Daniel Loeb, whose Third Point has a 6.5% stake in Sony (SNE) worth some $1.1B, is pushing for a spinoff of the company's entertainment business including the film studio responsible for James Bond blockbuster "Skyfall" and the music label which houses big name artists such as Taylor Swift. (Andrew Ross Sorkin) [View news story]
Dan is going for the free ride with the yen in devaluation all the talk about breaking it up is theater and nothing more. The idea of the massive yen devaluation is to spur exports from Japan so Sony can benefit and US holders who also have to deal with the poorer exchange rate for going back into dollars when selling Japanese stocks have to hope that exports pump up the value of Sony more than the yen devaluation does harm and it probably will with Sony dependent on foreign exchange currencies for exports. That probably makes Sony a free ride within parameters. It will not want to sell off any foreign exchange generating businesses because foreign harder currencies make Sony powerful and ordinary Japanese citizens grovel before them. Here we go again where Sony cameras and other devices cost more in Japan than they do in the west and of course all foreign imports cost more in Japan too. So more Japanese people are working and earning less.
Berkshire Hathaway Intrinsic Value Pie Chart [View article]
looking at those charts you can see that Warren Buffet wished he had bought a controlling interest in Coke when he could have. Had he purchased 10 percent of Wal-mart back when he first considered it it might have been a large part of the pie. Rail and oil are not bad industries to be in except when they are. They are good ballast for a diversified portfolio. Hybrid gas/ electric trucks are coming but the rails still are cheaper just slower.
What Berkshire's 'Elephant Gun' Means To Investors [View article]
Heinz might not be too over priced . I practically flipped when I found out that the French have adopted Heinz Ketchup. McDonald's presence there helped. You may have noticed that pickles you buy in jars at the supermarket are actually prepared and bottled in India. I have not seen Heinz products made in India and sold in the USA yet but I can tell you that if Vlasic does it , not sure who owns that brand, Heinz can do it too. That means the brand is even more valuable with lower production costs and low affordable shipping surcharges. I bought India pickles at krogers or safeway. Heinz has watched food processing grow into big business in Thailand and no doubt Heinz will be a big Chinese brand if not already. Heinz does have Chinese brands already but nothing like they might in the future. They purchased Yoshida's special sauce company in Portland so they already understand soy sauce. There are several Chinese soy sauce brands that have as high quality as Kikoman. You can see how Heinz can go shopping for brand in China and everywhere else and be a monolithic company still 500 years from now.
Buy, Sell Or Hold The Brand New 'CST Brands' Stock? [View article]
Kroger or Walmart could snap up 1000 outlets to add to their collections and distribution networks or even Budweiser. There is a base value for these assets that is tangible.
Buy, Sell Or Hold The Brand New 'CST Brands' Stock? [View article]
It does not look bad. 7-11 with a captive audience. I had no idea how popular Slurpies are being one of the top categories of foods in the USA. It does not mater how cars refuel in the future they have to stop somewhere plug in, get a fill up or change out a compressed natural gas tank. reality has already come into the picture that liquid hydrogen is just a frozen battery of sorts. If we were to go electric we could run 12 volt "third rail" in the pavement to keep cars charging as they stay in motion with a metal sweep made of wires. That seems unlikely especially with the US oil and natural gas boom and hints of substantially lower prices coming.
Intel maybe worth 30-60 dollars per share while it trades around 20. Revenues in the last annual report were 55 billion dollars. Over the past years they plugged more than 30 billion into new capital improvements/ new plants and equipment and pumped about 30 billion into R&D. The company has world sales in a variety of currencies in case the dollar ever plunges again. It takes just 9 or 10 years for dividends they pay out to equal what you pay per share now and the dividends are likely to trend higher each year. Earnings pay for the shares much faster . If you opened your own business and got 11 dollars per share in revenue having invested say 22 dollars per share a year and return on equity was relatively high would you sell or buy. The age of self driving cars is near. We are talking about a robotics revolution that is almost here. We are talking done and robotic armies. I will bet a lot of Intel will be inside. The cell phone revolution is just really a universal remote and a tool collection all in one . usually people buy a universal remote because they have a tv or two that goes with it.
