Berkshire News Briefs - 8/14/18

Berkshire Hathaway's Operating Earnings Soar 67% in the Second Quarter

Berkshire Hathaway shareholders should be pleased with the company's earnings report for the second quarter. The Omaha-based conglomerate reported operating earnings of $6.9 billion, a 67% increase over the year-ago period, due primarily to higher profits in insurance and a lower tax rate thanks to last year's corporate tax cut. [...] Insurance -- $2.1 billion profit
Railroad -- $1.3 billion profit
Manufacturing, service, and retailing -- $2.1 billion profit
Utilities and energy -- $581 million profit
Finance and financial products -- $429 million profit

Improved Insurance Results Lift Berkshire's Earnings

As wide-moat Berkshire Hathaway reported second-quarter results that were basically in line with our expectations, we are leaving our $330,000 ($220) per Class A (B) share fair value estimate in place. Second-quarter (first-half) revenue, which now includes both unrealized and realized gains/losses from Berkshire's investments and derivatives portfolios, increased 19.3% (decreased 2.9%) to $68.6 ($119.0) billion. Excluding the impact of investment and derivative gains/losses and other adjustments, second-quarter (first-half) operating revenue increased 8.4% (decreased 0.8%) to $62.2 ($120.7) billion. [...]

Warren Buffett’s Berkshire Hathaway is climbing after announcing a $111 billion cash pile that's fueling speculation over its next big investment

The Omaha, Nebraska-based company also said it's sitting on a $111.1 billion nest egg of cash and cash equivalents, giving speculators ample fodder to theorize over Buffett’s next investment. Berkshire in July loosened its policy on share buybacks, which it says will be repurchased when their value is "below Berkshire’s intrinsic value," Chairman Charlie Munger said. [...]

Buffett has not made a big acquisition since January 2016 when Berkshire paid $32.1 billion for the aircraft-parts manufacturer Precision Castparts. Prior to that, he made headlines with his purchase of truck-stop chain Pilot Flying J in the fall of 2017. [...]

BNSF's second quarter OR comes in weakest of the class 1 railroads

For the second quarter of this year, the operating ratio posted by BNSF was 66.8%. That was worse than the 65.3% of the second quarter of 2017, but was an improvement over the 67.9% posted in the first quarter of this year. Virtually every railroad posted an improved OR between the first and second quarters of this year, as the tough weather of winter 2018 faded away to the milder conditoins of spring and early summer.

The BNSF statement does not discuss management's views of the OR. But an OR of 63% posted by Union Pacific brought a decidedly negative reaction when posted a few weeks ago, particularly in comparison to those of CSX and Canadian National, which were both sub-60%. Other class 1 railroads--Kansas City Southern, Norfolk Southern and Canadian Pacific--were all around 64%, and Canadian Pacific's number was negatively impacted by labor disruptions that resulted in just a small strike but the disruption created by two shutdowns. [...]

Buffett's Berkshire Offers Loan to Owner of Former Sears Properties

Billionaire Warren Buffett's Berkshire Hathaway Inc is loaning up to $2 billion to the company that owns some of what used to be some of Sears Holdings Corp's best real estate.

A subsidiary of Buffett's conglomerate, Berkshire Hathaway Life Insurance Company of Nebraska, is offering what is known as a term loan facility to a New York-based real estate investment trust that owns the struggling retailer's formerly owned retail space.

The real-estate trust, Seritage Growth Properties , was formed as a spin-out of some of Sears' 235 top properties into a publicly traded company of its own in 2015. The U.S. department store operator then leased back some of the properties.

Buffett was an early backer of Seritage. He is personally one of the real estate trust's top owners, holding nearly 6 percent of its outstanding shares. [...]

Pilot Flying J lays off 50 at corporate headquarters Monday

“As part of our strategic process, internationally respected consulting firm Deloitte recently created an analysis of our business as we embark on exciting new initiatives and areas of growth,” Pilot Flying J President Ken Parent said in a released statement. “With these new strategies, we will be re-allocating resources to shift attention to new opportunities and to streamline our operations. [...] We do remain focused on continuing to build upon our standards as an industry leader, having opened 15 new stores this year, building nine more, and creating 17 truck care centers as we look to more efficiently grow our company footprint. Last year Warren Buffett's Berkshire Hathaway bought a 38.6 percent stake in Pilot Flying J. The Haslam family retained a 50.1 percent stake, but by 2023, Omaha-based Berkshire Hathaway’s share will increase to 80 percent. [...]

