gfp
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Posts posted by gfp
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Exactly right - they pay a dividend so Prem can "make sure that my family survives." Simple as that - from the 2000 annual report:
"This brings me to my own compensation arrangements. For many years now I have felt that as a controlling shareholder involved in the management of the company, my compensation should be closely linked to all shareholders. So from 2000 onwards, my compensation will be a fixed salary of $600,000 with no bonuses. This compensation will not increase annually, and if 1999/2000 is repeated, could decrease!! However, to make sure that my family survives, Fairfax will examine instituting a dividend – yes, a modest dividend – in 2001 at an annual rate of $1 or $2 per share. Going forward, the only difference between me and you, our shareholders, will be my salary of $600,000 – which based on recent performance, many of you may think is too high! While the payment of a modest dividend results in double taxation to most of you and is not as economically efficient as retaining all our profits and compounding at high rates of return (as we have done for the past 15 years), this was the only way I could think of to bring my compensation in line with your interests. While I may have generated some sympathy from you, I should add that I continue to travel well – in fact a little better recently because we sold our Lear Jet for US$2.5 million (cost US$1.8 million) and purchased a Gulfstream II for US$6.2 million."
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Berkshire board member, former KO President, and close friend of Buffett
http://blogs.wsj.com/moneybeat/2015/02/24/buffett-on-keough-everybody-loved-him/
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Berkshire did recently offer preferred equity financing for Coty's offer for Avon - so he isn't completely averse to cosmetics if someone else is running it. I don't remember the terms and the deal didn't go anywhere, but perhaps it was very lucrative financing and nothing more.
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Here is an article with more detail on how Buffett is using Ted and Todd (and others) to do a lot of the heavy lifting - these guys are really looking perfect for the job so far. Ted, especially, seems to have Warren's complete confidence and is invaluable to BRK.
http://www.sltrib.com/home/2211912-155/buffett-delegating-even-more-to-his
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my apologies if this has already been posted/discussed, but I saw this blurb from Insurance Insider in my inbox a few moments ago and found it interesting. I have not received the entire article yet - but it sounds like Prem pulled a Warren on this negotiation -
"Watsa forestalls Brit process with snap take-it-or-leave-it bid
Fairfax Financial founder Prem Watsa prevented a potential bidding war for Brit Insurance by offering a $1.88bn binding all-cash offer just 10 days after entering into serious negotiations, and threatened to walk away if the proposal was not accepted in short order.
Sources said that the ingredients were in place for a semi-formal auction process, with at least two other parties in discussions with Brit, including an Asian strategic interest.
It is understood that one of the other parties involved was Japanese big three member Mitsui Sumitomo - the business that came closest to consummating a deal with Brit before its IPO last spring."
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here's a note from Insurance Insider this morning on the relationship -
Happy Mardi Gras
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As with Fairholme, you aren't required to include securities in your 13F that don't trade on a major exchange apparently.
I hear that ackman and icahn own these but i can't seem to find it on their 13Fs. Why is that?
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At the moment, most of the segments are here:
No transcript that I have seen, but this article covers most of it:
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berkowitz is holding a conference call right now. You should listen to it. (there is no new news)
Is there any news? FNMAS is dropping like a stone right now.
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Where does he say it is a net-net? Not being a subscriber to his paid newsletter, there is nothing of substance at the link you provided. Not too long ago it could be said that the company had "net cash" or a "net cash position." But a net-net is much more rare, especially in large US companies.
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I know someone who spends tens of thousands a year just to have someone on call to fix the wi-fi in their home when it goes out (which is constantly)... It's ridiculous.
Seriously? I need to start charging my friend/family when they call me with their computer/network problems.... :)
My wifi router is about 3 years old and I think I needed to unplug it and plug it back in once or twice in that time, but other than that no problems. It sounds like this person you know should just buy a new router and fire his tech guy.
It's several houses that are attached by breezeway / hallway thingies. With multiple guest structures, etc... I think the stucco wire mesh creates some type of faraday cage that makes the wi-fi system fairly complicated. But old people can't fix that type of stuff. They CAN throw tantrums when the wi-fi doesn't work at their home but works perfectly at an $8/night hostel...
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"If I had a few million that I had to spend, but couldn't buy a house/car/boat/rv/lawyer how could I possibly spend the money?"
International luxury travel can add up - especially if you are flying private. The most conspicuous consumers I know spend a lot on travel, a lot on renovations of properties, a lot on "pet projects" - exotic tree farm with a 'writing cabin' in the middle anyone?... And a lot on gifts of high-end items to others, including family. Having a family full of private school tuitions and private university tuitions can add up as well.
I know someone who spends tens of thousands a year just to have someone on call to fix the wi-fi in their home when it goes out (which is constantly)... It's ridiculous.
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They could have purchased Tim Hortons shares in Canada and they wouldn't have to report them on the 13F at all. It is also possible they invested in 3G partnerships directly and received interests in the common that way - but that is not common for Buffett.
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Not sure if this was posted elsewhere on the board, but on the same day as the Charter Brokerage acquisition announcement Berkshire sent out a press release confirming the closing of their investment in QSR, Restaurant Brands International (the BKW-THI merger). What was previously unreported about the deal is that Berkshire will hold 4.18% of the common shares (and 14.37% of the votes because of the preferred shares) following the deal. Since the penny warrants were only for 1.75% of the common, this means Berkshire purchased a meaningful stake (over $400 million USD) in either BKW or THI before the merger (or has investments in the 3G partnership itself).
