Berkshire News Briefs - 12/2/16

Berkshire Hathaway filed their quarterly 13F last month, detailing their investment portfolio make-up as of September 30. You can see all the buys and sells highlighted in this chart of BRK's current holdings.

The big news was that Buffett has bought stock in all four major airlines. American, Delta, and United-Continental are listed in the SEC filing; Buffett also told CNBC that he has bought a stake in Southwest in October (after the Sept. 30 SEC cut-off for the 13F).

Berkshire Hathaway also sold 100% of its stake in Suncor Energy (SU) and Media General (MEG). Other big moves (+/- more than 10%) are reductions in Liberty Media (LMCA -48%, LMCK -36%), Kinder Morgan (KMI -25%), and Walmart (WMT -68%), and an addition to Liberty SiriusXM (LBXMK +11%).

Buffett's Berkshire takes stakes in four major airlines

Berkshire Hathaway's just released SEC filings show that the company has taken a stake in three of the four major airline companies — American Airlines, United Continental Holdings and Delta Air Lines.

But CNBC can report exclusively that Berkshire also has taken a stake in the fourth major carrier, Southwest Airlines.

The move into airlines is a shocking reversal for Warren Buffett, who has shunned the industry for decades following a volatile investment he made in US Airways back in 1989.

Warren Buffett's Berkshire Hathaway Is Cashing Out of Walmart

Warren Buffett has almost completely checked out of Walmart. After trimming some of his stake in the retailer earlier this year, Buffett slashed his remaining Walmart stock by nearly 70% as the discount store announced its controversial deal to buy e-commerce startup Jet.com. Buffett’s stake in Walmart is now worth less than $1 billion, down from nearly $3 billion in the middle of this year, according to new securities filings. [...]

Warren Buffett's Berkshire Hathaway Bets Big on Airlines at the Strangest Time

For two decades, Warren Buffett has been decrying airlines as terrible investments. Indeed, Buffett famously observed that a far-sighted capitalist should have shot down Orville Wright's plane at Kitty Hawk to save future investors the billions of dollars they would go on to lose in the airline business.

Yet in a stunning reversal, Berkshire Hathaway bought shares of the three largest U.S. airlines last quarter: American Airlines, Delta Air Lines, and United Continental. (Buffett revealed on Monday that Berkshire Hathaway went on to purchase shares of Southwest Airlines in October.)

This is strange timing for Berkshire Hathaway to reverse its stance on airline stocks, especially American, Delta, and United. Profit margins appear to have peaked at all three companies. [...]

Nevada votes to end NV Energy monopoly

Receiving almost three quarters of the votes, Nevada voters have passed a ballot measure that aims to break up NV Energy’s monopoly and liberalise the electricity market to more competition.

Known as the Energy Choice Initiative or Question 3 on a ballot approved on Tuesday, the news is a victory for solar as this is a significant move to deregulation of the state’s public utility. [...]

The measure was initiated in part by large companies, including casinos, wishing to break free from the state utility and find their own providers. [...]

That Big Berkshire Hathaway Railroad Deal

It's been seven years since Buffett's Berkshire Hathaway Inc. announced its biggest deal to date -- the $35 billion-plus purchase of Burlington Northern Santa Fe Corp. The Oracle of Omaha had the foresight to place his "all-in wager on the economic future of the United States" just as the nation emerged from a recession, and has reaped the benefits. [...]

BNSF's net income has more than doubled since 2009, which has in turn driven Berkshire Hathaway's earnings higher. Berkshire has already earned more than $22 billion in dividends from BNSF. In other words, it has already recouped basically all the cash used to finance the deal, which is a rare feat in itself. [...]

Buffett throws weight behind new Wells chief

Warren Buffett has thrown his weight behind scandal-hit Wells Fargo, saying it is “a great bank that made a terrible mistake” whose new chief executive Tim Sloan is “exactly right” for the top job.

Breaking his months-long silence on the debacle, the head of Berkshire Hathaway, the bank’s biggest shareholder, confirmed he has not sold any shares after the scandal erupted over sales practices. [...]

Duracell closing Cleveland, Tenn., packing plant by 2018

Battery maker Duracell plans to take some juice out of its Cleveland, Tenn., workforce, closing its packing plant by 2018 and cutting about 140 jobs. The move by Duracell, maker of the well-known "coppertop" battery, will not impact its manufacturing operation in Cleveland, where nearly 150 people are employed making C and D batteries, the company said. [...]

The announcement is the second major consolidation by Duracell since it was purchased by Warren Buffett's Berkshire Hathaway early this year. This summer, Duracell revealed it plans to close a battery-making plant in South Carolina that employs 430 people. The shutdown of the Lancaster, S.C., factory that makes AA batteries will begin in March and should be complete by the middle of 2019, Duracell said. [...]

Warren Buffett’s Meeting with University of Maryland MBA/MS Students – November 18, 2016

Berkshire has only 25 people at headquarters, but 360,000 employees. The managers of Berkshire’s 70 businesses choose their own people. The qualities they look for are intelligence, energy, and integrity. But the most important quality in a manager is having a passion for the business. It is not IQ but passion for their businesses that make Berkshire’s 70 managers stand out. When WB was 23 years old, he was rejected by Ben Graham for a job. Years later he received a letter saying the “next time you come to NY stop by my office”. WB went the next day. He never asked about pay. You should take a job that you would take if you didn’t need a job. [...]

Jokes in Warren Buffett’s Shareholder Letters

We all know Warren Buffett (Trades, Portfolio) is the greatest investor ever. He built his wealth buying stocks that sold below their intrinsic value. He is also an avid writer. He is very good at communicating his thoughts through conversational and humorous language and frequently tells jokes. These are some of the jokes he has told in his shareholder letters. [...]

Berkshire News Briefs - 11/7/16

In Rare Interview, Ted Weschler Says He Likes Apple’s “Subscription Element“

In the first detailed explanation of Berkshire’s investment thesis for Apple, Weschler says that the smartphone business had been transformed by the app economy and cloud computing. "As network speed has gotten faster and faster, and with it the information that people can absorb on the network, things like photo applications, and apps, they create a stickier ecosystem". Statistics showed that there was a high likelihood iPhone or iPad buyers would also purchase their next device from Apple, he added: "Once you are fully invested in the App ecosystem and you have got your thousands of photographs up in the cloud and you are used to the keystrokes and functionality and where everything is, you become a sticky consumer." [...]

Cash at Buffett’s Berkshire Hathaway hits new record with stock market near highs

Buffett’s Berkshire Hathaway closed the third quarter with $84.8 billion in cash, a gain of some $13 billion during the course of 2016.

Buffett over the years has not been shy about using the cash spit off from his vast array of holdings to buy companies, such as his most recent acquiree, Precision Castparts. Even excluding the $20 billion he has said he likes to keep as a cushion, Buffett has plenty of firepower to deploy. [...]

Warren Buffett’s business buys KC area’s largest home builder

Warren Buffett’s Berkshire Hathaway Inc. has bought the assets of the Kansas City area’s largest home builder, Summit Custom Homes, the companies announced.

The deal involved Berkshire’s Tennessee-based Clayton Properties. It has been buying other home builders, beginning its own operations with the purchase of an Atlanta business last fall. Clayton has sold 500 homes in its first year.

Clayton Properties bought the operating assets of Summit Custom Homes, which is based in Lee’s Summit. The announcement, which did not disclose terms of the sale, said it included about 1,200 lots in the Kansas City area. [...]

Purchase gives Shaw Industries huge share of wood-plastic composite market

Shaw Industries Group Inc., the world's biggest carpet maker, is taking a harder approach to floorcovering with the purchase of the leading producer of the increasingly popular wood-plastic composite flooring.

The Dalton, Ga.-based Shaw announced Tuesday it has reached a definitive agreement to purchase USFloors, also based in Dalton, for an undisclosed amount. Started in 2001 by Piet Dossche — the brother-in-law of Beaulieu of America co-founder Carl Bouckart — USFloors helped develop the waterproof, wood-like vinyl flooring, as well as cork, bamboo and hardwood products. [...]