Warren Buffett Is Ending His Meetings With College Students

Billionaire Warren Buffett is ending his long-standing practice of meeting with business students to answer their questions about investing and life.

The Omaha World-Herald reports Buffett's office has told the universities that have been bringing students to Omaha to meet with him for years that he will no longer host the groups. Last year, he met with students from 40 different universities.

One of Buffett's assistants, Joanne Manhart, says Berkshire Hathaway's chairman and CEO is cutting back on speaking engagements.

Manhart says Buffett's health wasn't a factor in the decision, but Buffett will turn 88 on Aug. 30. [...]

Berkshire News Briefs - 7/30/18

Warren Buffett has set the table for a big stock buyback at Berkshire Hathaway

In a press release late Tuesday, the company said that it has amended its policy regarding share repurchases, now allowing for repurchases of Berkshire stock to be made at the discretion of Buffett and vice chairman Charlie Munger so long as both men "believe that the repurchase price is below Berkshire’s intrinsic value, conservatively determined." [...]

Additionally, the company will not repurchase stock in excess of an amount that would reduce its cash and equivalent holdings to less than $20 billion. [...]

Atul Gawande starts first day as CEO of Amazon, Berkshire Hathaway and JPMorgan health venture

After months of anticipation and fanfare, Dr. Atul Gawande is starting his new job Monday as the CEO of the healthcare venture from Amazon, Berkshire Hathaway and JPMorgan Chase.

The healthcare community at large seems to be both skeptical and hopeful about the venture and Gawande’s appointment. His goal will be to create innovations in a burdened and dangerously large healthcare industry, lowering the cost of care while improving health outcomes. [...]

Berkshire's Todd Combs Aided Buffett in Showdown Over USG Transaction

Warren Buffett’s investing deputy, Todd Combs, helped the billionaire investor in his effort to exit Berkshire Hathaway Inc.’s stake in USG Corp. [...]

Combs’s role in the deal highlights his emergence as a top deputy for Buffett. Combs was selected for an investment role at Berkshire in 2010 and was later joined by Ted Weschler. The pair now oversee $25 billion, according to Berkshire’s annual letter released this year. Combs has increasingly been in the public spotlight with his appointment to JPMorgan Chase & Co.’s board in 2016 and his recent role helping to craft Berkshire’s health-care venture with JPMorgan and Amazon.com Inc. [...]

Meet the new CIO of BNSF Railway, and learn how technology will shape the railroad's future

[...] In the five years Murugappan has been with the company, he's driven a substantial amount of change in how BNSF utilizes technology.

He was part of the team that modernized the systems BNSF uses to inspect its assets. Predicting when the assets need maintenance is vital, and BNSF is using things like big data to make the process more efficient. [...]

Oil industry concerned over BNSF's move to limit retrofit tank cars

U.S. refiners and producers are seeking ways to counter efforts by BNSF Railway Co to limit use of retrofitted oil tank cars following an Iowa derailment last month, Reuters has learned.

The crackdown by the country’s largest railroad, owned by Warren Buffett’s Berkshire Hathaway Inc, could take thousands of tank cars off a key rail line at a time when producers and refiners are scrambling to hire them.

With latest OK, PacifiCorp moves ahead with wind, transmission additions

With the last necessary state-level regulatory approvals it needed now in hand, PacifiCorp said it will move forward in building 1,150 MW of wind projects and a high-voltage transmission line in Wyoming.

The utility's goal is to complete the three wind projects in 2020 to realize the full benefit of production tax credits. The new projects will increase the amount of owned and contracted wind capacity on PacifiCorp's system by more than 60% [...]

Warren Buffett donates $3.4 billion worth of Berkshire stock

Warren Buffett's annual donation of stock to five foundations is worth around $3.4 billion this year.

In a news release, Berkshire Hathaway said Buffett converted 11,867 of his Class A shares into around 17.8 million Class B shares to make the contributions.

Based on the schedule established in 2006, when Buffett pledged to give away the bulk of his fortune in the coming decades, the Bill and Melinda Gates Foundation will be getting a large majority of the shares. [...]

Berkshire News Briefs - 7/7/18

Warren Buffett is big winner after US bank stress tests

Warren Buffett’s Berkshire Hathaway is poised to net about $1.7bn in dividends after Wells Fargo and other banks in which he is a shareholder sailed through the Federal Reserve’s annual stress tests. [...]

