- The tremendous track record of Warren Buffett has been shown to be driven by his preference for lower volatility investments and the employment of modest investment leverage.
- Recent acquisitions by Berkshire Hathaway have continued to build on this investment philosophy.
- This articles discusses an easy-to-implement strategy to replicate the keys to the Oracle of Omaha's success.
- Investors are concerned with BRK.A's ability to find a successor worthy of Warren Buffett.
- Ajit Jain, the chief of Berkshire Hathaway Re-insurance is tipped to be Buffett's successor.
- Our analysis shows Ajit Jain and BH Reinsurance's contribution to BRK.A has been remarkable.
Valuing Berkshire Via Burlington Northern Santa Fe Railway
- Need to value BNSF Railway to value Berkshire Hathaway.
- BNSF Railway is very similar to Union Pacific in Size and Revenue.
- Use Union Pacific's stock price and Modified Enterprise Value to Operating Income to value BNSF Railway.
Berkshire Hathaway Is Still 14% Undervalued And Generates Solid Profit Growth
- Berkshire's share price is 14% undervalued relative to its fair intrinsic value, even after including the impact of a $2B decline in its IBM shares.
- Berkshire's revenue and profit grew by 8.5% in the first nine months of 2014 versus YTD 2013.
- Berkshire rebranded its real estate brokerage brand in order to create a franchise network in order to generate strong potential organic growth in this segment through franchising fee revenues.
- Berkshire generated a 9.29% ROE even though over 60% of its book value is comprised of non-earning assets and low-earning assets such as bonds, cash or goodwill.
- Hedge fund manager and well-known value investor Whitney Tilson still sees value in Berkshire.
How Berkshire Hathaway's Todd Combs And Ted Weschler Performed Relative To The S&P 500 In 2014
- Berkshire Hathaway's Todd Combs and Ted Weschler appear to have underperformed the S&P 500 in 2014.
- Combs and Weschler's largest investments, DirecTV and DaVita, outperformed the S&P 500.
- Many of Combs and Weschler's holdings declined in 2014.
Warren Buffett's Berkshire Hathaway Portfolio: A Free Cash Flow Analysis
- Learn how to analyze any portfolio or stock using the Free Cash Flow Yield Ratio.
- See how Warren Buffett is preparing for a Bear Market scenario.
- Watch as we take apart the most current Berkshire Hathaway equity portfolio piece by piece.
- Lean how to use the Free Cash Flow Yield ratio to make you a better investor.
- Here's my lessons learned over 18 years as a shareholder of Berkshire Hathaway.
- Warren Buffett taught me great tools for investing my money.
- I review Buffett's latest acquisitions and his stock's valuation.
Tracking Warren Buffett's Berkshire Hathaway Portfolio - Q3 2014 Update
- Warren Buffett's US long stock portfolio increased marginally from $107.58B to $107.79B this quarter.
- Berkshire Hathaway's largest three holdings are at over half the entire portfolio.
- Berkshire Hathaway significantly increased Charter Communications, DIRECTV, and General Motors this quarter.
Paying Under 2 Times EBITDA For An Industry Leader
- News broke on Nov. 13 that Berkshire Hathaway would be acquiring Duracell and some cash in exchange for an equity swap with Procter & Gamble.
- While Procter & Gamble has been focused on growth lately, Duracell likely provides Buffett the strong and stable cash flow he desires.
- To top things off, Buffett's deal to buy the battery maker is a steal once investors consider the cash and tax benefits of the transaction.
Buffett's Brilliant Duracell Deal: A Reprise Of Past Deals, A Comment On The Present Market, A Whisper About The Future
- The Duracell deal reprises Buffett/Berkshire deals with Phillips 66, Washington Post and White Mountains Insurance.
- The cookie cutter for these deals was a cash-rich spinoff yielding a bolt-on acquisition.
- The attractiveness in each case is reinforced greatly by the opportunity to get rid of a no longer wanted publicly-traded asset without paying heavy capital gains tax.
- Duracell may not have a brilliant future, but upon close examination the price is so right it doesn't matter.
- The Duracell over PG deal suggests a Buffett caution on high-priced "defensive" stocks and whispers a possible course of action for his large Coca-Cola position.
- As of this writing, I just sold my entire position in Berkshire Hathaway.
