Berkshire News Briefs - 3/12/16

This week's post got really long, so I broke it in two. News about Berkshire Hathaway itself in this post, news about subsidiaries coming next in a second post...

Berkshire after Buffett: One thing may not change (CBS MoneyWatch)

Most interesting, more and more major shareholders are becoming convinced that they should stick with Berkshire. They've been increasingly assured that with Buffett's decentralized management style -- unit managers operate independently and make their own business decisions -- a solid structure has been put in place that would enable Berkshire to operate soundly even after his departure. [...]

Another wealth manager at a major Wall Street investment bank noted that there could be "initial rush selling" once Buffett announces the exact date of his retirement, but "that would definitely inspire us to jump in and buy more shares when the stock tumbles as a result."

Buffett’s Berkshire Plans $9 Billion Bond Sale to Repay Loan (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. sold $9 billion in debt, the conglomerate’s biggest bond deal ever, in the latest offering from a blue-chip company tapping investor demand for the most creditworthy borrowers.

Berkshire sold the debt in seven parts, according to data compiled by Bloomberg. Proceeds will help pay down a $10 billion loan used to finance its purchase of Precision Castparts Corp. Buffett had said earlier that Berkshire used about $23 billion of its cash for the deal and would borrow the rest. [...]

Investor orders for Berkshire Hathaway bond sale hit $34bn (Financial Times)

Investor orders for a piece of a $9bn Berkshire Hathaway bond sale eclipsed $30bn on Tuesday, as the conglomerate headed by Warren Buffett sought to repay bank loans used to finance its $36bn takeover of Precision Castparts. [...]

Orders for the year’s fourth-largest transaction hit $34bn, climbing rapidly as banks closed their books, one person familiar with the situation added. [...]

Nebraska Peace Foundation calls for report on risks Berkshire Hathaway faces from climate change (Omaha World-Herald)

The Nebraska Peace Foundation is asking Berkshire Hathaway Inc. to issue a report describing the risks it faces from climate change and the “initiatives and goals relating to each risk issue identified.” [...]

In the letter and proxy draft, Buffett said it is “highly likely” that climate change “poses a major problem for the planet.” [...]

But although climate change may cause disasters, Buffett said, Berkshire’s property insurance operations do not risk significant losses from such disasters.

That’s because the companies would adjust their premiums and exposure to claims if climate change begins to cause more property damage, which hasn’t happened yet, he said. [...]

Comments on Mistakes and Buffett’s Original Berkshire Hathaway Purchase (ValueWalk)

I noticed a passage in last year's letter that is relevant to the topic—Buffett himself was attracted to buybacks on a dying business—Berkshire Hathaway in the early 1960's. Berkshire was a Ben Graham cigar butt—it was trading at around $7 and had net working capital of $10, and book value of $20. Berkshire was a classic “net net”—a stock trading for less than the value of its cash, receivables, and inventory less all liabilities. Buffett liked the fact that Berkshire was a) trading at a cheap price relative to liquidation value, and b) using proceeds from the sale of plants to buy back shares—effectively liquidating the company through share repurchases. [...]

Why Berkshire Hathaway Is Expected to Outperform SPY in 1Q16 (Market Realist)

7 parts, focusing on the different areas of Berkshire Hathaway (BNSF, Energy, Manufacturing, etc.)

Berkshire’s holdings have been performing on the back of insurance, financials, and manufacturing. Chairman and CEO Warren Buffett is deploying cash for buying stocks at attractive valuations. Berkshire’s recent investments include Precision Castparts (PCP) and Kinder Morgan (KMI). [...]

3 Big Competitive Advantages of Berkshire Hathaway (Fool)

Berkshire Hathaway is a unique business. It's primarily an insurance company, but it also sells furniture, energy, homes, underwear, and private jets. And the company has amassed a stock portfolio that would make most long-term investors jealous. One of Warren Buffett's biggest criteria when deciding what to buy is identifiable competitive advantages -- of which Berkshire has quite a few of its own. [...]

Berkshire News Briefs - 1/19/14

Upstart Managers School Sage of Omaha (Wall Street Journal)

Two investment managers, hired by the 83-year-old billionaire in recent years as part of his succession plan, each posted returns last year that outdid both Mr. Buffett's performance as Berkshire's top stock picker and the Standard & Poor's 500-stock index, according to people familiar with the matter. The 2013 returns mark the second year in a row that the two men beat the broader market gauge, which gained 32% including dividends last year, as well as their boss. [...] The younger managers' strong performance is further proof that Mr. Buffett "hit the jackpot" with their hires, as he said in his last letter. The 83-year-old billionaire investor hired Todd Combs and Ted Weschler to eventually manage all of Berkshire's investments once he is no longer at the helm, although he has no plans to step down.