Berkshire is one of the biggest single investors in the financial sector globally. It is the number one shareholder in lenders including Wells, Bank of America and American Express, and has sizeable stakes in several others. [...]

Amazon-Berkshire-JPMorgan Health Venture Takes Aim at Middlemen

The health venture established by Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co. will take aim at intermediaries in the health-care system as a part of a broad effort to reduce wasteful spending, the venture’s newly named chief executive officer said.

The still-unnamed business will initially seek to develop ways to improve care for the more than 1 million individuals who get health insurance from the three firms. Over time, the venture will make those innovations available freely to other companies, meaning that if it’s successful, its effects could be felt more broadly among the more than 150 million people in the U.S. who get their health insurance through work. [...]

Warren Buffett hands reins of World-Herald, other Berkshire Hathaway newspapers to Iowa firm Lee Enterprises

As the newspaper industry navigates a decline in print circulation and advertising revenue, hometown owner Warren Buffett is assigning the fate of his own BH Media Group to an out-of-town company.

Lee Enterprises of Davenport, Iowa, will manage The World-Herald and the 29 other Berkshire Hathaway-owned daily newspapers, the companies announced Tuesday in a five-year agreement that could bring Lee $50 million over five years.

Berkshire Hathaway's Acquisitive Clayton Lands Arbor Homes

After an 18-month courtship, Maryville, Tenn-based Clayton Properties Group closed on the acquisition of Indianapolis' No. 1-ranked home building firm, Arbor Homes, adding to its 8-state map a 24-year old private builder whose signature stock in trade is a rarity these days: the profitable below-$200,000 site-built home.

The 7th regional site-build jewel in the Clayton crown adds to its suddenly hefty portfolio of regional firms--on pace to deliver as many as 4,500 homes in 2018--gives the Berkshire Hathaway unit fresh headway and a platform to launch further inroads in its goal to provide people priced out of many housing markets with an attainable path to homeownership. [...]

BNSF estimates 230,000 gallons of oil spilled in NW Iowa

Iowa Gov. Kim Reynolds visited Saturday to authorities assigned to clean up 230,000 gallons of oil that spilled Friday morning into the Little Rock River near Doon in northwest Iowa.

The spill was caused by a derailed BNSF train. [...]

The company reported later Saturday that about 100,000 gallons of the 230,000 gallons of spilled oil had been contained, and that oil would be removed from the immediate area with oil-water separators. [...]

How Warren Buffett and Bill Gates ended up walking into an Old Market store

Warren Buffett and Bill Gates didn’t just wander into an Old Market nostalgia store the day after the Berkshire Hathaway shareholders meeting in May, with “Little Brown Jug” playing in the background.

No, some of Gates’ staffers had been to Omaha in the past and were fascinated by Larry Richling’s Fairmont Antiques & Mercantile store/Hollywood Candy, 1209 Jackson St., and its combination of candy store, memorabilia collections, soda fountain and more.

The Gates group decided that it would be just the place for an episode of Gates’ video blog, showing the two friends having a good ‘ol time in Omaha. [...]

Berkshire News Briefs - 6/20/18

Buffett, Bezos, Dimon appoint Dr. Atul Gawande as CEO of their newly formed health-care company

Dr. Atul Gawande will lead the joint health-care venture between Amazon, J.P. Morgan and Berkshire Hathaway, the three companies announced Wednesday.

Berkshire Hathaway CEO Warren Buffett, J.P. Morgan CEO Jamie Dimon and Amazon CEO Jeff Bezos announced a partnership in January to tackle rising health-care costs.

They will form a new company for the venture, which will be headquartered in Boston, a hub for biotechnology and medical research. It will be "free from profit-making incentives and constraints. [...]

USG takes $7 billion offer from Knauf after spurned advances

Sheetrock maker USG Corp accepted a $7 billion cash offer from German construction products maker Gebr Knauf KG on Monday after three months of back-and-forth negotiations that began when longtime USG shareholder Warren Buffett teamed up with the German bidder to sell his stake.

The companies agreed to a $44 per share deal, a bump from the $42 initially offered by the private German family-owned company in late March. Buffett’s Berkshire Hathaway Inc had a 31 percent stake in USG and has said previously it would offload its stake. [...]

The Berkshire Hathaway investment dates back to 2001, when Buffett helped the company out of bankruptcy with a loan that was later converted to a stake in the company’s equity so large that a wholesale acquisition of the entire company remained one of the few ways for Berkshire to exit the investment without pushing down the share price. [...]

