Buffett says will likely buy small business in Europe

[Charlie]

http://finance.yahoo.com/news/buffett-says-likely-buy-small-203212772.html

 

Buffett says will likely buy small business in Europe -Fox Business

 

NEW YORK, Feb 4 (Reuters) - Billionaire investor Warren Buffett said on Wednesday he is likely to buy a small business in Western Europe and he would like to buy more businesses abroad.

 

"We'd like to buy more businesses around the world," said Buffett, the head of conglomerate Berkshire Hathaway, in an interview with Fox Business.

 

Over the past 50 years Berkshire has bought dozens of companies ranging from insurance to railroads.

 

(Reporting by Luciana Lopez)

 

 

Cheers!

[Liberty]

Does anyone has a link to an online video or transcript of the Buffett appearance on Fox? TIA.

[gfp]

At the moment, most of the segments are here:

 

http://video.foxbusiness.com/v/4032604090001/buffett-my-aunt-gave-me-20k-to-get-started/?#sp=show-clips

 

No transcript that I have seen, but this article covers most of it:

http://www.foxbusiness.com/business-leaders/2015/02/04/still-feisty-after-all-these-years/?intcmp=bigtopmarketfeaturesside

[Sea Island]

If Greece is still part of "western Europe" then Buffett is following Mr. Watsa's lead as Fairfax bought the "Home Depot" of Greece earlier this year.

[Charlie]

I like this comment:

 

When reminded it's one of the top five largest companies in the world he said, "There's still a few slots above us."

 

Can he get to the top slot?

 

"Well," he said smiling, "We're working on it."  :)

 

I don´t think the investment will be in Greece, simply because of country risk.

[hardcorevalue]

Here are links to all the videos:

 

http://video.foxbusiness.com/v/4032604091001/buffett-think-new-nebraska-store-will-do-over-1b-in-sales/?playlist_id=1866680862001#sp=show-clips

 

http://video.foxbusiness.com/v/4032604090001/buffett-my-aunt-gave-me-20k-to-get-started/?playlist_id=1866680862001#sp=show-clips

 

http://video.foxbusiness.com/v/4032560065001/buffett-will-probably-buy-a-small-business-in-western-europe/?playlist_id=1866680862001

 

http://video.foxbusiness.com/v/4032419536001/buffett-geico-was-my-first-love/?playlist_id=1866680862001#sp=show-clips

 

http://video.foxbusiness.com/v/4032461248001/buffett-on-coca-cola/?playlist_id=1866680862001#sp=show-clips

 

http://video.foxbusiness.com/v/4032419537001/buffett-on-oriental-trading---/?playlist_id=1866680862001#sp=show-clips

 

http://video.foxbusiness.com/v/4032581826001/buffett-on-cancer-2016-elections-and-apple-/?playlist_id=1866680862001

 

http://video.foxbusiness.com/v/4032712005001/warren-buffett-fed-will-find-it-very-tough-to-raise-rates-this-year/?playlist_id=1866680862001#sp=show-clips

[Liberty]

Thank you for the video links, I appreciate it.

[peter1234]

Thank you for the video links, I appreciate it.

+1

:)

[fisch777]

Thanks for links.  That FBN anchor is just painful.  Why does FBN exist?

[merkhet]

Thanks for links.  That FBN anchor is just painful.  Why does FBN exist?

 

To make CNBC look good. And that's a pretty amazing feat.

[netnet]

Thanks for links.  That FBN anchor is just painful.  Why does FBN exist?

 

To make CNBC look good. And that's a pretty amazing feat.

 

No joke.  Or maybe I should say big joke. ;)

[rb]

Ok,

 

The reporter was  a joke, WB carried her all the way through. That being said, there are a lot of businesses in Europe that would be a great fit for BH. Especially in Germany where there are a lot of privately owned, medium sized, very successful companies. Schluter comes to mind as a perfect fit.

 

Let's hope they will be willing to sell and we reap the rewards.

 

rb

[lathinker]

As reported first by the  FT, Berkshire has bought Detlev Louis:

 

http://www.ft.com/cms/s/0/f8faf4f6-b6f1-11e4-95dc-00144feab7de.html?siteedition=uk#axzz3SHyFal1x

 

Louis (https://www.louis.de/en)  is a retailer for motorcycle accessories such as clothing, helmets and service parts with more than 70 outlets across Germany. Berkshire is reported to pay 400mm EUR. The company has so far been private, it has been around for 75 years and has around 1600 employees, generating 270mm EUR in revenues. Interestingly, Buffett calls the deal a door-opener to Germany. The acquisitions is tiny compared to Berkshire's usual size.

