xboojum
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Posts posted by xboojum
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6 hours ago, villainx said:
Wondering why Berkshire doesn’t have an arm in its business to do CSU type smaller deals. I know in grand scheme of things it won’t be needle moving but the company already has Sees and Diary Queen, and can do more in that space. At the least it’ll build a competent group of acquirers and managers. Maybe the risk isn’t worth the small rewards, but just waiting for an elephant to come to crosshairs leaves a lot of smaller worthwhile game to pass.
I had hoped that Marmon would turn into this for small/midsized industrials. It's not clear if it hasn't, really, or if the acquisitions are just not sizable enough, even in aggregate, to be really noticeable.
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In this otherwise rather grim story about declining toy sales in the UK, it's noted that the bestselling toy in the UK last year was Jazwares' Squishmallows: https://www.theguardian.com/business/2024/jan/23/squishmallows-uk-toy-sales-games-action-figures
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10 hours ago, longterminvestor said:
Where Berkshire was once a home for big insurance and big businesses, things are changing. Berkshire rode the wave to where it is today. There was a time when Berkshire was manufacturing textiles....became a dinosaur. I have opened my eyes to the fact that Berkshire may have to pivot to new businesses/models/opportunities in a similar fashion that Berkshire left textiles for insurance. Do not know what that iteration looks like but I am open to it because of the culture inside the enterprise. I think on iteration that has occurred is Berkshire moonlights as a “Merchant Bank” franchise. Mr. Buffett can throw down billions fast with no strings and extract his terms.
This whole post seems about right to me. Berkshire's batting average in large acquisitions has gone down, even if nothing has been as bad as Dexter Shoe (the Precision Castparts acquisition in particular seems to gone terribly, although as a PCP shareholder at the time it bailed me out), showing the importance of BHE; if there's nothing tempting in the market, they always have the backup option of bunting for a single by building more solar/wind at reasonable, predictable returns, and while I think Pilot is a perfectly fine business . Between that and tuck-ins at Lubrizol, MiTek, etc., they have consistent options.
It really shows the franchise value of Constellation Software, though, in their ability to swallow all sorts of plankton-scale companies at a rate meaningful at what's now a $70 billion company (in addition to their recent pivot to buying large companies from forced sellers). -
5 hours ago, Munger_Disciple said:
My prediction is that we will see a lot fewer purchases of large "family owned" businesses by Berkshire going forward. With hindsight, Buffett clearly misjudged the character of sellers in this case and wants to put this awful episode it behind him and save Abel time and focus so that he & Abel can focus on more important things.
How many have we seen in the last decade? Pilot and Van Tuyl are it, right? The rise of private offices and private equity funds playing in the mom-and-pop buyout space means there's a lot more competition in the smaller side of the market (which isn't going to be sizable enough for Berkshire at this point). If Larson-Juhl wanted to sell but keep its management in place, they'd have probably have dozens of specialists to choose from that didn't exist in 2002. And the true whales of family-controlled privates entities, like a Mars or S. C. Johnson, are big enough that it's not apparent that selling to Berkshire makes any sense for them; they can bring in professional managers if they don't have a next generation of family, and it would be easy for them to monetize a slice of the company without giving up family control or involving Berkshire.
Oriental Trading Company was a busted private equity deal—it feels like that sort of things, or buying divisions from other large companies, and purchases of whole public companies—is going to be where Berkshire has to look, compared to the handshake deals Buffett used to pride himself on. -
23 hours ago, Saluki said:
Mars Candy (and dog food and Banfield Veterniary hospital chain). The founder, Forest Mars died a few years ago. The sons who run it seem competent, but that business gene seems to die out after a while (as in See's Candy) so it may be for sale one day. Each of those seems like moaty businesses.
Cargill. Buffett hates commodity business, but he doesn't seem to mind oligopolies that provide stuff to other companies (Precision castparts, Lubrizol, Paint, Bricks, machining tools).
Koch: Nope.
If I remember correctly, Mars, Cargill, and Koch (not in that order) are three of the five biggest private companies by revenue in the US, the others being the well-run grocery chains Publix (largely based in Florida) and HEB (largely based in Texas). -
Looks like the CEO of Lubrizol (since all of 2021) has been removed; JM's Mary Rhinehart stepping in for now: https://www.businesswire.com/news/home/20220311005450/en/Mary-Rhinehart-Named-Interim-President-and-CEO-of-Lubrizol
Berkshire Hathaway Annual Meeting 2024
in Berkshire Hathaway
Posted
Buffett had people for that -- Harry Bottle was the fixer at Dempster Mill, for instance.