Buffett, Dimon urge end to quarterly profit forecasts

Investor Warren Buffett and JP Morgan Chase CEO Jamie Dimon are encouraging public companies to stop predicting their quarterly earnings and focus on long-term goals.

The two executives said on CNBC Thursday that companies that focus on hitting their quarterly numbers may do things that hurt them in the future, such as delaying investments or changing when certain gains are recorded. [...]

Grainger Is Caught Between an Amazon and a Buffett

[...] Intriguingly, Grainger may now have other competition via Warren Buffett's Berkshire Hathaway Inc., which last year acquired Production Tool Supply. The deal wasn't publicized, but the company has since used it to launch Berkshire eSupply, a wholesale service business that aims to provide smaller distributors with access to e-commerce platforms, fulfillment services and a greater product offering than they’d otherwise be able to support. [...]

Warren Buffet visits metro to announce new GEICO service center, 500 new jobs in Lenexa

Warren Buffett is bringing what he calls his favorite company to [the Kansas City metro area]. GEICO Insurance will open a service center in Lenexa, bringing 500 jobs.

Kansas Gov. Jeff Colyer and billionaire CEO Warren Buffett joined representatives from the city of Lenexa, Johnson County and Geico on Tuesday morning to make the announcement. [...]

Lenexa city leaders said the city did not offer any financial incentives to lure GEICO but said the state did offer some incentives. [...]

Warren Buffett helps Israel sell $80 million in bonds at Omaha dinner

Warren Buffett hosted a dinner in Omaha this week for investors who bought $80 million worth of Israel Bonds, a source of revenue for a country where Berkshire Hathaway Inc. has a major investment.

The dinner at the Fred & Pamela Buffett Cancer Center was the second time Buffett has helped the Israeli group, the Development Corporation for Israel, formed in 1951 to raise money to build Israel’s economy. Since then, the bonds have raised about $41 billion.

Giving it Away: The Other Buffett Family Business

[...] Now 64 with two grown children, Susie Buffett has a more-than-full-time day job. Her Sherwood Foundation, formerly known as the Susan A. Buffett Foundation, gave away $141 million in 2016, according to the most recent IRS filing, funding dozens of nonprofit initiatives in education, social justice, and poverty alleviation. That’s everything from a local ballet company to Big Brothers/Big Sisters to a black police-officers group to Omaha’s Bike Union—and those are just the Bs. Each of these groups is carefully evaluated before the first check is cut. “I don’t want to come off like I’m complaining,” Buffett says. “I am grateful beyond words for what we get to do. But it’s not so easy to try to do it well, and we are trying to do it well.” [...]

Two billionaires walk into an Omaha Dairy Queen. A blizzard of excitement ensues

Omaha did a double-take when folks there spotted Warren Buffett and Mark Cuban eating lunch Monday in Buffett's hometown at the Dairy Queen near 72nd and Q streets. [...] Cuban, the owner of the Dallas Mavericks, memorialized his trip to the land of Dilly Bars on his Instagram, where he shared a photo of the two men. [...]

The Omaha World-Herald got the scoop on at least one topic that came up over lunch — basketball. [...] Buffett's office would not disclose what else the two men talked about, the newspaper reported. [...]

Berkshire Hathaway's Stealth Top Ten Holding

Here's the most recent published list of Berkshire Hathaway's top investment holdings:

Company       % of Port
-------       ---------
Apple         14.63
Wells Fargo   14.54
Kraft Heinz   13.24
Bank of Amer  10.48
Coca Cola      9.60
Amer Express   7.87
Phillips 66    4.27
US Bancorp     2.44

Over the past few years, Berkshire has been making a number of smaller investments in John Malone's media empire companies. (These positions are usually attributed to Ted Weschler by the financial media, though nobody knows for sure.) Each one is small, but they add up when you put them together. While Buffett's style is to roll every subsidiary up into a huge conglomerate, Malone's style is to break his empire apart into many smaller, publicly-traded entities.

Company             % of Port
-------             ---------
Charter Comm        1.49
Liberty SiriusXM C  0.64
Sirius XM Holdings  0.39
Liberty Global A    0.38
Liberty SiriusXM A  0.31
Liberty Global C    0.13
Liberty Lilac A     0.03
Liberty Lilac C     0.01
                    ----
Total               3.38

Technically, Sirius XM (SIRI) might not be on the list of Malone companies, but Liberty SiriusXM controls 69% of SiriusXM, so I'm counting it.