Berkshire’s Richline Buys Jeweler Started by Stay-at-Home Moms

Richline Group Inc., a jewelry manufacturer and marketer owned by Warren Buffett’s Berkshire Hathaway Inc., agreed to buy designs, a brand name and inventory from Silpada Designs as part of a push into sterling-silver products.

Silpada was started by stay-at-home moms and grew into “the world’s largest home party seller of sterling silver jewelry,” Richline said Friday in a statement. Terms weren’t disclosed. [...]

Buffett-Backed Insurer Keeps Getting Sued Over Complex Products

Miller’s nonprofit is one of dozens of employers -- from a bike-courier service in Manhattan to a linen-supply company in Sacramento -- that have sued Applied for deceptive practices. The businesses allege the insurer peddled products regulators hadn’t approved. They complain about being surprised by large bills based on formulas that stacked the deck in the insurer’s favor. California, Vermont and Wisconsin have banned some Applied plans. [...]

As courts weigh these quarrels, this much is clear: It’s a lot of hot water for one of Buffett’s companies. The billionaire, who didn’t respond to requests for comment, tells Berkshire managers that “there’s plenty of money to be made in the center of the court.” In other words, no need to get close to the line, legally or ethically, to make some extra bucks. [...]

Warren Buffett Loves This Business—Maybe a Little Too Much

Warren Buffett watchers know that the reinsurance business has been an important ingredient in his winning formula. Companies like his Berkshire Hathaway sell coverage to other insurance companies for natural disasters and other big events. In return, the reinsurance sellers collect lots of premiums, which they can invest while waiting to pay claims. Buffett has credited this “float” with helping to build one of the world’s great fortunes.

But the business isn’t what it used be. Buffett sold stakes in the world’s two largest reinsurers—Swiss Re and Munich Re—last year, saying their prospects look worse in the next decade than they did in the last. And he put a new leadership team in at Berkshire’s own Gen Re unit to try to reverse more than a decade of shrinking float. [...]

Here's How Long it Takes Warren Buffett to Decide on a Billion-Dollar Deal

When asked by Rubenstein if he receives calls from people every day, hoping to pitch him the “perfect” deal, Buffett said his phone rings less than expected because Berkshire has a clear-cut criteria.

“When somebody calls, I can usually tell within two or three minutes whether a deal is likely to happen or not,” Buffett told Rubenstein. “There’s just half-a-dozen filters,” he said, gesturing toward his head. “And it either makes through the filters or not.” [...]

Newspaperman, Omaha native Stanford Lipsey had ear and trust of Warren Buffett

Omaha native Stanford Lipsey, who led newspapers owned by Warren Buffett to Pulitzer Prizes in Omaha and Buffalo, New York, died Tuesday morning at his home in Rancho Mirage, California. [...]

In 1969 he sold the Sun to Berkshire Hathaway Inc., headed by Buffett, beginning a nearly 50-year relationship between the two men.

When Berkshire’s Blue Chip Stamps division bought the Buffalo Evening News in 1977, Buffett sent Lipsey to Buffalo, eventually making him publisher. [...]

Berkshire Hathaway 3rd Quarter Earnings

Berkshire Hathaway reported 3rd Quarter Earnings after the market closed on Friday, Nov. 4. [Press Release]

The headlines seemed to be either glass half full or glass half empty, depending on whether you believe Buffett's assertion that operating income is the best yardstick to measure the company's growth by.

Berkshire Hathaway profits falls 24 percent; company keeps Wells Fargo stake (St. Louis Post-Dispatch)

Berkshire Hathaway Inc. on Friday said third-quarter profit dropped 24 percent from a year earlier, when it recorded a large one-time gain, but acquisitions helped boost operating profit at the conglomerate run by billionaire Warren Buffett.

The company also reported a $22.1 billion stake in Wells Fargo & Co. as of Sept. 30, suggesting it kept its 10 percent ownership position even as the bank became embroiled in a scandal over its creation of unauthorized customer accounts. [...]

Quarterly net income for Omaha, Neb.-based Berkshire fell to $7.2 billion, or $4,379 per Class A share, from $9.43 billion, or $5,737 per share, a year earlier.

Operating profit, which excludes investment and derivative gains and losses, rose 7 percent to $4.85 billion, or $2,951 per share, from $4.55 billion, or $2,769 per share. [...]

Berkshire Operating Profit Climbs 6.6% on Manufacturing Gain (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. said third-quarter operating profit rose 6.6 percent on contributions from newly acquired manufacturing businesses.

Operating earnings, which exclude some investment results, climbed to $4.85 billion, or $2,951 a share, from $4.55 billion, or $2,769, a year earlier [...]

Several of Berkshire’s large businesses struggled in the third quarter, however. The insurance group reported that underwriting profit slipped 34 percent to $272 million as results worsened at the company’s namesake reinsurance business and auto insurer Geico. Income from Berkshire’s railroad, BNSF, fell about 12 percent to $1.02 billion on reduced demand for coal and petroleum products. [...]

Book value, a measure of assets minus liabilities, rose to $163,783 per share at the end of September from $160,009 three months earlier. The cash pile rose to a record $84.8 billion

Berkshire Hathaway reports 3rd quarter operating earnings of $4.85 billion, up 6.6 percent (Omaha World-Herald)

[...] Although net income is the standard measure of corporate performance, Buffett has said Berkshire’s operating earnings are a better gauge because net income is affected by swings in the paper value of its insurance-like derivatives and by investment gains and losses taken during the reporting period.

Operating earnings reflect the earnings by the companies that Berkshire owns, such as BNSF Railway, Berkshire Hathaway Energy and its insurance operations. Net income is the overall profit by the company, including investments and derivatives. [...]

Berkshire News Briefs - 10/12/16

Mars Cashes Out Warren Buffett to Take Control of Wrigley

Mars Inc. has finally taken full control of Wrigley, formally putting M&Ms and Altoids mints in the same division — and cashing out its partner, Warren E. Buffett, in the process. [...]

Berkshire Hathaway helped Mars buy Wrigley for about $23 billion in 2008. It was a classic deal for the billionaire, who has traditionally favored acquisitions involving well-known names and strongly performing businesses.

But there was a lucrative element in the way Mr. Buffett participated in the transaction. As part of the arrangement, Berkshire received preferred shares worth about $2.1 billion, which paid a 5 percent annual dividend, and $4.4 billion worth of bonds that carried a hefty 11.45 percent interest rate. [...]

Berkshire Is Bigger Than Buffett

We think two big concerns--a belief that Berkshire Hathaway's size will prevent it from growing at a decent clip in the future and that the company's shares will get pummeled once Buffett no longer runs the show--have kept some investors on the sidelines. Although we believe that the wide-moat firm is unlikely to consistently grow its book value per share at a double-digit rate, something that happened nine times during 2001-15 and 40 times during 1965-2015, we think that Berkshire can grow its book value per share at a high-single- to double-digit rate going forward, much as we've seen since the start of the new millennium. This type of growth should leave returns solidly and consistently above the firm's cost of capital [...]

Cash is piling up faster than Warren Buffett can invest it

Warren Buffett has the kind of money problem most people would envy: a growing mountain of cash.

Nearly $73 billion piled up at Berkshire Hathaway by mid-summer, more than Buffett’s conglomerate has ever held before.

And the total continues growing every day Buffett doesn’t make a major investment because Berkshire’s 90-odd businesses generate roughly $1.5 billion in cash every month. [...]

Yahoo Finance to Host Exclusive Live Stream of Berkshire Hathaway Shareholders Meeting for Second Year

Yahoo! Inc. today announced that it will host the exclusive live stream of Berkshire Hathaway’s annual shareholders meeting on Saturday May 6, 2017, for the second year in a row. Approximately 40,000 Berkshire Hathaway shareholders from around the world attend the highly anticipated annual event. In 2016, Yahoo Finance opened the meeting to the general public via live stream, for the first time ever, with more than 1 million viewers tuning in. [...]

