Month: May 2022

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Lessons From Warren Buffett Value Investing

Lessons From Warren Buffett: You’re Neither Right nor Wrong Because People Agree With You or Disagree

Warren Buffett believes firmly that the work of the investor is to find opportunities, and it makes no difference if other people agree with you or not.

“Ben Graham said long ago that you’re neither right nor wrong because people agree with you or disagree with you,” Warren Buffett noted at the 2006 Berkshire Hathaway Annual Meeting. “You’re right because your facts and reasoning are right. So all you do is you try to make sure that the facts you have are correct. . . . And then once you have the facts, you’ve got to think through what they mean. And you don’t take a public opinion survey. You don’t pay attention to things that are unimportant. I mean, what you’re looking for is something — things that are important and knowable. If something’s important but unknowable, forget it. I mean, it may be important, you know, whether somebody’s going to drop a nuclear weapon tomorrow but it’s unknowable. It may be all kinds of things. So you — and there are all kinds of things are that knowable but are unimportant. In focusing on business and investment decisions, you try to think — you narrow it down to the things that are knowable and important, and then you decide whether you have information of sufficient value that — you know, compared to price and all that, that will cause you to act. What others are doing means nothing.”

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.

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Minority Stock Positions Stock Portfolio

Berkshire Hathaway Adds to Its Occidental Petroleum Stake

(BRK.A), (BRK.B)

A dip in the price of Occidental Petroleum has Warren Buffett resuming his purchases of OXY shares on May 10 and 11.

In its latest Form 4 filing Berkshire made the following purchases:

Common Stock 05/10/2022 716,355 $57.3161
Common Stock 05/02/2022 185,419 $57.3386

After these purchases, Berkshire holds 143,162,392  shares of OXY common stock.

In addition to its over 15% stake in OXY common stock, Berkshire also holds 200,000 series A preferred stock shares and warrants that Berkshire for roughly 84M shares of common stock at $59.624 per share.

© 2022 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.

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Kraft Heinz

Kraft Heinz Tests Paper-Based, Renewable and Recyclable Ketchup Bottle

HEINZ, maker of the world’s favorite ketchup and beloved condiments, is teaming up with Pulpex to develop a paper-based, renewable and recyclable bottle made from 100 percent sustainably sourced wood pulp.

Innovating its iconic ketchup bottle, HEINZ is the first sauce brand to test the potential of Pulpex’s sustainable paper bottle packaging for its range of world-famous condiments.

HEINZ, maker of the world’s favorite ketchup and beloved condiments, is teaming up with Pulpex to develop a paper-based, renewable and recyclable bottle made from 100 percent sustainably sourced wood pulp. (Photo: Business Wire)

For Kraft Heinz, this collaboration is the latest step in its journey to reduce its environmental footprint. It progresses the Company’s sustainable packaging ambitions, in that it aligns with its goal to make all packaging globally recyclable, reusable or compostable by 2025. It is also an innovation that will help Kraft Heinz achieve net zero greenhouse gas emissions by 2050.

HEINZ and Pulpex are developing a prototype to test how the cutting-edge innovation could be used for HEINZ Tomato Ketchup bottles and other packaging formats in years to come. Pulpex’s current data indicates the carbon footprint of Pulpex bottles is materially less than glass and plastic on a bottle-by-bottle basis. Once used, they are also expected to be widely and readily recyclable in paper waste streams.

“Packaging waste is an industrywide challenge that we must all do our part to address,” said Kraft Heinz CEO Miguel Patricio. “That is why we are committed to taking steps to explore sustainable packaging solutions across our brands at Kraft Heinz, offering consumers more choices. This new HEINZ bottle is one example of how we are applying creativity and innovation to explore new ways to provide consumers with the products they know and love while also thinking sustainably.”

The next step in the process will involve prototype testing to assess performance before testing with consumers and bringing the bottle to market.

“We hope to bring this bottle to market and to be the first sauce brand to provide consumers this choice in their purchasing decisions, as many consumers today are looking for more sustainable packaging options,” said Rashida La Lande, EVP & Global General Counsel and Chief Sustainability and Corporate Affairs Officer at Kraft Heinz. “We’re eager to continue discovering more sustainable packaging for our beloved and iconic brands.”