If there was one John Malone company the way there is one Warren Buffett company, it would make up 3.38% of Berkshire Hathaway's portfolio, making it the eighth largest holding.

Berkshire News Briefs - 2/23/18

Berkshire Hathaway released its quarterly 13F statement, detailing its stock holdings as of Dec. 31, 2017.

Here's a summary from Dataroma.

Buffett's Bumpy Ride With IBM Draws to a Close With Stock Sales

Warren Buffett is just about done with International Business Machines Corp.

His conglomerate, Berkshire Hathaway Inc., reported that it cut its stake in Big Blue by 94 percent during the fourth quarter, essentially drawing to a close a rare blemish on his investing record. [...]

IBM was always a curiosity for Buffett followers. He’d spent years telling them that technology companies were outside his area of expertise then plowed more than $10 billion into the company in 2011. [...]

Warren Buffett's Berkshire Hathaway loves loathed Israeli drug stock Teva

After news hit Wednesday that Warren Buffett's Berkshire Hathaway had made a $358 million investment in Israel-based drug company Teva Pharmaceutical Industries, a skepticism lingered even as shares of the heavily shorted stock soared.

What does Berkshire Hathaway see in an out-of-favor drug stock that has languished — Teva shares have declined by roughly half in the past year — that the rest of Wall Street doesn't?

Maybe nothing special. And the size of the bet — at $358 million — is within the discretionary stock selling mandates of Buffett's hedge fund lieutenants, Ted Weschler and Todd Combs. But the bet is consistent with Buffett's long history of value investing, albeit with a twist. [...]

Phillips 66 agrees to repurchase shares from Berkshire Hathaway subsidiary

Phillips 66 said it will buy back shares worth $3.28 billion from a Berkshire Hathaway subsidiary, in a transaction that could ease regulatory pressure for Berkshire, the conglomerate run by Warren Buffett.

Phillips 66 will repurchase 35 million shares for $93.725 per share. The buyback will bring Berkshire's stake in Phillips 66 to slightly below 10 percent. [...]

Buffett's BNSF railroad eyes blockchain for shipping freight

BNSF Railway Co, a unit of the billionaire’s conglomerate Berkshire Hathaway Inc (BRKa.N), on Monday said it has become the first major U.S. railroad to join the Blockchain in Transport Alliance.

The alliance is a group of more than 200 companies examining how best to use the digital ledger technology behind bitcoin and other cryptocurrencies in the transport industry.

It hopes to establish blockchain standards in such areas as vehicle maintenance, quality control and fraud prevention.

Among its members are shippers FedEx Corp and United Parcel Service Inc, tire maker Bridgestone Corp, German software company SAP SE, and some banks and brokers [...]

Buffett’s Berkshire Hathaway Is Cutting More Jobs Across Newspaper Group

BH Media Group is reducing staff by 148 employees and not filling 101 vacant positions, representing a total of about 6 percent of its workforce, the company said Tuesday in a statement. The organization is seeking to trim expenses because of declining advertising revenue.

Among the cutbacks, Buffett’s hometown newspaper, the Omaha World-Herald, is eliminating 43 positions including vacant ones, the paper reported on its website Tuesday. Eleven newsroom employees were among those let go. [...]

Buffett's Business Wire suffers cyberattack

Business Wire, the corporate news release distributor owned by Warren Buffett's Berkshire Hathaway Inc, on Tuesday said it has been suffering for nearly a week from a cyberattack designed to disable it.

The company said it has been experiencing a "directed and persistent" denial of service attack since Jan. 31, though customer information has not been compromised.

"Our website slowed down," said Neil Hershberg, a senior vice president at Business Wire, in a phone interview. "At no point were clients unable to get our releases to us. Our distribution network was totally unaffected by this attack." [...]

Warren Buffett is retiring from Kraft Heinz board

Warren Buffett is retiring from the board of directors of Kraft Heinz, a subsidiary of his company Berkshire Hathaway.

"Mr. Buffett decided to retire from the board as he decreases his travel commitments," Kraft Heinz said in a press release on Friday.

The 87-year-old billionaire will retire after his term ends at the Kraft Heinz annual meeting of stockholders, the company said. [...]

Berkshire News Briefs - 2/3/18

Amazon, Berkshire Hathaway, and JPMorgan are creating a new healthcare company to tackle the 'hungry tapeworm' of rising costs

Amazon, Berkshire Hathaway, and JPMorgan Chase are creating a new business designed to lower healthcare costs for US-based employees in a move that could shake up the managed-care industry.