Berkshire Hathaway Eyes Growth Despite Cat Loss Concerns

Berkshire Hathaway’s non-insurance businesses like utilities and & energy, and manufacturing, service & retail, have been reporting favorable results. In fact, total revenue from manufacturing, service and retail has improved substantially over the past several quarters. The strong results across most of the units can be attributed to better economic conditions and higher consumer demand.

Also, the company’s book value has been improving consistently. The insurer’s already robust book value growth is expected to be boosted further with the turn of the economy, increased gains from the value of the derivatives positions, and continued positive contribution from earnings growth in insurance operations. [...]

Atlas Bolt & Screw President Ridenour to retire

Randy Ridenour, President of Atlas Bolt & Screw Company LLC, has decided to retire at the end of 2016 after 32 years with the company. [...]

Atlas Bolt & Screw Company, a Marmon/Berkshire Hathaway company, offers a wide range of construction fasteners that reduce installation costs and extend the lives of metal buildings worldwide. [...]

Shaw Contract eyes smaller town, to raise investment limit

Shaw Contract, a business unit of Shaw Industries Group Inc which is a wholly-owned subsidiary of the Warren Buffet's Berkshire Hathaway, is looking to penetrate into the small towns and also raise investment limit in the country. The Bengaluru [India]-based Shaw Contract India has been in operations for over two decades and is the second-largest supplier of commercial carpet tiles in the country with a market share of around 22 percent, the company claimed. [...]

Berkshire can't resist India any more, to return with reinsurance business

Warren Buffett, who had exited India three years back citing regulatory suffocation, can’t resist India any more. Berkshire Hathaway is in fact returning to India with a plan to set up a reinsurance branch which would be much bigger than what it was when it was into insurance broking. [...]

Currently, Berkshire is present in India as a services company and is a leader of reinsurance treaty — purchased by insurers from one or more other companies — of large insurance companies including Bajaj Allianz General Insurance.

The company provides support services such as data collection, market research and training to insurance companies. As a leader of the treaty, it reinsures vast portions of the risk underwritten by these companies. [...]

Berkshire Hathaway Specialty Insurance Company Expands to Macau, Makes Local Office Appointments

Berkshire Hathaway Specialty Insurance Company (BHSI) today announced that it has received a license to provide insurance and reinsurance in Macau and filled key positions in its newly established Macau office. [...]

Berkshire News Briefs - 9/21/16

Warren Buffett: I won't comment on the Wells Fargo scandal until November (Business Insider)

Warren Buffett is waiting until after the election to weigh in on Wells Fargo.

Buffett told Fox Business' Liz Claman that he will not comment on the bank's scandal until November. Buffett is the largest shareholder of Wells Fargo and recently petitioned the Federal Reserve to increase his ownership stake above 10%. [...]

Wells Fargo recently settled with regulators for $185 million after it came to light that employees had opened around 2 million accounts without the knowledge of customers. About 5,300 of the bank's employees were fired as a result of the scandal. [...]

Buffett Now Phillips 66's Top Owner (Investopedia)

Shares of Phillips 66 rose after the news this week that billionaire Warren Buffett had increased Berkshire Hathaway Inc.'s holdings of the energy company by 1,019,974 shares, making Berkshire the largest holder. Berkshire now owns about 15.4% of the stock outstanding, or a total of 80,671,982 shares. [...]

Nevada Approves SolarCity’s Deal With Berkshire’s NV Energy

Nevada regulators have approved a deal between Berkshire Hathaway Inc.’s NV Energy utility and SolarCity Corp. that will roll back rate hikes for existing rooftop solar customers. The Nevada Public Utilities Commission voted 3-0 on Friday in favor of a settlement that will shield more than 32,000 rooftop solar customers in the state from increased fees that took effect in January. Earlier this week, NV Energy and SolarCity had asked the commission to approve an agreement that would grandfather those who signed up to use home solar prior to January under more favorable rates for 20 years. [...]

Berkshire Hathaway Will Do Just Fine After Buffett (Fortune)

Investment research firm Morningstar released a note on Sept. 2 that eased a widespread fear that without the now 86-year-old Oracle of Omaha and his partner, 92-year-old Charlie Munger, Berkshire Hathaway would collapse.

“The key to Berkshire’s success over the years has been Buffett’s ability to not only find fruitful ways to put the firm’s excess capital to work but in paying close attention to culture and fit when acquiring companies,” wrote Greggory Warren, senior equity analyst at Morningstar. “Berkshire’s culture of management autonomy and entrepreneurship has to a large degree become institutionalized.” [...]

Berkshire Hathaway firm CTB to buy 80% stake in Cabinplant (Packaging Business Review)

Berkshire Hathaway company CTB has agreed to purchase 80% stake in Danish company Cabinplant for an undisclosed sum. Based in Haarby, Cabinplant provides processing and weighing / packing solutions for the food industry. [...] The company, which has around 300 employees, carries out operations in about 30 countries. CTB said that the Cabinplant’s poultry processing equipment complements its Meyn poultry processing subsidiary.

Pasta Equipment Maker Dominioni Joins Marmon (BusinessWire)

Marmon Food, Beverage & Water Technologies Company, part of Berkshire Hathaway Inc., today announced the acquisition of the assets of Dominioni Punto & Pasta S.r.l., a leading Italian supplier of commercial pasta equipment, by Marmon Pasta Solutions S.r.l. Terms were not disclosed.

Founded in 1968 by Pietro Dominioni, the family-run business designs and produces professional pasta equipment for the restaurant, hospitality, and catering markets, as well as high-volume pasta manufacturers. The business will continue to operate under the Dominioni brand name and its operations will remain based in Lurate Caccivio (Como). Fabrizio Dominioni, son of the founder, will continue to manage the business. [...]

J.P. Morgan Names Berkshire Hathaway Investment Manager Combs to Board (NASDAQ)

J.P. Morgan Chase & Co. on Tuesday said it named Berkshire Hathaway Inc. investment manager Todd Combs to its board, bringing into the fold an heir-apparent of billionaire investor Warren Buffett's enterprise.

Mr. Combs, 45 years old, is a former hedge-fund manager who began working at Berkshire in 2011. He and a counterpart, Ted Weschler, manage portfolios of about $9 billion each, but they will take over all stock-picking duties when Mr. Buffett is no longer running the firm.

Mr. Combs has served as a director at Precision Castparts since late January, according to a regulatory filing. [...]

Berkshire Hathaway and underwriting unit sued for running ‘reverse Ponzi scheme’ (MarketWatch)

A New York City-based courier service has sued Berkshire Hathaway Inc. and one of its companies, saying they’ve been running a “fradulent scheme” by misusing premiums that were supposed to be used for funding its workers’ compensation coverage.

Breakaway Courier Systems in a lawsuit filed Friday said Berkshire and its Applied Underwriters company have engaged in what was “essentially a reverse Ponzi scheme.” [...]

Berkshire Agrees to Stop Selling EquityComp Policies in California (Insurance Journal)

California Insurance Commissioner Dave Jones on Tuesday approved an order agreed to by California Insurance Co. and Applied Underwriters Captive Risk Assurance Company Inc. under which they will stop selling workers’ compensation policies that the two Berkshire Hathaway companies used without filing key addendums to the policies. [...]

Jones’ action stemmed from his decision that a complex insurance scheme in a case involving a company called Shasta Linen. [...] Jones found that the insurance companies issued the policies and rates without his approval. He also ruled that the companies designed the program with the intent of avoiding the review of insurance regulators.

World’s Smartest Investor Outperforms With Boring Utilities (Oil Price)

[...] But several years ago, Buffet began steering Berkshire into investments unusual for a financial concern. He purchased a number of regulated electric utilities and a railroad, the Burlington Northern. These investments have much in common. They provide essential services in slow growing markets. They generate steady albeit modest returns. They require ongoing, large capital investments to maintain current levels of service and, as long as investment takes place, they generate substantial income tax deferrals that can also be invested profitably. Since these businesses are growing, at least in term of their assets--and some level of profitability is virtually assured--the owner or investor can still reinvest their capital at a reasonable return. They don’t have to worry about the vagaries of public markets equity or fixed income. They can invest in themselves so to speak. [...]

