Month: May 2023

Categories
Dairy Queen

Dairy Queen Appoints Two Executives

(BRK.A), (BRK.B)

Berkshire Hathway’s American Dairy Queen Corporation (ADQ), a prominent player in the quick-service restaurant (QSR) industry, has recently made two significant additions to its international business team.

The company, a subsidiary of International Dairy Queen, Inc. (IDQ), announced the hiring of Chris Wren as the vice president of development, international, and Greg Kirian as the vice president of marketing, international. These appointments aim to bolster brand awareness and facilitate restaurant growth outside of the United States and Canada.

Chris Wren brings an impressive background of nearly three decades in franchising and the restaurant industry to ADQ. His extensive executive finance and development experience at renowned companies such as CIT Bank, Dine Brands Global, Wingstop, and Yum! Brands make him a valuable asset. In his new role, Wren will be responsible for overseeing the strategic direction and execution of international business development in both new and existing markets.

Greg Kirian has over two decades of experience in the global food and beverage industry. Having held leadership positions in international marketing at esteemed companies like Little Caesar’s, Wingstop, and Yum! Brands, Kirian is well-equipped to lead brand and marketing strategies for ADQ’s international markets.

The decision to hire strong leaders in marketing and development roles aligns with ADQ’s ambitious business goals of expanding their global footprint beyond the United States and Canada.

Nicolas Boudet, the chief operating officer, international at American Dairy Queen Corporation, emphasized the criticality of such leadership to achieve their objectives. Boudet expressed confidence in both Wren and Kirian, commending their impressive and diverse portfolios of experience in global businesses. Their expertise will be instrumental in driving DQ restaurant growth and enhancing brand awareness in new and existing markets worldwide.

Chris Wren and Greg Kirian both hold master’s degrees in business administration from Southern Methodist University in Dallas, Texas.

International Dairy Queen, Inc. (IDQ), headquartered in Minneapolis, Minnesota, acts as the parent company for American Dairy Queen Corporation (ADQ) and Dairy Queen Canada, Inc. With a presence in over 20 countries, IDQ operates a system of more than 7,000 restaurants.

© 2023 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: Don’t Let Emotion Wreck Your Investing

With a seasoned wisdom born out of decades of astute observation and thoughtful analysis, Warren Buffett urges investors to eschew the siren call of capricious sentiments that too often cloud judgment and lead to grave missteps. For in the delicate dance of financial markets, where fortunes are won and lost amidst the ebb and flow of economic tides, it is the rational mind, steadfast and unswayed by the tempestuous winds of emotion, that emerges victorious.

“We make bad investment decisions plenty of times. I make more than Charlie. I like to think it’s because I make more decisions, but probably my batting average is worse. But, I can’t recall any time in the history of Berkshire that we made an emotional decision,” Buffett said at the 2023 Berkshire Hathaway annual meeting. “You don’t want to be a no emotion person in all of your life, but you definitely want to be a no emotion person in making an investment or business decision.”

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© 2023 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 Specialty Insurance

Warren Buffett Lauds Berkshire Hathaway Specialty Insurance’s Remarkable Growth

(BRK.A), (BRK.B)

At the 2023 Berkshire Hathaway Annual Meeting, Warren Buffett showered praise upon a Berkshire company that has quietly achieved remarkable growth in a relatively short span of time. The subject of Buffett’s admiration was none other than Berkshire Hathaway Specialty Insurance (BHSI).

With enthusiasm, Buffett emphasized that BHSI, a company that had blossomed from a mere handful of employees to a thriving workforce of over 1,500 in a mere decade, stood alone as a resounding success story among its peers. Buffett proclaimed, “There’s only been one that I know of, a company started in the last ten years, that has been an overwhelming success. And that’s a company that Ajit (Jain) and four people who joined with him set to develop a new business. It’s called Berkshire Hathaway Specialty.”

Buffett went on to highlight the exceptional achievements of BHSI, particularly its impressive insurance float of $12 billion. He noted that while other companies in the industry struggled to carve out their niche, BHSI thrived without incurring any significant underwriting losses.

Under the guidance of President & Chief Executive Officer Peter Eastwood, who along with three other executives came to the company from AIG, BHSI has grown into a powerhouse insurance company offering a comprehensive range of insurance services, including commercial property, casualty, healthcare professional liability, executive and professional lines, transactional liability, surety, marine, travel, programs, medical stop loss, homeowners, and multinational insurance.

