Monthly Archives: March 2021

GEICO Makes Insurance Acquisitions

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Berkshire Hathaway’s auto insurer, GEICO, has acquired Republic Group No. Two Company, a Missouri corporation formed in 1965.The transaction took place in January 2021.

GEICO acquired 100% of the voting shares of Republic Group No. Two Company and control of Southern County Mutual Insurance Co., a property and casualty insurer based in Dallas, Texas.

GEICO management has indicated its intention to reinsure Southern County 100% to an affiliate; however, the reinsurance agreement has not yet been put into effect.

© 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 n

BYD’s SkyRail Monorail Proposal for L.A. Gets $64 Million in Funding

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Berkshire Hathaway-backed BYD has received a big boost for its proposed SkyRail monorail for Los Angeles.

In 2019, BYD submitted its SkyRail proposal as one of LA Metro’s four refined concepts for the Sepulveda Transit Corridor. Of the four proposals, BYD’s SkyRail monorail and Sepulveda Transit Corridor Partners – Bechtel’s heavy rail have been selected to receive over $60 million in funding each to move to the next stage.

The goal is to create a high-capacity transit line between the San Fernando Valley and the Westside through the Sepulveda Pass that would move some 100,000 people a day off the I-405 Freeway, which is already ranked as one of the most traveled urban highways in the nation.

LA SkyRail Express (LASRE) – a team of leading transportation, construction, engineering, finance, and technology companies including John Laing, Skanska, BYD, Gensler, HDR, ACI and Innova – has been awarded a contract by the Los Angeles County Metropolitan Transportation Authority’s (Metro) for the Sepulveda Transit Corridor Project PDA RFP.

With the Metro Board’s approval, Metro and LASRE will enter into a contract for pre-development services in an amount not to exceed $63,605,132. The award of this contract, along with a similar one for Sepulveda Transit Corridor Partners – Bechtel’s heavy-rail option, will allow the project’s environmental process to begin, which will include extensive community conversations over the next one-to-two years to help shape the final alignment, technology and station locations.

If ultimately selected as Metro’s preferred team and technology, LASRE intends to link the historically underserved San Fernando Valley to the Westside and LAX transportation and education hubs, including options to connect directly with UCLA, with innovative, high-speed, high-capacity service.

“We are delighted to have reached this significant final stage of the Sepulveda Transit Corridor Project selection process. The LA SkyRail Express proposal from the Valley to the Westside and the Alternative Proposal for the entire corridor to LAX, including the direct connect alternative that we developed through an 18-month workshop process with UCLA, are estimated to fit well within the Measure M budget, with LA SkyRail Express costing a fraction of the subway alternative,” said Anthony Phillips, Co-Head of PPP and Greenfield Projects at infrastructure investor John Laing.

“SkyRail is the advanced, high speed, high-capacity monorail system that incorporates advances that have been made in monorail technology through urban applications in many of the world’s largest cities over the past 60 years. SkyRail is designed to maximize safety and energy efficiency. Equally as important, LA SkyRail Express can help alleviate the chronic congestion Valley and Westside residents have faced for decades. We are hopeful about progressing to the next stage of the bid process and proud to play our part supporting one of the most consequential infrastructure projects in Los Angeles’s history. The LA SkyRail Express team looks forward to the next stage of the selection process with great optimism and integrity.”

LASRE’s vision is to develop a transformative link in LA County, increasing mobility and transportation accessibility for those with few options. The natural barrier created by the Santa Monica Mountains has long caused some of the worst auto congestion in the country. LASRE’s solution will provide a technically and financially viable alternative to the I-405, providing safe, reliable, efficient and sustainable transportation between the San Fernando Valley and Westside within Metro’s allotted budget.

Our mission is to provide direct, efficient connections throughout the corridor, not only to Metro’s bus and transit network, but also to major mixed-use centers along the route, such as UCLA, the Westside, and the South Bay area surrounding LAX, as well as LAX itself.

“Addressing Los Angeles’ chronic traffic congestion will take an innovative solution that will finally link the region’s existing east-west lines, and that’s exactly what the LA SkyRail Express team can deliver,” stated Denny Zane, executive director of Move LA. “Unlike other options, it won’t take decades for LASRE’s potentially transformative technology to connect the San Fernando Valley to the Westside and UCLA, and to LAX to create an integrated transportation system at far less cost, something our City desperately needs.”