- It was one of the first stocks I owned and I still believe it is a great company.
- However, striving for early retirement, I am investing for the sake of passive income. Since Berkshire does not pay one and maybe never will, I decided to sell it today.
- I reinvested the capital directly into three other companies. Two of them are in Mr. Buffett’s portfolio.
Lasting Lessons From 'Berkshire Beyond Buffett,' With Recent Publication
- Professor Lawrence Cunningham’s Berkshire Beyond Buffett: The Enduring Value of Values was recently published by the Columbia Business School Press.
- The publication details aspects of Berkshire Hathaway, such as acquiring family-owned businesses with broad scope and non-negotiable offers, that could keep the company afloat after Buffett's departure.
- Berkshire Hathaway reported very strong results in August, showing prowess in the face of concern over its founder's health.
- We reiterate our positive stance on the conglomerate, looking to 2015 and beyond.
Analyzing Berkshire Hathaway Using The 4 Filters Test
- Berkshire Hathaway passes all Four Filters.
- Berkshire Hathaway's structure is a major competitive advantage.
- The company will continue to thrive long after current management moves on due to the company's structure.
Should You Consider Adding To An Already Oversize Position In Berkshire?
- Traders advocate doing more of what works and less of what doesn't; does this maxim apply to value investors?
- Berkshire Hathaway has become in recent years an oversize part of my portfolio. Is there a rationale for adding to it?
- Bayes Theorem implies that affirmative new information should increase one's conviction (justifying increasingly large position size in a stock).
- I have owned and followed Berkshire for more than 25 years, in the process not only gathering information but also improving my ability to analyze that information.
- Berkshire's success is not so smooth as to raise doubt (like Madoff or LTCM), but is enough to confirm Berkshire as the real deal - a low-risk compounding machine.
Berkshire Hathaway: The Buy For When You Get An Itchy Trigger Finger
- All investment classes look overpriced.
- By rights, we should be patient.
- But if we can't be patient, buying Berkshire is the thing to do.
- Berkshire's scale and diversity prevent it from acting like a nimble market participant.
- Berkshire keeps tens of billions uninvested to support its liquidity policy.
- Berkshire's productive businesses still beat the S&P.
Is It Time To Wake Up And Smell Burger King's New Coffee?
- Burger King and Tim Hortons' merger is for more than tax purposes.
- Look at Starbucks for a cross-branding example that’s done very well.
- Burger-coke-and-French-fry loving Warren Buffett will help fund a Tim Hortons and Burger King merger.
Lubrizol Q4 2008 Earnings Call TranscriptFeb. 5, 2009
Lubrizol Corp. Q3 2008 Earnings Call TranscriptOct. 30, 2008
The Lubrizol Corp. Q2 2008 Earnings CallJul. 31, 2008
The Lubrizol Corp. Q1 2008 Earnings Call TranscriptMay. 2, 2008
The Lubrizol Corp. Q4 2007 Earnings Call TranscriptFeb. 8, 2008
Lubrizol Q3 2007 Earnings Call TranscriptOct. 26, 2007
Today, 11:02 AM
- Berkshire Hathaway's (BRK.A, BRK.B) NetJets won't have to pay the IRS more than $366M in taxes and penalties after a jude rules the tax agency must follow guidance it gave the company's predecessor in 1992.
- It's a mixed verdict for NetJets though, as the judge also rules the company is not entitled to a refund of more than $220M paid by three of its business units.
Wed, Jan. 14, 4:11 PM| Comment!
Mon, Jan. 5, 10:50 AM
- "The market's realizing that it's more than just a stock portfolio," says fund manager and Berkshire Hathaway (BRK.A, BRK.B) owner David Rolfe.
- It wasn't long ago that buying Berkshire was seen as a way to be part of The Oracle's stock-picking prowess, but now it's more about the company's acquisitions and the performance of its operating units.
- Most of Berkshire's stocks reside in its insurance units and income from those investments accounted for just a sixth of a total of $15.7B in profit in the first nine months of 2014 vs. more than 80% 15 years prior - making sour stock picks like Tesco and IBM of little import.
- Berkshire more than doubled the S&P 500's 11% gain in 2014.
