Berkshire News Briefs - 5/17/17

Berkshire’s Earnings Hit Speed Bump on Insurance Businesses

Warren Buffett’s Berkshire Hathaway Inc. hit a speed bump in the first quarter as insurance units posted an underwriting loss, overshadowing gains at the company’s railroad and energy business. [...]

First-quarter operating profit slipped 4.8 percent to $3.56 billion, the company said Friday in a statement. [...]

Berkshire’s war chest totaled $96.5 billion at the end of the first quarter, a record. [...]

Book value, a measure of assets minus liabilities that’s closely tracked by investors, rose 3.5 percent in the first quarter to $178,073 per share. [...]

Berkshire Hathaway press release on 1Q17 Earnings

Berkshire Cuts 21st Century Fox Stake, Adjusts Airline Bets

Warren Buffett’s Berkshire Hathaway Inc. spent the first quarter fine-tuning its investments in airlines and technology companies, and retreating from 21st Century Fox Inc.

In a filing Monday detailing its stock portfolio at the end of the quarter, Berkshire no longer listed Fox. Holdings in American Airlines Group Inc. and Southwest Airlines Co. increased, while a stake in Delta Air Lines Inc. was reduced. Buffett previously disclosed that he boosted a bet on Apple Inc. in the first quarter as he pulled back from International Business Machines Corp. [...]

The new 13F filing is here. Berkshire Hathaway's updated stock holdings in an easy to read format from Dataroma is here.

5 Key Takeaways From Today's Berkshire Hathaway Meeting

So, what would prompt Berkshire to start putting its cash to work? Essentially, Buffett said that Berkshire wants to acquire businesses that will have a competitive advantage over the next five to 10 years, whose management teams are strong, and that are offered at a fair price. [...]

Buffett also said that if there's a persistent shortage of attractive investment opportunities, Berkshire may eventually choose to increase its buyback criteria of 120% of book value or less, but he is still optimistic about finding ways to deploy Berkshire's capital. [...]

Here's the best wit and wisdom from Warren Buffett at this year's Berkshire Hathaway annual meeting

Buffett and long-time business partner Charlie Munger spoke for hours at the Berkshire Hathaway annual meeting Saturday in Omaha.

The pair frequently elicited laughter from the crowd of 40,000 by answering questions from shareholders and journalists with their usual folksy sense of humor and wisdom. [...]

A Comparison of Berkshire Hathaway Class A and Class B Shares

[...] From these tables, institutions and mutual fund holders own only 27% of the A shares, but 64% of the B shares. That can be explained by insiders and 5% owners holding 41% of the A shares and less than 1% of the B shares. According to Berkshire’s Notice of Annual Meeting of Shareholders May 6, 2017, Warren Buffett beneficially owned 38.3% of the A shares as of March 8, 2017. The insiders primarily accumulated their shares in the 1960’s and 1970’s when Berkshire traded at less than $100 per share.

It should be noted, however, that these tables imply that individuals (other than insiders) hold about 31% of the A shares and 35% of the B shares. [...]

Clayton Homes unveils new tiny home series

Clayton, a Berkshire Hathaway company and a builder of manufactured, modular and site-built homes, introduced its new tiny homes collection Saturday at the Berkshire Hathaway’s Annual Shareholders Meeting in Omaha, Nebraska. [...]

The homes are just 464 square feet and offer 270 degrees of window views. They have vaulted ceilings to give the homes a larger feel, and the master bedroom fits a queen-size bed and a full-height closet. [...]

Even in Texas, sometimes the billionaires lose

A bill that would carve out a loophole for Buffett’s chain of auto-dealerships in Texas — put on the fast track last month right after the billionaire’s meetings with Gov. Greg Abbott and Lt. Gov. Dan Patrick — ran into a wall of opposition from prominent Tea Party activists. They burned up the phone lines at the Capitol and publicly criticized what they saw as special treatment for the wealthy and connected.

Not long after those activists spoke out against the carve-out legislation in an open letter to the billionaire, Patrick pulled the “Buffett Bill” off the Texas Senate agenda, effectively killing it for now [...]

John Oliver eviscerates one of Warren Buffett's favorite companies

One of Warren Buffett's favorite stocks has just been attacked by HBO comedian John Oliver.

DaVita operates dialysis centers, and Buffett's Berkshire Hathaway owns a nearly 20% stake in the company. It was the subject of a scathing 24-minute long segment on Sunday's "Last Week Tonight."

Oliver accuses DaVita of pushing patients to continue receiving long and expensive dialysis treatments instead of having kidney transplants, which could eliminate the need for dialysis.

Berkshire News Briefs - 12/2/16

Berkshire Hathaway filed their quarterly 13F last month, detailing their investment portfolio make-up as of September 30. You can see all the buys and sells highlighted in this chart of BRK's current holdings.

The big news was that Buffett has bought stock in all four major airlines. American, Delta, and United-Continental are listed in the SEC filing; Buffett also told CNBC that he has bought a stake in Southwest in October (after the Sept. 30 SEC cut-off for the 13F).