In 2017, BYD launched its first commercial SkyRail line in Yinchuan, capital of Northwest China’s Ningxia Hui Autonomous Region. In April 2020, the company signed a deal to build a monorail for São Paulo, Brazil. The SkyRail will be for the Line 17 (Gold Line) project.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares for $232 million. It’s an investment that has paid off handsomely. Berkshire’s original investment of $232 million had grown in value to $5.897 billion as of December 31, 2020.

© 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: You Can’t Understand a Company By Reading Wall Street Reports

When it comes to evaluating a company, you can’t rely on the reports Wall Street provides you, according to Warren Buffett. You have to do your own work, reading annual reports, including the annual reports of a company’s competitors.

“You can’t read Wall Street reports and get anything out of them,” Warren Buffett said at the 1996 Berkshire Hathaway Annual Meeting. “You have to do it yourself and get your arms around it. I don’t think we’ve ever gotten an idea, you know, in forty years from a Wall Street report. But, we’ve gotten a lot of ideas from annual reports.”

Buffett’s full explanation on evaluating a company

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.

Wellfleet Introduces Revolutionary Quote-to-Claim Insurance Platform

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Berkshire Hathaway’s Wellfleet Insurance has launched “Lighthouse,” an innovative and proprietary platform designed to make quoting, implementing, and administering workplace benefits more accurate and efficient for brokers and clients.

Built on EIS’ cutting-edge core system and digital experience platform, Lighthouse by Wellfleet supports a personalized, proactive, and connected user experience for brokers, clients and members. Features of the platform include its ability to support a single system of record; smoothly connect with clients’ chosen HR technology platforms; and seamlessly exchange data from quote to claim.

Lighthouse is further enhanced by Wellfleet’s commitment to responsive, personalized service with reliable data. Each Wellfleet client is partnered with a dedicated Client Manager, who ensures benefits solutions are delivered how and when clients want them, while providing ongoing support from implementation through re-enrollment.

“Many carriers use a patchwork of dated legacy systems for quoting, enrollment and claims. These systems were not built to work together, which leads to errors and inefficiencies that brokers and their clients should not have to endure,” stated James Ocampo, Executive Vice President and head of Wellfleet’s Workplace Benefits division. “That’s why Wellfleet chose to invest in the development of Lighthouse, a highly-digital, customer-centric platform that delivers a consistent, multi-channel experience supported by authentic end-to-end service.”

A recent survey conducted by Wellfleet and EIS identified the top five pain points brokers experience with their carrier partners and the solutions Lighthouse delivers:

1. Time to receive quote – Lighthouse supports the crafting of highly-customized and flexible plan designs, which simplifies and expedited the quoting process.

2. Billing errors – As an end-to-end platform, Lighthouse powers the flow of accurate data from quote to claim, ensuring bills are accurate.

3. Quoting errors – Leveraging the clean data input at time of quote, Lighthouse seamlessly deploys the approved case-build file, ensuring the proposal, policy administration system, and enrollment systems are built in sync.

4. Lack of real time data insights for the broker and the client – With its single source of truth, Lighthouse delivers accurate, meaningful data in real-time.

5. Slow data processing time – Lighthouse validates enrollment data in hours or days, not weeks.

“EIS and Wellfleet have invested in the future of workplace benefits by building a groundbreaking, fully digital experience for the market,” said Samantha Chow, LAH Markets Lead at EIS.

“By coupling Wellfleet’s attentive servicing and deep knowledge of broker pain points with EIS’ open, cloud- and API-based technology, we’ve developed a vibrant, customer-centric ecosystem for Wellfleet’s distribution, data and service partners,“ said Chow. Lighthouse leverages the EIS SuiteTM of software solutions to support broker and customer lifecycles from rating and quoting, policy issuance and administration, to billing and claims management.

“Lighthouse has been a highly-anticipated and long-needed market offering,” noted Drew DiGiorgio, Wellfleet President and CEO. “Launching it to the market is the cornerstone of Wellfleet’s long-term strategy to offer next-generation tools and services that give customers what they want – a personalized user experience supported by a team of industry leaders and experienced support staff.”

