In his 2010 annual letter to shareholders, Berkshire Hathaway Chairman and CEO Warren Buffett used the metaphor of his company's cash as an "elephant gun" to be used in his hunt for big companies to purchase. Ever since then, the news media has fixated on Berkshire Hathaway's hunt to bag that elephant to fuel its future growth. After all, how can an enormous company the size of Berkshire Hathaway grow even larger without swallowing up increasingly larger subsidiaries? [...] While the world watches and waits for that elephant to come along, though, Berkshire Hathaway has been quietly growing another way: rabbit hunting. Rather than using the metaphorical elephant gun to bring down the biggest game of all, the subsidiaries Berkshire Hathaway already owns have been quietly hunting their own small targets. Taken individually, most of these moves barely made the news outside of a company press release. But looking at all of the little moves together, you can see from the pattern that Berkshire Hathaway is growing just fine without any elephants.
BNSF CEO Rose changes roles, renews Buffett succession talk (Reuters)
Berkshire Hathaway Inc's BNSF Railway Co moved Chief Executive Matthew Rose to an executive chairman role, renewing speculation that he may be in line to replace Warren Buffett at Berkshire's helm. As executive chairman, Rose, 54, will work on activities including organizational planning, market positioning and public policy at BNSF over the next decade, the company said on Wednesday. Carl Ice, 57, will replace Rose as chief executive at the nation's largest railroad, beginning January 1. Ice has been at the railroad for 34 years, and has been president of BNSF since November 2010.
Berkshire Hathaway HomeServices Grows Again with 12 Affiliate Signees (MarketWatch / BusinessWire)
Berkshire Hathaway HomeServices, the new real estate brokerage network operated by HSF Affiliates LLC, today announced the signing of 12 more affiliates for the network. [...] These signings bring to 502 the number of offices that have transitioned to or signed with the brand since July, and include nearly 19,000 agents in 24 states. Many more signings are on the way, said Earl Lee, CEO of HSF Affiliates LLC.
Related:
Warren Buffett’s new franchise brand, Berkshire Hathaway HomeServices, grows to 51 firms (Inman)
Warren Buffett’s new real estate franchise brand, Berkshire Hathaway HomeServices, will convert 12 more Prudential Real Estate-affiliated brokerages, bringing the total number of firms committed to the 1-year-old network to 51. [...] The 12 new firms, which grow the new franchise network to 502 offices and 19,000 agents in 24 states, will transition to the new brand by the middle of 2014. [...] HomeServices of America created the new brand when it took a majority stake in the Prudential Real Estate and Real Living brands from Brookfield Asset Management in October 2012. It will eventually replace the Prudential Real Estate brand, which is slated to disappear in the 2020s as a condition of Prudential Financial Inc.’s sale of its real estate franchising business to Brookfield Asset Management in 2011. [...] So far, only Prudential-affiliated firms have committed to Buffett’s new brand.
Brokerages converted to the Berkshire Hathaway HomeServices brand and having their press releases turn up in my BRK news search this week include Middle Tennessee, Nebraska, Atlanta, GA, Orlando, FL, Greenville, SC, and Wellesley, MA.
Buffett's Berkshire Buys More DaVita (NASDAQ)
Warren Buffett 's company, Berkshire Hathaway, bought 1,314,170 additional shares of DaVita HealthCare Partners this week. The transaction, reported Dec. 9, represents a 6.77% increase to the existing holding. After the buy, Berkshire's DaVita stake is sized at 36,461,294 shares, raising its ownership to about 17.14%. [...] The two companies have agreed that Berkshire will not acquire more than 25% of DaVita without DaVita's approval.
Warren Buffett’s Berkshire Hathaway acquires Hartford UK variable annuity business (Life Insurance and Pensions)
This story came up last summer, and the deal is just now finalizing.
Columbia Insurance Company, a Berkshire Hathaway firm, has purchased Hartford Life International Limited (HLIL) in a transaction valued at approximately $285m. Property and casualty insurance provider Hartford originally signed an agreement with Columbia Insurance in June this year, to divest its UK variable annuity business, as part of its strategy to streamline its operations. HLIL's sole asset is its subsidiary, Hartford Life Limited (HLL), a Dublin-based company that sold variable annuities in the UK from 2005 to 2009. As of 30 November 2013, HLL had $1.7bn in assets under management.
Berkshire Estimates Were Cut For Bad Reasons. Expect A Good Q4 (Seeking Alpha)
After strongly outperforming the S&P 500 through July, Berkshire treaded water for a few months but then began to notably underperform the SP500 since Berkshire announced Q3 earnings on Nov 1. The culprit? Not only did Q3 earnings miss the consensus estimate, but, even worse, that surprise caused the few analysts who cover Berkshire to lower future earnings forecasts. We think that in their rush to not get fooled again, they overreacted.
Did Buffett Buy ExxonMobil Because It's More "Buffett" Than Berkshire? (Fool)
Berkshire Hathaway CEO Warren Buffett's most notable investment this past quarter, 8.8 million shares of ExxonMobil, actually started with a larger 31 million-share buy in the quarter ended June 30. Based on the Sept. 30 13F, this makes ExxonMobil Berkshire's seventh-largest stock holding, worth $3.75 billion. While that's significantly smaller than the company's holdings in Wells Fargo, Coca-Cola, IBM, and American Express -- each worth more than $10 billion -- ExxonMobil is perhaps the most "Buffett" of all the companies that Buffett has invested in over the years. Let's take a look at why.
Warren Buffett Places One Heck of Bet on Energy (Fool)
Warren Buffett made big headlines in the energy space when Berkshire Hathaway publicly disclosed that it had accumulated a $3.4 billion position in ExxonMobil. This alone is a pretty significant bet on the future of oil and gas. When you look at some of Buffett's other energy holdings, though, it points to a very specific investment strategy: Canadian oil sands. Let's take a look at Buffett's energy holdings and what makes all of them work.
Berkshire Hathaway Is Undervalued By 15% (Seeking Alpha)
Berkshire Hathaway is unlikely to repeat the 19.8% returns it enjoyed from 1964-2011 due to its size and because it has already bought up many of the most desirable investment opportunities in the marketplace. However, Berkshire should continue to generate solid growth and performance due to its mix of high quality businesses that it owns as well as its well-regarded portfolio of marketable securities. [...] Berkshire Hathaway's share price is undervalued by 15% relative to its fair intrinsic value and its business units continue to generate steady profit growth.
Berkshire Hathaway and Warren Buffett's 2013 Year in Review (Fool)
Berkshire Hathaway has had a relatively eventful 2013, with a major acquisition, a few significant stock purchases, and one question that still lingers.
Finally...
Warren Buffett held a Q&A session with MBA Students from 8 universities last month, and a professor from the University of Maryland Robert E. Smith Business School in attendance took copious, detailed notes:
Buffett talks about how he writes the annual letter to shareholders (2013's is already done except for the final numbers, watch for it to be published on February 28). He talks about the Goldman Sachs and GE warrant deals from 2008. He talks about how his political views were formed. Moats, negotiations, women's equality, assessing managers, influences, career advice.
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