Buffett/Berkshire - general news

[abcd]

https://www.nytimes.com/2017/05/12/business/dealbook/a-little-known-accounting-change-could-have-a-big-impact.html?_r=0

[dcollon]

Testing Mattresses with Warren Buffett

 

[WneverLOSE]

"Warren Buffett's 31 Berkshire Hathaway Automotive dealerships in Texas face an uncertain future after the state Legislature failed to take action to make them legal."

http://www.autonews.com/article/20170605/RETAIL07/170609924/1400

 

not that it will have any needle moving impact on anyone but maybe that's why some due diligence and lawyers may be useful ?

[John Hjorth]

Just to give some perspective to the post by WneverLOOSE. From the 2015Q1 interim report :

 

In the first quarter of 2015, Berkshire acquired controlling interest of the Van Tuyl Group. The Van Tuyl Group (now named Bekshire Hathaway Automotive) includes 81 automotive dealerships located in 10 states as well as two related insurance businesses, two auto ucations and a manufacturer of automotive fluid maintenance products. In addition to selling new and pre-owned automobiles, the Berkshire Hathaway Automotive group offers repair and other services and products, including extended warranty services and other automotive protection plans.

 

So, as WneverLoose wrote, this will not move the needle as such for Berkshire, but certainly for the Van Tuyl aquisition, this might be considered something material, that has skipped the attention of the involved parties.

 

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It's beyond my comprehention, why there in Texas is legal protection of car dealerships against competition from car producers trying to compete by selling cars B2C.

[Guest longinvestor]

Just to give some perspective to the post by WneverLOOSE. From the 2015Q1 interim report :

 

In the first quarter of 2015, Berkshire acquired controlling interest of the Van Tuyl Group. The Van Tuyl Group (now named Bekshire Hathaway Automotive) includes 81 automotive dealerships located in 10 states as well as two related insurance businesses, two auto ucations and a manufacturer of automotive fluid maintenance products. In addition to selling new and pre-owned automobiles, the Berkshire Hathaway Automotive group offers repair and other services and products, including extended warranty services and other automotive protection plans.

 

So, as WneverLoose wrote, this will not move the needle as such for Berkshire, but certainly for the Van Tuyl aquisition, this might be considered something material, that has skipped the attention of the involved parties.

 

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It's beyond my comprehention, why there in Texas is legal protection of car dealerships against competition from car producers trying to compete by selling cars B2C.

 

So a big parent cannot own both a "vehicle" maker and sell other things on wheels? Is this Texas or the Soviet Union?

[bizaro86]

That law is obviously asinine, but this popped out at me from the article.

"The Legislature adjourned May 31 without taking further action. It’s not scheduled to reconvene until January 2019" emphasis added by me.

 

Sounds like being a Texas legislator is nice work if you can get it...

[gfp]

I knew someone who worked for Rick Perry a few years ago in Texas Government.  I was surprised to learn from him that being a Texas legislator is not a full time job.  This article mentions that it is not much of a paying gig either, kind of like serving on the Berkshire board of directors.  I think Berkshire will be fine in Texas - Buffett met with the governor and the Berkshire bill was fast tracked into the legislature, where it just stalled out and disappeared.  I would expect that the investigation will find that Berkshire is not in violation of the Texas law (more of an anti-Tesla model law) because they don't find that manufacturing RVs is an issue for an owner of auto dealers.  If they were going to have an issue with it, they would have taken care of the 'Berkshire bill' that was specifically intended to carve out an exception for Berkshire's situation.  Buffett has a bit of pull in Texas, and he isn't hurting anyone.

 

https://www.dallasnews.com/news/local-politics/2015/02/16/texas-every-two-year-legislature-isnt-so-part-time

 

That law is obviously asinine, but this popped out at me from the article.

"The Legislature adjourned May 31 without taking further action. It’s not scheduled to reconvene until January 2019" emphasis added by me.

 

Sounds like being a Texas legislator is nice work if you can get it...