Berkshire Hathaway also sold 100% of its stake in Suncor Energy (SU) and Media General (MEG). Other big moves (+/- more than 10%) are reductions in Liberty Media (LMCA -48%, LMCK -36%), Kinder Morgan (KMI -25%), and Walmart (WMT -68%), and an addition to Liberty SiriusXM (LBXMK +11%).

Buffett's Berkshire takes stakes in four major airlines

Berkshire Hathaway's just released SEC filings show that the company has taken a stake in three of the four major airline companies — American Airlines, United Continental Holdings and Delta Air Lines.

But CNBC can report exclusively that Berkshire also has taken a stake in the fourth major carrier, Southwest Airlines.

The move into airlines is a shocking reversal for Warren Buffett, who has shunned the industry for decades following a volatile investment he made in US Airways back in 1989.

Warren Buffett's Berkshire Hathaway Is Cashing Out of Walmart

Warren Buffett has almost completely checked out of Walmart. After trimming some of his stake in the retailer earlier this year, Buffett slashed his remaining Walmart stock by nearly 70% as the discount store announced its controversial deal to buy e-commerce startup Jet.com. Buffett’s stake in Walmart is now worth less than $1 billion, down from nearly $3 billion in the middle of this year, according to new securities filings. [...]

Warren Buffett's Berkshire Hathaway Bets Big on Airlines at the Strangest Time

For two decades, Warren Buffett has been decrying airlines as terrible investments. Indeed, Buffett famously observed that a far-sighted capitalist should have shot down Orville Wright's plane at Kitty Hawk to save future investors the billions of dollars they would go on to lose in the airline business.

Yet in a stunning reversal, Berkshire Hathaway bought shares of the three largest U.S. airlines last quarter: American Airlines, Delta Air Lines, and United Continental. (Buffett revealed on Monday that Berkshire Hathaway went on to purchase shares of Southwest Airlines in October.)

This is strange timing for Berkshire Hathaway to reverse its stance on airline stocks, especially American, Delta, and United. Profit margins appear to have peaked at all three companies. [...]

Nevada votes to end NV Energy monopoly

Receiving almost three quarters of the votes, Nevada voters have passed a ballot measure that aims to break up NV Energy’s monopoly and liberalise the electricity market to more competition.

Known as the Energy Choice Initiative or Question 3 on a ballot approved on Tuesday, the news is a victory for solar as this is a significant move to deregulation of the state’s public utility. [...]

The measure was initiated in part by large companies, including casinos, wishing to break free from the state utility and find their own providers. [...]

That Big Berkshire Hathaway Railroad Deal

It's been seven years since Buffett's Berkshire Hathaway Inc. announced its biggest deal to date -- the $35 billion-plus purchase of Burlington Northern Santa Fe Corp. The Oracle of Omaha had the foresight to place his "all-in wager on the economic future of the United States" just as the nation emerged from a recession, and has reaped the benefits. [...]

BNSF's net income has more than doubled since 2009, which has in turn driven Berkshire Hathaway's earnings higher. Berkshire has already earned more than $22 billion in dividends from BNSF. In other words, it has already recouped basically all the cash used to finance the deal, which is a rare feat in itself. [...]

Buffett throws weight behind new Wells chief

Warren Buffett has thrown his weight behind scandal-hit Wells Fargo, saying it is “a great bank that made a terrible mistake” whose new chief executive Tim Sloan is “exactly right” for the top job.

Breaking his months-long silence on the debacle, the head of Berkshire Hathaway, the bank’s biggest shareholder, confirmed he has not sold any shares after the scandal erupted over sales practices. [...]

Duracell closing Cleveland, Tenn., packing plant by 2018

Battery maker Duracell plans to take some juice out of its Cleveland, Tenn., workforce, closing its packing plant by 2018 and cutting about 140 jobs. The move by Duracell, maker of the well-known "coppertop" battery, will not impact its manufacturing operation in Cleveland, where nearly 150 people are employed making C and D batteries, the company said. [...]

The announcement is the second major consolidation by Duracell since it was purchased by Warren Buffett's Berkshire Hathaway early this year. This summer, Duracell revealed it plans to close a battery-making plant in South Carolina that employs 430 people. The shutdown of the Lancaster, S.C., factory that makes AA batteries will begin in March and should be complete by the middle of 2019, Duracell said. [...]

Warren Buffett’s Meeting with University of Maryland MBA/MS Students – November 18, 2016

Berkshire has only 25 people at headquarters, but 360,000 employees. The managers of Berkshire’s 70 businesses choose their own people. The qualities they look for are intelligence, energy, and integrity. But the most important quality in a manager is having a passion for the business. It is not IQ but passion for their businesses that make Berkshire’s 70 managers stand out. When WB was 23 years old, he was rejected by Ben Graham for a job. Years later he received a letter saying the “next time you come to NY stop by my office”. WB went the next day. He never asked about pay. You should take a job that you would take if you didn’t need a job. [...]

Jokes in Warren Buffett’s Shareholder Letters

We all know Warren Buffett (Trades, Portfolio) is the greatest investor ever. He built his wealth buying stocks that sold below their intrinsic value. He is also an avid writer. He is very good at communicating his thoughts through conversational and humorous language and frequently tells jokes. These are some of the jokes he has told in his shareholder letters. [...]