Monthly Archives: April 2020

BYD Donates $1 Million in PPE for First Responders

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BYD Motors, LLC., has pledged a donation of $1 million in medical supplies, including PPEs and hand sanitizer to transit agencies and first responders in the United States and Canada.

The supplies are arriving at various U.S. distributions centers to be closer to those locations where they are needed most.

The supplies include FDA-approved Adult Surgical Masks and KN-95 respiratory protective devices as well as hand sanitizer that is 99.999% effective. Several thousand PPEs have already been delivered to agencies that include the City of Los Angeles, the Valley Medical Center in San Jose California, the Toronto Transit Commission and the LA County Sheriff’s Department.

BYD President for North America Stella Li praised first responders and transit agency employees working to stop the spread of COVID-19.

“BYD wants to help those who are helping all of us and believe this is how we can do it best,” she said. “We will get through this together.”

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 almost ten-fold, and is now worth roughly $1.96 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 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.

GEICO Providing $2.5 Billion to Policyholders Through Policy Credits

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GEICO is providing a 15 percent credit to its auto and motorcycle customers as their policy comes up for renewal between April 8 and Oct 7. The credit will also apply to any new policies purchased during this period.

The credit is part of GEICO’s ongoing efforts to assist customers during the Coronavirus pandemic.

The average auto policy has a semi-annual premium of about $1,000 and generally covers more than one vehicle.

GEICO expects credits to average about $150 per auto policy and $30 per motorcycle policy. The company estimates the benefit to its 18 million auto and one million motorcycle customers will be approximately $2.5 billion.

Current customers can expect to see the discount when they renew. Customers do not need to take any action to receive this credit.

Shelter in place policies have reduced driving significantly. Vehicle accidents are down considerably, and although GEICO expects a return to near normal once the impacts of COVID-19 subside, GEICO remains committed to serving its customers’ changing needs in the best way it can.

“This ongoing crisis has widespread effects that will linger. That is why we wanted to give this credit for at least six months,” said GEICO President and CEO Todd Combs. “Our customers have been loyal, and we are committed to doing all we can to help them.”

Last month, GEICO announced it was pausing cancellations of coverage due to non-payment and policy expiration through at least April 30, 2020. Beyond that, the company has committed to offering maximum flexibility to policyholders who need special payment options as well as transitioning nearly all of its associates to work from home to continue providing the 24/7 service it is known for.

© 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.

Berkshire Hathaway Specialty Insurance Appoints Michael Pille Head of Healthcare Underwriting in Germany

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Berkshire Hathaway Specialty Insurance has promoted team member Michael Pille to head its fast-growing healthcare underwriting operation and team in Germany.

“As Head of Healthcare, Michael will lead our effort to service the German healthcare market and expand our local healthcare team,” said Andreas Krause, Country Manager for Germany, BHSI. “In this newly created position, Michael will elevate our ability to deliver innovative professional liability solutions for the healthcare industry, including novel SIR (stop loss) alternatives, backed by BHSI’s underwriting expertise and commitment to claims handling excellence.”

Michael, who has more than a decade of underwriting experience in the German market, joined BHSI in 2017 as Senior Underwriter, Liability. He holds a bachelor’s degree in Insurance Management and a master’s Degree in Insurance Law from Cologne University of Applied Science. Michael is a Fellow of the Chartered Insurance Institute.

© 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.

Berkshire Hathaway Specialty Insurance Rolls Out Professional First Technology Liability Insurance in Australia and New Zealand

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Berkshire Hathaway Specialty Insurance has launched Professional First Technology Liability Insurance policies in Australia and New Zealand. Both policies clearly articulate broad, customizable professional liability protection for the full scope of services provided by technology and tech-related firms.

“BHSI is committed to simplicity and that is evident in these easy-to-navigate policy forms which are readily tailored to the individual needs and exposures of technology firms and backed by BHSI’s financial strength,” said Cameron McLisky, Head of Executive & Professional Lines for Australasia at BHSI. “We take a partnership approach to this market, with our brokers and customers collaborating with our decision makers, from underwriting, to claims service.

With BHSI’s Professional First Technology Liability Insurance, customers choose any or all of three separate towers to secure professional indemnity, cyber and general liability covers. Limits and coverage can be structured to address the individual needs and preferences of a wide variety of tech firms, including those involved in software design and development, systems integration, technology consulting, telecommunications and IT training.

© 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 Tackles Lithium Battery Fires With Its Breakthrough Blade Battery

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BYD has announced the launch of the Blade Battery, a development set to mitigate concerns about battery safety in electric vehicles.