The companies were not specific about what kind of enterprise they aim to create, noting only that they wanted to improve employee satisfaction while reducing costs, according to a joint release. Still, the news was enough to send shares of managed-care providers lower. [...]

Berkshire Hathaway Utility Unit Shuffles Top Executives

Berkshire Hathaway is shuffling the executives in charge of its utility unit after promoting Greg Abel to oversee all of Berkshire's non-insurance businesses.

Abel's promotion to vice chairman of Berkshire Hathaway was announced Wednesday. Following that move, Berkshire promoted MidAmerican Energy CEO William Fehrman to replace Abel at Berkshire Hathaway Energy. [...]

Berkshire Hathaway Energy includes MidAmerican, PacifiCorp, NV Energy and several other utilities.

With Fehrman moving up to oversee Berkshire Hathaway Energy, Des Moines, Iowa-based MidAmerican promoted Adam Wright to be its new CEO. [...]

Ajit Jain Reports $109 Million Stake in Berkshire Hathaway

One of Warren Buffett’s top deputies has amassed a stake in Berkshire Hathaway Inc. valued at more than $100 million.

Ajit Jain, the insurance executive who was named a vice chairman of Buffett’s conglomerate earlier this month, disclosed the holdings in a regulatory filing on Thursday. A large portion of the stake is held by a foundation and trusts in his family’s name, and his wife also owns some of the shares. Jain directly controls about $22 million of the stock. [...]

Potential Buffett Heir Reveals What May Be Just the Start of His Berkshire Stake

[...] A regulatory filing on Friday shows Abel indirectly holds about $2.1 million of stock in the Omaha, Nebraska-based company. But a separate disclosure last year noted an agreement that could catapult his holdings higher. That filing showed he could convert a stake in Berkshire’s energy business into more than $400 million of stock in the conglomerate.

The new filing was triggered by his promotion last week to vice chairman for non-insurance operations at Berkshire, a position that will put him in charge of businesses ranging from BNSF Railway to Dairy Queen. [...]

Warren Buffett’s Berkshire Hathaway had an amazing 2017. 2018 isn’t looking too bad, either.

[...] The Jain and Abel ascension followed a momentous 2017 for Berkshire Hathaway that saw the company’s “A” shares break $300,000 per share. It closed at $320,000 on Thursday, but you can still buy the Berkshire “baby B” shares for $213.

Also last year, Berkshire’s cash-on-hand surpassed $100 billion as Buffett/Munger scurried to find new investments. The Republican tax plan that became law late last month gifted a one-time, $37 billion windfall to Berkshire shareholders, which helped raise the stock price.

Not least of all, Buffett won a $1 million, decade-old bet with a hedge-fund bigwig. Buffett said he could do better than a portfolio of hedge funds by investing in boring, index fund over 10 years. Buffett gave the money to Girls Inc., one of his favorite charities.

So where does Berkshire Hathaway go from here? [...]

Iscar Wants to Expand Galilee Factory, but It Can’t Find Workers

Iscar, the Israeli maker of machine tools owned by U.S. billionaire investor Warren Buffett, wanted to build an additional plant at its headquarters in the Galilee town of Tefen. Eli Cohen, the minister of economy and industry, was there to help with an offer of a 50-dunam (12.5-acre) site at no cost.

Cohen wanted to ensure that as Iscar grows, it grows in Israel, rather than just overseas. But it doesn’t look like the plant will be built after all, and that’s because there aren’t enough skilled workers to hire, sources close to the company told TheMarker. [...]

New headquaters, expanding workforce at Guard

Berkshire Hathaway Guard Insurance, having moved its headquarters to downtown Wilkes-Barre’s Public Square, is now in the process of filling about 170 jobs it says have been made possible by the move.

The project, which began late last year, is well underway with many departments having moved to the building at 39 Public Square, which Westguard Insurance Co. purchased for just over $5 million in November, according to Guard officials. [...]

GUARD’s annual sales have grown sixfold to approximately $1.2 billion since 2007, and the insurer had run out of space for its more than 675 employees, most of them working in five different spots in the downtown.

Wilkes-Barre, wanting to retain the company, facilitated a $1 million Local Share Account grant to help the project. The state added another $855,000 grant. [...]

Your Next Running Shoes Will Be Custom-Built for You

[...] biomechanical assessment, part of a service and philosophy that Brooks calls Run Signature, has long been in use by the company to help guide its customers to the best-fitting shoe in its arsenal. But the options so far have been limited to what Brooks can sell off the shelf.