A psychologist reveals the persuasive tactic Warren Buffett uses to make his shareholders trust him (Business Insider)

[...] This unabashed recounting of Berkshire Hathaway's setbacks isn't unique to the 2012 letter; in fact, Buffett frequently opens his letters this way.

According to psychologist Robert Cialdini, this strategy is brilliant. Cialdini is a professor emeritus of psychology and marketing at Arizona State University, the CEO and president of Influence at Work, and the author of the new book "Pre-Suasion," in which he highlights the invisible interpersonal forces behind our behavior.

In the book, he highlights Buffett's letter-writing strategy as a prime example of a "pre-suasive" tactic, or a way to influence people to behave a certain way in the moments before they make their decision. In this case, the decision might be whether to start or continue investing in Berkshire Hathaway. [...]

Berkshire News Briefs - 9/3/16

Warren Buffett’s company tops up on Phillips 66 shares (CBS News)

Warren Buffett’s company now controls more than 15 percent of Phillips 66 stock after buying another 414,065 shares of the oil refiner this week.

Berkshire Hathaway disclosed the latest purchases in a filing with the Securities and Exchange Commission on Wednesday.

Berkshire now owns about 79.5 million shares of Phillips 66 (PSX), which represents 15.2 percent of the Houston-based company’s stock. [...]

Here's How Warren Buffett Could Lose a Major Cash Cow as Dow Chemical Rallies (Fortune)

[Berkshire Hathaway] has been collecting roughly $225 million a year (or $8 a second) in interest from his Dow Chemical stake since 2009. That year, Buffett provided Dow with $3 billion to help finance its purchase of chemical maker Rohm and Haas. As part of the agreement, the industrials giant gave the investor preferred stock and slapped on a hefty 8.5% annual payment on top of it.

But the contract came with a back door for Dow. Starting in April 2014, should shares of Dow Chemical close above $53.72 for 20 days in any consecutive 30-day trading period, Dow can convert Buffett’s preferred shares into common stock—canceling the Oracle’s $8-a-second payout. Each of Dow’s common shares pay a mere 3.4% annual regular dividend, so it’s of little surprise that Dow Chemical has indicated that it fully intends to convert Buffett’s stake should the conditions be met. [...]

Berkshire’s Jain Tells Gen Re Staff to Fix ‘Problem’ With Costs (Bloomberg)

Ajit Jain, one of Warren Buffett’s top managers at Berkshire Hathaway Inc., has a message for the staff that he oversees at Gen Re: It’s time for their business to get much leaner and less bureaucratic.

After taking charge of the reinsurer this year and installing a longtime deputy to lead the operation, Jain sent a memo to employees detailing five areas, including compensation and sales channels, where changes should be made. He also called for increasing business unit autonomy, accepting modifications on the terms of some risk-transfer deals and reducing complexity. [...]

Iowa Approves Massive Wind Farm Amid Utility's Push for 100 Percent Renewable Energy (GovTech)

The Iowa Utilities Board has given MidAmerican Energy the green light for the utility's plans for a $3.6 billion wind energy investment, the largest renewable energy project in the state.

The state board on Friday gave final approval for the utility's Wind XI farm.

The project -- first announced in April -- is part of Des Moines-based MidAmerican's goal to reach 100 percent renewable energy for Iowa customers. [...]

BNSF launches faster intermodal service between Pacific Northwest, Texas (Progressive Railroading)

Starting Sept. 12, BNSF Railway Co. will offer intermodal customers a new service to move freight between the Pacific Northwest and Texas, the Class I announced yesterday.

Under the new service, shippers who move commodities and consumer goods between Portland, Ore., or Seattle and Dallas/Fort Worth will be able to cut transit times by up to two days when compared to rail transit time options currently in the marketplace, BNSF officials said in a press release. [...]

Berkshire Affiliates Refund $95K After Market-Based Rate Ruling (RTO Insider)

NV Energy and PacifiCorp returned nearly $95,000 to generation customers after FERC revoked market-based rate authority for Berkshire Hathaway Energy affiliates in four neighboring Western balancing authority areas and imposed cost-based rates. [...]

The commission restricted Berkshire’s market-based rate authority in June after ruling that the company’s affiliates failed to disprove that they collectively exercise horizontal market power in the PacifiCorp East, PacifiCorp West, Idaho Power and NorthWestern balancing areas [...]

Berkshire Hathaway, Transformed (Bloomberg)

Warren Buffett's Berkshire Hathaway took its first step toward becoming a conglomerate back in 1967 by stepping from textiles into insurance, which would become its lifeblood. Nearly fifty years later, it's evolved again.

The $358 billion company's steady foray into energy, railways and manufacturing (among other sectors) has radically changed its earnings profile over the past decade. As a result, once-core insurance divisions such as Geico have become a much smaller part of the overall business. In fact, Berkshire's insurance arm is expected to contribute just 25 percent of its total 2016 pre-tax operating earnings, less than half the 57 percent that it accounted for in 2006. [...]

86 Reasons We Love Warren Buffett (Fool)

Tuesday, Aug. 30, is Warren Buffett's 86th birthday. Each year, I celebrate the Babe Ruth of Investing's birthday by adding another reason we love our hero. [...]

Berkshire News Briefs - 8/22/16

Berkshire Hathaway's quarterly 13F statement was filed with the SEC last week, detailing the company's investment holdings. Visit Dataroma for a quick summary table of changes from last quarter.

Buffett’s Berkshire Hathaway Increases Bet on Apple (WSJ / MoneyBeat)

Warren Buffett's Berkshire Hathaway sharply increased its bet on Apple Inc. during the second quarter, bringing its stake in the iPhone maker to roughly $1.5 billion. [...]

Berkshire reduced its holdings in discount retailer Wal-Mart Stores by 27% and cut its stake in farm machinery maker Deere & Co. by 5.7%. The firm cut its stake in Suncor Energy, Canada’s largest crude oil producer by 26%.

Berkshire continued to build its stake in refiner Phillips 66, increasing its stake by 4.3% but left its stake in pipeline giant Kinder Morgan unchanged. [...]

Brooks Running is leading the charge against a controversial Olympics rule

Who’s behind the [@rule40 Twitter] account? The Berkshire Hathaway-owned sneaker company Brooks Running, based in Seattle, which sponsors 12 athletes competing at this year’s Olympics. Brooks CEO Jim Weber says Rule 40 must change.

In addition to the @rule40 Twitter handle, Brooks owns the rule40.com domain name, and is using both to wage a PR war against the USOC.

Under Rule 40 guidelines, non-official sponsors cannot refer to the Olympics in any marketing, advertising, or social media during a blackout period that begins nine days before the opening ceremony and ends three days after the closing ceremony. [...]

Berkshire Hathaway: The Lamest $1.2 Billion Haul (Fool)

Berkshire Hathaway earned about $1.2 billion in pre-tax income from the investment portfolios of its many insurance companies in the second quarter -- this represents a combination of interest and dividend income on investment assets of nearly $185 billion.

In dollars and cents, a billion dollars is something marvelous. Relative to Berkshire Hathway's massive investment portfolio, however, it's mere pocket change, and symbolic of a problem that plagues financial companies across the spectrum: Interest rates are simply too low to really move the needle. [...]

Warren Buffett Just Unloaded $195 Million Worth of These 'Weapons of Mass Destruction' (Fortune)

Warren Buffett, the famed CEO of Berkshire Hathaway, paid $195 million in June in order to terminate Berkshire’s final contract in which Buffett insurance and investing conglomerate sold protection against losses on bonds, according to a regulatory filing by the company Friday. That contract was initiated in 2008, and tied to municipal debt, with maturities ranging from 2019 to 2054.

The terminated contract gave Berkshire pre-tax earnings of $103 million in the second quarter and $89 million in the first six months of 2016. [...]