At an online launch event themed “The Blade Battery – Unsheathed to Safeguard the World”, Wang Chuanfu, BYD Chairman and President, said that the Blade Battery reflects BYD’s determination to resolve issues in battery safety while also redefining safety standards for the entire industry.

BYD highlighted a video of the Blade Battery successfully passing a nail penetration test, which is seen as the most rigorous way to test the thermal runaway of batteries due to its sheer difficulty. “In terms of battery safety and energy density, BYD’s Blade Battery has obvious advantages,” said Professor Ouyang Minggao, Member of the Chinese Academy of Sciences and Professor at Tsinghua University.

The Blade Battery has been developed by BYD over the past several years. The singular cells are arranged together in an array and then inserted into a battery pack. Due to its optimized battery pack structure, the space utilization of the battery pack is increased by over 50% compared to conventional lithium iron phosphate block batteries.

While undergoing nail penetration tests, the Blade Battery emitted neither smoke nor fire after being penetrated, and its surface temperature only reached 30 to 60°C. Under the same conditions, a ternary lithium battery exceeded 500°C and violently burned, and while a conventional lithium iron phosphate block battery did not openly emit flames or smoke, its surface temperature reached dangerous temperatures of 200 to 400°C. This implies that EVs equipped with the Blade Battery would be far less susceptible to catching fire – even when they are severely damaged.

The Blade Battery also passed other extreme test conditions, such as being crushed, bent, being heated in a furnace to 300°C and overcharged by 260%. None of these resulted in a fire or explosion.

He Long, Vice President of BYD and Chairman of FinDreams Battery Co., Ltd., covered four distinct advantages of the Blade Battery including a high starting temperature for exothermic reactions, slow heat release and low heat generation, as well as its ability to not release oxygen during breakdowns or easily catch fire.

In the past few years, many EV manufacturers have fallen into a competition for ever-greater cruising range. When the range becomes the prime factor to consider, this focus is then transferred to power battery makers, leading to unreasonable pursuits of “energy density” in the battery industry. It is due to this unpractical focus on “energy density” that safety has been sidelined from power battery development. BYD’s Blade Battery aims to bring battery safety back to the forefront, a redirection from the industry’s tenuous focus on this crucial aspect.

“Today, many vehicle brands are in discussion with us about partnerships based on the technology of the Blade Battery,” said He Long. He added that BYD will gladly share and work with global partners to achieve mutually beneficial outcomes for all industry players.

The Han EV, BYD’s flagship sedan model slated for launch this June, will come equipped with the Blade Battery. The new model will lead the brand’s Dynasty Family, boasting a cruising range of 605 kilometers and an acceleration of 0 to 100km/h in just 3.9 seconds.

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 almost ten-fold, and is now worth roughly $1.96 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 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.

Value Investing: Overcome Your Fear, Don’t Be Doomed to Mediocre Returns

Part of an occasional series on Value Investing

Fear. It’s the one word that summarizes the emotion that grips investors when times are bad, really bad. Fear is the emotion that takes rational, prudent decision-making out of the investing process. It’s the whipsaw to the euphoria and overconfidence that comes when times are good, portfolios are fat, and almost every investment opportunity looks like a good one.

Warren Buffett famously said that his investment strategy was founded on seeing fear in the marketplace as a tremendous buying opportunity.

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful,” Buffett wrote in his 1986 Letter to Shareholders.

Berkshire Hathaway’s vice chairman, and noted investor, Charlie Munger, has long expounded that periodic steep market declines are inevitable, and that unwillingness to withstand them is the road to poor performance.

In a 2009 interview with the BBC, Munger said:

“This is the third time that Warren (Buffett) and I have seen our holdings of Berkshire go down, top tick to bottom tick, by 50%. I think it’s in the nature of long-term shareholding, of the normal vicissitudes in worldly outcomes and markets that the long-term holder has his quoted value of his stock go down by say 50%. In fact you could argue that if you are not willing to react with equanimity to a market price decline of 50% 2-3 times a century, you are not fit to be a common shareholder and you deserve the mediocre result that you are going to get, compared to the people who do have the temperament who can be more philosophical about these market fluctuations.”

Diversification: Your Tool For Overcoming Fear

So, how can you overcome fear? It’s wired into us. It’s not intellectual, it’s emotional. It’s the flight part of fight-or-flight response. Overcoming fear is easier said than done, but here is a suggestion.

Trust the power of diversification. If you are buying index funds, such as S&P 500 index funds, know that the entire U.S. economy is not going away. It’s already survived the Great Depression, Great Recession, and a host of lesser known financial crises that run all the way back to the Credit Crisis of 1772. As, Charlie Munger pointed out, you have to expect that steep price declines will happen a number of times during your lifetime.

