Lessons From Warren Buffett: There’s Nothing More Agonizing Than This

Lessons From Warren Buffett, Value Investing, Warren Buffett,

There is investing and then there is just plain gambling. It is something that Warren Buffett sees as almost inevitable for a certain type of investor. What type of investors are they? They are investors that always have their eyes on somebody else’s portfolio.

“There’s nothing more agonizing than to see your neighbor, who you think has an IQ about 30 points below you, getting richer than you are by buying stocks. And whether it’s internet stocks or whatever… and people succumb to it,” Buffett explained at the 2017 Berkshire Hathaway Annual Meeting. “If the market gets hot, new issues are doing well and people on leverage are doing well, a lot of people will be attracted to, not only speculation, but what I would call gambling.”

Buffett’s full explanation about speculation and markets

See the complete Lessons From Warren Buffett series

© 2021 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: It Is a Waste of Time Having an Opinion About the Stock Market’s Direction

Lessons From Warren Buffett, Value Investing, Warren Buffett,

Turn on the financial news and you will see a steady stream of predictions as to the stock market’s overall direction. What is more routine at the beginning of the year than pundits predicting where the market will be at the end of the year? Will it hit a new high? Will it plummet? It clearly fascinates a lot of people, but not Warren Buffett, who sees those types of predictions as a waste of time.

“You may have trouble believing this, but Charlie and I never have an opinion about the market because it wouldn’t be any good and it might interfere with the opinions we have that are good,” Warren Buffett said at the 1994 Berkshire Hathaway Annual Meeting. “If we’re right about a business, if we think a business is attractive, it would be very foolish for us to not take action on that because we thought something about what the market was going to do, or anything of that sort. Because we just don’t know. And to give up something that you do know and that is profitable for something that you don’t know and won’t know because of that, it just doesn’t make any sense to us, and it doesn’t really make any difference to us.”

Buffett’s full explanation on investing and the direction of the stock market

See the complete Lessons From Warren Buffett series

© 2021 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.

NetJets Reaches Agreement With Pilots’ Union

NetJets

(BRK.A), (BRK.B)

After more than a decade of often contentious relations, NetJets and its pilots union have reached a new agreement without any of the past drama.

At their nadir in 2015, the rift was so wide that angry pilots conducted picketing at the Berkshire Hathaway annual meeting in Omaha.

This time, NetJets has reached its agreement with its pilot union, the NetJets Association of Shared Aircraft Pilots (NJASAP) through a less heated negotiating process.

The new agreement gives all crewmembers the opportunity to earn additional compensation while enhancing quality of life on tour.

NetJets elected to initiate mid-term bargaining to improve compensation for long-term and new hire pilots, leading to the development of a new program that expressly recognizes the exceptional efforts its pilots put forth on a daily basis.

NetJets Chairman and CEO Adam Johnson and NJASAP President Pedro Leroux signed the 2018 Tentative Agreement following several months of collaboration between the parties that paved the way for an ambitious six-week negotiation.

The 2,500-member pilot group ratified the measure in late December with 81-plus percent voting in favor of the package of amendments that extends the 2015 Collective Bargaining Agreement an additional three years through 2026.

Among other enhancements, the newly ratified Flight & Duty Pay Program (FDPP) introduces new compensation elements, ensuring NetJets continues to be the industry leader in pilot compensation and work rules; the FDPP benefits both the pilot group and propels the business and brand forward.

“Ratification of the 2018 Tentative Agreement represents countless hours of hard work from both the NetJets team and NJASAP as we worked toward a common goal that is mutually beneficial and built on a foundation of trust and transparency,” Johnson said. “In the spirit of true collaboration, the agreement has our pilots’ best interests in mind and maintains NetJets’s position as the industry leader in pilot relations. We believe this agreement and our relationship with our crewmembers are truly unique in our industry.”

Added Leroux, “The NJASAP Executive Board is exceedingly pleased with the outcome of this negotiation – an ambitious undertaking characterized by honesty, goodwill and a genuine commitment to continuing collaboration. It is my privilege to recognize the outstanding efforts of leaders and representatives from both NetJets and NJASAP and to express my sincere appreciation to the pilot group for its thoughtful review and ratification of this ground-breaking agreement.”