The Playbook Interview: Warren Buffett (Politico)

“There’s two things that make it [the economy] better: innovation and productivity, which are interlocked in certain ways. When you think of it, all of the products that you and I are using to make our lives better weren’t even around 30 years ago. It’s pretty extraordinary. And if you go back 100 years, every time I get in the dental chair, I think to myself, if this was 100 years ago, they’d be pouring whiskey down me and holding my arms. Now, I sit there and daydream about other stuff. So anything that improves experiences – what people want to do with the 24 hours in the day that they have. And secondly, what really counts is gains in productivity. If you go back 100 years … the farms around where I live here were producing 30 bushels of corn per acre. Now they’re producing 160 bushels of corn per acre. Well, that’s dramatic, and of course they take less people to do it as well, so, just up and down the line, you look at how many man-hours it takes to produce an auto now compared to 50 years ago. So, productivity – that’s the way the human race improves.” [...]

Berkshire Hathaway group firm Mouser to invest ₹90 crore in India over three years (Hindu Business Line)

Mouser Electronics, a subsidiary of TTI Inc and part of Warren Buffett’s Bershire Hathaway, is expected to invest ₹90 crore to ramp up its India presence.

Speaking to BusinessLine during the company’s opening of a new customer service and back office support centre on MG Road here, Mark Burr-Lonnon, Mouser’s Senior Vice-President of APAC and EMEA, said: “The India sales trend looks good as customer traction is up 45 per cent. A major part of that demand comes from Bengaluru, followed by Hyderabad, Delhi and Pune. Online sales from Indian customers which was 57 per cent in 2015 has grown to 62 per cent in January-July 2016. Therefore, we have decided to ramp up our India team, to increase the levels of local support we offer to customers here.” [...]

Berkshire Hathaway Travel Protection Teams Up With TripInsuranceZone (Digital Journal)

Berkshire Hathaway Travel Protection (BHTP) is now teaming up with TripInsuranceZone to bring BHTP’s suite of travel insurance products to the online travel insurance comparison website TripInsuranceZone.com. [...]

Using TripInsuranceZone’s unique comparison engine, travelers can research, quote, compare and purchase travel insurance from most major travel insurance providers in the United States. [...]

How Risky Is Berkshire Hathaway Inc.? (Fool)

No stock is without risk, and Berkshire certainly isn't an exception. Here are just a couple of the reasons Berkshire's share price could go down. The stock market could drop significantly. [...] Interest rates could stay low. [...]

Either of these things could cause Berkshire's stock to plunge in the short term, and there are plenty of other economic and company-specific issues that could hurt Berkshire. It has happened before: Berkshire lost nearly half of its share price in 1974 and more recently took a 32% haircut in 2008. So, if you buy Berkshire, do it for the long term. Thanks to the incredible diversity of Berkshire's revenue stream, any weakness should be temporary. [...]

Richard Holland, who helped launch Buffett-Munger partnership, dies at 95 (Washington Post)

Richard Holland, the Nebraska advertising executive who helped link up one of the great partnerships in business history — between Berkshire Hathaway Chairman Warren Buffett and his deputy, Charles Munger — died Aug. 9 at his home in Omaha. He was 95. [...]

As one of Buffett’s earliest investors, Mr. Holland reaped gains that made him and his wife, Mary, among Omaha’s wealthiest people and most generous philanthropists. Although their net worth wasn’t public, their private charitable foundation reported assets of $158.8 million in 2014. [...]

Wanted: Help handing out Warren Buffett’s fortune (Boston Globe)

Each year, Buffett, the billionaire investor, receives thousands of letters from people asking whether he would pay their mortgages, medical bills, credit card debt, and more. Through a unique sibling partnership, Buffett forwards the letters to his older sister, Doris, who decides which ones to fund. Over the past decade, at least 22,000 letters have crossed their collective desks, and they have given away more than $12 million.

And now, in what might be Boston’s most unusual volunteer opportunity, Doris Buffett — who moved to the city last fall — is looking for people in Greater Boston to help her read a backlog of those letters, as well as new batches that continually arrive. [...]

Berkshire News Briefs - 8/5/16

Berkshire Said to Draw Fed Scrutiny Over Wells Fargo Investment (Bloomberg)

Berkshire has asked the Fed for approval to maintain and even increase its 10 percent stake in Wells Fargo, saying in a June application that it may seek to “purchase additional shares.” If the Fed denies the request, Berkshire might have to dial back the holding of about $24 billion that Buffett described in a recent shareholder meeting as “our largest marketable security."

Omaha, Nebraska-based Berkshire probably wouldn’t have to sell anything if it can persuade regulators that its stake in AmEx doesn’t mean it exerts any control over the credit-card company. Berkshire has successfully made the argument in the past to banking agencies. [...]

Warren Buffett’s Short-Term Hit and Run Transactions (Insider Monkey)

The examples in the article are Express Scripts (ESRX), Archer Daniels Midland (ADM), Intel (INTC), CVS Health (CVS), and Exxon Mobil (XOM).

Warren Buffett is known for his highly successful value investing approach. [...] However, over the past few years, his fund, Berkshire Hathaway, has disclosed some short or medium-term stakes, positions it did not maintain for more than a year.

In many occasions, these stocks were picked by one of Buffett’s hedge fund managers, Todd Combs and Ted Weschler, and not by himself. [...] As readers will notice, it seems like Combs and Weschler’s strategy is all about profit taking, acquiring stocks at low prices and selling when they surge, instead of keeping them for long periods of time. [...]

Warren Buffett Made a Big Bet On an 'In-Your-Face' CEO (Bloomberg)

[Precision Castparts CEO Mark] Donegan, 60, a former Villanova University football player who devoted most of his career to Precision, shares many qualities with other Berkshire managers: He’s a low-profile CEO with a great track record, relentless about staying ahead of the competition. During the 13 years he led Precision as a publicly traded company, its stock climbed 20-fold, annual revenue quadrupled to $10 billion and he bought dozens of businesses, consolidating a position as a key supplier to Boeing Co., Airbus Group SE and General Electric Co. It helped him attain a cult status among investors. [...]

Behind the numbers, though, something more brutal is going on. For years, Donegan has traveled the globe, sometimes bullying staff during quarterly reviews at Precision plants. Bloomberg News spoke with 15 current and former employees—some at the most senior levels of the organization—as well as half a dozen people with knowledge of how the company is run. Those who know the CEO best describe a manager who’s highly effective but at times strains basic decency. [...]

Book Review: Inside The Investments Of Warren Buffett (Investing-dot-com)

I have no idea how many books have been written about Warren Buffett, but sometimes I have the feeling that he is giving George Washington a run for his money. The latest addition to the literature is Yefei Lu’s "Inside the Investments of Warren Buffett: Twenty Cases" (Columbia Business School Publishing, 2016).

Lu examines 20 investments Buffett made over the course of his career that, in Lu’s opinion, “had the largest material impact on his trajectory.” He puts himself in the shoes of imaginary investment analysts “studying the businesses at the same time … Buffett did.” Why would an ordinary analyst either recommend or, as would often have been the case, argue against investing in a company to which Buffett eventually opted to commit funds? [...]

The DQ® System Announces Plans to Develop 24 Locations in Five Caribbean Countries in the Next Five Years (Business Wire)

If you read these News Brief posts the whole way to the bottom every time, you know that I have a thing for these recurring, formulaic Dairy Queen press releases. They mean almost nothing to Berkshire Hathaway's bottom line in the grand scheme of things, but I love to see DQ expanding to all the corners of the globe anyway.

Plans call for the development of DQ Grill & Chill® locations in Trinidad and Tobago, DQ Grill & Chill and DQ Treat locations in Jamaica, and DQ Treat locations in St. Lucia, Grenada and St. Maarten. Currently, there are eight DQ Treat locations in Trinidad, the first of which opened in 2012. [...]

Royal Treats Ltd. signed the multi-unit, multi-country agreement with American Dairy Queen Corporation (ADQ) to develop the new locations. They currently operate eight DQ Treat locations throughout Trinidad and Tobago [...] With their new agreement, they will introduce DQ Grill & Chill locations to fans in Trinidad and Jamaica.

