Berkshire News Briefs - 1/7/14

(Also see Berkshire Energy & Subsidiary News for 1/7/14.)

WEB on Stocks in the 20th Century (Fool Boards)

This post from the Fool's public BRK board is a transcript of Buffett talking about the history of the stock market in the 20th century.

The country will do very well over time, but you will see these huge waves and if you can stay objective throughout that—if you can detach yourself temperamentally from the crowd—you get very rich. And you won’t have to be very bright…It doesn’t take brains, it takes temperament. It takes the ability to sit there and look at something—when I started out in 1950, I would go through and find things at 2x earnings. And they were perfectly decent businesses and people wanted jobs at those companies and everybody knew they were going to be around and they wouldn’t buy them at 2x earnings. And that’s when interest rates were 2.5%.

Berkshire Seen Failing Buffett 5-Year Test for First Time (Bloomberg Businessweek)

Berkshire Hathaway Inc. [...] is poised to report that it failed to increase net worth more rapidly than the Standard & Poor’s 500 Index during the past five years, according to analyst estimates. It would be the first time the billionaire investor fell short of the goal since he took over the Omaha, Nebraska-based company in 1965. Buffett, 83, highlights the comparison as a way for shareholders to evaluate his performance against a low-cost fund that tracks the index. The S&P 500 returned 128 percent including dividends since the end of 2008, fueled by the Federal Reserve’s stimulus efforts and higher corporate profits. Berkshire’s book value per Class A share, Buffett’s yardstick, rose 80 percent to $126,766 starting at the same point until Sept. 30, the latest data available.

Berkshire Jacks Up USG Corp Holdings To 30.5 Percent (ValueWalk)

Berkshire Hathaway Inc. increased its holdings in USG Corporation to 30.5% following the issuance of shares upon conversion of USG’s 10% Contingent Convertible Senior Notes due 2018. Berkshire now holds 43.43M shares in USG, a building materials company, according to its 13D/A filing. [...] USG Corporation is the biggest manufacturer of gypsum-based building products such as gypsum wallboard in the United States. Warren Buffett has had an interest in the company since 2000 when he had purchased a 15% stake. [...] Buffett is known to have a keen interest in the building industry, though one motive ascribed to this is slightly uncharitable, and, according to investment manager Richar Losch’s blog is “hurricane synergy”: “This is the idea that, if Berkshire Hathaway Inc. can buy enough companies in the building materials, construction, and manufactured housing industries, then, when its insurance companies are paying insurance claims for catastrophic damage due to hurricanes and earthquakes, Berkshire Hathaway, as a company, will just be transferring money from one pocket to another.”

Here's How Warren Buffett Made $9.5 Billion in 3 Months (Fool)

Although we won't know until February what stocks Warren Buffett bought and sold in the fourth quarter, a quick analysis of his most recent investments shows that Berkshire Hathaway probably had one of its best quarters ... ever. Although the acquisition of ExxonMobil was the big news in the fourth quarter, perhaps the biggest news was just how well Berkshire Hathaway did. Provided no stocks were added or sold in the Berkshire Hathaway portfolio, Buffett probably made almost $9.5 billion in the fourth quarter, and the portfolio had a return of more than 10.3%.

Buffett Embarrasses Analysts Again in His Latest Big Win (Benzinga)

Remember when Warren Buffett bought all of those newspapers? In fact, he bought 63 in total for $142 million along with loans totaling $445 million. At the same time, he took his fair share of criticism from all of the “experts” [...] But once again, Buffett showed his experience while simultaneously proving to the “experts” that they still have a lot to learn. As part of the deal, Berkshire Hathaway negotiated the right to “penny warrants.” This gave Buffett the right to buy 4.65 million shares of Media General for a penny a piece. According to the Wall Street Journal, Berkshire exercised those rights in September of 2012, taking a 17 percent stake in the company. By the end of last year, that $4 stock when Buffett became involved had a sticker price of more than $22. That makes Buffett’s position worth about $105 million. Add to that the interest Media General is paying to Berkshire for the loan and what you have is profit for Berkshire. Turns out Buffett wasn’t as nutty as people said back in 2012.

The 2 Real Threats To The Future Of Berkshire Hathaway (And Its Defense Against Them) (Seeking Alpha)

There are two areas, however, which may be harder to sustain without the presence of Buffett himself. (1) Human excellence. This is the real Berkshire edge. Will it be maintained? (2) A unique model of decentralized management but centralized capital allocation. This is made possible in part by the excellence of the managers of the various parts and in part by the authority of Buffett himself, who has allocated capital both internally and externally with no formal help beyond the suggestions and inputs of Charlie Munger and a few of his lieutenants. Is this model sustainable without Buffett?

Here it is, your moment of zen...

My Wish for 2014 (Fool Boards)