Oct. 7, 2014, 3:20 PM
- “It’s a 30-minute instrument if you’ve been wrong on interest rates and it’s a 30-year instrument if you’ve been right on interest rates," says Warren Buffett, scratching his head over why folks aren't lining up to get mortgages.
- "It's a good way to short the dollar, short interest rates. It is a no-brainer," he adds, admitting the home construction pickup has been slower than he expected.
- Berkshire Hathaway (BRK.A, BRK.B), of course, has units doing everything from building and selling houses, to manufacturing carpeting, paint, and bricks, and Buffett continues to expect a pickup in business. “[Slow household formation] doesn’t last long. Hormones kick in and in-laws get tiresome, too.”
Oct. 2, 2014, 9:27 AM
- We actually bought some stocks on the dip yesterday, says Warren Buffett (BRK.A, BRK.B), appearing on CNBC. More from The Oracle ...
- "I made a mistake on Tesco (OTCPK:TSCDF, OTCPK:TSCDY). That was a huge mistake by me."
- The new Coca-Cola (NYSE:KO) compensation plan makes "great sense." His involvement came only after being asked, and was not adversarial. "I feel as good about my Coke investment as I've ever felt."
- "It doesn't have anything to do with taxes," says Buffett, of the Burger King/Tim Horton's deal. He notes Tim Horton's earns twice as much money as BK, and the deal has to pass muster with Canadian regulators.
- Alibaba? "I don't think we've bought an IPO in over 50 years."
- Asked about today's announced purchase of a major auto dealer, Buffett says it's a play on the strength of the auto sector right now. "I fully expect we'll buy a lot more dealerships over time."
Oct. 2, 2014, 8:11 AM
- Van Tuyl Group is the country's largest privately-owned auto dealership group, and the 5th-ranked overall.
- After being folded into Berkshire Hathway (BRK.A, BRK.B), the company will be known as Berkshire Hathaway Automotive, and - no surprise - will continue to be led by its existing management team.
- Buffett: "The Van Tuyl Group fits perfectly into Berkshire Hathaway from both a financial and cultural viewpoint ... [It] enjoys excellent relations with the major auto manufacturers and delivers unusually high volumes at its 78 locations. This is just the beginning for Berkshire Hathaway Automotive."
- The deal is expected to be closed in Q1. Term were not disclosed.
- Press release
Sep. 25, 2014, 2:29 PM
- Berkshire Hathaway (BRK.A, BRK.B) and CenterPoint Energy (NYSE:CP) are among 10 companies that signed confidentiality agreements to explore bids for Energy Future's Oncor electricity distributor, Bloomberg reports.
- NextEra Energy (NYSE:NEE), which helped prompt the auction with a takeover bid this year valuing Oncor at more than $17.5B, also signed a non-disclosure agreement letting it conduct due diligence.
- The bankrupt Energy Future's profitable Oncor business operates the largest distribution and transmission business in Texas and delivers electricity to more than 3M homes and businesses.
Sep. 24, 2014, 3:31 PM
- "They took their bitterness out on AIG and wanted to make a big show," says former AIG CEO Bob Benmosche talking about last year's defections of execs to Berkshire Hathaway (BRK.A, BRK.B). "They went over there and, boy, are they really not showing us anything at all."
- Of the exiting rainmakers, Benmosche says they wanted to be left alone to run their own franchises at AIG. "The fact is that they disagreed with a very simple philosophy. We have to be one AIG.”
- After a one-year cool-off period, Berkshire has resumed hiring AIG managers. "The business that they’re picking off is unusually profitable,” says KBW's Meyer Shields. “It’s not hurting Berkshire at all on the underwriting side.”
- Previously: Berkshire makes another hire from AIG
Sep. 23, 2014, 2:49 PM
- Bidding to expand its specialty insurance business, Berkshire Hathaway (BRK.A, BRK.B) hires Brian O'Neill from AIG. It was in April 2013 when Berkshire poached four AIG execs - including P&C head Peter Eastwood - for its new operation.
- Berkshire quickly hired about 15 more from AIG, with "war" breaking out between the two companies. A truce - with Berkshire agreeing to halt the poaching for a year - was agreed to ... that was about one year ago to the day.
Sep. 23, 2014, 1:04 PM
- Its share price already struggling over the past year, Tesco (OTCPK:TSCDY) - the U.K.'s largest supermarket operator - is off another 15% this week after an accounting bungle in which it overstated its profit forecast by £250M. The stock is now lower by about 50% Y/Y.
- Berkshire Hathaway (BRK.A, BRK.B) - Tesco's 3rd largest shareholder with a 4% stake - is sporting losses of about $750M on its original $1.7B purchase.
Sep. 12, 2014, 4:37 AM
- Burger King (NYSE:BKW) will meet with leaders next week to discuss a $7.25B loan package, including a $6.75B seven-year term loan and a $500M five-year revolver, to back its $11.5B purchase of Tim Hortons (NYSE:THI).
- The loan, being arranged by JPMorgan Chase, would be the single biggest term loan for an acquisition by a speculative-grade borrower since 2007.
- Berkshire Hathaway (BRK.A, BRK.B) is also providing $3B of preferred equity financing for the transaction.
Sep. 11, 2014, 8:31 AM
- "I think Einstein needed somebody to talk to," says Charlie Munger, responding to a question about how he and Warren Buffett hooked up in a partnership. "He wouldn't have been as good as he was if he didn't have a talking foil who knew something, and I think I've been very useful in that regard."
- The Chairman of Daily Journal Corp. (NASDAQ:DJCO), Munger was speaking at the annual meeting.
