Berkshire News Briefs - 12/27/17

A Year In Berkshire Hathaway's Tech Stocks

Though he has since changed his mind, Buffett famously avoided tech stocks for more than the first 30 years of his investing career. In an interview from the mid-1980s, Buffett said that the technological revolution had “gone right past him,” and he hadn’t found any tech companies he understood.

“It’s OK with me. I don’t have to make money in every game,” he said.

In recent years, Berkshire has made room for some of the sector’s companies, making it the portfolio’s third biggest weighting. Buffett holds IBM, and one of his deputy investors he hired to manage portions of the portfolio bought VeriSign. Both Buffett and one of Berkshire’s mangers also own a stake in Apple.

As 2017 draws to a close, Berkshire has a net profit on tech, though IBM has floundered. [...]

A Year In Berkshire Hathaway's Financial Stocks

Warren Buffett achieved a significant feat in 2017 – each of his financial stocks looks to be ending the year in the green.

Wells Fargo & Co. gained 12.3%, Bank of America Corp. rose 35% and American Express Co. increased 35.6%. The behemoth institutions were outdone by several of their smaller peers in his portfolio, however. The best, Moody’s Corp., rose 60.9%, with MasterCard following, up 47%, and Visa Inc. up 44.6%.

Some of the weaker performers were Synchrony Financial, increasing 6.8%, US Bancorp, increasing 7.9%, and Goldman Sachs Corp., increasing 8.3%. [...]

Investment Advice From Berkshire's Todd Combs and Ted Weschler

Warren Buffett (Trades, Portfolio) is slowly winding down his management of Berkshire Hathaway’s investment operations. Even though he is still undoubtedly the leading of the group, his two investing lieutenants Todd Combs and Ted Weschler have gained more independence in recent years. [...]

So far, interviews given by these two managers have been limited but they have spoken in the past on their investment process. I thought it would be interesting to gather some of this insight from two of Buffett’s most trusted employees. [...]

State taking legal action to prevent railcar “dumping ground” in the Adirondacks

Gov. Andrew Cuomo said New York is taking legal action to halt a rail operator’s plan to store thousands of train cars indefinitely in the Adirondack Park.

The move represents what the governor calls “the first step in a series of aggressive actions” to stop Iowa Pacific Company’s from storing old oil tanker cars in the state’s protected wilderness. [...]

The state is also calling on Berkshire Hathaway — owners of the Union Tank Car Company, which owns the cars being stored — to immediately stop the storage plan.

Gov. Cuomo will announce these legal actions and the long-term plan to remove the railcars from the Adirondacks during his upcoming State of the State Address on January 3. [...]

Roseville-based toy company's stress on learning with fun pays off at Christmas time

Since 1990, MindWare has been creating brainy toys for kids of all ages, as its tag line says.

It has also become a reliable innovator for retailers with products like Qwirkle, Keva Structures building planks and Science Academy kits for making slime, lip balm and volcanoes, as well as hundreds of other toys and games. [...]

MindWare experienced double-digit growth this holiday season, consistent with most years past, the company said. That’s significantly higher than the 5 percent growth the toy industry as a whole is experiencing, according to the NPD Group. [...]

The company’s acquisition by Berkshire Hathaway’s Oriental Trading Company in 2013 jump-started its marketing, web development and customer service. [...]

Buffett's investment helped drive M&T's growth

[...] In the case of M&T Bank Corp., it was 1990, and the Buffalo-based bank had the opportunity of a lifetime: the two dominant financial institutions in Buffalo, Empire of America and Goldome, had been seized by federal regulators during the savings & loan crisis. Now the regulators were looking for someone to buy the failed banks.

M&T and KeyCorp, then based in Albany, decided to divide the spoils between them. But M&T "needed some capital in order to be able to be positioned to do the deal," bank spokesman C. Michael Zabel said.

So Buffalo News Publisher Stanford Lipsey introduced his friend M&T CEO Robert G. Wilmers, to his longtime patron: Warren Buffett. [...]

Today, Berkshire is M&T's sixth-largest shareholder, with 3.56 percent of the bank's stock as of Sept. 30. That's 5.382 million shares, worth nearly $920 million.

Shares of Warren Buffett's Berkshire Hathaway hit $300,000 — each — for the first time

One "A" share of Warren Buffett's Berkshire Hathaway will set you back about $300,000 as of Monday.

The conglomerate's most expensive share class touched that milestone for the first time in the morning before dipping back. It closed trading on Monday at $299,360, up 1.04 percent. It has outperformed the S&P 500 this year — rising more than 22 percent versus the index's 20 percent gain.

One share would get you roughly two of Tesla's most expensive car models available now.

If that lofty price makes you break out in hives, the company's B shares closed trading at $199.34, also up around 22 percent for the year. [...]

