Buffett/Berkshire - general news

[wachtwoord]

1. Looks like it

2. Yen is much weaker than CHF. Also there's likely more demand for these.

[roberts1001]

Makes me think about doing the same.  Buy a Japanese stock or fund and then hedge the currency risk using FX, receiving about 2% in interest on the USD/JPY FX contract (at current interest rates).  Maybe buying something like iShares Japan Value (EWJV) with a P/E of 9.77.

 

Or maybe something like UBS.  The Swiss stock market is expensive at a P/E of 22, but UBS has a P/E of 10, a P/B of 0.75 and a dividend yield of 6.35%.  Then hedge the currency risk using FX, receiving 2% interest on the USD bought and paying negative 1% on the CHF sold.

 

I'm not saying EWJV or UBS are good buys, or that FX hedging is a good idea, but it's something to think about.  Then again, maybe I should stick with what I have, which at this point is pretty much just BRKb and cash.

 

Wishing success to all.

[gfp]

Duracell looks set to do a small deal for Everready assets (India market only) -

https://www.cnbctv18.com/market/eveready-shares-hit-5-lower-circuit-after-reports-of-duracells-plans-to-buy-company-assets-4316751.htm

 

[Cigarbutt]

Applied Underwriters sale information -

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/53946178

2x return in 13 years! Not a great return unless Applied upstreamed a whole bunch of dividends to the mother ship over the years. Ajit & Warren are probably just getting rid of a "problem child".

Looking at various regulatory filings, it remains hard to get a clear picture but it appears that the acquisition was underwhelming. Underwriting results varied ++ from year to year and the lumpiness was not accompanied by very significant growth over the longer term. It is interesting to note that employee count went from 421 employees in 2006 to 703 employees in 2018. Employee count is not a precise measure but it gives an approximate idea of the level of written premiums and payroll services. One of the most recent filings indicated that the sub still wrote 86.4% of its WC premiums in California. From the spglobal document, during the BRK ownership, there was no capital movement to and from the parent. Also, it appears that the sub maintained autonomy over the investment management of the float and this possibility is supported by the profile of invested admitted assets which had a very high allocation to bonds.

So, indeed not a great return and an elegant way to get rid of a poor reputational risk to return subsidiary.

[villainx]

I didn't see this shared, and there's a pay or sign up wall, but there was an article about real estate brokers on the economist recently: https://www.economist.com/united-states/2019/08/29/why-americas-real-estate-brokers-are-such-a-rip-off.

 

Berkshire has a big real estate brokerage subsidiary, right?  I don't sense real threat to status quo (or direct mention of Berkshire), mainly stating the problems.  But it's interesting to think about Berkshire expansion in that area (as well as Brookfield's exit?).

[Munger_Disciple]

 

Looking at various regulatory filings, it remains hard to get a clear picture but it appears that the acquisition was underwhelming. Underwriting results varied ++ from year to year and the lumpiness was not accompanied by very significant growth over the longer term. It is interesting to note that employee count went from 421 employees in 2006 to 703 employees in 2018. Employee count is not a precise measure but it gives an approximate idea of the level of written premiums and payroll services. One of the most recent filings indicated that the sub still wrote 86.4% of its WC premiums in California. From the spglobal document, during the BRK ownership, there was no capital movement to and from the parent. Also, it appears that the sub maintained autonomy over the investment management of the float and this possibility is supported by the profile of invested admitted assets which had a very high allocation to bonds.

So, indeed not a great return and an elegant way to get rid of a poor reputational risk to return subsidiary.

 

Good post. Given there were no distributions, it was a very sub-par return.

[CassiusKing1]

Tracy Britt Cool leaving Berkshire to start her own firm.

 

https://www.cnbc.com/2019/09/18/berkshire-executive-and-buffett-protege-tracy-britt-cool-is-leaving.html

[WneverLOSE]

Tracy Britt Cool leaving Berkshire to start her own firm.

 

https://www.cnbc.com/2019/09/18/berkshire-executive-and-buffett-protege-tracy-britt-cool-is-leaving.html

 

Interesting to me is that out of the thousands of investment professionals that would kill to be in her position Buffett chose her out of school at the age of 25 (my current age  8))

 

Interview with her from 2018 :

 

One day this forum will have to be called Corner of Berkshire, Fairfax, Boston-Omaha & Tracy Co. with all the new mini Berkshires around

[John Hjorth]

It reads to me like something smaller than the Swedish public listed Investor AB as a part of the whole Wallenberg sphere [market value right now at SEK ~361 B], but still active management, or perhaps like the Danish Schouw & Co A/S [just to keep it minor] :

 

“I want to build a long-term platform and a long-term vehicle to acquire and build businesses,” Cool said in an interview with the WSJ. “There are companies that I think there’s a lot of value in helping them get to the next level, but they’re too small for Berkshire.”