© 2021 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

BYD Establishes New Battery Research Institute

Minority Stock Positions, Stock Portfolio,

(BRK.A), (BRK.B)

Berkshire Hathaway-backed BYD has established a new battery research institute in the Chinese city of Chongqing.

Dubbed the Chongqing Fudi Battery Research Institute Co., Ltd., the company is owned by Fudi Industrial Co., Ltd, a wholly-owned subsidiary of BYD.

The institute has registered capital of 100 million yuan ($15.467 million).

BYD’s Fudi Industrial Co., Ltd, currently has five companies under its umbrella, including Fudi Vision, Fudi Battery, and the company supplies parts not only to BYD, but also to its competitors, including Great Wall, Changan, Dongfeng and Chery.

A Profitable EV Company

In the last six months, BYD has reported strong sales of its vehicles, including the Han luxury car, which debuted in July. The Han is outselling its rivals from both Nio and Xpeng Motors.

BYD’s Han EV’s long-range pure electric version has a single-charge range of 605 kilometers (376 miles) based on the NEDC test cycle.

In other news, BYD announced in December that it received a large order to deliver another 406 pure electric buses to the Colombian capital of Bogota. The order was just weeks after it completed the delivery of 470 pure electric buses to the city.

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 thirty-fold.

© 2021 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: Don’t Try and Sell to Buy Back Later at a Lower Price

Lessons From Warren Buffett, Value Investing, Warren Buffett,

You picked a winner and it’s shot up through the roof. Time to sell and buy back later at a lower price?

Warren Buffett and Charlie Munger advise against it.

“Generally speaking, trying to dance in and out of the companies you really love, on a long term basis, has not been a good idea for most investors” Charlie Munger explained at the 1999 Berkshire Hathaway Annual Meeting.

Warren Buffett concurred: “It’s pretty tough to do,” Buffett added. “You have to make two decisions right…you have to sell it right first, and then you have to buy it right later on….If you get in to a wonderful business, best thing to do is stick with it.”

Buffett and Munger’s full explanation on trying to sell and buy back

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.

Lessons From Warren Buffett: There’s No Set Formula for Knowing Whether the Market, or a Company, is Undervalued or Overvalued

Lessons From Warren Buffett, Value Investing, Warren Buffett,

Warren Buffett places a strong emphasis on a company’s intrinsic value in determining whether the company should be purchased in whole or in part. Whether a company is undervalued or overvalued is at the heart of knowing whether it is a good investment. The same applies to the stock market as a whole.

So, is there a straightforward formula that you can use to determine valuation? Not according to Warren Buffett.

“It’s not reducible to any formula where you can actually put in the variables perfectly,” Warren Buffett explained at the 2017 Berkshire Hathaway Annual Meeting. “It’s just not quite as simple as having one or two formulas and, then, saying the market is undervalued or overvalued, or a company is undervalued or overvalued.”

As he noted, you can have a formula, but the hard part is knowing what variables to put in.

Warren Buffett’s full explanation on determining valuation

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.

Berkadia Acquires Moran & Company

Acquisitions, Berkadia

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, has acquired the apartment brokerage practice of Moran & Company, expanding Berkadia’s core capabilities to include an enhanced focus on institutional investment sales.

The partnership will launch Berkadia Institutional Solutions, powered by Moran, a platform dedicated to serving institutional investors nationally through Berkadia’s robust suite of services and resources combined with Moran’s strong institutional investor relationships, built on trust, client service and collaboration.

“This is a tremendous day not just for the Berkadia and Moran teams, but most importantly for our clients—the primary focus in everything we do,” said Berkadia CEO Justin Wheeler. “We remain optimistic about the future of multifamily and are committed to building the most robust CRE platform in the country, powered by the best talent in our industry. There’s no team more experienced or respected in the institutional sales space than Moran.

Together, we will transform apartment institutional investment sales nationally, offering our clients industry leading advice, resources and support to create new opportunities and better outcomes for long-term success.”

Moran Co-Chairman Mary Ann King will be joining Berkadia as Co-Head of Investment Sales and Head of Berkadia Institutional Solutions, powered by Moran, working together with Keith Misner, SVP and now Co-Head of Investments Sales, to lead the integration of the entire 31-member Moran team, including 15 dedicated institutional sales advisors, into Berkadia.

