Monthly Archives: December 2020

BYD Receives 406 eBus Order from Bogata

(BRK.A), (BRK.B)

Berkshire Hathaway-backed BYD (Build Your Dreams) has won a large order to deliver another 406 pure electric buses to the Colombian capital of Bogota. The order is just weeks after the delivery of the 470 pure electric buses to the city.

BYD will co-work with Superpolo, a Colombian bus manufacturer, on the body part of the buses for such order.

The buses were tendered by the Bogota City Public Transport Authority (TRANSMILENIO S.A.). A joint venture between Colombian business group Fanalca and international public transport operator Transdev used BYD’s integrated E-bus solutions to bid and successfully won the tender.

The buses are expected to be deployed along 15 routes in Bogota’s Fontibon district in 2021 and thereafter 150,000 residents along the routes will be able to enjoy pure electric and zero-emission transportation services.

“BYD is honored to receive another large order. There are currently 483 electric buses in TRANSMILENIO S.A, and when all 406 buses are in operation next year, Bogota will have 889 pure electric buses, of which 876 will be from BYD – accounting for more than 98.5%,” said Lara Zhang, Regional Director of BYD Latin America.

BYD first entered the Colombian market in 2012 and made several milestone achievements: building the first pure electric taxi fleet in South America in 2013, entering the Bogota BRT system in 2017. It also delivered 64 electric buses to Medellin in 2018.

Throughout Latin America, BYD’s new energy vehicle footprint has spread to major markets including Chile, Colombia, Ecuador, Brazil, Barbados, Panama, Costa Rica, Uruguay and Argentina.

Globally, BYD’s green transport offerings have spread to over 300 cities, operating in more than 50 countries and regions.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value over twenty-fold.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Lessons From Warren Buffett: Here’s What to Pay Attention To

The Dow is up 200 points, or it is down 150 points, when you turn on the nightly news the overall stock market’s gyrations are what gets attention. Is it what you should be paying attention to?

Not if you want to invest like Warren Buffett.

“Charlie and I don’t think about the market. And Ben (Graham) didn’t very much. I think he made a mistake to occasionally try and place a value on it,” Buffett explained at the 1999 Berkshire Hathaway annual meeting. “We look at individual businesses, and we don’t think of stocks as little items that wiggle around on the paper and have charts attached to them. We think of them as parts of businesses.”

Buffett’s full explanation on focusing on individual companies rather than the market

See the complete Lessons From Warren Buffett series

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Commerce Department Removes Berkshire Hathaway Subsidiary Erroneously Placed on Military End User List

(BRK.A), (BRK.B)

A Berkshire Hathaway company that was erroneously listed on a proposed U.S. Commerce Department list of Military End-Users in connection with China has been removed from the draft list.

A draft rule released by the U.S. Commerce Department’s Bureau of Industry and Security would add a new ‘Military End-User’ List to its regulations on military-use and end-user export controls.

An initial list of entities identified by BIS as “Military End-Users” in the new rule erroneously included Berkshire Hathaway’s TTI Electronics Asia PTE Hong Kong Ltd a subsidiary of Berkshire Hathaway’s US-based TTI, Inc.

In a statement, TTI said: “The action taken by BIS confirms our position that TTI HK is not a ‘Military End User’ nor does it maintain any ties to the Chinese military. Our customers, suppliers, and all business partners can rest assured that TTI and our affiliates globally are fully compliant with all laws and regulations in the locations where we do business, including all U.S. export control requirements.”

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BYD Delivers Europe’s Largest Ever Single eBus Order

(BRK.A), (BRK.B)

Berkshire-Hathaway-Backed BYD, the world’s leading eBus manufacturer, has commenced delivery of Europe’s largest ever single order for electric buses to Keolis Nederland BV, the Dutch subsidiary of global public transport provider, Keolis.

An initial 246 BYD low-floor eBuses – part of a total order for 259 vehicles – are now with Keolis Nederland and have entered service on 13th December on routes in Zwolle, Apeldoorn, Ede, Dedemsvaart, Vaassen, Harderwijk, and Deventer in the country’s IJssel-Vecht region.

The remaining vehicles are scheduled for delivery and start of operation in Spring, 2021.

The new pure-electric, zero-emissions eBus fleet from BYD will deliver a huge contribution to reducing greenhouse gas emissions. Keolis has calculated an annual CO2 reduction of over 15,755 tonnes.

Despite restrictions brought about by the coronavirus pandemic, the BYD eBus fleet has been delivered on time and according to pre-pandemic production schedules. An extremely efficient production process of the eBuses was achieved by an integrated approach throughout the BYD supply chain and its various manufacturing sites, including the BYD Hungary eBus production facility.

The Keolis fleet comprises BYD’s 12-metre and 13-metre eBus models. The 13-metre model benefits from BYD’s new upgraded battery technology to provide extended range and ‘city-to-city’ capability. The majority of the Keolis order – 206 vehicles – is made up of BYD’s best-selling 12-metre model. All 12- and 13-metre models feature DC Combo 2 and pantograph charging capability.