 

- - - o 0 o - - -

 

Ambitions are the cradle of experiences.

[Jurgis]

One day this forum will have to be called Corner of Berkshire, Fairfax, Boston-Omaha & Tracy Co. with all the new mini Berkshires around

 

More likely it will be called Corner of Berkshire Past.

 

Fairfax has not done well.

Berkshire after Buffett ... ???

Boston-Omaha is not something special and likely won't be.

Tracy Co. - we'll see.

[John Hjorth]

One day this forum will have to be called Corner of Berkshire, Fairfax, Boston-Omaha & Tracy Co. with all the new mini Berkshires around

 

More likely it will be called Corner of Berkshire Past.

 

Fairfax has not done well.

Berkshire after Buffett ... ???

Boston-Omaha is not something special and likely won't be.

Tracy Co. - we'll see.

 

A great mix of skeptisism for the future, rear mirror view on future outcomes [- at least to me -], and no trust or belief in the [very competent!] persons [perhaps, perhaps not!] younger than you . ... -Very much like me! [ : - ) ]

[Orchard]

From NY Post:

Cool was named CEO of Pampered Chef, which enlists home chefs to help sell its cookware, in 2014. The company’s revenue has fallen from $320 million in 2015 to $280 million in 2018, according to Direct Selling News.

 

Buffett told the Journal that Pampered Chef’s second quarter revenue was up 19 percent, but failed to mention the revenue losses since Cool — who joined the company as a financial assistant straight from Harvard — has taken the helm.

[Mephistopheles]

From NY Post:

Cool was named CEO of Pampered Chef, which enlists home chefs to help sell its cookware, in 2014. The company’s revenue has fallen from $320 million in 2015 to $280 million in 2018, according to Direct Selling News.

 

Buffett told the Journal that Pampered Chef’s second quarter revenue was up 19 percent, but failed to mention the revenue losses since Cool — who joined the company as a financial assistant straight from Harvard — has taken the helm.

 

Not surprised. It appears Buffett's bias in favor of women reveals itself yet again. Would a male have had the same opportunity and career trajectory right out business school?

[Dynamic]

Maybe you're right, Mephistopheles. Perhaps there's a counterpoint. I think the rapid rise of Ajit Jain, despite not being experienced in the insurance business may be a parallel for someone like Tracy Britt Cool. Perhaps Tracy Britt Cool is just a person with the right stuff to really make a positive difference and impressed right from the start.

[Spekulatius]

Tracy monetizes her experience gained with Buffet . Nothing wrong with this, but no guarantee for success either. The problem with anyone starting out with a BRK copycat is if they can afford to be patient.

 

There are plenty of holding companies with good capital allocators that can be bought at a discount to NAV.

[abitofvalue]

Interesting that WEB already came out and said he wouldnt be investing..

[Spekulatius]

Interesting that WEB already came out and said he wouldnt be investing..

 

Why would he? If she can do deals that are too small for BRK, the gains won’t  be material. If she were to compete with BRK he doesn’t have a reason to invest in her vehicle either.

[Guest]

Interesting that WEB already came out and said he wouldnt be investing..

 

Why would he? If she can do deals that are too small for BRK, the gains won’t  be material. If she were to compete with BRK he doesn’t have a reason to invest in her vehicle either.

 

Where did you guys see this?

 

His personal account is way smaller so I would imagine he would invest with her if he thought she would do better. Look at Munger and Li Lu.

[gfp]

In the absence of any real material Berkshire related news in ages, we can at least read about this interesting real estate development in Omaha that Applied Underwriters is leading -

https://www.omaha.com/money/applied-underwriters-celebrates-work-on-heartwood-preserve-development-touts-natural/article_d4ef8492-37c8-595f-aa64-151f3d20673a.html

 

Here's hoping for "Berkshire Hathaway acquires ExxonMobil" or similar headline sometime soon..

[oscarazocar]

Interesting that WEB already came out and said he wouldnt be investing..