Berkshire Hathaway 2nd Quarter Earnings

Berkshire Hathaway released its 2nd Quarter earnings this afternoon. Click for the full earnings statement.

Berkshire profit up 25 percent as insurance helps, BNSF weighs (CNBC)

Berkshire Hathaway on Friday said second-quarter profit rose 25 percent, helped by improved results from insurance underwriting and investments and the purchase of Precision Castparts, Warren Buffett's largest-ever acquisition.

But operating results fell short of analyst forecasts, as depressed oil prices and coal demand weighed on volume at the conglomerate's BNSF railroad unit.

Net income for Omaha, Nebraska-based Berkshire rose to $5 billion, or $3,042 per Class A share, from $4.01 billion, or $2,442, a year earlier.

Operating profit rose 18 percent to $4.61 billion, or $2,803 per Class A share, from $3.89 billion, or $2,367. [...]

Revenue rose 6 percent to $54.46 billion. Book value per share, Buffett's preferred measure of growth, rose 1.7 percent from the end of March to $160,009.

That makes the current Price/Book Value 1.36 based on today's closing price. The threshold for stock buybacks is below a P/BV of 1.2.

Berkshire News Briefs - 7/28/16

Buffett Buys $1.8 Billion ‘Gem’ of a Medical Insurer in N.Y. (Bloomberg)

Berkshire Hathaway Inc. agreed to buy Medical Liability Mutual Insurance Co., extending Chairman Warren Buffett’s leadership in the business of protecting doctors against lawsuits.

The target company is the largest underwriter of medical professional liability insurance in New York and will convert from a policyholder-owned to a stock business, Omaha, Nebraska-based Berkshire’s National Indemnity unit said Monday in a statement that didn’t disclose terms. Policyholder surplus, a measure of assets minus liabilities, was $1.8 billion as of Dec. 31, according to the statement. The deal is expected to be completed in the third quarter of 2017, pending regulatory and customer approvals. [...]

Berkshire Hathaway Wants to Insure Your Doctor (Fool)

There are two broad types of insurance companies: stock insurers and mutual insurers. Stock insurers are institutions owned by investors seeking to earn a return on their investment. Mutual insurers are owned by their policyholders. Mutual insurers are to insurance what credit unions are to banking.

MLMIC is a mutual insurer. But Buffett's acquisition isn't just altruistic; Berkshire Hathaway is obviously buying MLMIC to make money. Thus, for the deal to go through, MLMIC will have to convert to a stock insurance company. Its policyholders will then receive a payout that MLMIC currently estimates to be roughly equal to premiums paid to the company during the 3-year period from July 2013 to July 2016. [...]

Buffett Says Earnings Guidance Can Lead to Corporate Malpractice (Bloomberg)

Warren Buffett, who is among business executives pushing for improved corporate governance, said that the practice of telling Wall Street what to expect from quarterly earnings can distort management’s priorities.

“Guidance can lead to a lot of malpractice,” the billionaire chairman of Berkshire Hathaway Inc. said Thursday on CNBC. “It doesn’t have to, but I think if the CEO goes out and says, ‘We’re going to earn $1.06 next quarter,’ I think that if they’re going to come in at $1.04, there’s a lot of attempts to find a couple extra pennies some places.” [...]

Lawsuit over Acme Brick retirement plans to move forward (Ft. Worth Star-Telegram)

A lawsuit challenging reduced retirement benefits at Acme Brick can move forward after a federal appeals court ruled that parent Berkshire Hathaway acted improperly.

The suit, filed in 2014 by Acme’s former chief financial officer Judy Hunter, who oversaw the plans, alleged that Berkshire, the Nebraska-based conglomerate run by billionaire Warren Buffett, used “strong-arm tactics” to force the Fort Worth-based brick company to reduce retirement plan benefits. [...]

There's Nothing 'Surprising' About Geico's New Campaign (Advertising Age)

Geico has tapped a big name for a spot in its newest campaign—Marco Polo, the Middle Ages explorer famous for traveling Asia. In a humorous ad that stays true to the insurer's quirky humor, an actor appears as Mr. Polo in an outdoor swimming pool as children play the popular Marco Polo discovery game. Mr. Polo continues to say "Si, scusi," as he believes the kids are looking for him. A voice-over says, "Playing Marco Polo with Marco Polo? Surprising. What's not surprising? How much money Amanda and Keith saved by switching to Geico," as the camera shows real-life Geico customers holding a sign asserting $645 in savings. Meanwhile, a llama noses around the pool. [...]

Berkshire Hathaway Takes on Texas' Three-Tier System (Wine Business)

In another potentially historic case, McLane Company Inc., which has sold food products in Texas sine since the 1980s through the AmeriServ and McLane Foodserice trademarks, has called into question Texas’ “One Share Rule,” by filing a complaint with the Texas Alcohol Control Board (TACB) in Austin. Its parent company, Berkshire Hathaway Inc., owns a two-percent share in Walmart and doesn’t believe that this is a justifiable reason for McLane not to be able to distribute alcoholic beverage in Texas. [...]

How Warren Buffett & Elon Musk Both Compete and Contrast on Energy (Fortune)

Musk and Buffett see the energy and transportation sectors changing in similar ways, and, over the past few years, their companies have increasingly competed with each other over both solar energy and electric cars. [...]

That two of the world’s savviest business minds seem to disagree over how key parts of how the clean energy sector will develop are reflects how the world’s energy transformation is still in its early days. Their opposing viewpoints about fossil fuels also highlight Musk’s entrepreneurial vision-driven spirit with Buffett’s down-to-earth profit-driven investment strategy. [...]

Warren Buffett's Latest Utility Challenge in Nevada (Fool)

When Nevada regulators agreed earlier this year to allow MGM Resorts, Wynn Resorts, and Las Vegas Sands to leave NV Energy, one of Berkshire Hathaway's largest utility assets, it opened a slew of problems for the utility. Not only could the utility lose 7% of its demand if all three casino companies left, but data company Switch has now also challenged why it wasn't allowed to leave the utility a year ago. [...]

Berkshire's Duracell to close South Carolina plant, affecting 430 workers (Reuters)

Duracell said it plans to close a battery-making plant in South Carolina that employs 430 people, making the announcement fewer than five months after being acquired by Warren Buffett's Berkshire Hathaway Inc.

The shutdown of the Lancaster, South Carolina, plant, which made AA batteries, will begin in March and should be completed by the middle of 2019, Duracell said in a statement dated Wednesday.

Duracell is consolidating its North American production of AA and AAA batteries into a plant in LaGrange, Georgia. [...]

Purchases by auction are not really Buffett's style (Omaha World-Herald)

Pardon us if it seems like Berkshire Hathaway Inc. may not be bidding to acquire Oncor Electric Delivery Co., the Texas electricity distribution company that is coming out of bankruptcy.

Sources are telling Texas newspapers that Berkshire Hathaway Energy is a bidder in a high-profile auction for the company after an earlier $18 billion purchase fell through. [...]

But Berkshire CEO Warren Buffett has been so adamantly opposed to auction-style purchases that it could be the Berkshire rumors are being floated to keep other buyers interested and bidding as much as possible. [...]

Berkshire News Briefs - 7/14/16

Berkshire applies to boost Wells Fargo stake above 10 percent (Business Insider)

Warren Buffett's Berkshire Hathaway Inc has applied to increase its ownership stake in Wells Fargo & Co above 10 percent, the Federal Reserve said on its website on Friday.

Boosting the stake above 10 percent could mean increased federal scrutiny over the investment. [...]

CEOs relish 'unique' benefits of being a Buffett-owned business, despite some downsides (Omaha World Herald)

Donegan, during a visit to Omaha this spring for the annual meeting of Berkshire shareholders, estimated that since he became a Berkshire CEO, he can devote 15 percent more of his days to actually running Precision Castparts.

That’s a substantial gain in perhaps the most valuable of economic commodities — time — and an example of how business life inside Berkshire is different from business life outside. [...]