“We are delighted to work with HEINZ to bring our patented packaging technology to such a famous name in food and are excited about the potential of this collaboration,” said Scott Winston, Pulpex CEO. “We believe that the scope for paper-based packaging is huge, and when global household names like HEINZ embrace this type of innovative technology, it’s good news for everyone – consumers and the planet.”

The pulp-based bottle would become the newest option available to HEINZ Tomato Ketchup fans, joining the recyclable HEINZ iconic glass bottle and plastic bottle, as well as plastic squeeze bottles with their 30 percent recycled content (available only in the E.U.) and 100 percent recyclable caps.

© 2022 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.

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Lubrizol

Lubrizol and Park Place Technologies Partner to Expand Collaboration With Intel by Providing World-class Service, Maintenance and Monitoring for State-of-the-art Immersion Cooling Systems in Data Centers

(BRK.A), (BRK.B)

Today, data centers are largely cooled by inefficient and expensive air conditioners. Lubrizol’s immersion cooling ecosystem solution, using CompuZol™ Immersion fluids, addresses the limitations posed by air-cooled methods by delivering a turn-key, sustainable immersion-cooled solution that enables superior thermal management and increased infrastructure density. The solution helps protect customers’ enterprise infrastructure investments and provides greater assurance to future technologies than traditional air-cooled systems, all while helping customers reach their global sustainability goals.

Now, Berkshire Hathaway’s The Lubrizol Corporation and Park Place Technologies have announced that Park Place will become a certified partner of this ecosystem solution, leveraging its market-leading capabilities to provide on-demand service, maintenance and real-time monitoring capabilities to customers utilizing immersion-cooled solutions from Lubrizol. Park Place is an Intel® Data Center Solutions Premium Support Partner that brings global reach and scale together with Intel® certified testing and validation capabilities.

“Lubrizol’s immersion cooled ecosystem solution delivers advantages to today’s data center operators ranging from lower energy costs and higher computing densities to longer server life, all through a more sustainable solution than conventional air cooling,” said Matt Joyce, Vice President, Corporate Business Development for Lubrizol. “Our partnership with Park Place Technologies adds a world-class service, maintenance and monitoring capability to our sustainable offering.”

“Park Place’s industry-leading global service, support, and preventative maintenance capabilities provide the optimal synergy with Lubrizol’s immersion cooled ecosystem solution, delivering a circular economy and sustainability-focused solution aimed at unlocking power densities of the future,” said Chris Adams, President and CEO of Park Place. “Our portfolio of third-party data center hardware maintenance, professional service, infrastructure managed services, network performance monitor and hardware sales, paired with Lubrizol’s novel turn-key solution using CompuZol™ immersion fluid, will deliver substantial value to our customers and end-users, enabling virtually seamless adoption of single-phase immersion cooling technologies with the support of world-class organizations.”

“Scaling innovative technologies such as liquid immersion cooling is critical to maximizing data center power efficiency as well as minimizing data center carbon footprint,” said Jennifer Huffstetler, VP and GM, Data Center Platform Strategy, Mobilization, Sustainability and Services at Intel. “We’re thrilled to see the partnership of Lubrizol and Park Place Technologies to scale the commercial deployment of CompuZol™ based liquid immersion cooling solutions. The combination of Park Place Technologies’ expertise in deploying Intel Xeon® processor-based solutions along with Lubrizol’s proven, validated, and environmentally friendly CompuZol™ liquids demonstrates the technology is ready for worldwide deployment.”

Lubrizol’s immersion cooled ecosystem solution begins with Lubrizol’s family of patented thermal management CompuZol™ immersion fluids, designed specifically for Data Center, Edge, and Far Edge applications. Through a multi-year collaboration with Intel, and partnerships with other industry leaders in the infrastructure, server design and manufacturing, and immersion tank industries – and now in maintenance and service through Park Place – this ecosystem solution brings together Immersion Cooling with new technology advancement for sustainability, and delivers a turn-key solution for customers looking to unlock higher computing power densities while reducing energy and water consumption and extending server life.