Warren Buffett Violates His 'Ham Sandwich' Principle With Goldman Deal [View article]
You can't predict how long Berkshire will own the Goldman common shares. Goldman is in a business that is rather in dispensable to the economy contrary to ideas that investment banking is a sleazy profession. Goldman Sachs is a window on all sorts of opportunities. Some day some independent firm like Goldman will break up the Berkshire Hathaway conglomerate into bits and pieces. Seems to happen all the time. If Warren Buffet is looking for other conglomerates being sliced and diced having friends at a place like Goldman can get you leads on what private companies maybe coming up for sale . It might be Europe having the next fire sale and getting a whim of something like that in a timely manner can get research done before other potential bidders can figure out what the various business elements involved might be worth. Goldman has some expertise in being able to evaluate such things and Buffet does too. Being in Business with Goldman Sachs and partnering with them could be pretty lucrative if you stay away from the next sub prime mortgage derivatives mess?
It is not going anywhere now but it does when it does. For fools buying gold and putting it in a vault, WY maybe a good alternative. At present price per share it might take 100 shares to buy 1 acre of their fee simple land and to get a typical urban lot of 5000 ft it costs you only $345 equivalent and it pays a dividend because it is managed land and not just an alligator as realtors tend to call bare land that produces nothing and just eats. If I were Larry Elison I might wait till the price falls and try buying it all for a few billion dollars. Right now its spendy at around17 billion dollars if you bought it all with no added buyers premium. It may or may not be over fair value but when it comes to fair value I would say gold is way out of line now when the intrinsic cost of mining new gold is less than $400. WY land fee simple and leased has significant product value including fracking gas that is not something that is factored in the price.....
Weyerhaeuser Sitting Pretty in Pacific Northwest [View article]
Depending on how you calculate the number of "owned acres" it now takes between 80 and 100 shares to buy an acre of land. If you are buying land to hold something of intrinsic value like a gold bar or a silver bar, WY shares are a better alternative and they pay a variable dividend. Land with harvestable timber can be worth far more than $3000 an acre. WY land includes some of that, land for re-growing cut forests and probably fracking gas, oil and more that has not been discovered yet. WY is also in the business of selling property for "homesteading". You can look up the cost of forested buildable lots online. The company has other assets including the right kind of trees they developed. It is kind of nice to get a dividend for owning what is basically raw land. I wish I could find a map showing exactly where the properties are all located. I found one once or twice but may not be up to date now.
Damn Right: Behind The Scenes With Berkshire Hathaway Billionaire Charlie Munger [View article]
The next Warren Buffet , Charlie Munger, John D. Rockafeller , Andrew Carnegie are completely invisible to most people when it is the best time to start following what they are up to -to take advantage of the same opportunities. Berkshire Hathaway is a very mature conglomerate/ investment bank with soon might seem worth more broken into pieces than the whole no matter how well managed it is. Learning from the past also tells you that the great financial empires have to morph over time. Although Warren Buffet built things differently with contemporary tax advantages other banking houses don't have it may still all prove to be a dinosaur at some point or just so ripe it could be liquidated for twice as much per share instead of plodding along with zero immediate dividend returns and moderate appreciation. I think the low tax advantages could just go away if the US decided to drop the present tax statutes for a much simpler plan. Berkshire would grow with that but everyone might have the same low tax advantages all of a sudden if the government did it right. Soon a new unknown generation of managers will take over. I like the idea of the farmer son taking control and leaving the family name on the enterprise and I like the attitude of farmers who plant seeds and let them grow and then wait paitently to harvest them. I see an inevitable harvesting of the values at Berkshire Hathaway by all new people . Fortunately the value is going to be there in whole or parts. It is possible that some future trillion dollar cap company of the future will come and start hoarding the shares before their market value falls when they cyclical nature kicks in. Apple Inc could have preserved a lot of it's frothy stock value by buying brk.b shares in exchange for over valued apple shares when they were 700 dollars a share. The would not have had to take control of a controling interest to get that value but just came in incrementally. Warren buffet giving means sales in the future of shares that all could change with his family not having a controlling interest and the bill and malinda gates trusts having controlling interests. It has to morph .
I think Buffet might look at ABT after it's spin off for an at least modest size elephant with apparent cash flow that is pretty substantial as a reason to go private with no dividend policy.