Now Brooks, the top brand in specialty running with 25% of the shoe market, according to the NPD Group, wants to take that a step further. The company is working with tech stalwart HP to marry a runner’s gait information with a three-dimensional foot scan generated by HP’s new FitStation device. HP’s technology can measure pressure along the foot as it lands in each stride. The data help Brooks determine how much polyurethane to inject in a shoe’s sole to achieve the right density for as many as 30 zones of your foot.

At a time when Adidas, Nike, and other sportswear companies limit footwear customization to color and material, Berkshire Hathaway–owned Brooks seeks to create running shoes with customized performance elements as well as build data-rich digital customer profiles. [...]

Philanthropist Susie Buffett to help launch Navy's newest littoral combat ship into fleet

The Navy's newest Independence-class littoral combat ship will join the nation's fleet Saturday with a commissioning ceremony in San Diego, and the future USS Omaha has close ties to the family of Berkshire Hathaway Chairman and CEO Warren Buffett.

Susie Buffett, an Omaha philanthropist and the billionaire's daughter, is serving as the ship's sponsor. [...]

Warren Buffett is expected to attend along with other prominent leaders from Nebraska. [...]

Back in 2015, she formally christened the future USS Omaha at the Austal USA shipyard in Mobile, Alabama, with a bottle of bubbly. [...]

Berkshire News Briefs - 1/10/18

Berkshire Hathaway Inc. News Release

On January 9, 2018, Berkshire Hathaway Inc.’s Board of Directors voted to increase the number of directors comprising the entire Board of Directors from twelve to fourteen. Gregory E. Abel and Ajit Jain were then elected to serve as Directors to fill the resulting vacancies on the Board of Directors. In connection with their election to the Board of Directors, Warren E. Buffett, Berkshire Hathaway’s Chairman and CEO, appointed Mr. Abel to be Berkshire Hathaway’s Vice Chairman – Non-Insurance Business Operations and Mr. Jain to be its Vice Chairman – Insurance Operations. [...]

Warren Buffett: 'I feel terrific,' and moves toward succession are not related to my health

Warren Buffett told CNBC on Wednesday the appointment of two new vice chairs at Berkshire Hathaway is "part of a movement to succession over time," and has nothing to do with any change in his health. [...]

"They are the key figures," Buffett said. "They both have Berkshire in their blood."

"There is not a horse race at all," he added. "They both have their areas of specialty."

Buffett and his 94-year-old longtime partner, Charlie Munger, are staying in their respective positions as chairman and CEO and vice chairman. [...]

Speculation had centered on Abel and Jain as possible successors, and Buffett told CNBC that elevating them would have also made sense five years ago. He said he decided about six weeks ago to make the move, saying to himself, "why not now." [...]

It was Munger's idea for Abel, Jain, and himself to all have vice chair titles, Buffett said. [...]

Warren Buffett wins $1M bet against hedge funds and gives it to girls' charity

In 2007, the famed billionaire investor made a $1 million bet that an S&P 500 stock index fund would outperform a basket of hedge funds over the course of a decade.

The index fund returned 7.1% compounded annually over the 10-year period, easily beating the 2.2% average return of a basket of funds picked by asset manager Protégé Partners, according to The Wall Street Journal.

Buffett promised to give the prize money to his local affiliate of Girls Inc., a non-profit organization that provides programs designed to inspire "all girls to be strong, smart and bold." [...]

Berkshire Hathaway could gain $37 billion from GOP tax cuts

Berkshire Hathaway, the conglomerate led by Warren Buffett, stands to gain an potential $37 billion from the GOP's tax cuts, according to new research from Barclays.

"We now estimate Berkshire Hathaway's 4Q book value could be boosted by about $37 billion resulting from the US corporate tax reform due to a decline in its deferred tax liability," analysts at the firm wrote in a report on Monday.

The authors also said the reduction in the corporate tax rate could lift the company's earnings power by as much as 12 percent "in 2018 and beyond," and it could repatriate some foreign profits and use it for investment. [...]

Warren Buffett Shares the Secrets to Wealth in America

I have good news. First, most American children are going to live far better than their parents did. Second, large gains in the living standards of Americans will continue for many generations to come. [...]

This game of economic miracles is in its early innings. Americans will benefit from far more and better "stuff" in the future. The challenge will be to have this bounty deliver a better life to the disrupted as well as to the disrupters. And on this matter, many Americans are justifiably worried. [...]