[WneverLOSE]

Berkshire Hathaway Inc.’s auto dealerships and recreational-vehicle manufacturer have violated Texas regulations and should lose their licenses, the enforcement division of the state’s Department of Motor Vehicles concluded.

https://www.wsj.com/articles/berkshire-dealerships-and-rv-maker-broke-texas-law-regulator-says-1497379828?mod=nwsrl_heard_on_the_street

 

There is no way in hell this will happen but the hole fiasco around it is kind of insane.

nobody wants them to stop selling cars in Texas so why even bother with all the legal stuff ? just mail them "Hi, you broke the law but it ok, here is your permit to do so, have a good day Warren" and finish with it. I really hope Warren will not accept the stupid penalty and tell them he will close those dealerships and layoff 4,200 workers and that Texas will lose 220m a year of taxes. We will see how firm are they on those penalties.

[John Hjorth]

Berkshire Hathaway Inc.’s auto dealerships and recreational-vehicle manufacturer have violated Texas regulations and should lose their licenses, the enforcement division of the state’s Department of Motor Vehicles concluded.

https://www.wsj.com/articles/berkshire-dealerships-and-rv-maker-broke-texas-law-regulator-says-1497379828?mod=nwsrl_heard_on_the_street

 

There is no way in hell this will happen but the hole fiasco around it is kind of insane.

nobody wants them to stop selling cars in Texas so why even bother with all the legal stuff ? just mail them "Hi, you broke the law but it ok, here is your permit to do so, have a good day Warren" and finish with it. I really hope Warren will not accept the stupid penalty and tell them he will close those dealerships and layoff 4,200 workers and that Texas will lose 220m a year of taxes. We will see how firm are they on those penalties.

 

If it comes to that extreme eventually, Berkshire will just sell those Texas dealerships again, like what happened with about 2 km railroad at BNSF a few years ago.

[rb]

Berkshire Hathaway Inc.’s auto dealerships and recreational-vehicle manufacturer have violated Texas regulations and should lose their licenses, the enforcement division of the state’s Department of Motor Vehicles concluded.

https://www.wsj.com/articles/berkshire-dealerships-and-rv-maker-broke-texas-law-regulator-says-1497379828?mod=nwsrl_heard_on_the_street

 

There is no way in hell this will happen but the hole fiasco around it is kind of insane.

nobody wants them to stop selling cars in Texas so why even bother with all the legal stuff ? just mail them "Hi, you broke the law but it ok, here is your permit to do so, have a good day Warren" and finish with it. I really hope Warren will not accept the stupid penalty and tell them he will close those dealerships and layoff 4,200 workers and that Texas will lose 220m a year of taxes. We will see how firm are they on those penalties.

 

If it comes to that extreme eventually, Berkshire will just sell those Texas dealerships again, like what happened with about 2 km railroad at BNSF a few years ago.

John, I know you've expressed some dismay and confusion at the Taxas law a while back. I didn't have time to respond at that point so I will now and maybe you get a better flavour of what's going on.

 

Basically these laws are all over America. They are very old. They date to a time when there were hundreds of car manufacturers. The reason they were enacted was for warranty. Basically there was a much greater change for the auto retailer to be in business than the auto manufacturer 3-5 years from purchase. Of course that is not the case anymore and everyone mostly forgot that these laws exists.

 

However these laws came back to front recently because of Tesla and their direct to consumer model. Auto dealers started putting pressure on governments to enforce the laws against Tesla. A number of states rightly pulled back on those laws but some other notably Texas and New Jersey are holding very firm on those laws in order to bar Tesla.

 

There is poetic justice in the fact that a law that dealership special interests pushed governments to enforce against Tesla ends up biting dealerships.

[John Hjorth]

Thank you for sharing your knowledge with a past and present perspective here, rb. It is very much appreciated.

 

In that perspective, it makes a least some kind of sense.

 

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I read this board every day, thus I learn something every day!

[WneverLOSE]

There is poetic justice in the fact that a law that dealership special interests pushed governments to enforce against Tesla ends up biting dealerships.

 

tbh it benefits dealerships, but Berkshire is suffering. I own a bit of AutoNation, I will be happy to take those dealerships off Warren's hands for a small wholesale discount :)

(by the way those are the best dealerships out there, making more than 120m per location)

[CorpRaider]

Re: Dealerships I noticed a large (regional?) auto dealer chain advertising a mobility solution last week.  Apparently, you pay ~$1000 to $1,500 and get to select various automobiles that are delivered to you.  I didn't inquire further when I saw the price, but you know on second thought it might not be that steep if you are a person with a constant auto payment, if it includes insurance licensing, service and taxes.  I thought it was interesting.