- "Anyone who thinks this is a great tragedy is stark raving mad," says Munger over the hubbub about Berkshire Hathaway's (BRK.A, BRK.B) financing of Burger King's takeover of Tim Hortons, and the subsequent relocation to Canada. He notes Berkshire's tax bill will go up as a result of its involvement.
- Elon Musk? He's a genius, says Munger, "and I don't use that word lightly ... He’s also one of the boldest men who ever came down the pike. So put me down as saying I’ve always been afraid of the guy whose IQ is 190 and he thinks it’s 250.”
Sep. 4, 2014, 5:58 PM
- Senior execs from rail operators BNSF (BRK.A, BRK.B) and Canadian Pacific (NYSE:CP) pleaded with regulators today not to force them to take other operators’ trains on their networks in areas of the northern plains plagued by severe freight delays.
- Today's hearing discussed how farmers faced severe delays moving last year’s bumper harvest because of rail congestion, and there is growing concern over the potential for similar delays for this year’s harvest, which already is starting for some crops and also is expected to be large.
- "Any decision that forces more railcars on to our already congested system will not create more capacity,” BNSF chief marketing officer Stevan Bobb warned. “It will reduce capacity to some BNSF customers.”
Aug. 26, 2014, 2:00 AM
- In a surprise twist which lands Warren Buffett in the middle of the Burger King (NYSE:BKW)-Tim Hortons (NYSE:THI) deal, Berkshire Hathaway (BRK.A, BRK.B) is now expected to provide about 25% of the financing for the merger, WSJ reports.
- The exact structure of Buffett's participation remains unclear, but sources say he will invest in the form of preferred shares.
- Due to deal being structured as a tax-inversion, the new move also shoves the billionaire into a heated debate over U.S. taxes.
- THI +1.7% AH
Aug. 25, 2014, 9:58 AM
- "I am perfectly willing to spend whatever it takes to get everyone in the country to check our price," says Warren Buffett. Berkshire Hathaway's (BRK.A, BRK.B) Geico's ubiquitous ads - the company spent $1.2B last year (and Buffett says it will be more in 2014) - account for nearly 25% of all U.S. insurance companies' advertising spending. And it made Berkshire Hathaway the 7th largest advertiser in the country in 2013.
- Since shortly after current CEO Tony Nicely took the top job at Geico in 1993, the insurer's market share in personal auto insurance has about quadrupled to 10%, and last year the company became the 2nd largest U.S. auto insurer - behind State Farm, but ahead of Allstate and Progressive. Pretax underwriting profit of $393M in 2013 was up 17% from a year earlier.
- One reason for the need for the lavish ad spending for this otherwise thrifty company: Geico doesn't use agents, but instead sells policies directly to consumers via the Web or the phone.
- Geico execs are "cost-conscious connoisseurs," says the author of an upcoming book on Berkshire. "At headquarters, they're as thrifty as can be….Geico is the quintessential Berkshire company."
Aug. 21, 2014, 11:43 AM
- Hedge funds are having a difficult time of it again this year, up 1% vs. a 7.5% gain for the S&P 500, according to Goldman Sachs, which crunched the numbers on 775 funds with $1.9T in AUM.
- Nevertheless, Goldman's list of 50 stocks which "matter most" to hedge funds has outperformed the S&P 500 on a quarterly basis 66% of the time since 2001. The stocks this quarter (posted in order of the number of funds in which a name is a top-10 holding):
- ACT, AAPL, FB, AGN, AAL, GM, TWC, AIG, MSFT, HTZ, CHTR, MU, WMB, LNG, C, DAL, HCA, APC, CBS, ALLY, GOOGL, APD, NRF, BAC, EBAY, LBTYK, PCLN, VRX, BIDU, DTV, DISH, DG, EQIX, MA, WAG, ARCP, GILD, LINTA, MON, FOXA, VC, AMZN, BRK.A, BRK.B, SUNE, CMCSA, JPM, MIC, CCI, HES, LAMR.
- A special call-out to Northstar Realty (NYSE:NRF), Visteon (NYSE:VC), SunEdison (NYSE:SUNE), Macquarie Infrastructure (NYSE:MIC), and Lamar Advertising (NASDAQ:LAMR) for making the list of hedge fund hotels despite their relatively tiny market caps.
Aug. 20, 2014, 3:25 PM
- "Berkshire had owned convertible notes of USG since 2008 and was effectively forced to convert the notes when they were called for redemption by USG in December 2013," says Warren Buffett in a statement. "This event triggered a filing requirement for Berkshire (BRK.A, BRK.B) and we were late in realizing that fact.”
- Previously: Berkshire Hathaway to pay fine over reporting violation
Aug. 20, 2014, 11:42 AM| 14 Comments
Aug. 19, 2014, 7:17 PM
- Among Warren Buffett's (BRK.A, BRK.B) Q2 moves was a pullback in oil company investments, selling off the vast majority of his stake in ConocoPhillips (NYSE:COP) and dumping some of his holdings in Phillips 66 (NYSE:PSX) and National Oilwell Varco (NYSE:NOV).
- The move looks prescient, as U.S. crude prices have dropped from ~$107/bll in mid-June to less than $95 today, and energy stocks went from being among the best performers on Wall Street to the middle of the pack.
- West Texas crude for September delivery fell $1.93 to $94.48/bbl, the lowest settlement for a front-month contract since Jan. 17, and Brent crude traded near 14-month lows.
- ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, CRUD, USL, UWTI, DWTI, DNO, SZO, OLO, OLEM
BRK.A vs. ETF Alternatives
Berkshire Hathaway Inc is a conglomerate holding company owning subsidiaries engaged in a number of business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, service and retailing.
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