Berkshire News Briefs - 9/20/17

JPMorgan becomes just seventh bank to cover Buffett's Berkshire Hathaway, calling it a screaming buy

Despite Berkshire being the sixth-largest company in the S&P 500 by market cap, there are just seven analysts covering the company, according to FactSet. This compares to the No. 5 most valuable company in the index, Amazon, which has 41 analyst ratings. Wall Street doesn't really bother to cover Buffett because of Berkshire's low relative trading volumes as Street research often gets paid from trading commissions. [...]

The analyst established a year-end 2018 price target of $210 for Berkshire Hathaway B shares, representing 17 percent upside from Wednesday's close. [...]

The analyst also mentioned Berkshire utility executive Greg Abel is currently the "most likely" successor to replace Warren Buffett as CEO of the company. [...]

Buffett Fails in Bid to Boost Stake in Canada's Home Capital

Warren Buffett’s bid to double his stake in Home Capital Group Inc. was rejected by shareholders of the Canadian mortgage lender in a vote Tuesday.

About 89 percent of investors voted against the offer, which would have boosted Berkshire Hathaway Inc.’s stake to 38 percent from about 20 percent. Stockholders including CIBC Asset Management had objected to the deal, arguing it would dilute the stock by selling shares to Berkshire at an almost 30 percent discount. [...]

Rocky Mountain Power Invests $3.5 Billion for Wyoming Energy

A long-term view of electrical generation -- not politics or fads -- drives Rocky Mountain Power's decision to invest $3.5 billion in transmission capability, wind power and other infrastructure in Wyoming by 2020, company officials said Friday. [...]

The Salt Lake City-based Rocky Mountain Power is a part of the Portland, Ore.-based PacifiCorp, a subsidiary of Berkshire Hathaway. Rocky Mountain Power has nearly 1.1 million customers in Wyoming, Utah and Idaho [...]

Rocky Mountain Power's energy-generating capacity is about 55 percent coal, 25 percent natural gas, 10 percent hydroelectric, and 10 percent wind and other sources [...]

Irma's Impact on Insurers

[...] Because of the limited presence of national primary carriers in the homeowners market in Florida, we think the biggest industry impact of large privately insured losses would probably be in reinsurance. Reinsurers have faced weak pricing in recent years due to an overabundance of capital and the rise of the catastrophe bond market. In our view, major catastrophe losses could be a catalyst for an industry shakeup and a return to more normalized pricing conditions. For disciplined and well-capitalized reinsurers such as Berkshire Hathaway, the positive impact on pricing should provide a material long-term offset to the near-term losses.

Oriental Trading’s MindWare buys Peaceable Kingdom, game maker that aims to 'inspire cooperation and cultivate kindness'

MindWare, a division of Oriental Trading Co. of La Vista, has acquired Peaceable Kingdom, a company that develops cooperative games and related products, for an undisclosed amount.

Peaceable Kingdom, based in Berkeley, California, was founded in 1983 by the family of Clement Hurd, illustrator of the “Good Night Moon” children’s book. [...]

The company makes games with the goal to “inspire cooperation and cultivate kindness,” including Bunny Bedtime, Mole Rats in Space, Friends and Neighbors, You Guessed It, Say the Word and What’s It? [...]

Warren Buffett's son Howard to become Illinois county sheriff

Howard Buffett, son of billionaire investor Warren Buffett, is adding to his job titles that of interim sheriff of Macon County in central Illinois.

Macon County Sheriff Thomas Schneider said Friday that he is retiring early ahead of an election next fall for his replacement. He has chosen Buffett, whose charitable foundation has contributed more than $55 million in the region over the past two decades, to serve in the meantime.

Howard Buffett has been a Macon County undersheriff since September 2014 and has completed more than 3,300 hours of patrol and training. [...]

Billionaire Warren Buffett sings a duet with Stevie Wonder at star-studded Forbes 100th anniversary party

The Berkshire Hathaway CEO joined pop music legend Stevie Wonder for a duet at a star-studded gala honoring Forbes magazine at Manhattan's Chelsea Piers on Tuesday.

Wonder and Buffett sang a duet of the classic hit The Glory of Love, a single written by Billy Hill and first recorded by Benny Goodman in 1936. [...]

Berkshire News Briefs - 6/30/13

Berkshire's Oriental Trading Co. acquires toy company (Omaha World-Herald)

Omaha's Oriental Trading Co. said Thursday it had acquired a “brainy” toy company, taking another step in expanding Warren Buffett’s presence in the business of selling goods to consumers through catalogs and online. The subsidiary of Buffett's Berkshire Hathaway Inc. said Thursday it has purchased MindWare Holdings Inc. of suburban Minneapolis for an undisclosed amount of cash, its first acquisition under Berkshire ownership. MindWare creates, wholesales and sells more than 1,000 educational games, toys and other products via catalogs and online sites. [...]

“Our expectation is that this is the first of many acquisitions to come down the road,” Taylor said.“It gives us a chance to leverage our world-class, high-tech platform that we've built to sell products direct to consumers and to organizations.” MindWare owner Martin Smith, who is retiring, said he wanted the company to have a permanent home.

