Month: April 2021

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Johns Manville

Johns Manville Plant Has 7-Alarm Fire

(BRK.A), (BRK.B)

Berkshire Hathaway’s Johns Manville had a 7-alarm fire on April 7-8 at its plant located in Winslow Township, New Jersey.

The fire was initially extinguished, but it rekindled the following evening, before being fully subdued.

No injuries were reported, and the extent of the damage is not known. The cause of the fire is currently under investigation.

Johns Manville manufactures insulation and building materials.

“Nearly thirty (30) hours after the first alarm was transmitted, firefighters remain on the scene of the Johns Manville Fire. Seven alarms were ultimately struck for this fire yesterday,” the Camden County IAFF Local 3249 posted on their Facebook page. “As part of an organized incident management plan, fire companies throughout the region are being rotated in to the scene for defined operational periods to prevent safety hazards due to fatigue from overwork. Other companies are also covering for units committed to the scene in order to ensure adequate coverage is maintained for any other emergencies that may occur within the region while this extended operation continues.”

Berkshire Hathaway has been snakebit with fires recently, with a major fire destroying a Lubrizol plant in Rouen, France in September 2019, and just last month a fire destroyed a Forest River RV plant in Goshen, Indiana.

© 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.

Categories
Lessons From Warren Buffett

Lessons From Warren Buffett: There Is No Award for Degree of Difficulty

Warren Buffett reminds investors that there is no special award for the degree of difficulty of an investing strategy. And, according to Buffett, in the end it is the execution of an investing strategy that is the most important thing.

“This is not like Olympic diving. In Olympic diving, you know, they have a degree of difficulty factor. And if you can do some very difficult dive, the payoff is greater if you do it well than if you do some very simple dive. That’s not true in investments,” Warren Buffett said at the 1998 Berkshire Hathaway Annual Meeting. “You get paid just as well for the most simple dive, as long as you execute it all right. And there’s no reason to try those three-and-a-halves when you get paid just as well for just diving off the side of the pool and going in cleanly. So we look for one-foot bars to step over rather than seven-foot or eight-foot bars to try and set some Olympic record by jumping over. And it’s very nice, because you get paid just as well for the one-foot bars.”

Buffett’s full explanation on degree of difficulty versus reward in investing

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.

Categories
Berkshire Hathaway Energy

Berkshire’s JAX LNG to Triple Production Capability and Double Storage Capacity

(BRK.A), (BRK.B)

Berkshire Hathaway’s JAX LNG is expanding its natural gas production and storage facility at the Jacksonville Port Authority (JAXPORT) in Jacksonville, Florida.

JAX LNG, a joint-venture between Berkshire Hathaway’s Pivotal LNG and its partner NorthStar HoldCo Energy, LLC, are expanding JAX LNG and building a 5,400 cubic meter LNG articulated tug barge unit, the Clean Canaveral.

Pivotal LNG, a subsidiary of BHE GT&S, and NorthStar, are tripling the facility’s production capability to 360,000 gallons per day and doubling LNG storage capacity to four million gallons.

“With the excellent support we have from our construction contractors, we are excited to commence our expanded operations, particularly for our new anchor customer beginning its LNG-powered voyages in 2022,” said Tim Casey Senior Vice President – LNG for NorthStar. “The expansion of JAX LNG and the construction of the Clean Canaveral will allow us to supply our existing customers, take on new customers and deliver LNG to points anywhere from Savannah, Georgia to Miami, Florida. The market for LNG as a bunker fuel is accelerating as more LNG powered ships are put into service. JAX LNG and Polaris New Energy are prepared to support the shipping industry’s important effort to reduce its carbon footprint by using LNG, an environmentally friendly fuel that can reduce greenhouse gas emissions by over 20 percent.”

The JAX LNG facility has been in service since the fourth quarter of 2018 and, through its integrated LNG marine loading dock, JAX LNG has safely completed more than 150 deliveries of LNG to the Clean Jacksonville bunker barge.

JAX LNG has also been servicing additional customers in the shipping, over-the-road trucking and aerospace segments.

About JAX LNG

JAX LNG, LLC is a joint venture between Berkshire Hathaway’s Pivotal LNG, a subsidiary of BHE GT&S, and NorthStar Midstream, operating a 120,000 gallon per day LNG plant with 2 million gallons of storage in Jacksonville, FL. The LNG facility was constructed to bring liquefied natural gas to the southeast U.S. and Puerto Rico.

Berkshire Hathaway acquired its stake in the facility as part of its $9.7 billion acquisition of Dominion Energy’s natural gas transmission and storage business in 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.

Categories
Lessons From Warren Buffett

Lessons From Warren Buffett: Why Depreciation Is the Worst Kind of Expense

When it comes to discussing a company’s financial performance, EBITDA (earnings before interest, taxes, depreciation, and amortization), has become such a common reference point that you would think that everyone embraces its utility. However, neither Warren Buffett, nor Charlie Munger, who famously said “I think that, every time you see the word EBITDA, you should substitute the words ‘bullshit earnings,’” have much good to say about the acronym. Buffett has even gone so far as to call its widespread use a “mass delusion.”

“In respect to EBITDA, depreciation is an expense, and it’s the worst kind of an expense,” Warren Buffett said at the 2017 Berkshire Hathaway Annual Meeting. “You know, we love to talk about float. And float is where we get the money first and we have the expense later. Depreciation is where you spend the money first, you know, and, then, record the expense later. And it’s reverse float. And it’s not a good thing. And to have that enter into a multiple, it’s much better to buy a business that has, everything else being equal, has no depreciation because it has, essentially, no investment and fixed assets that makes X, than it is to buy a company where there’s a lot of depreciation in getting to X. . . . And, of course, it’s in the interests of Wall Street, enormously, to focus on something called EBITDA because it results in higher borrowing power, higher valuations, and all of that sort of thing. So it’s become very popular in the last 20 years. . . . It’s a very misleading statistic that can be used in very pernicious ways.”

hear Buffett’s full explanation

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.