not be a geopolitical premium in spot pricing. That’s not how commodity goods pricing works.

There may be a premium in multiple paid for E&Ps in parts of the world where supply has a lesser chance of disruption and capitalizing on extraordinary pricing. But the commodity spot price itself will not have a premium on potential disruption

[Hesterfield Insights @Hesterfield_]

I have one issue with the O&G guys storage charts. WTI markets clearly don’t care what SPR levels are when calculating price on inventory levels.

The Russia Ukraine war price action clearly showed this. So long as we have SPRs to burn, the market isn’t going to price inventories based on their levels draining.

You may have a higher floor for overdue to excess demand of refilling, but if suppliers can plan around that longer term visibility they usually fill the gap with production growth.

[Bison Insights @BisonInsights]

US oil & products inventories have fallen to multi-year lows

[Hesterfield Insights @Hesterfield_]

Second large outright acquisition for Berkshire this year with the $tmhc news.

In Lennar at ~1B and then obviously Clayton and Berkshire Hathaway home services for housing focused.

Not a crazy move, they are heavy in the housing and new construction adjacent market.

$brk $brkb

[Hesterfield Insights @Hesterfield_]

This is one of my biggest pet peeve complaints about Berkshire. Warren had to sell them and he explained exactly why.

They were bankrupt without a bailout. The optics of the govt bailing out an industry where Warren Buffett owned 10% would have been awful. Him selling the airlines at a loss probably saved the industry.

[Hesterfield Insights @Hesterfield_]

Would signal they gave Ted a lot more money to manage. Maybe they gave him Todd’s old book of money. You’d know best but as far as I know they topped out around 40B in the past - 15B is a huge portion of that.

Or like you said just a repeat of Apple where Ted starts and the big boss blows it out.

[Hesterfield Insights @Hesterfield_]

Quit paring down apple. Bought a shit load of Google. Took chevron profits. Ran Todd’s book to 0.

Main wonder is if Google has been Greg the whole time.

$brk

[Bourbon Insider Research @BourbonInsider]

Berkshire Hathaway Q1 2026 13F
Increased his position in 4 companies and added 3 new positions. Key holdings include:

$GOOGL (5.9% of portfolio) — increased by 203%, average cost $287
$NYT (<1% of portfolio) — increased by 199%, average cost $83.7

He also initiated a new position in $GOOG and $DAL, and reduced his holdings in $CVX, $BAC, $STZ

[Hesterfield Insights @Hesterfield_]

$foa
Will need clarity on the funded volume decrease back below 600m.
Presentation has guidance reaffirmed on funded volume and submission volume increasing so could just be a timing issue, but clarity will be needed.

Adj eps guidance got raised which is good.

Call will tell

[Hesterfield Insights @Hesterfield_]

I really wonder if all the ai spend zuck is making has roic
The world may never know

[Fiscal.ai @fiscal_ai]

Meta just delivered their fastest revenue growth in 4 years.

Ad Impressions: +19%
Price per Ad: +12%

$META

[Hesterfield Insights @Hesterfield_]

Now if you want to make the argument to the fullest is that double means we can’t sell them chips since they could get and power more than USA. But realistically they won’t get enough allocation for that to matter.

Obviously he’s talking his own book by saying he wants to sell to China. But it’s not existential if we do sell good chips to China

[Hesterfield Insights @Hesterfield_]

I think the biggest thing people were missing from Jensen and dwarkesh was Jensen trying to say that high end chips don’t actually matter if you don’t care about energy efficiency.
He can’t say it straight up since that kills his most. But the whole point he tries to make is they can replicate his chip level by just having more worse chips.

China has enough energy. They can replicate it all.
$nvda

[Chris McGuire @ChrisRMcGuire]

Reuters reports Huawei plans to make 750,000 Ascend 950PR AI chips in 2026. That is TINY--about 1% of Nvidia's AI compute production--and will not come close to meeting China's AI needs. China needs US chips to compete with the US in AI - which is why we shouldn't give them any!