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Buffett/Berkshire - general news


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Guest longinvestor

I've lived under 15 presidents and bought stocks under14 of them. I was two under Hoover and hadn't got into stocks yet. But I bought under Eisenhower  ;D

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  • 2 weeks later...

Nice. Although the financial details are undisclosed this sounds like a typical friendly acquisition, retaining good existing management, and presumably for a reasonable price that would probably return about 9-10% per annum after tax.

 

I don't have a particularly strong feel for the US market. In the UK I know it's fairly tough on estate agents with internet companies like PurpleBricks.com offering fixed price rather than commission and advertising strongly, though solicitors/conveyancers will still charge a sizeable amount to do the legal work. I've spoken to someone who says it's quite a tough time for estate agents and that these new entrants don't provide what she feels is a proper level of service. However, I think that many people find estate agents bad to deal with very often and would rather have a few thousand pounds more in their pockets than slightly less bad service.

 

One thing possibly looming is whether or not blockchain technologies could spread into areas like this and replace the layers of companies and registrars who are currently in the trust-but-verify business and who maintain or query ledgers of ownership transactions. Blockchains could eventually provide a distributed trust network for property records and transactions which has the potential to make a lot of these transactions far simpler with far lower frictional costs. If it spreads, it could be a game-changer to certain industries of 'middlemen' and a cost-saver for the rest of us.

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Buffett featuring in a short Forbes article, presumably there'll be a much longer article in the magazine itself when it comes out. Nothing in the web article no one hasn't heard before though.

 

https://www.forbes.com/sites/randalllane/2017/09/20/warren-buffett-my-greatest-investing-advice-and-the-investments-everyone-should-make/#7e9541d1593e

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Buffett featuring in a short Forbes article, presumably there'll be a much longer article in the magazine itself when it comes out. Nothing in the web article no one hasn't heard before though.

 

https://www.forbes.com/sites/randalllane/2017/09/20/warren-buffett-my-greatest-investing-advice-and-the-investments-everyone-should-make/#7e9541d1593e

 

Thanks for sharing. It's very interesting.

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https://www.reuters.com/article/us-buffett-forbes/buffett-calls-pessimists-about-united-states-out-of-their-mind-idUSKCN1BV0A3

 

Buffett said he expects the Dow Jones Industrial Average to be “over 1 million” in 100 years, up from Tuesday’s close of 22,370.80. He said that’s not unreasonable, given how the index was roughly 81 a century ago.

 

That's all ? While the raw figure may sound nice it's actually only 3.9% nominal annual return (maybe even negative real returns).

 

Any thoughts on this ?

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  • 2 weeks later...

It may be 5 or 6 Billion dollars for the entire company.  38% could be $2.25 Billion, the eventual 80% $5 Billion or so.  With few other acquisitions this quarter and what I assume to be a quick closing with Byron as the investment banker and one of the sellers, we will probably find out what Berkshire paid in the annual report cash flow statement.

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Could be $8 Billion valuation for the whole thing.  Not sure.  Sales will be much higher than market cap for a company in that business.  It probably makes at least $500 million net each year, but I don't have a source for accurate numbers.

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Guest longinvestor

This must be fairly big. That flying thing actually has 770 locations.

 

It appears that they have roadside truck services as well. Can see some connections with McLane, Xtra and Geico(?). In somewhat of a related way, DQ, Burger King are surely co-located at some of the 770 locations?

 

The way it's going, with Berkshire gobbling up pieces of America, how can there not be a connection ;D

 

 

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In other news, QBE, the large Australian Insurance company, issued a press release that indicates that Berkshire could see a $900 million payout on a reinsurance contract that Ajit wrote for QBE.  QBE exhausted the reinsurance coverage and then some, so BRK could be on the hook for the entire $900 million.  Along with the AIG deal amortization and the GEICO numbers, this would almost certainly mean the first full year underwriting loss in quite a while. 

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