Warren Buffett's Love for Burger Joints Is Landing Him Billions of Dollars

The financing deal gives RBI the option to redeem some, or all, of Berkshire's preferred stock. It indicated it would fully redeem the stake, plus dividends that have accrued from it. The redemption rate alone is 9.9%, which means Buffett is getting an effective interest payment of $297 million on the original $3 billion in financing.

On top of that are the dividends, which are hefty at 9% per year. This adds $810 million onto his return, which doesn't factor "an additional amount, if necessary, to produce an after-tax yield as if the dividends were paid by a U.S.-based company," according to a recent Berkshire regulatory filing.

On top of that, Buffett's investment vehicle still owns that RBI stake derived from the warrant. At the most recent closing stock price, that holding would be worth over $523 million, even after we net out the exercise price. [...]

Brooks Needs Runners Who Hate to Run

Within a few years of Weber taking over, Brooks became the best-selling brand at specialty stores. Then Fruit of the Loom Inc., which is owned by Berkshire Hathaway Inc., bought the company in 2006. Brooks flew under Berkshire’s radar for a couple of years until Todd Combs, one of Warren Buffett’s investment managers, brought it to his attention. Combs is a triathlete; Ted Weschler, another top Berkshire investment manager, is a marathoner. Buffett may not have realized it, Combs said, but this random shoe company was doubling in size every three years.

Soon after, Buffett met with Weber, who explained his all-­running-only-running strategy. Buffett liked the idea of focusing on a niche market. “He thinks long-term,” Weber says of Buffett, who told him: “Whatever you do, just make the brand stronger.”

So that’s what Weber did. Buffett was so pleased by Brooks’s success that in 2012 he spun it off from Fruit of the Loom, which didn’t have footwear experience. As Berkshire holdings go, Brooks is small, accounting for a sliver of the $24 billion it made in 2016. But for Buffett, it appears to be a source of pride. [...]

Q&A with Lubrizol’s Eric R. Schnur

Q: There are numerous references in company literature to values handed down from its founders. What are those values?

A: Fundamentally, our corporate philosophy comes down to three things. It’s about people and how important they are. I talk to employees at all of our major locations and ask them about the company, its culture and what they would never want to change. The first answer always is our focus on people. They feel the company really cares about people. This is something I felt walking through the door that first day at the pilot plant. There is a focus on safety. You cannot care deeply about people and expect them to work in an unsafe environment. We operate chemical plants. Those can be unsafe environments if you don’t invest in them and have policies and procedures. The last is business and corporate ethics.. Never do anything illegal. When you have thousands of people around the world, that doesn’t mean everyone is acting perfectly every single moment of the day. But we are vigilant about it. We do things the right way. It isn’t just a slogan. We want to move faster and drive quicker decision making, all the things companies our size talk about. But the focus always is on people, ethics and safety. [...]

Berkshire Hathaway subsidiary to remove idle crude oil rail tankers from New York forest preserve after governor's objections

A Berkshire Hathaway subsidiary has decided to remove its idle crude oil rail tankers from a New York forest preserve after the state’s governor objected to their storage there.

Chicago-based Union Tank Car said Tuesday that all 65 cars it has in the Adirondack Forest in northeast New York will be removed by mid-January. [...]

Russell Brands announces layoffs

A total of 75 permanent employees of Russell Brands LLC were notified Friday that they would be laid off. [...] The reduction in force is expected to drop the number of people employed at what is now primarily a distribution center down to around 250 people. [...]

Just six years ago, Russell Brands still had 750 employees in Alexander City. Earlier this year when it was announced that the company would cease manufacturing of athletic team uniforms, company officials said it was unclear how the move would impact the estimated 500 Russell employees who were working in Alexander City at that time. [...]

Oriental Trading CEO who turned company into profitable part of Berkshire dies at 56

Sam Taylor, who guided Oriental Trading Co. from bankruptcy into one of Berkshire Hathaway Inc.’s local success stories, died more than a year after being diagnosed with a lethal form of brain cancer. He was 56. [...]

Taylor came to Omaha with his family — wife Stephanie and daughters Ashton, Celine and Mallory — in May 2008 to take over the troubled company, which had been saddled with high debt through a series of buyouts and refinancings. [...]

With the turnaround underway, in 2012 Taylor successfully pitched Oriental Trading to Berkshire CEO Warren Buffett, explaining how its La Vista distribution system, catalogs, online sales system and staff could become a profitable part of Berkshire. [...]