January 2022 – Page 3

(BRK.A), (BRK.B)

Berkshire Hathaway is doubling-down on its mega-store strategy in Texas. Berkshire’s NFM (formerly Nebraska Furniture Mart) will build a second store located 200 miles from its Grandscape development located in The Colony in the Dallas-Fort Worth area.

The new store will be located in Cedar Park, a town that is 16 miles to the north-west of Austin.

While Berkshire’s plans are big, they are not the scale of its 433 acre Grandscape development.

The Cedar Park Development will feature a 250-room, full-service hotel that includes a 30,000-square-foot, city-owned convention center; a 250,000 square feet of commercial development; a 500,000-square-foot NFM store; and a 700,000-square-foot warehouse servicing NFM.

NFM’s CEO Tony Bolt began searching for a second Texas location in 2019, and finally settled on Cedar Park, which at roughly 200 miles from its Grandscape development in The Colony in Dallas-Fort Worth as to not pull away any business, but close enough to benefit from NFM’s strong name recognition that it established when it built not only the largest furniture and appliance retail store in the U.S., but also a retail and mixed-use development that includes hotels, offices, entertainment.

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.

Whenever inflation kicks up, gold always gets touted as an inflation hedge. However, Warren Buffett is quick to point out that there is nothing special about gold in that regard, and, most importantly, that he always prefers productive assets to non-productive assets.

“People, historically, have felt that was the first refuge from a currency that was going to decline in value. But, so is a barrel of oil. So is an acre of land. So is a piece of Coca-Cola. So is See’s Candy,” Warren Buffett noted at the 2005 Berkshire Hathaway Annual Meeting. “See’s candy, if the dollar goes down fifty percent, we will be selling See’s candy for double the present price. We’ll be getting the same real price for See’s candy. People will work the same number of minutes or hours per week in order to buy a pound or two-pound box of the candy. So we would much prefer some asset that is going to be useful whether the currency is worth what it is today, or ten percent of what it is today, or whether people are using seashells in order to transact business. Because people will go on eating and they’ll go on drinking and doing various things. And their preferences will translate, in real dollars, into more or less the same economics for us. And we would not trade the ownership of those kind of assets for us for a hunk of yellow metal, which has very little real utility except for people who are looking to flee from the dollar and, in our view, really haven’t thought through the consequences of what fleeing would — where they should flee… My dad was a huge gold enthusiast. So I sat around the dinner table…We sat around listening to the virtues of gold, and that was in, we’ll say, 1940. And gold, at that time, was $35 an ounce. And we would’ve had some storage and insurance costs. And, you know, here it is, 65 years later. World wars, nuclear bombs, all kinds of things. And the compound rate from $35 to a little over $400, less those expenses, is not something that causes me to salivate.”

Hear Buffett’s full explanation

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