The Tiny Companies Making Warren Buffett Billions (Fool Video)

Berkshire Hathaway and Warren Buffett have purchased droves of smaller businesses over the years and brought them under the Berkshire-umbrella. As Berkshire Hathaway continues to transform into a collection of operating businesses, how should investors view this "Other" segment?

Speaking of those tiny companies making billions... Berkshire Hathaway acquired Utah-based R.C. Willey Home Furnishings in 1995.

Bill Child built a company that Warren Buffett wanted to buy (4-Traders)

Just like many of Utah's successful businesses, R.C. Willey Home Furnishings started as a part-time sideline. Rufus Call Willey, a lineman for Utah Power, began selling Hotpoint brand appliances door-to-door in 1932 in rural Syracuse, a tiny town in Davis County. [...] In 1950, Willey built his first tiny store next door to his house in Syracuse, having operated out of the back of his little red pickup truck until then. When he died unexpectedly in 1954, son-in-law Bill Child, recently graduated from college with a degree in education, was asked to take over the business. Based on a loyal customer base and a good reputation, Child said, "OK."

Cannon Equipment acquired by Berkshire Hathaway's Marmon (Cannon Falls Beacon)

This was one small part of the bigger IMI acquisition that was announced in December.

Cannon Equipment [...] officially became part of billionaire Warren Buffetts's empire on January 1. The Marmon Group, headquartered in Chicago, a division of Buffett's Berkshire Hathaway company, officially acquired Cannon Equipment as of the start of 2014. [...] Cannon Equipment traces its roots to Point-of-Sales, founded in Cannon Falls by Howard "Speed" Fredrickson in 1966. IMI Corp., out of the United Kingdom, bought the company in 1981. It sold Cannon Equipment and some other similar companies it owned to Marmon for $1.1 billion in cash. Cannon Equipment specializes in design and manufacture of material handling carts, cages, racks and automation equipment used in retail dairy and newspaper sales.

Marmon Highway Technologies Introduces Fontaine Intermodal (Trucking Info)

Fontaine Engineered Products, Inc., a Marmon Highway Technologies/Berkshire Hathaway company, recently established a stand-alone division – Fontaine Intermodal – to design and produce innovative products for the growing intermodal transportation market. Fontaine Intermodal operates a dedicated facility in Jasper, Ala., where it produces the Fontaine Evolution Intermodal Flat Deck product.

Mass. mill that started Buffett's empire razed (Yahoo/AP)

The Massachusetts textile mill that helped billionaire Warren Buffett launch his investment empire, but which he also called one of his biggest blunders, is being torn down. Roland Letendre, the current owner of the Berkshire Hathaway mill in New Bedford, started demolishing the structure on Monday after efforts to sell the property failed. The mill, built in 1927, had been on the market with an asking price of $500,000, but it needs about $1 million in repairs, Letendre said. [...] Buffett, then an ambitious 34-year-old investor, acquired control of the textile manufacturer in 1965. Overwhelmed by foreign competition, Buffett closed the mill in 1985 and sold the complex in 2000 to Letendre for $215,000.

NextEra Energy Fires Up 20 MW Solar Farm (Fool)

NextEra Energy announced today that it has begun commercial operation of its 20 MW Mountain View Solar Energy Project located in North Las Vegas. The latest addition to NextEra Energy's renewable energy portfolio, Mountain View's 84,000 photovoltaic solar panels will push power to Berkshire Hathaway-owned NV Energy.

What's the Difference Between Berkshire Hathaway Class A and B Shares? (Fool Video)

Berkshire Hathaway is known for a lot of things. Its Chairman and CEO, Warren Buffett, its successful track record, and of course, its expensive Class A share price. In this segment of The Motley Fool's financials-focused show, Where the Money Is , banking analysts Matt Koppenheffer and David Hanson take a question from their mailbag regarding the the Class A and Class B shares for Berkshire Hathaway.

