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people watching that because you own 26.7% of Kraft Heinz it came out with a lot of bad news on on Thursday with its earnings missing with an SEC investigation being unveiled with a writedown of the brands and and by the way management saying on the call but they didn't anticipate things would necessarily get better in 2019 oh they do see improvement and we cut the dividend forgot to mention that let's just get to one of the questions we have from a viewer t 63 this is rich before dad what are your thoughts on Kraft Heinz following all the current news and what is your biggest concern regarding Kraft Heinz future well we have some very very strong brands of Kraft Heinz and as I pointed out earlier the company earns about six billion dollars pre-tax but after depreciation not after amortization after depreciation earned six billion on seven billion of tangible assets it's a fabulous business it's in terms of return on tangible assets I mean this is a great business we're sitting here the first year mark but returns much higher at crap it's much higher than it is at JPMorgan it's much you go up and down the list there's very few companies that are earning six billion on seven billion of tangible assets but in buying and and we overpaid in and Kraft I don't think we overpaid in Heinz and we borrowed money that related to projections that have not been met we're and a lot of money but we were paying out a lot of money so we had very little in the way of retained earnings to reduce debt so our debt of thirty 1 billion is higher than we projected originally to rating agencies and so on and and we need to bring it down and it comes down very slowly I mean unless you sell sell properties I mean even if you cut the dividend from 250 to 160 that's a billion one a year but on 30 1 billion you'll go the right direction but there's a lot of it there's there's real debt to be reduced a lot of people wrote in and had questions about your partners with 3G 3G where your partners in the Heinz deal and then with the addition of Kraft as well let's go to t61 this is from James Shanahan mr.
Buffett how would you characterize the relationship with 3G today would you still consider additional deals with 3G yeah I considered George Apollo and his associates but my primary contacts been with Georgie Apollo 11 over the years first meeting him on the jet board and I think he's an absolutely outstanding human being and and and but a year ago he he he pointed out that the game had changed in terms of brands that they gave a talk at some forbes event or some place and and that was a full year ago and six months ago I told you and you know it's a good thing that brands said it's it's not as packaged goods or not as good a business as they were the really strong brands are but you know we've learned that over the last few years as the struggle between the retailers and the and the brands has shifted toward the retailers and that's why Kirkland is a big a very very big brand Walmart's going more to to private label there's some big forces on the other side if you've got if you've got a good enough friend you know you can you can you can also call your Costco drop coca-cola some years ago they brought them back do you see that ever shifting or do you think that the the game is going to be this way weighted towards the retailer's except for the biggest brands it certainly looks like particularly with the addition of Amazon to the picture I mean when you when you have Amazon and Walmart fighting it's a little bit like the elephant's fighting and I mean the mice get trampled and I don't see I certainly don't see the retailer's position getting weaker I mean you have all tea coming in and stronger I that it just and you got Walmart's not a very very very good job yeah Doug McMillon on it but he carries around that list of the 10 top retailers from the pack from every decade oh my yeah to remind him you know that it's hard to stay on top and and and but now you've got to bury and a lot of other players to put two particularly strong players that that I've got their foot to the floor and and there's some extent are will be pushing their own brands in terms of the partnership with 3G if the situation has changed according to both georgie lehman george apollo lehman and to you if brands are not as strong as they used to be and as you've said in the past it's gotten really much more expensive to try and look at any of these other consumer packaged goods companies and potentially buy them does that mean the whole 3g formula has kind of been upended is it really difficult to make it work if you can't go out and buy another company and then cut cost yeah well the acquisition just don't work as well i mean for one thing the prices got pushed up and you know anything almost almost anything at a price can be good not everything but anything at a certain price can't be bad i mean if you if you pay too much you pay too much and and and it doesn't that doesn't change and this you borrowed a fair amount in conjunction with it takes a while to turn rmii I do not see well we're not in a position to buy additional brands and I I have not thought it made sense as we've seen both prices change and the competitive position changed somewhat I still like that I like the businesses we have very much I'll be happy to be in Kraft Heinz five years from now or ten years from now I'm certainly happy to be George Apollo's partner he's a terrific human being and very smart on business but but you can say that we both misjudged the retail versus brand fight as to who would be gaming around on the other watching what happened to shares of Kraft Heinz on on Friday after all that news came out after the market closed on Thursday I mean stock was down 30% and I think for Berkshire alone that was a loss of about four billion dollars on top of your three billion dollar share of the 15 billion dollar write down I know you wrote in the annual meeting or the annual letter about how there are days because you have such a big portfolio 173 billion dollars in stocks there are days with market volatility being back that you see a swing of plus or minus four billion dollars are in certain days I know you're like dr.
Spock you're completely emotional Asst when it comes to dealing with the market moves but is there any part of you it gets a little queasy when you see that you've lost four billion dollars in a day not least I mean makes me assuming I like the business best which ones they are but overwhelmingly during the fourth quarter the things were going down a they were buying out their own stock so I'm actually making money that day you know without laying out of dime and then secondly I can buy more of some although a lot of my bets at 10 percent problem with but I I mean there are certain stocks I would have kept buying except that was bumping up against the the 10 percent but no I'm I mean if if if you paid X X dollars a pound for amber yesterday and you're going today and now it's at 80% of X maybe you have a little hamburger left in here refrigerators I mean you tear your hair out over the dad or do you say oh my god you know this is terrific the price is cheaper what what else in the world don't you like to buy cheaper but then you're paying the day before you
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