Read This Before You Invest In Chesapeake Energy [View article]
something seems wrong there. Not sure i would believe their stats now . It maybe their extraction costs don't cover the new low market prices and they are covering over or glossing over or ignoring the inevitable.
This public policy attitude is completely stupid. You let the markets decide. The fact that someone, anyone is willing to invest significant private capital to an expensive long distance pipeline building program is a tiny little clue that the free market is trying to work out the problem without any need for government interference. Supposing the investors in this pipeline are completely wrong well then they lose their money and we call the whole thing a great folly. It may turn out to be just that a giant folly but right now with the money trying to get out of a lot of pockets and running to get this pipeline built it looks to be amazingly better bet than what the government did with subsidies and tax breaks for wind energy or solyndra and similar failing solar power companies. The whole idea that the government has any purpose at all being involved tells you that there maybe something disingenuous in their complaints and concerns. It is not their money. Yes I do have a problem with the use of eminent domain to get access for the pipeline . I believe that should be negotiated between all concerned. If we go back to the Alaska Pipeline we find that it made low cost gasoline and diesel to the west coast for a lot of years.
5 Thoughts On The Berkshire/3G - Heinz Deal [View article]
It looks more like a finacial banking deal for Berkshire Hathaway considering it's mix of perfered and common shares with what are variable coupons essentially. I would not be sure which party, Berkshire or the Brazilian counterpart would end up the long term sole owner of Heinz. It looks like Berkshire is taking less risk and both firms are betting on converting debt to higher leverage once interest rates gear up and inflation does too. Heinz is big enough to split into a number of different companies. It is a great vechicle for financing debt because it actually is a growing company still.
Buffett's Heinz Deal: Buffett Gets Best Of Both Worlds With Common, Preferred [View article]
There are some savings to start with dividends no longer needing to be paid out to shareholders and money is saved in complying with sec rules where millions of trees get turned into paper reports every quarter. Buffet does look like he got a free ride with the high pay out perferred shares. It eliminates risk. The debt is also extremely important. Heinz is a solid property that can raise prices in an inflationary environment. Debt is very much worthwhile with inevitable inflation because it is all positive leverage. Heinz also has a chart that shows it can grow sales faster than the rate of inflation to expand. It looks like a good deal especially for Berkshire Hathaway. At worst it could be Warren Buffet paid for it in 20 years corrected for inflation but with some of the debt paid down and of less potency with probably higher interest rates and a depreciated dollar and other currencies Heinz deals in. I had no idea what a great company it is. Heinz was actually able to make Ketchup their number one product in France! ketchup you know what French waiters thought of Ketchup when they made the joke that you wanted it with your french fries in that five star restaurant. Thanks to the popularity of McDonalds and Burger King Ketchup is king in france and Heinz is a desired brand.
Daniel Loeb, whose Third Point has a 6.5% stake in Sony (SNE) worth some $1.1B, is pushing for a spinoff of the company's entertainment business including the film studio responsible for James Bond blockbuster "Skyfall" and the music label which houses big name artists such as Taylor Swift. (Andrew Ross Sorkin) [View news story]
Berkshire Hathaway Intrinsic Value Pie Chart [View article]
What Berkshire's 'Elephant Gun' Means To Investors [View article]
Buy, Sell Or Hold The Brand New 'CST Brands' Stock? [View article]
Buy, Sell Or Hold The Brand New 'CST Brands' Stock? [View article]
ARM Proven Wrong, Intel Vindicated [View article]
Warren Buffett Violates His 'Ham Sandwich' Principle With Goldman Deal [View article]
WY: Lumber Isn’t Going Anywhere [View instapost]
Weyerhaeuser Sitting Pretty in Pacific Northwest [View article]
Damn Right: Behind The Scenes With Berkshire Hathaway Billionaire Charlie Munger [View article]
Buffett Defends Investments, No-Dividend Policy, Chastises CEOs [View article]
Read This Before You Invest In Chesapeake Energy [View article]
Natural Gas: Transport Or Export? [View article]
5 Thoughts On The Berkshire/3G - Heinz Deal [View article]
Buffett's Heinz Deal: Buffett Gets Best Of Both Worlds With Common, Preferred [View article]