8 Hilarious Warren Buffett Insights From the Ronald Reagan Era (Fool)

A lot has changed since 1984: Ronald Reagan isn't president, gas costs well more than a dollar per gallon, and Apple personal computers look considerably different. But, if just one thing hasn't changed in 30 years, it's Warren Buffett's letter to Berkshire Hathaway's shareholders. Every year, the letter is chock-full of investing insight and witty commentary. Here are eight of Buffett's best lines from 30 years ago. [...] "Our experience has been [big ideas] pop up occasionally. (How's that for a strategic plan?)"

Berkshire News Briefs - 12/2/13

Berkshire Said to Reduce Its Energy Future Bond Stake (Bloomberg)

Warren Buffett’s Berkshire Hathaway Inc. reduced its holdings of Energy Future Holdings Corp. debt by a third after the Texas power provider made an interest payment and staved off a bankruptcy filing, according to a person with knowledge of the transaction. Berkshire sold about $615 million of its $1.8 billion in face value of Texas Competitive Electric Holdings Co.’s senior unsecured notes this month [...] The Omaha, Nebraska-based company had taken more than $1.9 billion in writedowns from 2010 through the third quarter of this year, “substantially all” of which was related to Texas Competitive bonds, according to regulatory filings on its website.

Berkshire’s PacifiCorp Looks to Sell Oregon Hydroelectric Dam (Bloomberg)

Berkshire Hathaway Inc.’s PacifiCorp utility is seeking to sell a hydroelectric dam that’s no longer profitable to operate. The dam is on the Deschutes River in Bend, Oregon, PacifiCorp said today in a statement. The company, owned by Warren Buffett’s Omaha, Nebraska-based firm, may seek to place the structure under local control.

Even Warren Buffett doesn't want old Berkshire HQ (CNBC)

The mayor of New Bedford, Mass., wants to save Berkshire Hathaway's old headquarters from demolition, but he's having trouble finding buyers. Even Warren Buffett himself isn't interested. The Wall Street Journal reports the owner of the 86-year-old "squat, dilapidated office building" at 129 Cove Street wants to build a parking lot in its place but has agreed to wait a few months while the city looks for a buyer for what once housed the Berkshire Hathaway textile company.

Why Warren Buffett Doesn't Mix Morals With Money (Fool)

Buffett and Charlie Munger once thought about buying a chewing-tobacco company. They traveled to Memphis, entertaining the idea along the way. They never took the deal. Buffett later said the following: "In the end, we decided we didn't want to own it. We would buy stock in a tobacco company, but we didn't want to own it." This is interesting. Buffett would own shares of a tobacco company, but he wouldn't own all of it. He wants some barrier between Berkshire Hathaway and the company, perhaps for liability reasons, and probably also for insurance on his reputation.

NetJets enhances safety features on Bombardier Signature Series long-range aircraft with Tempus IC medical device (Avionics Intelligence)

NetJets Inc., a Berkshire Hathaway company and a provider of private aviation for nearly 50 years, is partnering with Remote Diagnostic Technologies to add a new safety feature to all super midsize and large cabin NetJets Signature Series aircraft by equipping them with the Tempus IC Medical Device. The Tempus IC lightweight, compact telemedicine device uses the plane’s onboard satellite communication capability to connect to a doctor on the ground in the event of a medical emergency. The device enables trained medical experts to begin helping the crew and passengers within minutes of a medical incident occurring on board, especially in remote areas or on long flights, such as flying over the ocean.

5 Things You Probably Didn't Know About Warren Buffett (Fool)

1. Harvard turned him down
2. He learned the most from a guy you've likely never heard of
3. He's really good at what he does
4. His father was a four-time congressman
5. He doesn't consider himself the most important person at Berkshire

Berkshire News Briefs - 5/13/13

Berkshire Hathaway profits up more than 50% (Financial Times)

Berkshire Hathaway said first-quarter profits had jumped more than 50 per cent from the year-ago period because of insurance gains and overall growth from the $268bn conglomerate’s diverse mix of business. [...] The largest contributor to the rise was insurance underwriting profits of $901m, compared with $54m last year. The rise included a one-off gain of $255m related to amendments to a contract with a unit of Swiss Re. Overall revenues of $43.9bn rose from $38.1bn a year ago.

Berkshire Hathaway's 1st Quarter Press Release and 10Q filing.

The Berkshire Hathaway Q&A (Omaha World-Herald)

During more than five hours of fielding questions from shareholders, journalists and financial experts, Berkshire Hathaway Chairman and CEO Warren Buffett and Vice Chairman Charlie Munger were asked why they do what they do, what changes they would consider and what the secrets of their success are.