Warren Buffett has always believed in the power and resilience of the U.S. economy. He points out that in his own lifetime it has survived World War II and a host of other challenges, including over a decade of inflation in the 1970s and early-1980s, when mortgage rates peaked at over 18%, and has come back stronger.

“Anything can happen to stock prices tomorrow. Occasionally, there will be major drops in the market, perhaps of 50% magnitude or even greater,” Buffett said in an interview on CNBC in February. He urged investors, even small investors to see price declines for the opportunity that they are.

Remember it’s buy low and sell high, not the other way around.

The resiliency and long term strength of the U.S. economy, in other words the power of businesses as a whole to meet needs and solve problems, enabled the Dow Jones Industrial Average to not only survive a loss of 90%, but to rise from its Great Depression doldrums of a low of 41.22 to the record high 29,551.42 set on Feb. 12, 2020.

As shocking as a DJIA number in the 40s seems to us today, it’s not the Dow’s all-time low, which was 28.48 on August 8, 1896. Thus, you don’t need a century of lifespan to prosper investing in the stock market. An investor that prudently bought at 28.48 in 1896 was still up roughly 45% when the DJIA hit its depression era low.

Given enough time, the strength of the economy has proven time and time again the value of investing in equities.

“Most people are savers, they should want the market to go down. They should want to buy at a lower price,” Buffet notes.

So, get a hold of your fear and turn it into the courage to see the opportunity that is right in front of you.

© 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.

Berkshire Hathaway’s MLMIC Offers Medical Professional Liability Coverage for Physicians Returning as Volunteers During the COVID-19 Pandemic – No New Premium Required

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As part of ongoing efforts to support our dedicated physicians throughout New York, Berkshire Hathaway’s MLMIC Insurance Company is extending medical professional liability coverage – without requiring any new premium – to retired physicians who were last insured with MLMIC and are coming back as volunteers to provide care during the COVID-19 pandemic.

MLMIC defines “volunteer,” in this case, as a retired physician providing professional services for no fee, salary or other compensation with the exception of reimbursement for expenses incurred delivering those services. Qualifying physicians may apply online.

The coverage limits of the medical professional liability offered to these volunteers will be the same as what they held when actively practicing prior to retirement and when last insured by MLMIC. Coverage also includes defense costs if a claim is filed against them while volunteering.

In addition, if the returning physician previously held regulatory defense coverage, it will be provided for actions resulting from volunteer professional services. There is no new premium for this coverage, which is included through physicians’ expired policies without impact upon any presently existing tail policies.

New York physicians can access this information at https://www.mlmic.com/covid-19/returning-physicians. To request coverage, interested volunteers can apply online or call (800) ASK-MLMIC (1-800-275-6564) and ask for Underwriting.

© 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.

Volvo North America Teams with Berkshire’s Fontaine Modification

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Volvo North America has partnered with Berkshire Hathaway’s Fontaine Modification to develop the Volvo Auto Hauler (VAH) 300, Volvo Trucks’ signature day cab in the North American market. This reduced-height cab option is currently the lowest in the industry by 1.5 inches, offering auto haulers best-in-class versatility for local and regional automobile transport applications. The 300 is now available for order at an unladen 94.5-inch height.

“At Volvo Trucks, we pride ourselves on building strong partnerships to solve our customers’ business needs,” said John Felder, product marketing manager at Volvo Trucks North America. “Through extensive research, testing and engineering in collaboration with Fontaine Modification, the new VAH 300 model with a 94.5-inch height represents a new standard of excellence for trucks in the highly specialized auto hauler market.”

The company notes that over the last 10 years, the height of vehicles hauled has significantly increased as the demand for more SUVs versus sedans rises. As a result, auto haulers are now in need of a solution that maximizes freight capacity, while also delivering optimal efficiency. The lower overall height of the VAH 300 offers the flexibility to position a larger vehicle over the truck’s cab to maximize payload. A clean top-of-frame behind the cab also allows for easier body mounting and trailer hookup.

“At Fontaine, we are proud of our recent changes that will provide about three more critical inches of room for hauling larger vehicles above the VAH 300 day cab,” said Paul Kokalis, president of Fontaine Modification Company. “We’re pleased to help Volvo Trucks deliver this best-in-class, reduced-height cab option to meet the demands of the North American auto hauler market.”

In addition to this new model, Fontaine also modifies a full range of Volvo Trucks models to service the needs of all customers for any auto hauling application or load size.

© 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.