Dec. 31, 2014, 8:43 AM
- Among the more interesting is the idea of North Korea hackers attacking the infrastructure of the NYSE and Nasdaq, precipitating a gigantic one-hour drop in stocks.
- Others include: 1) Significantly higher Apple (NASDAQ:AAPL) estimates, making it the first $1T market cap company, the best-performing large-cap in 2015, and a "must own." 2) Falling home prices in H2, making shorts of homebuilders (ITB, XHB) a good play 3) Bank stocks (NYSEARCA:XLF) have a hard time of it 4) Calling Twitter (NYSE:TWTR) his new Netflix, Carl Icahn amasses a sizable position, forcing a bidding war for the company between Google and Facebook 5) Google (NASDAQ:GOOG) becomes more shareholder friendly, cutting spending and launching a buyback program 6) Activists take aim at Cisco (NASDAQ:CSCO), forcing John Chambers out 7) Berkshire Hathaway (BRK.A, BRK.B) makes its largest-ever acquisition, and its not in consumer goods, but instead in energy, retail, or construction/equipment.
- The full piece is here.
Dec. 30, 2014, 8:37 AM
- China will extend subsidies on electric vehicles of up to 55K yuan ($8.8K) per vehicle until at least 2020, according to new draft rules published by the government.
- The development is the latest indication that Beijing plans to back the EV industry in the region as part of a broadened pollution-control initiative.
- Related news: Shenzhen (population ~10M) caps new car sales.
- Stocks of interest: TSLA, OTCPK:BAMXY, KNDI, TM, and Berkshire Hathaway (BRK.A, BRK.B) via BYD Group.
Dec. 18, 2014, 10:45 AM
- The electric car maker backed by Berkshire Hathaway (BRK.A, BRK.B) began tumbling in Hong Kong at about 2 PM local time, and were lower by as much as 47% within an hour before closing down by 29%.
- Board secretary John Li dismissed various rumors on a conference call, including one that Chairman Wang Chuanfu had been arrested in London. He also said the company has no indication The Oracle has reduced his stake.
Dec. 15, 2014, 11:35 AM
- While publicly traded stocks at 35% remain the most popular investment, that's down from 43% one year ago and 49% in 2012. ETFs at 25% are up from 21% one year ago.
- The most popular equity sectors are financials (NYSEARCA:XLF) at 27%, followed by Consumer Discretionary (NYSEARCA:XLY), and Energy (NYSEARCA:XLE), both at 16%.
- Apple (NASDAQ:AAPL) and Berkshire Hathaway (BRK.A, BRK.B) again hold the two top spots for individual picks, with the S&P 500 SPDR ETF (NYSEARCA:SPY), the Health Care SPDR (NYSEARCA:XLV), and the MSCI Emerging Markets ETF (NYSEARCA:EEM) rounding out the top five.
- Source: Tiger 21 Member Favorites Survey
Dec. 12, 2014, 6:29 PM
- Berkshire Hathaway (BRK.A, [[BRK.b]]) is acquiring Charter Brokerage, a provider of logistics services to the petroleum and chemical industries, from P-E firm Arsenal Capital.
- On its site, Charter calls itself "the premier drawback services company in the U.S.," and claims to "recover more duties, taxes and fees for our clients than any other firm."
- Berkshire is 11 days removed from announcing it's buying Weatherford's engineered chemistry and drilling fluids business for $825M.
Dec. 12, 2014, 3:08 PM
- With 2015 marking the golden anniversary for Berkshire Hathaway (BRK.A, BRK.B) under "current management," Warren Buffett's annual letter to shareholders will contain a bonus, writes Anupreeta Das - his vision for the company's next 50 years.
- Another bonus: Buffett's partner in crime Charlie Munger will also put pen to paper to talk about his vision for the coming five decades.
- Buffett and Munger have agreed not to read each other's accounts until shortly before Berkshire reports full-year results and releases the letters publicly at the end of February. They've also agreed not to change a word of their letters after reading the other's piece.
Dec. 8, 2014, 7:50 AM
- Its the first permit to sell nonlife insurance in Asia for Berkshire Hathaway (BRK.A, BRK.B), whose Specialty Insurance unit is in the process of expanding globally. Berkshire made a lot of noise one year ago when it poached a number of AIG executives to work at the division.
