Meet Ted Weschler: Buffett auction winner, Berkshire's new hire

[saumil]

http://finance.fortune.cnn.com/2011/09/12/ted-weschler-buffett-berkshire-hire/

[Rabbitisrich]

Thanks for the link. Pretty spectacular returns considering the period reported. Perhaps Alice Schroeder will find another anonymous commentator to report that Weschler is actually really dumb.

[zarley]

Hmmm . . .  another hire for BRK.  Thanks for the link saumil.

[Viking]

The longer these guys have to work with Buffett and learn the better I will feel about the investing function at BRK going forward; time also gives BRK an opportunity to ensure the right candidates were picked.

[Liberty]

The longer these guys have to work with Buffett and learn the better I will feel about the investing function at BRK going forward; time also gives BRK an opportunity to ensure the right candidates were picked.

 

Exactly. ideally, BRK would end up with a small group of superinvestors like Fairfax.

[Guest longinvestor]

Interestingly, if,  Warren found Todd, Ted and #3 to have a risk-averse, principal protecting instinct in their DNA (criteria they were screened for) arguably three circles of competence could be better than 1 for BRK holders?

 

But why Warren is irreplaceable is that his CoC has stayed the same all his life. That takes a special kind of character. "I know what I don't know, so I won't go there". That is a Warren special and he stands alone on that.

[netnet]

But why Warren is irreplaceable is that his CoC has stayed the same all his life.

 

I think you mean to say that he has stayed within his circle of competence not that the circle has not increased.

 

Although he has been a very prudent investor,  his circle of competence has most definitely increased!  (To paraphrase Munger, he is a learning machine.)

 

 

[AZ_Value]

Thanks for the link. Pretty spectacular returns considering the period reported. Perhaps Alice Schroeder will find another anonymous commentator to report that Weschler is actually really dumb.

 

LOL

[Guest longinvestor]

But why Warren is irreplaceable is that his CoC has stayed the same all his life.

I think you mean to say that he has stayed within his circle of competence not that the circle has not increased.

Although he has been a very prudent investor,  his circle of competence has most definitely increased!  (To paraphrase Munger, he is a learning machine.)

n

He bought See's candy then, he bought Wrigleys now

He bought Geico then, he bought General Re now

 

He did not buy IBM then, he did not buy Microsoft later, Google now

He did not buy health insurance biz then, he does not buy them now

 

And then he bought commercial airline stock once and swore never to touch them again....he admits to have strayed outside his COC.

 

The "learning machine"  he was, has allowed him to firm up his circle of competence to be an exact circle. To stay within the circle he waited for years/ decades for things inside his circle to become available to him at attractive prices.  So I am saying that his circle of competence as it had to do with how he acted buying businesses changed little.

 

Actually Munger, Lou Simpson, Ajit Jain, et al have bought stuff on their own. Not everything bought by BRK was Warren's decision, especially in the past 10-15 years. The world will probably never know but my wag is that Munger's enchantment with the first principles of engineering lead to the BYD, ISCAR, LUBRIZOL and BNI purchases. The problem of having too much  capital to deploy started two decades ago, not now and BRK has been expanding the collective circle of competence since then. Tuck-in aquisitions at the operating companies is clearly a new phenomenon at BRK and that is part of enlarging the collective circle. 

 

 

 

[Ben Graham]

Warren Buffett selects Ted Weschler of Peninsula Capital Advisors to manage portion of Berkshire Hathaway's investment portfolio.

 

PENINSULA CAPITAL ADVISORS LLC

 

http://www.j3sg.com/Reports/Stock-Insider/Generate-Institution-Portfolio.php?institutionid=5080&DV=yes

 

Portfolio Summary  Filing Report Date :    2011-06-30

[ericd1]

His fund did rather well...LOL

 

I figure his fund's CAGR was approximately 25.8%!

 

 

[dpvalliant]

Does anyone know how to have access to any of his annual reports?

[Ben Graham]

Does anyone know how to have access to any of his annual reports?

 

Ted Weschler - PENINSULA CAPITAL ADVISORS LLC

 

Portfolio Summary  Filing Report Date :    2011-06-30

 

He only holds nine companies in his portfolio, and six of the below listed companies stand out as related to the industry Walter Scott is in, with his communications company merging with Global Crossing.

 

I'm sure Walter and Ted will be talking about some possibilities. Walter Scott can give him a personal tour of the Level 3 Network.

 

DIRECTV  (DTV)

Liberty Media Corp. (LCAPA)

Valassis Communications Inc. (VCI)

Cogent Communications Group... (CCOI)

Cincinnati Bell Inc. (CBB)

Fiber Tower Corp. (FTWR)

 

http://www.j3sg.com/Reports/Stock-Insider/Generate-Institution-Portfolio.php?institutionid=5080&DV=yes

[Guest longinvestor]

Ben Graham, Yes, the 6 telecom like holdings caught my eye as well. Talk about circle of competence. Wonder if the COC is portable to the top investor job in the world.

[Rabbitisrich]

But why Warren is irreplaceable is that his CoC has stayed the same all his life.

I think you mean to say that he has stayed within his circle of competence not that the circle has not increased.