 

Why would he? If she can do deals that are too small for BRK, the gains won’t  be material. If she were to compete with BRK he doesn’t have a reason to invest in her vehicle either.

 

Where did you guys see this?

 

His personal account is way smaller so I would imagine he would invest with her if he thought she would do better. Look at Munger and Li Lu.

 

It was in the stories the day of the announcement.  From WSJ: "Mr. Buffett said he understood Ms. Britt Cool’s decision because he also left a job he loved, at his mentor Benjamin Graham’s investment firm, to work for himself in 1956. He added that he doesn’t intend for Berkshire to invest in Ms. Britt Cool’s new venture."

 

I think he may have said that more reasons than that he didn't think she would succeed.  First, he didn't say that he wouldn't invest, but that Berkshire wouldn't invest.  We have no idea what he does personally; my guess is that he does not invest in other people's funds based on his history.  Can anyone recall a single instance when he did that?  He has never been one to outsource his personal investing.  Second, if Berkshire invested in Britt's new vehicle, that might set a bad precedent.  Buffett doesn't want to give an incentive for people to leave Berkshire, and he probably doesn't want to be in a position of having people leave and investing in some but not others.

[Dynamic]

In the absence of any real material Berkshire related news in ages, we can at least read about this interesting real estate development in Omaha that Applied Underwriters is leading -

https://www.omaha.com/money/applied-underwriters-celebrates-work-on-heartwood-preserve-development-touts-natural/article_d4ef8492-37c8-595f-aa64-151f3d20673a.html

 

Here's hoping for "Berkshire Hathaway acquires ExxonMobil" or similar headline sometime soon..

 

And for those unable to read the story thanks to GDPR, it's also on archive.org here.

[Guest]

Interesting that WEB already came out and said he wouldnt be investing..

 

Why would he? If she can do deals that are too small for BRK, the gains won’t  be material. If she were to compete with BRK he doesn’t have a reason to invest in her vehicle either.

 

Where did you guys see this?

 

His personal account is way smaller so I would imagine he would invest with her if he thought she would do better. Look at Munger and Li Lu.

 

It was in the stories the day of the announcement.  From WSJ: "Mr. Buffett said he understood Ms. Britt Cool’s decision because he also left a job he loved, at his mentor Benjamin Graham’s investment firm, to work for himself in 1956. He added that he doesn’t intend for Berkshire to invest in Ms. Britt Cool’s new venture."

 

I think he may have said that more reasons than that he didn't think she would succeed.  First, he didn't say that he wouldn't invest, but that Berkshire wouldn't invest.  We have no idea what he does personally; my guess is that he does not invest in other people's funds based on his history.  Can anyone recall a single instance when he did that?  He has never been one to outsource his personal investing.  Second, if Berkshire invested in Britt's new vehicle, that might set a bad precedent.  Buffett doesn't want to give an incentive for people to leave Berkshire, and he probably doesn't want to be in a position of having people leave and investing in some but not others.

 

Thanks!

 

It's been a while so I might be mis-remembering this but I think he invested with his nephew either through his fund or bomn.

[John Hjorth]

Competition Policy International [October 2^nd 2019] : US: Hyundai, Kia sue four biggest railroads.

 

 

... BNSF is a unit of billionaire Warren Buffett’s Berkshire Hathaway, but was a standalone company at the time of the alleged conspiracy. ...

[DanielGMask]

https://buffett.cnbc.com/warren-buffett-archive/

 

Buffett in his own words

 

The Warren Buffett Archive is the world’s largest collection of Buffett speaking about business, investing, money and life.

 

- 26 full Berkshire Hathaway annual meetings, going back to 1994, with a highlight reel for each year

- 130 hours of searchable video, synchronized to 2800 pages of transcripts

- 500 video clips covering scores of subjects

- CNBC interviews, a Buffett Timeline, and a Berkshire Portfolio Tracker

[Cigarbutt]

Applied Underwriters sale information -

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/53946178

It appears that the 'story' has evolved (murkier?) with a new buyer and a slightly different price tag.

https://www.insurancejournal.com/news/national/2019/10/16/545668.htm

 

The official line continues to be the "channel conflict" issue but, even if the picture is incomplete, there are red flags that suggest that the issue may have been more 'cultural'.

https://www.consumerwatchdog.org/news-story/flash-report-ricardo-lara-was-it-money-laundering-bribery

https://yubanet.com/california/release-of-calendar-and-public-records-suggest-lara-made-first-contact-in-pay-to-play-insurance-scandal/