All vehicles are equipped with ambient lighting, USB charger ports and soundproof floor cover. In addition, the 13-metre models boast seats with the MMC (Multimedia Control) to offer unparalleled passenger convenience, including a reading light, a phone holder and a folding tray.

Safety and driver comfort are also boosted with bird-eye-view cameras providing the driver with a 360o view of the bus; plus an electric driver’s seat with memory card stores seat positions for multiple drivers and allows quick and easy automatic adjustment.

Marc Renouprez, interim CEO at Keolis Nederland, is delighted to be introducing the largest electric bus fleet in Europe, “With BYD in support,” he said, “Keolis is helping the transport authorities in the provinces of Gelderland and Overijssel in their green transition by deploying this e-fleet, making the IJssel-Vecht region a healthier place to live and work in. It is therefore a momentous milestone for Keolis, but also for our passengers, our PTA partners and the region.”

“We selected BYD thanks to excellent previous experience of the eBus product in our current regions the province of Utrecht and Almere city. The vehicles meet with the full approval of our passengers and our staff – and that’s very important. We have full trust in BYD’s expertise as a manufacturer in developing and maintaining BEV technology, and we were also confident that BYD would ensure the fleet delivery was executed on time.”

“This is a proud day for both BYD and Keolis,” said BYD Europe Managing Director, Isbrand Ho, “we have devised a total transport solution with New Energy technology at its heart. This fleet represents a step-change for public transport in the Netherlands; the start of what is a massive contribution to reducing carbon emissions in the country. The future of public transport has taken a significant step forward today,” he said.

A Profitable EV Company

BYD recently reported a net profit of 1.66 billion yuan (roughly 242 million U.S. dollars) for the first half of 2020. The net profit rose 14.29 percent over the same period in 2019.

Through June 30, BYD had revenue of 60.5 billion yuan, down 2.7 percent year on year, according to BYD’s financial report filed with the Shenzhen Stock Exchange.

Despite the global pandemic, BYD projects 2.8 billion yuan to 3 billion yuan of net profit in the first three quarters of this year, which would be an increase of 77.86 percent to 90.56 percent from the same period of 2019.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value twenty-fold.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Lessons From Warren Buffett: You Can Go Broke Short Selling

A company’s stock price goes up and up, seemingly disassociated from any meaningful metrics of valuation. So, should you short it?

It may be tempting, but Warren Buffett advises against it.

“Short selling, it’s an interesting item to study because it’s, I mean, it’s ruined a lot of people. It’s the sort of thing that you can go broke doing,” Buffett explained at the 2001 Berkshire Hathaway Annual Meeting. “Being short where your loss is unlimited is quite different than being long something that you’ve already paid for. And it’s tempting. You see way more stocks that are dramatically overvalued in your career than you will see stocks that are dramatically undervalued.”

Buffett’s full explanation on short selling

See the complete Lessons From Warren Buffett series

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Benjamin Moore Acquires UK-Based Shaw Paints

(BRK.A), (BRK.B)

Something that Warren Buffett is always fond of are bolt-on acquisitions that bolster Berkshire Hathaway’s existing companies. To that end, Benjamin Moore & Co. has acquired its United Kingdom distribution partner, Shaw Paints Ltd.

Prior to this transaction, Shaw Paints Ltd was the exclusive UK distributor of Benjamin Moore premium quality products and expansive color offerings to consumers, designers and professionals alike. Effective immediately, industry veterans and Shaw Paints co-founders, Craig and Helen Shaw, will join the Benjamin Moore team and remain based in the UK.

With this acquisition, Shaw Paints Ltd will become Benjamin Moore UK, in an effort to accelerate the brand’s growth in the United Kingdom.

The newly formed Benjamin Moore UK will continue to operate showrooms in Slough, Chelsea and Wilmslow, as well as fulfillment to a network of authorized stockists throughout the market.

“We’re thrilled to formally incorporate Shaw Paints Ltd into our international sales operations as they’ve been a trusted partner these past five years,” said Dan Calkins, Benjamin Moore Chairman & CEO. “With their sterling track record, this will enable Benjamin Moore to increase scale throughout the region and offer our best-in-class products to more UK customers.”

“The Benjamin Moore brand has been exceptionally well received in the UK market since the launch in 2015 and we have experienced strong growth as a result of our strategic partnership with Benjamin Moore,” said Craig Shaw, Shaw Paints Ltd Co-Founder. “We’re proud of the business we operate in the United Kingdom and through this acquisition, we expect to further accelerate growth with our industry-leading products and unparalleled color offerings.”

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Awards Three Newly-Designated Certified Sites

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BNSF Railway has awarded three new locations its Certified Sites designation. All three new sites will bring their respective state’s total count to two in Kansas, Missouri and Texas.

In order to be considered for the designation, sites must undergo a thorough analysis which includes an evaluation of environmental and geotechnical standards, available utilities, site availability and existing and projected infrastructure. All Certified Sites offer the convenience of direct rail service.