The commercial real estate industry has witnessed record-breaking private real estate equity fundraising in the past few years, with $83 billion raised in 2019 and $23 billion through June 2020 according to Preqin. The sector continues to gain favor with investors as it provides an opportunity to hedge risk and enhance portfolio diversification. Multifamily real estate in particular has demonstrated impressive resilience, coupled with long-term income growth and liquidity characteristics, generating attractive risk-adjusted returns over the past 25 years according to the NCREIF Property Index (NPI).

Moran’s 25-year legacy in multifamily investment sales, with a specialized focus on institutional investors, will complement Berkadia’s existing investment sales, mortgage banking and servicing platforms, delivering greater access to fully integrated commercial real estate solutions.

“At Moran, we’re incredibly proud of our legacy, but always thinking ahead to how we can better anticipate—and answer—our clients’ long-term needs. In joining Berkadia, we’re doing just that,” said Thomas F. Moran, Founder and Co-Chairman of Moran & Company. “Like us, Berkadia is privately-owned and shares our client-centric and collaborative mindset, our focus on people, and our commitment to integrity and excellence.”

“Moran’s team culture and client-focused approach has enabled us to build one of the best apartment institutional sales platforms in the business,” said King. “Now, as Berkadia Institutional Solutions, powered by Moran, we’ll truly be a fully integrated platform with a national presence for our clients, providing them with actionable insights, industry expertise and technology, supported by a full suite of capital markets resources, to maximize their long-term success. We’re energized and excited to move forward together at Berkadia and execute our shared vision for the future.”

In the past two years, Berkadia has executed several other strategic acquisitions aimed at broadening the firm’s depth of expertise and enhancing the firm’s comprehensive offerings, including the:

• Acquisition of Central Park Capital Partners, which launched Berkadia’s Joint Venture Equity & Structured Capital Group;

• Addition of a tax credit syndication and advisory platform with the integration of Riverside Capital into Berkadia Affordable; and

• Acquisition of LIHTC Advisors, a brokerage firm dedicated to providing full-service solutions for apartment investors and focusing on Low Income Housing Tax Credit (LIHTC) and other affordable housing properties.

Additionally, the organization has attracted elite talent across the country, including New York City, Boston, Chicago, Houston, Philadelphia, Dallas, Seattle, Indianapolis, Denver, St. Louis, Southern California, Orlando, Richmond and Birmingham, and within specialty categories, such as Affordable Housing, Hotels & Hospitality, HUD and Student Housing.

Berkshire and Berkadia

Founded in 2009 as a 50/50 joint venture between Berkshire Hathaway and Leucadia National Corporation (now known as Jefferies Financial Group), Berkadia is a third-party commercial mortgage servicer, as well as an approved lender for Fannie Mae, Freddie Mac, and HUD/FHA.

The company is among the top Freddie Mac and Fannie Mae multifamily lenders.

Berkadia owes its origins to GMAC Commercial Mortgage Corporation, which was acquired in 2009 by Kohlberg Kravis Roberts & Co., Five Mile Capital Partners LLC, and Goldman Sachs Capital Partners. Christened Capmark Financial, the company had $10 billion of originations in 2008 and a servicing portfolio of more than $360 billion before running into bankruptcy in October 2009.

In a deal approved by the bankruptcy court, Capmark sold its mortgage loan and servicing to the newly formed Berkadia in a deal worth $515 million.

The deal brought Berkshire into the heart of the commercial loan serving business, and the company has one of the largest commercial real estate servicing portfolios.

© 2021 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.

Intero Appoints New President

Appointments, HomeServices of America, Real Estate

(BRK.A), (BRK.B)

Berkshire Hathaway’s Intero has announced that Joe Brown has been promoted to President from his previous role of COO, a position he held for the last two and a half years.

Scott Chase has been promoted to COO and will combine this with his leadership role at Intero’s Los Altos office.

John Thompson, Intero’s prior President, has returned to his former role as Chief Culture Officer.

Joe Brown joined Intero in October of 2015 after a successful stint at Coldwell Banker Residential Brokerage, where he held numerous management positions, including President and COO of Bay Area operations. During his more five years with Intero, Joe has solidified himself as a key executive and has been instrumental to the company’s continued success. In addition to his role as President, he will continue to manage the Willow Glen office, one of the top real estate offices in the nation. In his new role as President, he will report directly to CEO Brian Crane, and will oversee recruiting and retention; culture, and staff coaching for the company’s 22 corporate offices.

