petec Posted February 27, 2018 Posted February 27, 2018 As others said, they're far from tapped out in utilities. They may even buy a large foreign utility like National Grid. Not with Jeremy Corbyn waiting in the wings. I like the LNG/GHE/DIS ideas.
nickenumbers Posted February 27, 2018 Posted February 27, 2018 I am not familiar with all of GE's segments and sub-businesses, other than just general knowledge. Can BRK spend $20B, and buy all the insurance, or financial service, or mortgage segments? If GE is looking to refocus, that might be a good fit and a larger acquisition opportunity. Again, I don't know what GE has available.
Cardboard Posted February 27, 2018 Posted February 27, 2018 "+1; I have first hand knowledge of Welch starting the rot. He was a loud mouthed PR guy but as you point out, the management rot was all Welch's creation. While on the subject, Larry Culp of DHR has joined the GE board, ostensibly to fix GE into its new avatar. It is ironic for me since some of the rotten management from GE walked over to DHR, where I worked during Welch's time. All they brought with was pernicious management behaviors. Like how they shit on suppliers. Simply go around and ask small suppliers who have or may have supplied to GE. AFAIK, in addition of the emerging accounting shite that is making the news, GE's contributions by way of management practices since Welch belongs in the toilet." All these posts against Welch must be from parents telling their kids that only participation matter. Getting good grades, finishing on top of something that you like does not matter. Let's all hug each other kids since that is how the world works. No need to push to hard. We are all equal... ::) Obviously, not everything went well at GE in the 20 years that Welch was at the helm but, there sure was a lot of good things. And oh by the way, Warren Buffett clearly mentions that Jack is a good friend. And if I were you, I would also read a little more about what kind of culture 3G brings about into an organization. His book: Straight from the Gut is a must read IMO for any manager. Evaluating people is absolutely needed. Providing feedback both positive and negative is absolutely needed. And unfortunately, there are people who are not at their place and you are providing them with a disservice by simply keeping them around. So I agree with his let go the bottom 10%. Keeping only #1 and #2 business in their field makes a ton of sense too. Cardboard
gfp Posted February 27, 2018 Posted February 27, 2018 It would be nice if Cargill, Bosch and Mars phoned, but I don't know why they would. I don't think the Koch brothers are going to call anytime soon. Unilever would have been fantastic for KHC, but even that deal was only going to be structured to put $20 billion or less in by Berkshire. Not even soaking up the cash generated while they waited for the deal to close..
StevieV Posted February 27, 2018 Posted February 27, 2018 I am also in the camp of buying back shares. However, at least for now, it seems as though Buffett isn't interested in a buyback. But what about the buyback threshold? Well, the buyback threshold hasn't resulted in much of an actual buyback. It is more of a stock price support plan than a buyback plan. I doubt changing the threshold to 1.25 or 1.27 will do much to change that. I am sure Mr. Buffett knows that as well. If he wanted to spend significant cash buying back shares, he would have done so. So, I have to assume, he doesn't want to. I don't see BRK avoiding a significant capital return plan at some point. If you buy-back 3% of your shares and pay a 3% dividend, you don't need huge outside opportunities. If you retain all the cash, you do need huge acquisitions.
rb Posted February 28, 2018 Posted February 28, 2018 "+1; I have first hand knowledge of Welch starting the rot. He was a loud mouthed PR guy but as you point out, the management rot was all Welch's creation. While on the subject, Larry Culp of DHR has joined the GE board, ostensibly to fix GE into its new avatar. It is ironic for me since some of the rotten management from GE walked over to DHR, where I worked during Welch's time. All they brought with was pernicious management behaviors. Like how they shit on suppliers. Simply go around and ask small suppliers who have or may have supplied to GE. AFAIK, in addition of the emerging accounting shite that is making the news, GE's contributions by way of management practices since Welch belongs in the toilet." All these posts against Welch must be from parents telling their kids that only participation matter. Getting good grades, finishing on top of something that you like does not matter. Let's all hug each other kids since that is how the world works. No need to push to hard. We are all equal... ::) Obviously, not everything went well at GE in the 20 years that Welch was at the helm but, there sure was a lot of good things. And oh by the way, Warren Buffett clearly mentions that Jack is a good friend. And if I were you, I would also read a little more about what kind of culture 3G brings about into an organization. His book: Straight from the Gut is a must read IMO for any manager. Evaluating people is absolutely needed. Providing feedback both positive and negative is absolutely needed. And unfortunately, there are people who are not at their place and you are providing them with a disservice by simply keeping them around. So I agree with his let go the bottom 10%. Keeping only #1 and #2 business in their field makes a ton of sense too. Cardboard Focusing on #1 or #2 businesses in the field is actually a pretty dumb idea. It bases capital allocation on the chase of the grandiose instead of valuation. That in turn motivates management to build a stable of really pretty businesses at the expense of shareholder value. I guess that policy has served it's purpose at GE.
