MCR

Speaking personally, we switched last month from Liberty Mutual to Progressive. We went from $8,700 annual premium for 3 cars (4 drivers) to just under $3,100. I couldn't wrap my brain around how this was possible, but maybe Progressive is looking at this difference as customer acquisition cost...

I'm in North Carolina

As a result of following this conversation, I decided to review my auto (and home) insurance. Just switched providers, saving over $5K for 2023 for auto policy. New 2023 policy for home is effectively same as 2022, but I consider this a gain as I avoid the inevitable increase that's coming from my current provider (increase was just over 26% in 2022).

Saw this today on Twitter: https://buffettbot.com/ My first query...not bad.

This is pretty cool: https://www.visualcapitalist.com/cp/berkshire-hathaway-holdings-since-1994/

I understand this argument with regards to "adjacent possible" markets, but remain puzzled (bordering on skeptical) about long-term moats (competitive advantage) for companies operating in multiple markets/verticals like Amazon (cloud service, grocery store, online retail, movie/TV streaming, music streaming, etc.). This is a lot of competition with companies that can expend energy in fewer verticals because they don't operate in so many (sub-) industries at the same time. Bruce Greenwald and Judd Kahn's 2005 HBR article, "All Strategy Is Local" (and their book, Competition Demystified) has been my touchstone for how to think about this. [I can share full article with anyone interested.] By contrast (or is it wishful thinking/confirmation bias on my part?), Berkshire appears to be constructed of companies that individually have strong competitive advantages, which in some instances (at least) are amplified by being part of the mother ship. (One example might be the amount of cash BHE can throw at renewables these days in part because it doesn't have to pay a dividend and how the energy tax credits in turn helps the mother ship.) Greenwald and Kahn's argument is that it's hard to create enduring advantages because they get competed away. But I wonder if discerning between "different services integrated for different customer segments" versus competing in multiple markets/verticals at one time with multiple sets of competitors is clearest in hindsight? In any case, Greenwald and Kahn's thesis (if correct) make Berkshire's success over so many years just that more outstanding IMO (acknowledging my bias and personal investment in its continued success).

Yesterday, while driving on I-85 in South Carolina near Spartanburg I came across a previously unknown (to me) small BRK bolt-on acquisition from 2014--SmileMakers. It was a nondescript building with its logo on the front and the words "A Berkshire Hathaway Company" printed underneath it. (Don't ask me how I read it that fast driving at 75 MPH.) I mentioned the company to my wife over lunch and it turns out she was very familiar with it. They produce gifts that dentists, doctors, etc. give away to kids. My kids have gotten their stuff for years; she told me my daughter got one when her wisdom teeth were pulled earlier this year. A little digging this morning found a news story from 2014 that the company was purchased by Oriental Trading Company from Staples. Not something we'd likely ever see mentioned in the Chairman's report and too small to move the needle for the parent company, but pretty neat to learn about another way BRK positively impacts people's lives (including my own).

New WSJ piece on OXY and BRK... https://www.wsj.com/articles/warren-buffett-not-expected-to-bid-for-control-of-occidental-following-stake-boost-11661099924?st=no06f5x1ogmv2n5&reflink=desktopwebshare_permalink

Excerpts from interview with Charlie: https://www.afr.com/markets/equity-markets/revealed-charlie-munger-s-best-investment-tips-20220705-p5az7y

https://reneweconomy.com.au/warren-buffett-snaps-up-two-australian-solar-farms-and-big-pv-and-storage-pipeline/

Here's the direct link: https://www.joincolossus.com/episodes/21729827/bloomstran-berkshire-hathaway-the-incomparable-compounder?tab=blocks

I couldn't agree more. After all, BRK at its core is a conglomerate of operating businesses. Very interested in protecting the moat around this group of companies. Broadening "investor superstars" to "superstar capital allocators", I'm looking for continued smart allocation of the stream of cash coming into BRK, whether it's via purchase of companies in whole (including bolt-ons), purchase of companies in part (shares), buyback of BRK shares, purchase of preferred stock (special situations), loans (under favorable terms), internal capex (e.g. BHE, BNSF, etc.), arbitrage, etc.

Interesting thread by Chris Bloomstran analyzing BRK's "underperformance" vs the S&P 500

Super interesting infographic from Hendrik Bessembinder's research on wealth creation in the stock market. Berkshire Hathaway is one of the top 20 wealth creators from 1926-2017. (It's also now or previously was a co-owner of several others in the group.) For some reason, the CRSP database used in the study dates BRK to November 1976, which is why it labeled as publicly trading for just over 40 years in the infographic. https://wpcarey.asu.edu/sites/default/files/2021-10/do-stocks-outperform-treasury-bills.pdf

Ever since BRK's acquisition of Duracell in 2016, I've wondered if there is an eventual play regarding electric vehicles (EV). BRK invested in BYD in 2009, which is a long time to develop some insights about the future potential direction of the industry (and market opportunities). However, I can't find much about EV's on Duracell's website (except for this). I also wonder about the potential impact of the shift to EV cars over the next 20 years on Pilot Flying J's business model. It looks like someone has a brainstorm about what this could look like: https://www.elischwemler.com/design/duracell-electrode Has anyone heard or read anything about Duracell (or any of the other subsidiaries) as it relates to EV?

I wonder if this is an example of the potential benefit of BRK as a conglomerate? BRK has the advantage of getting info (close to real-time or with some reasonable lag) on cost increases across an array of businesses/industries, which in theory could be used to inform writing new insurance contracts. The Q3 report never used the word "inflation" but mentioned cost increases many times -- generally attributed to supply chain disruption, the pandemic, increase in cost of raw materials, and increase in personnel costs. A standalone insurance enterprise (e.g. Progressive, State Farm, etc.) presumably would not have this type of first-hand information across an array of industries. The hope is that the extreme decentralization of BRK does not inhibit front running of this type of intel to provide insights to Ajit and the rest of the insurance crew. My guess is that they've got the incentives right for the insurance group to proactively look for this type of information across the BRK subsidiaries...

Interesting and entertaining March 2020 article about See's Candies. Don't think I recall hearing before that WEB turned down a $125M offer for See's in 1982. Very wise decision. https://thehustle.co/how-a-small-candy-company-became-warren-buffetts-dream-investment/

Thanks, MMM20. Reassuring and not entirely unexpected.

Has anyone heard any reference by BHE about risk of potential climate change-related write-downs or stranded assets? https://www.wsj.com/articles/trillions-in-assets-may-be-left-stranded-as-companies-address-climate-change-11637416980?

In Fall 2011, I took Bob Miles' course "The Genius of Warren Buffett" at the University of Nebraska-Omaha. One of the highlights (apart from a class lunch with WEB) was having Susan Buffett speak to our class about her father. It was clear she was very knowledgeable about BRK, her father's approach, and the culture of the company. Seeing Susan and her father interact during lunch was also a treat.