© 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.

Cause of Fire That Destroyed Forest River RV Plant Identified

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The cause of a fire that destroyed a Forest River RV plant in in Goshen, Indiana, on March 15, has been blamed on a space heater.

The fire was fed by flammable chemicals and adhesives on site.

There were no reported injuries.

Founded in 1996, Forest River has multiple manufacturing facilities throughout the United States producing Class A, B and C motorhomes, travel trailers, fifth wheels, toy haulers, pop-up tent campers, truck campers, park model trailers, destination trailers, cargo trailers, commercial vehicles, buses, pontoons, and mobile restroom trailers.

The company was acquired by Berkshire Hathaway in 2005.

© 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: Stocks Sell at Silly Prices From Time to Time

One of the most popular theories about stock market prices is that at any given time prices reflect all that is known about a company. Known as the Efficient Market Hypothesis (EMH), it became especially popular during the 1970s, as the rise of the Information Age brought about exponential increases in the storage and exchange of data.

It would thus stand to reason, that five decades later, when even the most casual investors have access to valuation tools that the most sophisticated traders of the 1950s would never even have dreamt about, that prices have reached an efficiency where stocks are always fairly and accurately priced.

However, Warren Buffett doesn’t believe when it comes to the market that there is anything efficient about it, and that in fact, far from the market always reflecting an accurate valuation of a company’s worth, that it is “built into the system that stocks get mispriced.”

“The beauty of stocks is they do sell at silly prices from time to time,” Warren Buffett said at the 2012 Berkshire Hathaway Annual Meeting. “Ben Graham writes about it in Chapter 8 of The Intelligent Investor. . . Chapter 8 says that in the market you’re going to have a partner named ‘Mr. Market,’ and the beauty of him as your partner is that he’s kind of a psychotic drunk, and he will do very weird things over time and your job is to remember that he’s there to serve you and not to advise you. And if you can keep that mental state, then all those thousands of prices that Mr. Market is offering you every day on every major business in the world, practically, that he is making lots of mistakes, and he makes them for all kinds of weird reasons. And all you have to do is occasionally oblige him when he offers to either buy or sell from you at the same price on any given day, any given security.”

Buffett’s full explanation on the stock market and stock prices


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.

BNSF Intermodal Business Continues Strong Showing Over 2020 Levels

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BNSF Railway continues to rack up strong Intermodal shipment numbers with an increase of 14.3 percent year to date as compared to the same period in 2020.

BNSF’s Group Vice President, Consumer Products, Tom G. Williams in testimony on March 10 before the House Committee on Transportation and Infrastructure’s Railroads, Pipelines and Hazardous Materials Subcommittee, noted that December 2020 and January 2021 “were the two largest months in BNSF history for moving volume direct to rail off the ports in Southern California. We have called back furloughed employees and pulled railcars and locomotives out of storage to help handle the increased freight demand and drive improved fluidity through this gateway.”

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 2020, 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. Intermodal shipping includes both containers and trailers, and BNSF’s shipment of trailers is up a dramatic 29.76 percent year to date.

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

© 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.

Mouser Electronics Recognized As Global Distributor of the Year by Littelfuse for 10th Time

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Berkshire Hathaway’s Mouser Electronics, Inc. has been named the 2020 Global High Service Distributor of the Year by Littelfuse, an industrial technology manufacturing company empowering a sustainable, connected and safer world. This is the 10th time that Mouser has been honored with the top award.

“On behalf of the entire Mouser team, we sincerely thank Littelfuse for this tremendous honor. It’s particularly rewarding to be recognized for the tenth year,” said Jeff Newell, Senior Vice President of Products, Mouser Electronics. “This achievement is a testament to our outstanding global partnership, along with all of the hard work by our team members across the globe. We look forward to much continued success.”

“Mouser Electronics is a valuable channel partner for Littelfuse and we are proud to recognize them as 2020 High Service Distributor of the Year,” said Malcolm Evans, Littelfuse Vice President of Global Sales, Electronics Business. “Close alignment with our distribution partners is an important part of our growth strategy and the exceptional service Mouser delivers reinforces the Littelfuse commitment to customer-focused innovation.”