Although he has been a very prudent investor,  his circle of competence has most definitely increased!  (To paraphrase Munger, he is a learning machine.)

n

He bought See's candy then, he bought Wrigleys now

He bought Geico then, he bought General Re now

 

He did not buy IBM then, he did not buy Microsoft later, Google now

He did not buy health insurance biz then, he does not buy them now

 

And then he bought commercial airline stock once and swore never to touch them again....he admits to have strayed outside his COC.

 

The "learning machine"  he was, has allowed him to firm up his circle of competence to be an exact circle. To stay within the circle he waited for years/ decades for things inside his circle to become available to him at attractive prices.  So I am saying that his circle of competence as it had to do with how he acted buying businesses changed little.

 

Actually Munger, Lou Simpson, Ajit Jain, et al have bought stuff on their own. Not everything bought by BRK was Warren's decision, especially in the past 10-15 years. The world will probably never know but my wag is that Munger's enchantment with the first principles of engineering lead to the BYD, ISCAR, LUBRIZOL and BNI purchases. The problem of having too much  capital to deploy started two decades ago, not now and BRK has been expanding the collective circle of competence since then. Tuck-in aquisitions at the operating companies is clearly a new phenomenon at BRK and that is part of enlarging the collective circle.

 

I don't have quite the same take on those business lines. Gen Re and Geico don't have much in common aside from being insurance companies, and the long-tail insurance lines have hugely expanded in the last decade. Among the other companies you mentioned, BYD stands out for being an small outlay and predominantly discussed by Munger. Without the appreciation, and the ties to Li Lu amidst the successor speculation, it didn't bear any marks of being a Buffett pick. Munger also pushed for the Iscar acquisition. But the merger documents show that Munger had nothing to do with Lubrizol, and BNI required less engineering knowledge and more conviction about the direction of energy prices, efficiency, and the roles of California and coal amidst Chinese growth.

 

You could say that Buffett stayed within his COC in the sense of hewing to first principles of business, but he has successfully (and unsuccessfully) applied that knowledge to new fields.

[Guest longinvestor]

......But the merger documents show that Munger had nothing to do with Lubrizol, and BNI required less engineering knowledge and more conviction about the direction of energy prices, efficiency, and the roles of California and coal amidst Chinese growth.

 

You could say that Buffett stayed within his COC in the sense of hewing to first principles of business, but he has successfully (and unsuccessfully) applied that knowledge to new fields.

 

In my earlier post, I said the same thing, that Munger has had a hand in many decisions. Below my understanding of those named businesses. I still am of the opinion that Buffett did not let his COC come in the way of BRK getting larger. He simply bought and brought people with their own COC, take all those operating companies. That wisdom of knowing your COC and seldom venturing far from it is uniquely Buffett.

 

BNI: Energy price direction, & efficiency or more specifically the relative difference between the coefficient of friction between rubber/asphalt and rails/wagon wheels carrying a ton of load. Yes, increased traffic of Chinese goods, coal are factors which drive home or expand the fundamental mu advantage.

 

ISCAR: The world is much less than half along the way to the conversion to hard material (Carbide, ceramics etc) based cutting and other tools. The shift is on a one-way street and little chance of seeing oncoming traffic(new entrants). I have some personal, hands on experience in this industry right out of college and the engineering moat for players like Iscar is as real as sunlight. Munger got this and has said "can't get enough of such deals"

 

Lubrizol: idk.....will wait for some word next year or so. They will talk about it sooner or later. hmmm.. that friction thing again...

 

 

[txlaw]

Lubrizol: idk.....will wait for some word next year or so. They will talk about it sooner or later. hmmm.. that friction thing again...

 

If you want to get more info on the LZ acquisition, it's worth going to the website and reading the 2010 Analyst Day presentation and transcript.

 

http://investor.lubrizol.com/phoenix.zhtml?c=91008&p=irol-eventDetails&EventId=3242330

 

It's a good amount of reading, but you'll see why WEB liked Lubrizol after going through it.

[Ben Graham]

According to an investor in Peninsula, Mr. Weschler recently told shareholders that $100 invested at the fund's inception on Jan. 14, 2000, had grown to $1,134, net of all fees, by last month. Over the same period, $100 invested in the Standard & Poor's 500-stock index grew to $104.08, according to Morningstar, an investment-research firm.

 

Jimmy Wheat, a private investor in Richmond, Va., who has invested alongside Mr. Weschler, says the fund manager's investing philosophy echoes Mr. Buffett's. "Ted's investment philosophy is knowing everything you can before you invest and sticking with it through thick and thin after you invest," said Mr. Wheat. "He's not going to start acting like a kid in a candy store."

 

http://www.linkedin.com/news?viewArticle=&articleID=767182800&gid=88752&type=member&item=70303231&articleURL=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424053111904353504576566372894483578.html%3Fmod%3DWSJINDIA_hpp_LEFTTopWhatNews&urlhash=K4Ge&goback=.gde_88752_member_70303231

[Ballinvarosig Investors]

I was chatting with a chap who has dealt with Weschler recently. Apparently Weschler is a commited Republican too ;D

[Rabbitisrich]

I was chatting with a chap who has dealt with Weschler recently. Apparently Weschler is a commited Republican too ;D

 

That seems unlikely. Weschler supports Planned Parenthood and has donated to democratic and republican candidates. Conservative/liberal categories are broad past the point of usefulness, but he doesn't appear to have an intellectually servile political mindset.