Billionaire Warren Buffett doing energy pilot program in Hawaii (Pacific Business News)

Warren Buffett’s energy company has started doing a pilot program for a residential property manager in Hawaii, a spokeswoman for one of his companies confirmed to Pacific Business News this week.

Iowa-based MidAmerican Energy Services LLC, a Berkshire Hathaway Energy company which was recently registered as a new business in Hawaii, is doing an energy management pilot that uses a technology platform to help clients manage the performance of the heating, ventilation, air conditioning and electric water heater systems at their property sites.[...]

Buffett may be interested in buying Hawaiian Electric Co. if Florida-based NextEra Energy Inc.’s proposed $4.3 billion deal to purchase the Honolulu utility falls through. A decision by Hawaii regulators on the NextEra-HECO sale is expected to come soon.

Precision Castparts neighbors sue, demand company to stop polluting (Oregon Live)

Four Southeast Portland residents who say their homes have been smothered with heavy metals and other pollution by a nearby Precision Castparts manufacturing plant are asking a judge to order the parts maker to stop polluting.

In a suit filed last week, the residents also are asking a Multnomah County Circuit judge to force Precision Castparts to clean up millions of pounds of nickel, chromium, arsenic and other toxic pollutants that they say have settled upon their neighborhoods and increased their chances of cancer and other health problems -- and even put children at risk of lower IQs. [...]

Gen Re Seeks to Add Brokerage Business Through Hookup with TransRe (Insurance Journal)

General Re, the unit of Warren Buffett’s Berkshire Hathaway Inc. that appointed a new chief executive officer in May, struck a deal with a rival reinsurer to help revive sales.

Alleghany Corp.’s TransRe will share revenue and risks on property/casualty reinsurance business that it underwrites through brokers and intermediaries for the next five years, the companies said Tuesday in a statement. The partnership gives TransRe, with the backing of Gen Re, the ability to take on twice as much risk for clients, the Alleghany unit said in a separate document listing facts about the deal.

Gen Re CEO Kara Raiguel is seeking new sources of premium revenue after being named to take over for Franklin “Tad” Montross. [...]

Buffett's Brooks branches out to attract gym generation (Channel NewsAsia)

Brooks, the running brand owned by Warren Buffett's Berkshire Hathaway Inc, believes that the U.S. marathon boom has peaked and it is looking to broaden its appeal to a younger gym generation.

Founded in 1914, the Seattle-based firm was close to bankruptcy when Jim Weber took over as chief executive in 2001. Weber decided to concentrate solely on running, a strategy Buffett bought into when he acquired the brand in 2006.

Brooks is now the market leader in the U.S. specialty running shoe market with a 29 percent share. It had total sales in 2014 of US$548 million, still only a fraction of overall leader Nike's sales of US$32 billion in the year to May 31. [...]

Berkshire Hathaway Said to Be Among Leading Oncor Bidders (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. submitted a bid for Energy Future Holdings Corp.’s Oncor Electric Delivery Co., people familiar with the talks said, joining NextEra Energy Inc. as a top contender to buy Texas’ biggest transmission operator.

Energy Future is mulling offers that value Oncor at about $18 billion, according to the people, who asked not to be identified because the information is private. The process is fluid and the leading bidders have switched places several times, the people said. [...]

25 Years of Learning and Laughter (Gates Notes)

I don’t remember the exact day I first met most of my friends, but with Warren Buffett I do. It was 25 years ago today: July 5, 1991.

I think the date stands out in my mind so clearly because it marked the beginning of a new and unexpected friendship for Melinda and me—one that has changed our lives for the better in every imaginable way.

Warren has helped us do two things that are impossible to overdo in one lifetime: learn more and laugh more. [...]

Berkshire News Briefs - 7/1/16

Warren Buffett Tries To Buy A Smart Basketball (Vocativ)

Spalding, exclusive provider of basketballs for the NBA, is owned by Russell Brands (and not Fruit-of-the-Loom as this article says; I double-checked). Other companies have until July 18th to bid on the bankrupt company's assets before the bankruptcy court finalizes the sale.

Russell Brands LLC, a subsidiary of Buffett’s Berkshire Hathaway Co., has offered $1.5 million for the bankrupt start-up company that makes the 94Fifty Smart Sensor Basketball, according to the Wall Street Journal. The parent company, InfoMotion Sports Technologies Inc., reportedly filed for Chapter 11 protection on March 1.

The 94Fifty ball, which sells for $199.99 and was named a top-25 invention of 2014 by Time magazine, uses embedded sensors in a basketball to log such data as shooting arc, backspin, release speed, and dribble speed. [...]

Berkshire units ordered to halt California workers' comp policy sales (Reuters)

California's insurance commissioner has ordered two Berkshire Hathaway Inc insurance units to stop selling some workers' compensation policies that he considers illegal.

Commissioner Dave Jones on Wednesday issued a "cease and desist order" preventing Berkshire's Applied Underwriters Inc and California Insurance Co units from selling or renewing the policies in question in California.

Jones had on June 20 found that the units evaded a state law meant to protect small businesses from unexpected workers' compensation costs, through the sale of a nontraditional policy whose terms and rates had not been reviewed by state officials. [...]

Claiming Unfair Treatment, Buffett’s McLane Sues To Enter Texas (Shanken News Daily)

McLane Co., the mammoth food and drinks distributor owned by Warren Buffett’s Berkshire Hathaway, has filed a federal lawsuit in Austin claiming that the Texas Alcoholic Beverage Commission (TABC) is unfairly barring it from distributing beverage alcohol in the Lone Star State.

McLane’s lawsuit, filed in conjunction with the Texas Association of Business, takes aim at the TABC’s so-called “one share” rule—under which the agency aims to protect the three-tier system by prohibiting alcohol producers, distributors and retailers from holding as little as one overlapping ownership share in another tier of the business. Because McLane parent Berkshire Hathaway owns a 2% stake in Walmart—which retails beverage alcohol in Texas—the TABC has refused to grant it a distribution license in the state. [...]

Why Warren Buffett is one of the very few making money off Alberta’s mostly unprofitable electric system (Financial Post)

Two years ago, Buffett’s Berkshire Hathaway Inc. bought more than half of all the electric transmission lines crisscrossing Albertan farmland in a $3.2 ­billion acquisition of Calgary-­based AltaLink LP from troubled SNC-­Lavalin Group Inc., making Berkshire Hathaway the electricity transmission provider to 85 per cent of Albertans.

Electricity analysts in the province say that purchase, like many of Buffett’s deals, now looks brilliant. Electricity prices in the province have collapsed — from $49 per megawatt hour in 2014 to around $16 so far this year — but transmission prices have risen, and will continue to rise for at least the next five years. [...]

Two BNSF Freight Trains Collide in Texas on Busy Rail Route (Bloomberg)

Two BNSF Railway Co. freight trains collided in Texas, leaving at least one worker injured. Rescue efforts were under way for three other employees involved in the accident. [...]

The collision occurred at 8:25 a.m. local time near Panhandle, Texas, BNSF said in a statement Tuesday. [...] The trains were carrying intermodal cargo, which are usually consumer goods. The accident occurred on the main line known as the Southern Transcon linking Los Angeles with Chicago. [...]

Berkshire News Briefs - 6/18/16

Anonymous bidder pays $3.46 million for Warren Buffett lunch (Reuters)

Buffett has only revealed that the winning bidder was a woman this year.

An anonymous bidder agreed at auction to pay $3,456,789 to eat lunch with Warren Buffett, tying the record for the right to dine with one of the world's most admired investors.

Money will go to Glide, a San Francisco charity that provides food, health care and other services to people who are homeless, poor or struggling with substance abuse.

Warren Buffett’s Dicey Power Play (Bloomberg)

When Warren Buffett’s Berkshire Hathaway bought Nevada’s main utility, NV Energy, three years ago, it inherited a lucrative customer base: the neon-lit, air-conditioned casino-hotels on the Las Vegas Strip. Now they’re in the midst of a costly split. Lured by the prospect of cheaper, cleaner energy elsewhere, two of the Strip’s biggest power users, MGM Resorts International and Wynn Resorts, told regulators in May they’re willing to pay millions in fees to ditch NV Energy’s services. [...]

