Core Viewpoint - GE Aerospace has demonstrated significant stock appreciation, highlighting the effectiveness of a long-term buy-and-hold investment strategy [1][2]. Company Performance - In its first full year as a stand-alone entity, GE Aerospace's stock appreciated nearly 85%, emphasizing its critical role in the aerospace sector and potential for recurring income from servicing commercial aerospace engines [2]. - The company has transformed since 2018, moving away from the challenges faced by General Electric, and now holds a dominant position in commercial aerospace, powering 75% of commercial flights with its engines [3]. Market Position and Business Model - GE Aerospace's CFM International LEAP engine is the exclusive engine for the Boeing 737 MAX and one of two options for the Airbus A320neo family, ensuring a steady income stream from long-term service agreements [4][5]. - The business model operates on a "razor-and-blade" strategy, where engines are sold at low margins to generate substantial service revenue over decades [6]. Service Demand and Revenue Growth - The recovery in flight departures has led to increased service demand, resulting in higher-than-expected service revenue from legacy CFM56 engines, despite slower LEAP engine deliveries due to supply chain issues [8]. - Management anticipates annual revenue growth in the double-digit percentage range from 2025 to 2028, with earnings per share projected to rise from approximately $6.10 in 2025 to $8.40 in 2028 [11]. Future Outlook - Supply chain issues are easing, allowing GE Aerospace to increase LEAP engine deliveries and capitalize on growing commercial engine and services order growth [9]. - The ramp-up in LEAP deliveries may negatively impact margins in the short term but is expected to enhance long-term earnings growth estimates [11].

Group 1: Bank of America (BofA) - Warren Buffett has sold over 401 million shares of Bank of America, representing approximately 39% of his position, which was originally over 1.03 billion shares [8] - The selling activity is part of a broader trend where Buffett has been a net seller of equities, with $174.4 billion more in stocks sold than purchased since October 2022 [6] - Profit-taking may explain the aggressive selling, as Buffett indicated concerns about rising corporate income tax rates, which could impact BofA's sizable unrealized gains [9] - BofA is particularly sensitive to changes in interest rates, benefiting from rate increases during inflation but facing risks as the Federal Reserve enters an easing cycle [11] - The valuation of BofA has changed significantly since Berkshire first invested, with the stock now trading at a 31% premium to book value, compared to a 62% discount at the time of initial investment [13] Group 2: Pool Corporation - Berkshire Hathaway has been purchasing shares of Pool Corporation for three consecutive quarters, with a total stake now at 1,464,000 shares [16] - Pool Corporation has shown remarkable long-term performance, with shares gaining over 35,000% since its IPO, and nearly 48,000% when including dividends [16] - The company's business model is characterized by recurring revenue streams from maintenance products, making sales and cash flow highly predictable [18] - Pool Corporation is investing in digitization through its software platform, Pool360, which has increased its contribution to net sales from over 12% to more than 16% [19] - The company has a strong capital-return program, spending significantly on share repurchases and dividends, which aligns with Buffett's investment philosophy [20] - Pool Corporation is currently valued at nearly 28 times forward-year earnings, suggesting that its stock may not be considered a bargain by Buffett's standards [21]