Scott Chase came on board with Intero in November of 2018, bringing more than 15 years of experience after a successful stint as regional sales manager at Opes Advisors. Scott has a business philosophy that centers on planning and continuous improvement in skills, systems and teams to take care of our customer’s concerns around real estate. In addition to his role as COO, he will continue to manage the Los Altos office, one of the highest producing offices in the United States. In his new role as COO, he will report directly to CEO Brian Crane and will drive strategic growth, partnerships and expansion of the Intero brand throughout Northern California.

John Thompson, a founder of Intero, has been the glue that has helped keep the culture of the company together for the last 18 years. John will use his experience, talent, and sense of humor as he revises his role of Chief Culture Officer. In this position, John will support agent engagement, company culture and manage special projects.

“In our 18 years as a premier real estate services company, we have never sat on the sidelines and waited for change to happen,” said Brian Crane, Intero’s Chief Executive Officer. “We know that our leadership is one of the keys to our success and having the right people in the right positions is critical to helping us reach our goals. I could not be prouder to have Joe, Scott and JT in these new roles and know they will help the Intero brand continue to grow in 2021 and beyond.”

Intero, a Berkshire Hathaway affiliate and wholly owned subsidiary of HomeServices of America, Inc., is a real estate services company with its headquarters in Cupertino, CA, the heart of the Silicon Valley. In addition to their 18-office corporate footprint, they have a franchise network that is comprised of more than 50 affiliates located in Alabama, California, Nevada, Tennessee and Texas.

© 2021 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.

BYD to Design and Assemble eBus Chassis in the UK, Expanding ADL Partnership

Minority Stock Positions, Stock Portfolio,

(BRK.A), (BRK.B)

BYD UK and Alexander Dennis Limited have announced that they will commence the design and assembly of chassis for the BYD ADL partnership’s electric single and double deck buses for the British market, ensuring completed vehicles are built in the UK.

Electric bus chassis assembly will take place in ADL’s facilities with on-the-ground support from the BYD team, and is planned to commence in the second half of 2021.

Until now, chassis for the BYD ADL Enviro200EV single deck and BYD ADL Enviro400EV double deck buses were fully built by BYD before being delivered to ADL’s facilities in the UK to have their bodywork fitted.

Since it began in 2015, the partnership has over 500 electric buses delivered or on order. They have clocked up a combined over 16 million emission-free miles of reliable service in London as well as numerous towns and cities across the UK.

More than 70% of electric buses introduced in Britain in this period were supplied by the BYD ADL partnership.

Frank Thorpe, Managing Director of BYD UK, said: “This news underpins the fantastic relationship we have with ADL in the UK. We have always worked closely to deliver the highest quality products and services, and we are confident that production of complete vehicles here in the UK will bring even greater efficiencies for our customers. More importantly,” he said, “this commitment from both BYD and ADL is also a reflection of the acceptance of eMobility from Local Authorities, bus operators and their passengers. Electrification in our towns and cities is gathering pace, and the BYD ADL partnership is spearheading the drive towards a more sustainable future.”

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 thirty-fold.

© 2021 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.

Mouser Electronics Adds 74 Manufacturers

Mouser Electronics

(BRK.A), (BRK.B)

Berkshire Hathaway’s Mouser Electronics, Inc., a leading New Product Introduction (NPI) distributor with the widest selection of semiconductors and electronic components, added a record number of new manufacturers — 74 — to its industry-leading line card during 2020, giving its customers even more product choices.

“With this record number of new manufacturers added in 2020, we reinforce our commitment to offering our customers the most comprehensive lineup of leading technologies across all product categories,” said Jeff Newell, Mouser Electronics’ Senior Vice President of Products.

As an authorized distributor, Mouser specializes in the rapid introduction of new products and technologies, giving its customers an edge and helping speed their time to market.

During 2020, as many companies faced supply chain challenges brought on by the pandemic, more semiconductor and electronic component manufacturers counted on Mouser to successfully help them introduce their products into the global marketplace. Mouser’s customers can expect 100% certified, genuine products that are fully traceable from each manufacturer.

With 20 new embedded manufacturers among the additions, Mouser continues to strengthen its focus on the Internet of Things (IoT) solutions.

© 2021 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.