Berkshire News Briefs - 6/5/17

Why Warren Buffett Took Out an Ad on the Same Page as One for a Strip Club

The billionaire took out a fine-print ad in the New York Daily News to say he’s seeking permission from the Federal Reserve to hold as much as 25 percent of the credit-card issuer’s shares. The notice appeared alongside listings for a Brooklyn co-op, a $2,500 Honda Accord and a liquor license application, plus a quarter-page ad for a strip joint.

Of course, Buffett was just obeying the law. Federal regulations require that shareholders seeking to boost their stakes in banks above certain thresholds publish announcements in “a newspaper of general circulation” in the community where the financial institution is based. (AmEx has its headquarters in lower Manhattan.) Still, in an era when so much information flows to investors through online feeds, the back pages of a metro can feel like a place to bury rather than reveal news. [...]

Berkshire Hathaway buys stake in Lanxess

Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway disclosed a stake in Germany’s Lanxess AG on May 19, worth roughly $179.85 million on the date of filing, a small fraction of his $96.5 billion cash hoard. [...]

Lanxess’ chemicals are used in an array of everyday and industrial products, such as biodiesel, spare wheels, paint pigments, leather manufacturing, white sugar, red wines and tires. Through a partnership with Saudi Arabian oil company Saudi Aramco, it also produces synthetic rubber.

The company has a 6.2 billion euro market cap, with revenue exceeding $7.6 billion in 2016, though revenue had been in decline for four straight years. On April 21, Lanxess completed the acquisition of U.S. company Chemtura, which produced 1.5 billion euro in annual sales, to stabilize the company, increase profitability and expand its footprint in the growth market of North America. [...]

Warren Buffet’s GenRe reinsurer gets India approval

General Re, which is a part of business guru Warren Buffett’s Berkshire Hathaway family of companies, has been given the final approval, called R3 from the Insurance Regulatory and Development Authority of India.

In a report, ieBusiness said that this is Berkshire’s second attempt to capture the Indian market. Berkshire’s initial venture was an online distribution that closed a couple of years after it launched in 2013.

Gen Re is different in that it will "deliver underwriting and risk management expertise locally rather than cross-border. It will facilitate an optimal business model," according to the report.

Gen Re’s area of interest is primarily on the life and health sector. It plans to expand in this segment but will also be looking to grow its presence in the property/ casualty reinsurance market in India which is a huge business opportunity. [...]

Meet Warren Buffett's 2 Trusted Stock Pickers

For much of the time Buffett has been at the helm of Berkshire Hathaway, he has managed the company's stock portfolio all by himself. However, that has changed in recent years with the hiring of two investment managers, Todd Combs and Ted Weschler, who were hired in 2010 and 2011, respectively.

Both men are hedge fund veterans with impressive track records. For example, Weschler's fund delivered 1,236% in gains in just 11 years before he closed it -- roughly 9 times the gain of Buffett's stock portfolio during the same time frame. [...]

Buffett’s Berkshire Hathaway could face fines over Texas dealership law

The billionaire’s holding company – Berkshire Hathaway Inc. – could be liable for civil fines in the range of $350,000 a day if an ongoing investigation by the Texas Department of Motor Vehicles determines it to be in violation of Texas law prohibiting the owner of an automobile manufacturer from also owning automobile dealerships in the state.

Berkshire Hathaway owns Berkshire Hathaway Automotive, which is based in Irving and operates 35 new-car dealerships in Texas, and it also owns Forest River Inc., an Indiana-based manufacturer of recreational vehicles. Owning both businesses potentially puts Berkshire Hathaway in violation of the Texas occupations code preventing ownership of a motor vehicle manufacturer and ownership of dealerships under a single corporate umbrella, even if the vehicles aren’t of the same type. [...]

Warren Buffett's cigar butt lesson: seeing value that others miss

While working in New York City, 20-something-year-old Buffett adopted Benjamin Graham’s practice of spotting companies that were slightly undervalued, such as having more in the bank account than they were worth on the stock market.

Anything with a bit of value that a smart investor could grab. In cigar terms, a mostly used butt ignored by others but with a few risk-free puffs left.

Looking beyond the unsavory image of smoking a used stogie (“The stub might be ugly and soggy,” Buffett once wrote), investors can embrace the idea of cigar butts as a lesson in recognizing value that others miss. Buffett used that ability to build up his personal investments in the 1950s before returning to Omaha and forming the partnerships that led to Berkshire. [...]

Two '90s Fan Favorites are Back at DQ

‘90s trends are in. Fashion, jewelry, shoes, toys and even hairstyles popular during that decade are part of a nostalgic revival taking place in 2017.

The Dairy Queen® system has now added treats to that list. The treat category leader, a Berkshire Hathaway company, is bringing back two popular fan favorites treats with Treatzza Pizza® on May 22 and Misty Slush® on June 26.

"There is an obvious resurgence in everything '90s and both Treatzza Pizza and Misty Slush were fan favorites from that era," said Barry Westrum, Executive Vice President of Marketing for American Dairy Queen Corporation (ADQ). "Those two treats were loved by fans from day one. They asked us to bring them back and we delivered." [...]

Warren Buffett lunch bidding quickly hits $1 million

An auction for well-heeled fans of Warren Buffett to eat lunch with the billionaire in support of a San Francisco charity that helps the homeless and impoverished got off to a fast start, with bidding quickly hitting seven figures.

The top bid was $1 million as of 1 p.m. EDT (1700 GMT) on Monday, and had been made within two minutes of the auction's Sunday night launch.

Bids often surge near the end of the eBay auction, which concludes on Friday at 10:30 p.m. EDT (230 GMT Saturday).

Buffett, the chairman of Berkshire Hathaway Inc, has raised $23.6 million in 17 years of auctions for Glide. [...]