Berkshire News Briefs - 2/22/17

Berkshire Hathaway released its 4Q 2016 13-F filing last week, revealing the contents of its investment portfolio as of December 31, 2016.

Here's the updated portfolio on Dataroma:

Holdings | Changes

More Commentary:

Massive Changes for Berkshire Hathaway and Warren Buffett Stocks in 2017

Warren Buffett just dropped Walmart and signaled the death of retail as we know it

Warren Buffett's Huge Stake in Apple: What He May See In AAPL

Buffett's Berkshire Hathaway reveals stake in Monsanto

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On Monday he ate through one Apple. But he was still hungry!

For longtime Buffett watchers, these new investments are not so much of a shock as they might appear to more casual observers. Because what Buffett loves more than anything in the world is paying a fair price for a business with huge barriers to entry. In the parlance of stockpickers, we call these moats (as in the defensive ring of water that surrounded the medieval castles of yore). A good moat means sustainable profit margins and a defensible business model that allows for an investment holding period of (hopefully) forever. [...]

Berkshire Hathaway jumps into wearables with a smart jewelry line

This spring, the jewelry manufacturer and distributor is launching a smart jewelry line called Ela. Starting with wristwear, Ela is the Richline Group's first foray into wearables, which should eventually extend into multiple product categories like rings and earrings.

Using Bluetooth Low Energy, Ela connects to both iOS and Android devices. It has a step-tracking feature that syncs with Apple Health and Google Health Kit. However, the company was interested in producing something better than just a "prettier step tracker," Cliff Ulrich, product innovation manager for the Richline Group, explained to ZDNet. The wearable also connects to the Ela app, through which you can create and share photos and other "memories" like special songs or a voice recording. The memories can be pre-loaded when giving it as a gift to someone else. A user can also create alerts -- the gem on the device will softly glow and vibrate when someone on your alert list is trying to contact you. Users can set the device to glow a certain color for specific contacts or groups. [...]

(Note this news article from last summer: Buffett’s Richline Acquires Wearables Maker Viawear (6/7/16))

Warren Buffett explains why he's investing in a risky tech sector: wearables

"Jewelry is a centuries-old business that isn't going anywhere, so it's a safe bet," [Buffett] told CNBC in an emailed statement. "With the addition of technology, we're simply updating something everyone knows and loves to better fit our modern age."

Richline Group product and innovation manager Cliff Ulrich explained, "We've designed Ela to be jewelry first. As a jewelry company, we understand jewelry retailers and consumers, what they want to carry and buy. They want to create an emotional connection, whether your giving Ela as a gift or buying it for yourself because you just got a bonus. Ela allows you to save memories in your jewelry, like a modern day locket." [...]

Warren Buffett’s late play for electricity distributor Endeavour Energy

The NSW government is heading towards another bumper ­result for its electricity privatisation scheme with Warren ­Buffett’s Berkshire Hathaway believed to have entered the auction for distribution business ­Endeavour Energy.

The Australian’s DataRoom column yesterday revealed Berkshire Hathaway is said to be part of a fourth consortium looking to buy the last and smallest of the electricity grid businesses being sold by the Berejiklian government for up to $US3 billion in a process that has attracted strong international attention. [...]

Warren Buffett – How Charlie Convinced Me To Break My Cigar-Butt Investing Habit

My cigar-butt strategy worked very well while I was managing small sums. Indeed, the many dozens of free puffs I obtained in the 1950s made that decade by far the best of my life for both relative and absolute investment performance. [...]

But a major weakness in this approach gradually became apparent: Cigar-butt investing was scalable only to a point. With large sums, it would never work well.

In addition, though marginal businesses purchased at cheap prices may be attractive as short-term investments, they are the wrong foundation on which to build a large and enduring enterprise. [...]

It took Charlie Munger to break my cigar-butt habits and set the course for building a business that could combine huge size with satisfactory profits. [...]

Warren Buffett selling home in Laguna Beach's Emerald Bay for $11 Million

Berkshire Hathaway CEO Warren Buffet has put his six-bedroom house in Laguna Beach’s Emerald Bay on the market for $11 million. [...]

Buffett, 86, has owned the ocean-view home since 1971, when he paid $150,000 for it. He’s used the house for family vacations for the past 46 years, Dolby said. [...]