 

So let's see if Buffett will become active in Europe/Germany. In fact, there are some excellent businesses in this country, but it is tough to find anything cheap.

 

[gfp]

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

[rb]

So let's see if Buffett will become active in Europe/Germany. In fact, there are some excellent businesses in this country, but it is tough to find anything cheap.

 

I think that it makes perfect sense that BRK would buy business in Europe and especially in Germany. Furthermore I disagree that there's nothing cheap in Germany. Maybe not for you and me, but not for BRK. There are tons of great businesses in Germany that have fantastic operations but the capital allocation is atrocious. Once BRK relieves the management of their capital allocation burden, then the value of those business should increase significantly.

 

I think the issue here is not the valuation but whether BRK will find willing sellers.

 

rb

[Charlie]

"I think that it makes perfect sense that BRK would buy business in Europe and especially in Germany. Furthermore I disagree that there's nothing cheap in Germany. Maybe not for you and me, but not for BRK. There are tons of great businesses in Germany that have fantastic operations but the capital allocation is atrocious. Once BRK relieves the management of their capital allocation burden, then the value of those business should increase significantly.

 

I think the issue here is not the valuation but whether BRK will find willing sellers."

 

+1

 

I think with a weak Euro it makes even more sense.  :)

 

It will be interesting to see in the annual report if Buffett increased his holdings in Munich Re and Sanofi.

 

 

[Guest longinvestor]

So let's see if Buffett will become active in Europe/Germany. In fact, there are some excellent businesses in this country, but it is tough to find anything cheap.

 

I think that it makes perfect sense that BRK would buy business in Europe and especially in Germany. Furthermore I disagree that there's nothing cheap in Germany. Maybe not for you and me, but not for BRK. There are tons of great businesses in Germany that have fantastic operations but the capital allocation is atrocious. Once BRK relieves the management of their capital allocation burden, then the value of those business should increase significantly.

 

I think the issue here is not the valuation but whether BRK will find willing sellers.

 

rb

 

Trying to relieve (local) management from capital allocation in German businesses is a non-starter in my experience working for /with businesses there. I agree that some of those decisions may turn out to be atrocious but get management to part with capital allocation? There is much pride and joy involved. Have heard stories of biz owners defending their capital allocation decisions all the way to BK and even beyond. Langfristig

 

Omaha perhaps can assist with capital allocation decisions on tuck-ins, but captive organic capital allocation, likely not.

[lathinker]

So let's see if Buffett will become active in Europe/Germany. In fact, there are some excellent businesses in this country, but it is tough to find anything cheap.

 

I think that it makes perfect sense that BRK would buy business in Europe and especially in Germany. Furthermore I disagree that there's nothing cheap in Germany. Maybe not for you and me, but not for BRK. There are tons of great businesses in Germany that have fantastic operations but the capital allocation is atrocious. Once BRK relieves the management of their capital allocation burden, then the value of those business should increase significantly.

 

I think the issue here is not the valuation but whether BRK will find willing sellers.

 

rb

 

Trying to relieve (local) management from capital allocation in German businesses is a non-starter in my experience working for /with businesses there. I agree that some of those decisions may turn out to be atrocious but get management to part with capital allocation? There is much pride and joy involved. Have heard stories of biz owners defending their capital allocation decisions all the way to BK and even beyond. Langfristig

 

Omaha perhaps can assist with capital allocation decisions on tuck-ins, but captive organic capital allocation, likely not.

 

+1

I agree with you. Some of the owners easily think beyond their generation so they do not really care about the short-term. This may sometimes be overcautious but it is not necessarily a negative.

 

Take Rational (RAA.DE), a listed market leader of cooking systems, as anecdotal evidence. This is one of the finest businesses listed in Germany and they have been growing strongly for decades. Back in 2009, despite risings earnings the founder (Mr. Meister) decided to cut the dividend from 4,50 EUR to 1,00 EUR. The company was financially strong, it had enough cash, their earnings rose in both 2008 and 2009, still Meister simply decided that if all businesses are going to die, Rational should be among the last ones. It made no sense in terms of capital allocation, analysts hated it and the stock collapsed from 150 to 60 EUR. After things had stabilised, they paid an extra dividend in 2011 and that was it. Poor capital allocation at the time? Probably yes. Conservative? Yes. Bad for the long-term investor? Not really.

 

 

[rb]

This brings me back to my point that the issue isn't really valuations but finding willing sellers.

 

The rules of a BRK acquisition:

1. Management must stay on and continue operating the business.

2. Capital allocation gets taken over by Omaha.

3. The rules above are not negotiable.