The newly-designated Certified Sites feature hundreds of acres ready for industrial development:

• New Century AirCenter Business Park, New Century, Kansas – Adjacent to Interstate 35 and with quick access to many of the other Kansas City region interstates, New Century AirCenter Business Park consists of 667 available acres located in unincorporated Johnson County, Kansas.
• Wildwood Ranch, Joplin, Missouri – Conveniently located southeast of U.S. Highway 66, Wildwood Ranch comprises 503 acres divided into two main areas that extend into both Jasper and Newton counties.
• Gateway Industrial Park, Gainesville, Texas – Located in northwest Gainesville and near Interstate 35, Gateway Industrial Park has 126 acres ready for rapid development of rail-served industrial sites.

Certified Sites are a part of BNSF’s Premier Parks, Sites and Transload program. The program is a strategic approach that addresses the increasing demand for customer site locations by developing various types of facilities across BNSF’s network. Businesses looking to locate at any of these properties could save six to nine months of construction time as a result of this analysis. BNSF Certified Sites are reviewed by an industry expert in order to ensure accurate, reliable data.

The goal of the program is to provide an inventory of rail-served sites that are available for immediate development.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BNSF Intermodal Business Up Dramatically

(BRK.A), (BRK.B)

BNSF Railway has been having a tough year, with overall carloads and intermodal down 8.38 percent from 2019 levels, but there is some very good news. Intermodal shipments, which is one of BNSF strengths, are up a whopping 12.3 percent in the fourth quarter as compared to 2019.

Rail intermodal, which moves shipping containers and truck trailers by rail, has been reaching record levels, and BNSF is the largest intermodal railroad, transporting over a million more intermodal loads annually than its competitors.

Back in July, BNSF noted that the rise in intermodal volume was primarily driven by e-commerce business.

A single train can take upwards of 400 tractor trailers off of highways, saving energy and reducing traffic congestion.

This video shows the scale of BNSF’s intermodal trains.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

Lessons From Warren Buffett: Hold a Stock Forever or Sell It?

Warren Buffett has said his favorite holding period to own a stock is forever, but often that get misinterpreted as Buffett never sells. Nothing could be further from the truth. While it is true that Buffett’s massive positions in Coca Cola and American Express have been held for decades, he has sold numerous positions over the years, including his holdings in Phillips 66 and IBM, for example, and most recently he sold the large positions he built up in airline stocks, including American, Delta, United and Southwest, after COVID-19 impacted their prospects.

All things being equal, Buffett notes “It’s not their inclination to sell,” however, he sells stocks all the time.

What makes Buffett sell a stock rather than hold it forever?

One factor is whether the company has had a negative change in its competitive advantage.

“We probably had one view of the long-term competitive advantage of the company at the time we bought it, and we may have modified that,” Buffett explained at the 2002 Berkshire Hathaway Annual Meeting.

He went on to add: “That may mean that we were wrong when we made the decision originally. It may mean that we’re wrong now, and their strengths are every bit as what they were before. But, for one reason or another, we think that the strengths may have been eroded to some degree. A classic case on that would be the newspaper industry, generally, for example. I mean, in 1970, Charlie and I were looking at the newspaper business. We felt it was impregnable a franchise as could be found.”

If the stock you are holding has strong revenues, is cranking out dividends, and has a bright future, there is no need to set an arbitrary selling price. As Buffett once said, “The real thing to do with a great business is just hang on for dear life.”

However, if the company’s prospects are deteriorating, there is no need to hold it forever.

Buffett’s full explanation on when he sells a stock

See the complete Lessons From Warren Buffett series

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

BYD Delivers eBuses to Macon-Bibb County Transit Authority

(BRK.A), (BRK.B)

Berkshire Hathaway-backed BYD (Build Your Dreams) has delivered two American-made battery-electric K9S buses to the Macon-Bibb County Transit Authority.

The highly reliable and safe K9S 35-ft electric bus equipped with a 266kWh iron phosphate battery and can be fully charged in 3 to 4 hours. The buses will provide Macon-Bibb County residents with quiet, zero-emission rides to their destinations.

The MTA affectionately named its new buses “Sparky” and “Bolt”

“We have been working on this bold initiative for more than two years and are delighted to leap into the future. The citizens of Macon-Bibb County will be well-served by buses that utilize this clean, safe and efficient technology,” said MTA CEO Craig Ross. “We thank John Hatch, BYD’s Regional Sales Manager, Southeast, and the factory team in Lancaster, California — all of whom have been invaluable throughout the process, including navigating a pandemic. The dual bus wrap design featuring a lightning bolt on one side and an electric plug on the other was chosen as an attention-getter highlighting our new green technology.”

“BYD transit technology is the safest and most advanced anywhere. We thank Macon-Bibb County Transit Authority for choosing BYD buses to reliably serve their community,” said Patrick Duan, BYD North America Vice President. “Our innovative battery-electric buses will help keep the air clean and lower the transit agency’s operating costs and at the same time provide customers with a comfort ride.”

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value twenty-fold.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.