© 2022 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.

Categories
Insurance

Berkshire’s Gen Re and Suffolk University Launch Strategic New Behavioral Economics Relationship

(BRK.A), (BRK.B)

Berkshire Hathaway’s Gen Re has looked to Suffolk University professors for their expertise in behavioral economics in a unique business relationship designed to benefit the reinsurer’s clients in the areas of underwriting, marketing, client engagement, customer service and more.

Behavioral economics draws from the fields of psychology and economics to better understand human behavior and decision-making when they deviate from strict rationality.

Over the past several years, Gen Re has conducted and shared results of several in-house behavioral economics studies focusing on key areas of interest to insurers. This research helped Gen Re’s reinsurance clients improve disclosure on insurance applications and personal history interviews, as well as explore other areas of interest such as policyholder communication, financial planning presentations, marketing materials and website design.

Expanding upon the Gen Re Research team’s existing efforts, the relationship with Suffolk University will provide:

• The ability for Gen Re clients to complete professor-developed and led behavioral economics training modules, extending from basic to advanced courses
• Broader outreach on the topic of behavioral economics and related applications in the insurance industry
• Speaking engagements with Suffolk University professors at Gen Re sponsored events

“Traditional economics is all about rational individuals, how they respond to prices, etc.,” explains Jonathan Haughton, professor of Economics at Suffolk University in Boston. “However, there are all sorts of cases where we don’t behave quite so rationally.”

Haughton and Suffolk Assistant Professor Lawrence De Geest both teach in the field of behavioral economics and are sharing their knowledge with Gen Re’s Research team. De Geest’s research examines the emergence of social norms and the effect of information on decision-making.

“All kinds of psychological factors outside of traditional economics play into people’s decision-making,” Haughton says. “For example, when it comes to health and medical disclosure, the way a question is framed in a questionnaire can make a big difference to what people choose to disclose. Loss aversion is another psychological factor that can affect economic decision-making. People are very averse to losing things to which they have become attached, so instead of saying, ‘Save $50 a month,’ you might say ‘Stop losing $50 a month. Don’t lose your ability to support your household.’”

Keith Brown, Senior Vice President and Head of Individual Life at Gen Re, says it’s important for insurers to pay attention to these important behavioral factors: “At a time of rapidly evolving underwriting approaches, uncertainty about future morbidity and mortality improvement, and increased insurer focus on client engagement, the behavioral economics training is being made available to Gen Re clients at an important industry inflection point.”

Suffolk University, located in the heart of downtown Boston, has a long history of partnering with industry to share relevant academic and business knowledge, research, and expertise.

“I am a big believer in faculty doing work with business, government and the non-profit sector outside of the academy,” Haughton says. “I think in the right proportion, it hugely benefits teaching and research.”

© 2022 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.

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Marmon Group

Marmon Aerospace & Defense Begins Construction of New Facility

(BRK.A), (BRK.B)

Berkshire Hathaway’s Marmon Aerospace & Defense has broken ground on a new 80,000-square-foot manufacturing facility in Hooksett, New Hampshire.

Upon completion, by the fall of 2023, the plant is expected to bring an additional 20 production jobs to the area. The company will invest $30 million in the new facility, which will house a state-of-the-art manufacturing operation producing large shipboard power cables to support the U.S. Navy and its ship-building network.

4659358 new facility scaled

The new operation will complement the company’s current product line at its plants in nearby Manchester, New Hampshire, and in Naples, Florida.

“This new facility will broaden Marmon’s military shipboard cable product offerings, which already include power, data, instrumentation, control, and communications cables,” said Robert Canny, Marmon Aerospace & Defense Group president. “We are pleased to make this investment in service to our customers, our team, and our community.”

Marmon Aerospace & Defense, is wholly-owned by Berkshire Hathaway under its Marmon Holdings division. The company has locations in Manchester, New Hampshire and Naples, Florida that manufacture wire and cable solutions for the key defense markets of land, air, sea, and space.

© 2022 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.