Berkshire Energy Units Barred From Selling Power at Market Rates (Bloomberg)

Units of Warren Buffett’s Berkshire Hathaway Inc., including PacifiCorp and NV Energy, were barred from selling power at market rates and must instead set prices based on the cost of running their plants.

More than a dozen Berkshire Hathaway power suppliers serving consumers in the West failed to prove they couldn’t exercise market power, according to an order from the U.S. Federal Energy Regulatory Commission late Thursday. The companies must revise rates from Jan. 9, 2015, to April 9 and provide refunds within 30 days of the order, according to the filing. [...]

Quicken founder and Warren Buffett have ties beyond Yahoo deal (Reuters)

The connection between Quicken Loans Inc founder Dan Gilbert and billionaire magnate Warren Buffett became evident last month with news that Buffett was backing Gilbert's surprise bid for Yahoo Inc.

But the two men have another business connection that hasn't been reported: an exclusive mortgage-purchasing agreement between Quicken and a subsidiary of Buffett's conglomerate Berkshire Hathaway Inc. [...]

Warren Buffett: I’m looking to invest more in women (Independent)

Warren Buffett, chairman and CEO of Berkshire Hathaway, told the audience at the first ever United State of Women summit in Washington DC that he currently invests in six companies with female CEOs and is "looking for more”.

He also has three women on the board of Berkshire Hathaway and wants to up that number too.

Billionaire Warren Buffett’s Berkshire Hathaway buys North Park Toyota (My San Antonio)

Billionaire Warren Buffett’s Berkshire Hathaway Automotive Inc. has purchased a controlling stake in North Park Toyota — the company’s first dealership in the San Antonio area.

Jeffrey Rachor, president and CEO of Berkshire’s automotive group, signed a 20-year lease for the dealership’s 23.7-acre property on April 4, with an option to buy.

Berkshire Hathaway Group’s Specialty Insurance Operation Opens German Office, Makes Executive Appointments in Northern Europe (Business Wire)

Berkshire Hathaway Specialty Insurance Company (BHSI) in coordination with its affiliate Berkshire Hathaway International Insurance Limited (BHIIL), today announced that it has established its office in Düsseldorf, Germany, and filled key executive roles in Northern Europe. [...]

Vestas scores massive order for Warren Buffett-backed wind farm (Denver Business Journal)

Vestas Wind Systems, with four manufacturing plants in Colorado, has reached a conditional agreement to supply up to 1,000 wind turbines to a massive wind farm in Iowa.

It's the largest order ever for a U.S. wind farm and believed to be one of the largest orders in the world, according to industry experts.

The buyer is MidAmerican Energy Co., a subsidiary of Berkshire Hathaway Energy [...] With the investment in Wind XI, MidAmerica expects wind farms will provide 85 percent of the energy it delivers to its Iowa customers.

Berkshire News Briefs - 6/9/16

Warren Buffett's NV Energy Is Losing Customers on the Vegas Strip to Renewable Energy (Fool)

MGM Resorts and Wynn Resorts have said that paying $102.6 million to leave the utility and find their own energy is better for their businesses than staying with NV Energy. Las Vegas Sands stopped short of committing $23.9 million to leave NV Energy this year but is leaving its options open. As these resorts collectively make up 7% of the demand in NV Energy's territory, this is a big deal for the utility.

Buffett awaits $8 billion of ‘bad news’ with Kraft Heinz payment (Pittsburgh Post-Gazette)

Warren Buffett is about to get back the $8 billion — plus a little extra — that his Berkshire Hathaway Inc. invested in Kraft Heinz Co. [...]

The 2013 deal allowed the foodmaker to pay a premium to redeem the preferred shares after three years, a period that expires next week. Mr. Buffett has said Berkshire will get about $8.3 billion, replenishing its coffers after the purchase of manufacturer Precision Castparts Corp. in January, one of his biggest buyouts ever.

Berkshire's Underappreciated Growing Dividend Income Stream (Seeking Alpha)

Today though if you look at Berkshire's 6 largest positions, you see something very different. Gone are the concentrated bets that are likely to double several times in the next decade. Instead, you find a very conservative looking portfolio (although still concentrated) that offers a significant amount of yield. [...]

Berkshire will receive over $2.7 billion in dividends from these [six] positions [KHC, WFC, KO, IBM, AXP, PSX] in 2016. That is basically the size of the entire Berkshire portfolio back when Buffett was buying Coca-Cola in the late 1990s.

Why Warren Buffett Dumped AT&T (Fool)

Warren Buffett never bought AT&T shares for Berkshire, nor did the company's other stock pickers. Instead, the AT&T stake was acquired through an acquisition.

In 2011, Berkshire began to accumulate a position in DirecTV, which it added to several times afterwards. [...] AT&T's acquisition paid shareholders $95 per share.

However, only $28.50 of that amount was in cash, with the remainder payable in AT&T stock, which is where Berkshire's AT&T stake originated. After the sale was complete, Berkshire received 59.32 million shares of AT&T during the third quarter of 2015, but they didn't stay in the portfolio for long. Berkshire unloaded 12.7 million of them during the fourth quarter, and sold the rest during the first quarter of 2016.

Buffett’s Richline Acquires Wearables Maker Viawear (Diamonds.net)

Richline Group, a jewelry subsidiary owned by Warren Buffett’s Berkshire Hathaway, continued its recent string of acquisitions with the purchase of Viawear, a provider of wearable technology for jewelry brands.

Viawear has developed bracelets that filter mobile notifications so wearers receive important alerts without having to check if they missed something. [...]

Lubrizol Names New President and CEO (Chemical Engineering Online)

The Lubrizol Corp. has announced that Eric R. Schnur, currently executive vice president and chief operating officer, has been named president, effective immediately, and will become chairman and chief executive officer on January 2, 2017. James L. Hambrick, the current chairman, president and chief executive officer, having fulfilled his commitment to remain in those roles for five years following Berkshire Hathaway’s acquisition of Lubrizol in 2011, has decided to complete his 38-year Lubrizol career. [...]

A two part interview with PacifiCorp execuitve Stefan Bird (PacifiCorp being the Berkshire Hathaway Energy company serving the Pacific Northwest):

Part 1:
PacifiCorp Green: Adapting to Changing Western Power Markets (Energy Times)

"Renewables are definitely a big part of our story. PacifiCorp is the second largest owner of utility- owned wind assets in the country, number two to our sister utility, MidAmerican Energy [...]

We’ve got about 2000 megawatts of renewables out of our total portfolio of 11,000 megawatts. We have a very large hydroelectric fleet and that contributes to our emission-free supply. There are a number of changes that have been pretty exciting in the last year or so as we collaborate more effectively with our neighbors. The Western grid is all physically interconnected, but we frankly don’t use it as efficiently and effectively as we could." [...]

Part 2:
Utility Excitement: Value for Customers (Energy Times)

"Being part by a large private corporation with very strong financial capabilities gives us some unique advantages, from a cost of capital standpoint and our ability to utilize federal tax credits. That allows us to pass those benefits through to our customers in a unique way. We can focus on the long-term, we’re not worried about quarterly results and we really want to make decisions that make sense for our customers to give them a sustainable value proposition for the long haul."

Auction for Warren Buffett charity lunch starts slow (Yahoo)

The annual charity auction for a private lunch with billionaire investor Warren Buffett is underway.

The top bid to dine with the chairman of the conglomerate Berkshire Hathaway Inc was $200,100 at 12 p.m. EDT on Monday, but will likely surge by the time the auction on eBay ends on Friday night.

Winning bids have reached seven figures every year since 2008, with the record $3,456,789 offer submitted anonymously in 2012. Last year's winner paid $2,345,678.

Auction proceeds go to Glide, a charity in San Francisco's Tenderloin district that provides food, health care and other services to people who are homeless, poor or struggling with substance abuse. Buffett has raised about $20.2 million in 16 auctions for Glide.