- Buffett in June 2013: "It's official: We are moving into commercial insurance in a substantial way."
Dec. 1, 2014, 7:46 AM
- Weatherford International (NYSE:WFT) agrees to sell its engineered chemistry and Integrity drilling fluids business to Berkshire Hathaway (BRK.A, BRK.B) unit Lubrizol Corp. for $750M in cash plus a potential increase of $75M for an earnout tied to the post-closing performance of the businesses.
- WFT says the sale is another step in its plan to divest non-core businesses and will bring total 2014 cash divestiture proceeds to ~$1.8B, implying a net debt of $6.6B-$6.8B at year end.
Nov. 24, 2014, 11:58 AM
- Electric utilities from Minnesota to Texas are trying to pressure Berkshire Hathaway's (BRK.A, [BRK.B]]) BNSF Railway to speed up deliveries of coal on its congested tracks before the worst winter weather hits.
- One group of utilities has petitioned federal regulators to impose a timetable on BNSF to add workers and improve tracks leading east from coal fields in Wyoming; some of the group’s utilities depend on BNSF, one of the largest shippers of coal from the West, for their coal supply, and they say they do not have an alternative.
- Xcel Energy (NYSE:XEL), which owns utilities in eight states, says all its coal plants served by BNSF have less than 30 days’ worth of coal; Allete’s (NYSE:ALE) Minnesota Power temporarily shut two smaller coal plants in September to conserve coal for its large coal plant in Cohasset.
- Coal producers also are struggling to cope with the rail service problems; Peabody Energy (NYSE:BTU) says coal shipments from its Western operations, including Wyoming mines that supply power plants in Minnesota, fell 2% in Q3 because customers could not find enough rail capacity.
Nov. 22, 2014, 11:49 AM
- Starbucks (NASDAQ:SBUX) plans to introduce Powermat wireless charging stations at close to 200 stores in the San Francisco region.
- The Powermat cuts out cords in the charging process by using a process called inductively coupled power transfer.
- A broader roll-out of the technology by Starbucks is planned across the U.S. and Europe within a year.
- General Motors (NYSE:GM) is also an early adopter of the Powermat wireless charging system with integration in the 2015 Cadillac ATS. The automaker is an investor in Powermat through its nimble VC arm.
- Duracell sits right smack in the middle of the Powermat innovation as the company with the brand and manufacturing capabilities to aim high. The swap of the business from profit-focused Procter & Gamble (NYSE:PG) to strategic-minded Berkshire Hathaway (BRK.A, BRK.B) sets up well for investments in long-term growth, note analysts.
Nov. 14, 2014, 4:28 PM
- Berkshire Hathaway (BRK.A, BRK.B) increased its GM stake in Q3 by 21% in Q3 to 40M shares. (13F filing)
- Warren Buffett's conglomerate exited its Deere (NYSE:DE) position; it had a 4M-share stake in the tractor maker at the end of Q2.
- A 449K-share stake was talen in PBM services giant Express Scripts (NASDAQ:ESRX). Stakes in IBM, Wal-Mart, MasterCard, and Visa were moderately increased.
- GM +0.7% AH. DE -0.4%.
Nov. 13, 2014, 3:53 PM
- The master of using the tax code to his advantage, The Oracle has done it again with his deal to buy Duracell from Procter & Gamble. Berkshire Hathaway (BRK.A, BRK.B) is paying $4.7B for the business, but the currency will be its P&G stock with a cost basis of just $336M.
- Had Berkshire instead sold the shares, it would have faced a capital gains tax bill of more than $1B. P&G is also set to get a tax break with the sale because it's retiring stock using property that has appreciated in value.
- It's the third time this year Warren Buffett has swapped shares for businesses, thus cutting out the IRS.
- Previously: Berkshire Hathaway lands Duracell brand
Nov. 13, 2014, 7:42 AM
- Berkshire Hathaway (BRK.A, BRK.B) announces it bought the Duracell battery brand from Procter & Gamble (NYSE:PG).
- Duracell Company will be seeded with $1.7B in cash at the closing and P&G will retrieve shares of its stock held by Berkshire as part of the terms of the deal.
- The transaction is expected to close in the second half of 2015.
- Previously: Procter & Gamble to shed Duracell
- PG +0.4% premarket.
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