Cardboard Posted February 28, 2018 Posted February 28, 2018 "Focusing on #1 or #2 businesses in the field is actually a pretty dumb idea. It bases capital allocation on the chase of the grandiose instead of valuation. That in turn motivates management to build a stable of really pretty businesses at the expense of shareholder value. I guess that policy has served it's purpose at GE." Please explain to me how focusing on businesses where you dominate or have a moat is a dumb idea? The only exception IMO would be a business where you have low revenues vs the leaders but, a very strong niche. Cardboard
Guest longinvestor Posted February 28, 2018 Posted February 28, 2018 "+1; I have first hand knowledge of Welch starting the rot. He was a loud mouthed PR guy but as you point out, the management rot was all Welch's creation. While on the subject, Larry Culp of DHR has joined the GE board, ostensibly to fix GE into its new avatar. It is ironic for me since some of the rotten management from GE walked over to DHR, where I worked during Welch's time. All they brought with was pernicious management behaviors. Like how they shit on suppliers. Simply go around and ask small suppliers who have or may have supplied to GE. AFAIK, in addition of the emerging accounting shite that is making the news, GE's contributions by way of management practices since Welch belongs in the toilet." All these posts against Welch must be from parents telling their kids that only participation matter. Getting good grades, finishing on top of something that you like does not matter. Let's all hug each other kids since that is how the world works. No need to push to hard. We are all equal... ::) Obviously, not everything went well at GE in the 20 years that Welch was at the helm but, there sure was a lot of good things. And oh by the way, Warren Buffett clearly mentions that Jack is a good friend. And if I were you, I would also read a little more about what kind of culture 3G brings about into an organization. His book: Straight from the Gut is a must read IMO for any manager. Evaluating people is absolutely needed. Providing feedback both positive and negative is absolutely needed. And unfortunately, there are people who are not at their place and you are providing them with a disservice by simply keeping them around. So I agree with his let go the bottom 10%. Keeping only #1 and #2 business in their field makes a ton of sense too. Cardboard Focusing on #1 or #2 businesses in the field is actually a pretty dumb idea. It bases capital allocation on the chase of the grandiose instead of valuation. That in turn motivates management to build a stable of really pretty businesses at the expense of shareholder value. I guess that policy has served it's purpose at GE. What is GE #1 or #2 in? Let’s go back to year 2000 when Welch stepped out. Well, they got into Finance, leasing, Insurance (?) also during Welch’s time, am I correct? The derivatives exposure happened when?
Lakesider Posted March 1, 2018 Posted March 1, 2018 Focusing on #1 or #2 businesses in the field is actually a pretty dumb idea. It bases capital allocation on the chase of the grandiose instead of valuation. That in turn motivates management to build a stable of really pretty businesses at the expense of shareholder value. I guess that policy has served it's purpose at GE. Focusing on the core businesses and monetising the rest worked really well for GD and its shareholders. I was hoping Flannery would do this but from his letter it sounds like hes not going to do anything radical. Maybe BRK could take over and unlock by selling off some divisions.
villainx Posted March 1, 2018 Posted March 1, 2018 I wonder if foreign or foreign exposure companies would be more likely now that taxes are "normalized" or less disadvantaged? Or if that was one of the reason why it hasn't been?
voyager Posted March 2, 2018 Author Posted March 2, 2018 Here are a few private companies that he might like Weber-Stephens, Gore Associates, Quicken Loans, or Penske. On the public side, how about HOG, LUV, DLTR, or DIS.
Guest compoundsnowly83 Posted March 2, 2018 Posted March 2, 2018 Amerco (holding company for U-Haul). Controlled by entrepreneurial family that has has used strong cash flow from core operations to expand into insurance and self-storage. Very high return on asset business that should be one of the larger beneficiaries of the tax bill. Business is almost entirely in the US with leading market share.
villainx Posted March 3, 2018 Posted March 3, 2018 Amerco (holding company for U-Haul). Controlled by entrepreneurial family that has has used strong cash flow from core operations to expand into insurance and self-storage. Very high return on asset business that should be one of the larger beneficiaries of the tax bill. Business is almost entirely in the US with leading market share. Amerco is smallish market cap wise. And that family controlling interest seems convoluted. Otherwise, yeah, it seems like it can fit somewhere in the Berkshire family.
ValueMaven Posted March 3, 2018 Posted March 3, 2018 I think we are all thinking about this in the wrong context actually... Berkshire should ALLOW bolt-on acquisitions at an aggressive pace and at managements discretion...ie; highlighted in this years letter...and us the cash to BUYBACK stock.... why force an deal, when valuations are $$$ Sincerely, VM
thefatbaboon Posted March 11, 2018 Posted March 11, 2018 Also, where the idea is either a bolt-on or a 3G target I think the self-imposed requirement that it be "friendly" is impractical. Say 3G/KraftHeinz wanted to buy Pepsi or Coke or Unilever and make them all fly coach, fire half the c-suite, close a bunch of factories, wring out synergies etc...is it reasonable to expect that they want to be bought.
DooDiligence Posted January 11, 2019 Posted January 11, 2019 This wouldn't be an immediate needle mover, but it could probably be expanded at a faster pace under Berkshire. https://www.forbes.com/sites/petercarbonara/2017/08/22/buc-ees-game-of-porcelain-thrones/ Buc-ees came to my attention because they're building one near me. "Power to the Beaver"
Viking Posted January 11, 2019 Posted January 11, 2019 GOOG. 3 or 4 years from now he will look like a genius :-)
Spekulatius Posted January 12, 2019 Posted January 12, 2019 I would wish them to buy some companies in the aerospace industry in addition to PCP. It’s a great secular growth market where patience will be rewarded. The second one is infrastructure. Pipelines (KMI ?), AirPorts, Harbors etc.
Txvestor Posted January 17, 2019 Posted January 17, 2019 John Deere. I can't beleive they have not yet.
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