For more detailed notes on the Q&A session, here's an account of it from the Motley Fool BRK-A board.

Warren Buffett's Candy: His Sweet Tooth for See's Candies, Dairy Queen (YouTube / Bloomberg Video)

Bloomberg's Betty Liu profiles the sweet side of Warren Buffett's empire with See's Candies and Dairy Queen as both companies look to expand while keep commodity costs under control. She speaks on Bloomberg Television's "In The Loop."

Berkshire Hathaway Shareholder Meeting Picketed By Utah Coal Miners (Huffington Post)

Dozens of Utah coal miners are picketing outside the Berkshire Hathaway's annual meeting in downtown Omaha. The protesters are members of United Mine Workers of America who work at Deer Creek mine near Huntington, Utah. The mine is run by a subsidiary of Berkshire's MidAmerican Energy Holdings Co. The union's contract expired in January, and the union and company are disagreeing on health care coverage and safety checks.

Berkshire's B-Share Generation (The Street)

Nick Antoine traveled to Berkshire Hathaway's annual shareholder meeting with air miles and lodged in a "dirt cheap" hotel room with a ceiling that leaked water from an overflowing toilet a floor above. The 24 year-old Princeton University graduate was forced to splurge on taxis due to unseasonably cold weather at the May 4 investor gathering in Omaha, Nebraska. [...] Twenty-somethings like Antoine describe the pilgrimage to Omaha as an affirmation of independent thinking in business and investment. Buffett's values and Munger's lucidity also carry an appeal beyond their stewardship of Berkshire and its more than 80 operating subsidiaries. Those youthful shareholders are building in number, according to longtime attendees of Berkshire's meeting. The company has dramatically expanded its investor base since splitting Class B shares, first issued in 1996, by 50-to-1 in 2010.

The Cult of Buffett (Fool Video)

The Berkshire Hathaway annual meeting has reached a cult-like status. People flock from around the world to hear words of wisdom from the Oracle of Omaha. But what did Warren Buffett actually reveal about the inner workings of Berkshire?

Here's How Warren Buffett Disappointed Me (Fool)

The Berkshire Hathaway annual meeting is attended by throngs of Berkshire faithful. For some shareholders at the meeting, it's probably impossible for Berkshire CEO Warren Buffett to ever be wrong in their eyes. If we're being realistic, though, Buffett does indeed have his slip-ups. As partner-in-crime Charlie Munger put it: "Just because Warren thought something years ago doesn't make it a law of nature." With that in mind, I rounded up the team of Fools who attended this year's Berkshire meeting to ask in what ways Buffett disappointed them during the meeting.

25 Surprising Facts About Berkshire Hathaway (Fool)

Berkshire's roots go back more than 174 years to the founding of textile manufacturer Valley Falls Company, which itself merged with Berkshire Cotton Manufacturing Company in 1929. The resulting company merged with Hathaway Manufacturing to create Berkshire Hathaway in 1955.

In 2010, Warren Buffett said he considered Berkshire the "dumbest" stock he ever bought. Why? Because in 1962 he acquired his controlling stake in anger when one of its managers short-changed him in a tender offer to the tune of $0.125 per share. After he fired the manager, Buffett realized he had committed too much of his money to a "terrible" textiles business, which he fought to save for 20 years before giving up. By Buffett's estimation, that mistake cost him more $200 billion in compounded returns.

Berkshire Sells Debt to Buyers Buffett Pities (Bloomberg)

Berkshire Hathaway Inc.’s $1 billion note sale shows that while Chief Executive Officer Warren Buffett may pity investors who’ve stuck with bonds as yields fall to record lows, he’ll sell them as much debt as they want.

The company’s Berkshire Hathaway Finance Corp. sold five-and 30-year securities offering the company’s lowest coupons for those maturities ever.

New book teaches children ABCs of Warren Buffett's Berkshire Hathaway (NDTV)

Two Omaha residents, author Nancy Rips and illustrator Tom Kerr, have teamed up on "My First Berkshire ABC" to teach children about one of the world's best-known companies, and a little about the local billionaire behind it. [...] Most pages show companies that Berkshire owns or invests in. G, for example, is for "Geico," and features the car insurer's talking gecko. And W is for "Wells Fargo", and features the bank's familiar stagecoach.