[gfp]

http://www.businesswire.com/news/home/20170614005701/en/MiTek®-Acquires-Mezzanine-International

 

MiTek continues to chug along with their second recent acquisition in the mezzanine structure space.  Cubic systems was a domestic operator and this one today is a European leader.

 

Remember, buy your metal connectors from USP at Lowe's, not that Simpson Strong tie stuff from Home Depot ;-)

[gfp]

Fox Business is running a story that has some interesting detail about Ted Weschler's activity in Germany working with Berkshire's German "scout", the banker that brought them the online motorcycle accessory retailer -

 

http://www.foxbusiness.com/features/2017/06/20/warren-buffetts-scout-inside-europes-biggest-economy.html

 

edit:

 

I see it is actually a wall street journal story, with pictures for those that subscribe -

https://www.wsj.com/articles/warren-buffetts-scout-inside-europes-biggest-economy-1497951001

[Guest longinvestor]

Fox Business is running a story that has some interesting detail about Ted Weschler's activity in Germany working with Berkshire's German "scout", the banker that brought them the online motorcycle accessory retailer -

 

http://www.foxbusiness.com/features/2017/06/20/warren-buffetts-scout-inside-europes-biggest-economy.html

 

edit:

 

I see it is actually a wall street journal story, with pictures for those that subscribe -

https://www.wsj.com/articles/warren-buffetts-scout-inside-europes-biggest-economy-1497951001

Germany has to be an attractive fishing pond for Berkshire. Private businesses that seek permanent homes is prevalent. I can think of businesses like INA-FAG Bearings being attractive. In the mold of ISCAR. Only needs next-generation kids to enjoy the good life over hard work. One thing is certain, many of the families would rather let the business run into the ground versus selling to FI's, PE etc.  Or for that matter large American conglomerates. Strong distaste.

[John Hjorth]

NICO has invested USD 377 M in Store Capital.

[Mephistopheles]

NICO has invested USD 377 M in Store Capital.

 

Thx for this

 

Why is Store Capital diluting its stock this much? Shares outstanding have been shooting up like clockwork

[Mephistopheles]

NICO has invested USD 377 M in Store Capital.

 

Thx for this

 

Why is Store Capital diluting its stock this much? Shares outstanding have shot up like clockwork every quarter. And once again with this deal

[doughishere]

http://www.cnbc.com/2017/06/26/buffetts-berkshire-hathaway-studied-this-stock-for-three-years-before-buying-in.html

 

Buffett's Berkshire Hathaway studied this stock for three years before buying in

[John Hjorth]

The real question here is, what is Mr. Buffett actually doing here? I simply don't get it. Any kind of sharing thoughts with my fellow board members about this investment in this topic would be much appreciated -  thank you in advance.

[Jurgis]

I don't do macro, but it feels like 1999.

Buffett is making mediocre investments since market is too high and nothing else is available.

 

Alternative explanation for this and HCG might be that it's all Ted's ideas and Warren just signs off without much supervision. That's also not very believable, but just throwing it out there. I base this on the size of the positions which are really small for Warren.

[CorpRaider]

The real question here is, what is Mr. Buffett actually doing here? I simply don't get it. Any kind of sharing thoughts with my fellow board members about this investment in this topic would be much appreciated -  thank you in advance.

 

Is it big enough to assume it is Buffett?  I haven't looked at STOR but there is some cheapish stuff (real cheap relatively speaking) in the area. 

[Ballinvarosig Investors]

It looks like this is a Ted Weschler pick.

 

https://www.bloomberg.com/news/articles/2017-06-26/buffett-s-bet-on-store-shows-not-all-retail-real-estate-is-equal

Store Capital Chief Executive Officer Christopher Volk said on Monday that Berkshire had been studying the REIT since 2014, occasionally holding conversations with management. Ten days ago, Buffett’s deputy investment manager Ted Weschler called the company to suggest a deal because the price had fallen to an attractive level, Volk said.

[netnet]

Alternative explanation for this and HCG might be that it's all Ted's ideas and Warren just signs off without much supervision. That's also not very believable, but just throwing it out there. I base this on the size of the positions which are really small for Warren.

 

I'm pretty sure that Todd and Ted both invest without supervision, at least in 'their' accounts.