KPO

OLN has bought back ~30% since issuing shares for the reverse Morris trust deal with Dow. This is more of an observation than an endorsement of the company’s current prospects. It actually looks like management executed a significant portion of the buybacks at (cyclical?) peaks in FCF and share price. No position, but worth watching given their willingness to return capital to shareholders.

Not to be rude, but why do these posts feel like advertising? There are dozens of available securitized debt listings, so what’s special about these Bell South/ AT&T debentures? For example, there are Qwest debentures that yielded over 2X this instrument at the time of your initial post if you’re a telecom fan. Maybe I’m missing something.

I tend to agree with the notion that big acquisitions are risky and value investors (is there such a thing as an investor not seeking value BTW) do gravitate towards turnarounds. That said, everything has a price (including no growth businesses like SIRI), and at $24 this one largely discounts the Terminix acquisition. If you look at the history of WM & RSG they had very rough periods, integration issues, etc. but have been great investments the last 15+ years. RTO has similar levers to pull, and Trian being involved is a bonus. I don’t have a huge position here, but it doesn't seem particularly risky at this valuation.

NSRGY

SIRI

Possibly against my better judgment, but I’m a sucker for a 16-17% free cash yield: Starter in SIRI at the end of trading.

Starters in DG and RTO

I think it’s one of those high quality companies like COST, RSG / WM, and AOS that really never look cheap, so you just have to start nibbling when it’s at the lower end of the range. I’ll make it a larger position sub $100, but started a position just under $111 when they reported recently. That said, I don’t love the voting arrangement in light of recent minority shareholder abuse in the media space, but I suppose the same argument could be made for not buying Alphabet.

Those who have done this in Phoenix know it’s pretty impressive, but doesn’t seem like a winner takes all business model. Alphabet may get a nice block of patent revenue from this business, but like many gold rushes, a single business rarely wins.

Maybe he’ll randomly sell it down to 400M shares too.

The Scottsdale crowd seems to be enamored with Vuori, which is currently a private company. They actually have a decent men’s lineup, but I’m cheap and like Costco’s knockoff price points much more.

This is an interesting possibility. One thing I’ve always wondered is how he tries to keep the A shares in the hands of people that protect the culture.

If it wasn’t such a shit show at the moment I’d suggest BA, but given where it is now I’ll bet DE. That said, the most likely answer is probably nothing. Just positioning his successor well.

More HST. CD/money market replacement with > 5% yield and modest inflation hedge. Not expected to be a home run by any stretch, but sometimes three yards and a cloud of dust works just fine.

DEO & HST

ULTA starter

On the surface this seems like a low quality acquisition unless there’s some structural reason that I’m missing as to why this business is better than failing counterparts in the US (e.g Mattress Firm). Retail bedding just seems a tough business with no moat, plus the Costco’s of the world and e-commerce can cherry pick.

For anyone interested in the history of the oil industry, and specifically Royal Dutch Shell & Standard Oil, this is worth a read. Just finished it. https://www.amazon.com/Breaking-Rockefeller-Incredible-Ambitious-Toppled/dp/0143130005

A bit more DEO

DEO

MTN

https://www.oxy.com/news/news-releases/occidental-and-bhe-renewables-form-joint-venture-to-commercialize-terralithium-extraction-technology/ For those that haven’t made the trip to the Salton Sea, it’s a wild and interesting place that happens to have on the order of 100 years of potential lithium supply for North America. This is a somewhat hidden Berkshire asset. If all goes well and lithium continues to be the long term source of EV energy that it is today, this could move the needle for Berkshire.

ULTA seems better to me if for no other reason than they sell consumables vs durables. A pair of $90 plastic yoga pants can last 3-4 years, but not ULTA make-up, plus you could argue LULU’s products are in more of a consumer fad category, while makeup is not.

Let’s hope so!

This is kind of an interesting article: https://www.cnbc.com/2024/05/31/warren-buffett-worried-about-huge-losses-in-booming-insurance-market.html To the extent Berkshire desires exposure to cyber coverage I think I’d prefer it be through minority holdings, like Chubb and/or AIG.