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Lessons From Warren Buffett

Lessons From Warren Buffett: When They Say the Word Synergy They Really Mean

While discussing what makes Berkshire Hathaway an attractive place to sell your successful business to, Warren Buffett noted that the term synergy is really just another way of saying that that a lot of people are going to get fired. And often first in line to get fired are the people that helped make a company successful in the first place.

“They would have all these ideas about synergy, and synergy would mean that the people that had helped him build the business over 30 years would all get sacked,” Warren Buffett said at the 2013 Berkshire Hathaway Annual Meeting. “And that the acquiring company would come in like Attila the Hun and be the conquering people, and he just didn’t want to do that to the people that helped him over the years.”

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2022 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
Acquisitions Marmon Group

Berkshire Hathaway’s Precision Edge Surgical Products Acquires Eva-Lution

(BRK.A), (BRK.B)

Berkshire Hathaway’s Precision Edge Surgical Products Company, a manufacturer of orthopedic and medical device instruments, has announced its asset acquisition of Angola, Ind. based Eva-Lution.

Eva-Lution has specialized in the manufacturing of medical instruments since 2015.

“The addition of the Eva-Lution operation will enhance Precision Edge’s continued growth in service to our strategic customers,” says Todd Fewins, Precision Edge president. “The demand is there, and this new site in Angola will provide added capacity, manufacturing equipment, and a talented group of people who deliver high-quality medical products.”

With its manufacturing headquarters located in Sault Ste. Marie, MI, and a second Michigan manufacturing site in Boyne City, Precision Edge has served the medical industry since 1989 by focusing on surgical cutting tools. Precision Edge recognized that most manufacturers focused on the basic design of an instrument, but not the precise cutting edge. The focus at Precision Edge has been, and continues to be, on supporting customers as they develop the most complex designs and provide the most accurate and precise cutting edge on medical tools, while also manufacturing non-cutting instruments.

The acquisition of Eva-Lution’s more than 60,000-square-foot site will support continued growth in a geographical area that is well known for orthopedic original equipment manufacturers (OEMs), as well as accelerate Precision Edge’s implant manufacturing capabilities.

“We are being very intentional in how we grow and where we grow,” says Kenneth Ross, Director of Sales at Precision Edge. “We have many exciting opportunities in our pipeline that will expand our offerings in both technology and services, allowing us to remain a leader in this great industry.”

Precision Edge is a member of Colson Medical, LLC, which is majority a company under the  Marmon Holdings division of Berkshire Hathaway.

© 2022 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.

Categories
Minority Stock Positions Stock Portfolio

Berkshire Hathaway Adds to Its Occidental Petroleum Stake

(BRK.A), (BRK.B)

Warren Buffett’s jump into oil and gas producers, which has seen him take huge stakes in Occidental Petroleum and Chevron, continued this week with $350 million of additional purchases of OXY shares on May 2 and 3.

In its latest Form 4 filing Berkshire Hathaway made the following purchases:

Common Stock 05/02/2022 736,516 $55.9957
Common Stock 05/02/2022 2,510,957 $56.7255
Common Stock 05/02/2022 1,918,019 $57.562
Common Stock 05/02/2022 701,626 $58.3745
Common Stock 05/03/2022 20,500 $57.7843

After these purchases, Berkshire Hathaway holds 142,260,618 of OXY common stock.

In addition to its stake in OXY common stock, Berkshire also holds 100,000 series A preferred stock shares and warrants that Berkshire can exercise for roughly 84M shares of common stock at $59.624 per share.

© 2022 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.

Categories
Appointments Berkshire Hathaway Specialty Insurance

Kathy Reid Named Head of Casualty, North America, at Berkshire Hathaway Specialty Insurance

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance has promoted Kathy Reid to Head of Casualty, North America.

“Kathy has been a major driver of BHSI’s growth in the casualty marketplace since our very beginning,” said Sanjay Godhwani, President, North America Region, BHSI. “She embodies the excellent capabilities and strong character that define our team around the globe, and I am pleased to have her in this leadership role where she can have an even greater impact as a leader to our teammates and a partner to our customers and brokers.”

Kathy has more than 25 years of insurance industry experience. She has been Senior Vice President at BHSI since 2013.

© 2022 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.