Buffett had helping hand in Oriental Trading acquisition (Omaha World-Herald)

Last year, when Taylor approached Berkshire Chairman and CEO Warren Buffett about buying Oriental Trading, he asked how involved Buffett would be in the business. Buffett answered that his philosophy is autonomy for top managers but that he should be informed about acquisitions. So Taylor brought the MindWare proposal to Buffett. “I knew we'd have to run this by Warren and get his blessing,” Taylor said, “mostly to make sure not to overpay for acquisitions. He was very helpful in helping us size it, to come up with our value we were going to offer.”

Buffett Adds $1.75 Billion in Hartford Annuity Deal (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc.agreed to take on Hartford Financial Services Group Inc.’s U.K. variable-annuity business, adding $1.75 billion in assets under management. Berkshire will pay $285 million in cash for Hartford Life International Ltd., which sold the annuities from 2005 to 2009, according to a statement today from Hartford, which is based in the Connecticut city of the same name. The deal will cut second-quarter earnings by about $110 million, Hartford said. [...]

The $285 million price is about the same as the unit’s statutory surplus, a measure of assets minus liabilities, as calculated under Irish accounting standards, Hartford said. The Hartford Life Ltd. unit is based in Dublin.

Most Respected (Forbes) http://online.barrons.com/article/barrons_cover.html#article...

Apple's reign is over. Its remarkable three-year hold on the throne of Barron's annual ranking of the world's most respected companies is history. [...] And proving that comebacks are possible even for an 82-year-old CEO, Warren Buffett's Berkshire Hathaway came out on top this year, up from a No. 15 finish in 2012 -- the only time in this ranking's nine-year history that it finished out of the top five.

Berkshire, White Mountains Get Symetra Stock in Warrant Deal (Bloomberg)

Berkshire Hathaway Inc.’s General Re and a unit of White Mountains Insurance Group Ltd. will each get about $40 million of stock in life insurer Symetra Financial Corp. in a deal to retire warrants granted in 2004. [...] Berkshire and White Mountains led an investor group in 2004 that purchased Safeco Corp.’s life-insurance business, which was renamed Symetra after the deal was completed. They remain the company’s largest investors [...]

Mars Said Seeking to Pay Back 11.45% Notes Held by Berkshire (Bloomberg)

Mars Inc. is seeking financing to pay off the balance of $4.4 billion of bonds provided by Warren Buffett’s Berkshire Hathaway Inc. in 2008 to acquire Wm. Wrigley Jr. Co., two people with knowledge of the matter said. [...] Berkshire backed Mars’s $23 billion purchase in October 2008 with the debt financing and an agreement to take a $2.1 billion stake in the Wrigley division once the deal closed. Berkshire would still be left with its equity stake in Wrigley and the preferred shares can’t be sold for another year, one of the people said.

State approves tax breaks to Athenahealth and Buffett company (Boston-dot-com)

The state approved $11.9 million in economic development tax credits Wednesday to 10 companies that promised to create new jobs and invest in local communities, including Athenahealth Inc. and Richline Group Inc., a subsidiary of billionaire Warren Buffett’s Berkshire Hathaway, Inc. [...] The council also agreed to award Richline, a jewelry manufacturing company, $400,000 in tax credits to support its growth in Attleboro. Richline, which recently bought a plant in Attleboro, plans to invest $3.6 million in new manufacturing equipment and interior building improvements, along with adding 100 new jobs.

Call a spade a spade (Hindu Business Line)

Warren Buffett’s Berkshire Hathaway had recently indicated that it is winding up its online insurance operation in India that was started in 2011. The bad news is that the experiment probably didn’t produce the desired results, but the good news is that the company took the bold decision to pull the plug and move on — at least for now. Obviously, the decision need not imply that the company would not try again. It might try, probably at a later time, using a different entry strategy or business model.

Dairy Queen installs treadmills for employees (Yahoo)

Dairy Queen, best known for candy-infused ice cream Blizzards, has installed a bank of treadmill workstations at its Edina, Minn., corporate headquarters as part of a wellness program aimed to combat "sitting disease," the not-so-technical term for ailments associated with sitting at a computer all day. [...] According to Megan Weizel, manager of the wellness program, the company also is adding showers and locker rooms "so people can freshen up if they exercise on their lunch hour or bike into work"—in part to entice potential new employees. "We're looking at not just these, but our whole wellness program as a recruitment tool," she said.

Take This Online Philanthropy Course And You’ll Get To Give Away The Buffett Family’s Money (Fast Company)

Warren Buffett’s family has a lot of money, and they want your help giving it away. The only catch: you have to participate in the Learning By Giving Foundation’s massive open online course (MOOC). Only then will you have the power to decide where (a tiny piece of) the Berkshire Hathaway fortune should go.