Berkshire News Briefs - 2/9/16

As Berkshire Hathaway meeting set to be streamed online, will fewer make Omaha pilgrimage? (Omaha World-Herald)

Berkshire Hathaway’s annual meeting, which draws nearly 40,000 people to Omaha each year in a pilgrimage to see investor Warren Buffett, will be streamed over the Internet this year for the first time, the company’s chief financial officer told The World-Herald.

That could have implications for the city’s tourism industry: People from around the globe descend on Omaha each year, filling hotels and restaurants. They also shop at Berkshire-owned stores, which offer discounts to shareholders during the annual meeting weekend. Will it keep people away from fair Omaha, which once a year is dubbed Woodstock for Capitalists?

Meeting Ted Weschler (Yaniv's Blog)

Many value investors, at some point of their careers, get to “see the light” and move away from investing in what’s called “cigar butt investing” (bad business at a great price) to investing in companies that trade at richer valuations but have great underlying businesses (great businesses at a reasonable price). The fortunate few, manage through this transition without a negative impact on performance. I asked Ted about this transition process and how he sees the two approaches. He said that when you try to map the risks that inherent to a “cigar butt” investing you end up with a much longer list than when you carry out the same exercise with a high quality business. Of course, many investors manage to achieve great performance over time with the bad-business-at-a-great-price approach so that is not to say that there is anything wrong with this approach–these are just two different styles. [...]

Berkshire purchases Castparts for $37B (Lincoln JournalStar)

Berkshire Hathaway completed its $37.2 billion acquisition of Precision Castparts on Friday.

Berkshire Hathaway’s acquisition of the manufacturer of components for aircraft, power plants and other industries reportedly is its biggest deal ever.

Warren Buffett agreed to purchase Precision Castparts in August.

Berkshire Hathaway names new board of directors for Precision Castparts (Omaha World-Herald)

In a securities filing Thursday, Berkshire said the directors are Warren Buffett, chairman and chief executive of Berkshire; Todd Combs, a Berkshire investment officer; Marc Hamburg, chief financial officer of Berkshire; and three Precision Castparts executives: CEO Mark Donegan, corporate counsel Ruth Beyer and Shawn Hagel, chief financial officer.

Donegan and Hagel were directors before Berkshire’s $32 billion purchase of Precision Castparts [...]

Musk vs. Buffett: The Billionaire Battle to Own the Sun (Bloomberg)

Buffett got into utilities in 1999. While many investors chased the latest Silicon Valley IPO, he bought a nice electric company in Des Moines. Building power plants and maintaining the grid offered almost endless opportunities to reinvest cash, which he had a lot of. And, as a monopoly providing an essential service, the local power company wasn’t going away anytime soon. Owning utilities isn’t “a way to get rich,” he later said. “It’s a way to stay rich.”

By 2013 the energy unit at Berkshire had expanded to include power companies serving parts of Oregon, Washington, Idaho, Wyoming, and Utah. It had also invested billions of dollars in wind farms in Iowa and giant solar arrays in California and Arizona. Two months after SolarCity got its love money from Nevada, Buffett offered $5.6 billion to buy NV Energy. Soon after Berkshire completed the purchase, NV Energy accounted for about a fifth of the company’s energy revenue. [...]

Buffett's BNSF to Cut Spending $1.5 Billion as Cargo Slumps (Bloomberg)

BNSF Railway Co., the railroad owned by Warren Buffett’s Berkshire Hathaway Inc., plans to reduce capital expenditures for the first time in six years as railroads seek to rein in costs amid a freight slump.

The rail carrier said Tuesday that it will spend $4.3 billion, down 26 percent from a record $5.8 billion in 2015, on locomotives, rail cars, track and maintenance. BNSF had increased investment since 2010, which marked a six-year low of $2.7 billion. [...]

Warren Buffett ups stake in Phillips 66 — again (Houston Business Journal)

Warren Buffett’s Nebraska-based Berkshire Hathaway Inc. has further increased its stake in Houston-based Phillips 66.

During the first three days of February, the company bought about 1.7 million Phillips 66 shares for nearly $132 million, according to CNBC. That means that over the past 30 days alone, the company has bought 12.5 million shares for $964 million.

The company now owns 73.98 million shares — or nearly 14 percent of Phillips 66 — worth about $5.9 billion, the Associated Press reports. [...]

What Happens After Warren Buffett Leaves Berkshire Hathaway? (Fool)

Warren Buffett has made it clear that the board of directors already knows who Berkshire's next CEO will be. And while the identity of that person remains a secret, we do have a couple of clues:

Berkshire's directors believe that future CEOs should come from internal candidates.

The new CEO will be relatively young -- Buffett wants the next CEO to stay on the job for decades and says that the company will operate best if its CEOs stay for 10 years or more. [...]

Warren Buffett will be advisor for 'Celebrity Apprentice' (CNBC)

Warren Buffett continues to raise his public profile with an upcoming appearance on the new season of NBC's "The Celebrity Apprentice."

In a news release, the network says that Buffett, "one of the most successful businessmen in the world," will be an advisor on the program, along with former Microsoft chief and Los Angeles Clippers owner Steve Ballmer, model and businesswoman Tyra Banks, actress and entrepreneur Jessica Alba, and entertainment attorney Patrick Knapp Schwarzenegger. [...]