Berkshire News Briefs - 2/6/17

Buffett Bought $12 Billion of Stock From Election Through Friday

“We’ve, net, bought $12 billion of common stocks since the election,” he said in an interview with Charlie Rose that aired on Friday. Buffett didn’t identify the securities that he picked.

Purchases of that magnitude represent a major pickup in activity for Omaha, Nebraska-based Berkshire. During the first nine months of last year, the company bought $5.2 billion and sold or redeemed roughly $20 billion worth of stocks, according to a regulatory filing. In 2015, Berkshire bought about $10 billion of equity securities. [...]

NV Energy and Apple partnering to build solar energy resources in Nevada

NV Energy and Apple have jointly announced an agreement to build 200 megawatts of additional solar energy in Nevada to support the tech company’s Reno-based data center with renewable energy. Completion is expected by 2019.

First, NV Energy must apply with the state’s Public Utilities Commission to enter into a power purchase agreement for the solar power plant. The acquisition will bring the utility’s total to more than 529 megawatts of new solar resources “in construction in Nevada or under review for approval,” according to a statement from NV Energy. That’s a significant gain on the company’s 491 megawatts of universal solar resources currently serving customers.

Apple plans to dedicate up to 5 megawatts of the new power to a subscription solar program NV Energy has in the works for residential and commercial customers. [...]

Why Berkshire Is Betting on Airlines

So why the change of heart? It stemmed, in part, from a presentation that American Chief Executive Officer Doug Parker gave at an investor conference in March, according to people familiar with the matter who asked not to be identified discussing Berkshire’s strategy. [...]

The analysis prompted Ted Weschler, one of Buffett’s investing deputies, to take a closer look at airlines, the people said. Before joining Berkshire, Weschler’s hedge fund had backed Parker in his successful 2005 bid to combine America West with US Airways. Through that process, the two men built a rapport. [...]

New life, and a nod to the past, as National Indemnity building set to become apartments

Todd and Mary Heistand are drawn to old buildings. They’re fans of Omaha history. They remain riveted by the climb of the city’s most storied business persona, billionaire Warren Buffett.

So it didn’t take much convincing for the Heistands, who own NuStyle Development, to buy the midtown National Indemnity Co. building upon which grew much of Buffett’s Berkshire Hathaway empire.

Numerous structures around 3024 Harney St. were razed recently to make way for a separate and future mixed-use project. NuStyle’s intercession means the 65-year-old property, which until recently was home base for the 77-year-old insurance company, will survive as a converted 48-unit apartment complex to be called the NICO. [...]

Warren Buffett shares oracle's wisdom in HBO documentary

Warren Buffett has long been a source of fascination, and not just for Berkshire Hathaway investors who flock to hear what the "Oracle of Omaha" has to say about money. HBO thus provides a sort-of public service to posterity with "Becoming Warren Buffett," and those who watch the feature-length documentary will feel the richer for it. [...]

Director Peter Kunhardt has essentially sat back and let Buffett tell his own tale, with selected voices from his life and business career thrown in throughout as a garnish. Beyond direct-to-camera interviews, part of the material comes from Buffett addressing a group of high school kids, dispensing homespun wisdom life and money that's self-effacing but infused with considerable authority. [...]

"Becoming Warren Buffett," the Man, Not the Investor

The documentary, which was made with the cooperation of Buffett and his family, deals with Buffett the businessman and investor, but it’s Buffett the man and his complicated, and often difficult, relationships with the people he loved most that are the film’s real subject. [...]

There’s another paradox the film hints at, too: the qualities that made it challenging for Buffett to deal with people are the very qualities that made him such a brilliant investor. [...]

BUFFETT: What I tell people who are anti-immigration

Legendary investor Warren Buffett gave a simple argument for why he’s pro-immigration.

“Well, immigration, this country is built on it. I always say to people that are anti-immigration, ‘let’s put it in retroactively.’ And everybody leaves,” the 86-year-old billionaire said on a panel with his friend Bill Gates on Friday at Columbia University in New York. [...]

He later added: “This country has been blessed by immigrants. And you can take them from any country you want and they’ve come here and they’ve found something that’s unleashed the potential that the place where they left did not, and we’re the product of it.” [...]