This week's post got really long, so I broke it in two. News about Berkshire Hathaway itself in this post, news about subsidiaries coming next in a second post...
Berkshire after Buffett: One thing may not change (CBS MoneyWatch)
Most interesting, more and more major shareholders are becoming convinced that they should stick with Berkshire. They've been increasingly assured that with Buffett's decentralized management style -- unit managers operate independently and make their own business decisions -- a solid structure has been put in place that would enable Berkshire to operate soundly even after his departure. [...]
Another wealth manager at a major Wall Street investment bank noted that there could be "initial rush selling" once Buffett announces the exact date of his retirement, but "that would definitely inspire us to jump in and buy more shares when the stock tumbles as a result."
Buffett’s Berkshire Plans $9 Billion Bond Sale to Repay Loan (Bloomberg)
Warren Buffett’s Berkshire Hathaway Inc. sold $9 billion in debt, the conglomerate’s biggest bond deal ever, in the latest offering from a blue-chip company tapping investor demand for the most creditworthy borrowers.
Berkshire sold the debt in seven parts, according to data compiled by Bloomberg. Proceeds will help pay down a $10 billion loan used to finance its purchase of Precision Castparts Corp. Buffett had said earlier that Berkshire used about $23 billion of its cash for the deal and would borrow the rest. [...]
Investor orders for Berkshire Hathaway bond sale hit $34bn (Financial Times)
Investor orders for a piece of a $9bn Berkshire Hathaway bond sale eclipsed $30bn on Tuesday, as the conglomerate headed by Warren Buffett sought to repay bank loans used to finance its $36bn takeover of Precision Castparts. [...]
Orders for the year’s fourth-largest transaction hit $34bn, climbing rapidly as banks closed their books, one person familiar with the situation added. [...]
Nebraska Peace Foundation calls for report on risks Berkshire Hathaway faces from climate change (Omaha World-Herald)
The Nebraska Peace Foundation is asking Berkshire Hathaway Inc. to issue a report describing the risks it faces from climate change and the “initiatives and goals relating to each risk issue identified.” [...]
In the letter and proxy draft, Buffett said it is “highly likely” that climate change “poses a major problem for the planet.” [...]
But although climate change may cause disasters, Buffett said, Berkshire’s property insurance operations do not risk significant losses from such disasters.
That’s because the companies would adjust their premiums and exposure to claims if climate change begins to cause more property damage, which hasn’t happened yet, he said. [...]
Comments on Mistakes and Buffett’s Original Berkshire Hathaway Purchase (ValueWalk)
I noticed a passage in last year's letter that is relevant to the topic—Buffett himself was attracted to buybacks on a dying business—Berkshire Hathaway in the early 1960's. Berkshire was a Ben Graham cigar butt—it was trading at around $7 and had net working capital of $10, and book value of $20. Berkshire was a classic “net net”—a stock trading for less than the value of its cash, receivables, and inventory less all liabilities. Buffett liked the fact that Berkshire was a) trading at a cheap price relative to liquidation value, and b) using proceeds from the sale of plants to buy back shares—effectively liquidating the company through share repurchases. [...]
Why Berkshire Hathaway Is Expected to Outperform SPY in 1Q16 (Market Realist)
7 parts, focusing on the different areas of Berkshire Hathaway (BNSF, Energy, Manufacturing, etc.)
Berkshire’s holdings have been performing on the back of insurance, financials, and manufacturing. Chairman and CEO Warren Buffett is deploying cash for buying stocks at attractive valuations. Berkshire’s recent investments include Precision Castparts (PCP) and Kinder Morgan (KMI). [...]
3 Big Competitive Advantages of Berkshire Hathaway (Fool)
Berkshire Hathaway is a unique business. It's primarily an insurance company, but it also sells furniture, energy, homes, underwear, and private jets. And the company has amassed a stock portfolio that would make most long-term investors jealous. One of Warren Buffett's biggest criteria when deciding what to buy is identifiable competitive advantages -- of which Berkshire has quite a few of its own. [...]
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