2.43% of the combined company was accumulated by Berkshire and 1.75% was given for almost free.
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The deal is worth your $62.12 number and you can buy BHI in the market for 55.45. That is the spread. Forget about the 78.62 number.
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It's the second bolt-on at Lubrizol in a week. They are going to combine today's two companies with the PSX sub they swapped for.
Here is last week's LZ bolt-on - probably a couple hundred million but not disclosed:
http://newscenter.lubrizol.com/phoenix.zhtml?c=250972&p=irol-newsArticle&ID=1992404
Operating units doing their part, billion at a time.
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Hey Liberty,
PSH has a website with all the communications in PDF -
http://pershingsquareholdings.com/media/2014/09/Pershing-Square-Holdings-Ltd.-Q3-Investor-Letter.pdf
Ackman's Q3 letter:
http://www.scribd.com/doc/248310494/Ackman-Pershing-Square-Holdings-Ltd-Q3-Investor-Letter-Nov-25
(If anyone has just the PDF, not the horrible scribd version, I'd appreciate it)
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Fairfax just came out -
looks like they added to IBM before the drop
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He would owe 34% on $4.364 Billion - which comes to $1.48 Billion in tax (which is also the value of the deferred tax liability that would "vanish" from BRK's books)
Does anyone know the actual tax rate that Berkshire would have had to pay on the PG shares if they instead just sold them outright? I'm curious what the"avoided" tax bill of this swap was, and I simply don't know if corporations that sell appreciated stock have different tax rates than individuals. THanks in advance
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"I think Berkshire would love to own this company for ever. "
Berkshire owns their main competitor through Mitek.
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http://www.cnbc.com/id/102052785
- initial CNBC report
http://www.berkshirehathaway.com/news/OCT0214.pdf
- Berkshire / Van Tuyl group joint press release
No information on price so far, but it looks around the same size as Sonic Automotive.
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If sites like Yahoo can't even get simple things like share counts / market caps correct (and they virtually never do), they certainly aren't much use for anything more involved than that. Most of those websites, Bloomberg excepted, don't even attempt a Market Cap any more. It was too advanced for them...
thanks for that. i see that most of the information is already available in 10k/Qs, why can't people make it available for beginners like us to readily access it. is it something that investors should even look at but just don't do it as it is readily not available.
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I would start by doing some research on the company and its industry. You would want to use the internet, the telephone and your eyes depending on the industry. Sometimes suppliers can be harder to track down - check the filings for risk factors on supplier concentration to see if they disclose any names or percentages. Otherwise it's gonna take scuttlebutt. (if this word means nothing to you, read a bit of Philip Fisher and maybe some Peter Lynch)
Fairfax acquires Brit PLC
in Fairfax Financial
Posted
insurance insider article this morning -
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Brit CEO Mark Cloutier has underlined his intention to remain at the company for the foreseeable future, as well as indicating that there may be opportunities for him in the longer-term at other operations within Fairfax Financial.
In addition to publishing its full-year results this morning (25 February) - which showed a 40.5 percent jump in pre-tax profits to £149.1mn - Brit announced the promotion of Matthew Wilson from head of global specialty to group deputy CEO and CUO.
Wilson has long been assumed to be Cloutier's designated successor, which the CEO said the business has made no secret of.
"Matthew has been the architect of the significant improvement in our underwriting business, and in my view his leadership is critical to the future of the business," Cloutier told The Insurance Insider.
"That doesn't mean that I'm going anywhere soon...but it does set a clear indication of the future direction of the business."
Cloutier went on to say that there was no timetable for how long he would remain in charge at Brit, but that he intended to be at the helm for "some time", adding: "My principal job right now is to make Brit fit into Fairfax and make it a big contributor to shareholder value at Fairfax."
And hinting at future collaborations with Fairfax CEO Prem Watsa, Cloutier added: "My hope is that I'll continue to work with Matthew and the team here for the foreseeable future, and it may be that I'll have the opportunity to poke my fingers around into things that Prem may ask me to help out with."
Watsa has known Cloutier since the latter worked for Fairfax's loss adjuster Morden & Helwig. The two have remained in contact ever since, and their relationship was thought to be a key factor in the speed at which the proposed merger was agreed.
The Fairfax CEO prevented a potential bidding war for Brit by offering a $1.88bn binding all-cash offer just 10 days after entering into serious negotiations.
Commenting on the importance of his personal relationship with Watsa in getting the deal over the line quickly, Cloutier said that the fact they'd done business together in the past and knew how each other worked certainly helped.
"There have been a couple of pretty large transactions that I've been involved in with Prem where we were able to do [them] on a hand shake, the old-fashioned way. So I think a combination of a longstanding relationship and understanding of each other - and certainly from my side an appreciation of how Prem does things - was an enabler for the transaction to move very quickly," he said.
"Given we'd traded in the past, there was a level of trust that really enabled the transaction, which is what underpinned the ability of the deal to get done quickly. Given the business we're in, the market outlook and all the uncertainty facing our businesses today, a rapid, well-priced deal with the highest level of certainty was in the best interest of all of our shareholders."
Cloutier also suggested that Brit's chief investment officer John Stratton, the main architect behind the carrier's impressive 2.9 percent investment return, could yet be retained.
Under traditional Fairfax take-overs, the investments of the merged entity are moved into Fairfax's portfolio.
Cloutier said that he expected Brit would move towards the Fairfax model, but said he would not speculate on what that meant for the company's staff.
He added: "Having said that, John's done an outstanding job for us, and that's recognised, so I don't think people should make any assumptions one way or the other."