Littelfuse chooses the winner of the High Service Distributor of the Year award based on a variety of distributor performance metrics, including overall sales growth, focus product sales, growth in the number of customers served, and the number and quality of creative marketing campaigns that reach customers. Mouser previously won the Littelfuse High Service/Catalog Distributor of the Year award in 2008 through 2011 and in 2014, 2015, 2017, 2018 and 2019.

© 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’s K8M 35-Foot Electric Bus Sets New High Score on FTA Bus Reliability Test

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Berkshire Hathaway-backed BYD (Build Your Dreams) has announced that its American-built and all-new K8M, a 35-foot zero-emission public transit bus, set a high scoring record in the Federal Transit Administration Model Bus Testing Program in Altoona, Pa.

The K8M record-setting performance included high marks in structural durability, reliability, maintainability, and safety. As a result, U.S. transit agencies can confidently use FTA funding to buy the K8M.

“We set a new benchmark and record for the entire American electric bus industry,” said Patrick Duan, BYD North America Senior Vice President. “The Altoona test results prove the K8M will give our customers the best reliability and lowest maintenance costs they deserve and demand. I’m very proud of our team, and I’m extremely happy that our customers will benefit when they deploy the top bus in its class.”

The innovative K8M, a state-of-the-art transit bus, is 35-foot in length and can seat up to 33 passengers. The highly reliable and safe K8M electric bus is equipped with up to 435kWh LFP battery and can be fully charged within 3 hours.

The popular BYD 35-foot electric bus is already in revenue service with several agencies across America, including LINK Transit in Wenatchee, Washington; Macon-Bibb County Transit Authority in Georgia, Baton Rouge’s Capital Area Transit System; the Vineyard Transit Authority of Massachusetts resort community of Martha’s Vineyard; the Regional Transit Authority of Central Maryland; and California’s Fresno County Rural Transit Agency.

BYD now offers four low-floor transit buses with Altoona certification with the K8M joining the 30-foot K7M, the 40-foot K9M, and the 60-foot articulated K11M. All of BYD’s zero-emission buses not only meet, but also exceed FTA Buy America requirements, incorporating more than 70% U.S. content.

BYD is the first battery-electric bus manufacturer that has both a unionized workforce and a Community Benefits Agreement, which sets goals for hiring veterans, single parents, second-chance citizens, and others facing hurdles in obtaining manufacturing employment. In addition, in partnership with SMART Local 105 and Antelope Valley College, BYD set up an apprenticeship program, improving production quality and efficiency and giving employees valuable skills that will benefit them for a lifetime.

BYD offers the widest range of battery-electric bus and coach models in the United States, ranging from 23-foot motor coaches on up to the 60-foot K11M and 45-foot double-decker C10MS.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares for $232 million. It’s an investment that has paid off handsomely. Berkshire’s original investment of $232 million had grown in value to $5.897 billion as of December 31, 2020.

© 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: The Stock Market Is the Most Obliging, Money-Making Place in the World

If Warren Buffett is known for anything, it is for his legendary patience. He is willing to build up tens of billions in cash, even well over 100 billion, and not feel compelled to use it until the deal is right. According to Buffett, who has compared investing to being a baseball batter waiting for just the right pitch, the stock market is the ideal place for such patience.

“The stock market is the most obliging, money-making place in the world because you don’t have to do anything,” Warren Buffett said at the 2012 Berkshire Hathaway Annual Meeting. “You know, you sit there with thousands of businesses being priced at the same price for the buyer and the seller. . . and it changes every day, and you’ve got lots of information about most of those businesses, and you don’t have to do anything. Compare that to any other investment alternative you’ve got. I mean, you can’t do that with farms. If you own a farm and the guy has the farm next to you and you’d kind of like to buy him out or something, he’s not going to name a price every day at which he’ll buy your farm or sell you his farm, but you can do that with Berkshire Hathaway or IBM. It’s a marvelous game. The rules are stacked in your favor, if you don’t turn those rules upside down and start behaving like the drunken psychotic instead of the guy that’s there to take advantage of it.”

Buffett’s full explanation on being a patient investor

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.