Operating as part of Berkshire Hathaway’s National Indemnity group of insurance companies, BHSI boasted impeccable financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s, a testament to their unwavering commitment to excellence.

Headquartered in the city of Boston, BHSI established its presence in key locations worldwide, including Atlanta, Chicago, Houston, Indianapolis, Irvine, Los Angeles, New York, San Francisco, San Ramon, Seattle, Stevens Point, Adelaide, Auckland, Brisbane, Cologne, Dubai, Dublin, Hong Kong, Kuala Lumpur, London, Macau, Madrid, Manchester, Melbourne, Munich, Paris, Perth, Singapore, Sydney, and Toronto. This global reach exemplified BHSI’s determination to serve diverse markets and cater to the unique needs of clients around the world.

© 2023 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: Investors’ Fortunes are Tied to Business Profits

In the grip of speculative fervor, as even money-losing enterprises witness their stocks soar skyward, it becomes all too easy to disregard the fundamental truth that enduring triumph in the realm of investments hinges on a company’s profits, not the capricious dance of its price.

“The only money investors are going to make, in the long run, are what the businesses make,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “I mean, there is nothing added. The government doesn’t throw in anything. You know, nobody’s adding to the pot. People are taking out from the pot, in terms of frictional cost, investment management fees, brokerage commissions and all of that.”

Hear Buffett’s full explanation

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© 2023 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
BNSF

BNSF Launching Intermodal Service From Houston Port to Dallas & Denver

(BRK.A), (BRK.B)

Berkshire Hathaway’s BNSF Railway, in a bid to enhance their service offerings, has revealed plans to launch intermodal service options from the Port of Houston to two major destinations: Dallas/Fort Worth and Denver.

Commencing on June 2, this new endeavor will witness BNSF providing on-dock rail service from Barbours Cut Container Terminal at the Port of Houston.

The intermodal facility in Alliance, Texas, will serve as a key point of connection for this service, catering to the bustling Dallas/Fort Worth area. Additionally, BNSF’s intermodal facility in Denver will be another vital destination accessible through this service.

By introducing these intermodal service options, BNSF aims to bolster supply-chain efficiency while capitalizing on the escalating demand for intermodal transportation at the Port of Houston.

The Port of Houston, being one of the busiest ports in the United States, serves as a critical hub for international trade and commerce. The availability of efficient and reliable intermodal services is vital for facilitating the smooth flow of goods and ensuring seamless connectivity between various regions. BNSF’s decision to launch this new service demonstrates their foresight and understanding of the market’s demands.

The intermodal sector has witnessed significant growth in recent years, with businesses increasingly recognizing the benefits of integrating multiple modes of transportation to optimize their supply chains.

© 2023 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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BNSF

BNSF Rebuffed in $21.7 Million Settlement Offer With Swinomish Tribe

(BRK.A), (BRK.B)

BNSF Railway, a subsidiary of Berkshire Hathaway, recently found their attempt to settle a lawsuit with the Swinomish Tribal Community met with rejection.

The company had offered a settlement sum of $21.7 million, only to have it dismissed by the tribe. In response, the freight railroad has requested the involvement of a federal judge to appoint an arbiter who can determine an appropriate settlement, as the tribe did not provide a response to BNSF’s offer.

The lawsuit in question was initially filed back in March 2015, asserting that BNSF had breached the terms of a right-of-way easement granted to them by the railroad.

According to the Swinomish Tribe, BNSF had exceeded the agreed limits on train and car crossings outlined in the agreement. The violation was deemed to be conscious and deliberate by U.S. District Court Judge Robert Lasnik, who issued a ruling on March 27. Judge Lasnik also pointed out that this transgression was motivated by the pursuit of profits.

The primary concern of the Swinomish Tribe revolves around the potential risks posed to their waterways by the transportation of oil via trains passing over the Swinomish Channel. This channel acts as a crucial link between Skagit Bay in the south and Padilla Bay in the north. The tribe’s historical treaty rights safeguard their fishing activities, and they are apprehensive that BNSF’s transportation of Bakken crude oil, in a manner and quantity that contravenes the explicit terms of the easement agreement, may jeopardize their way of life. Furthermore, the tribe asserts that BNSF had operated these trains without obtaining their consent or permission.

Should BNSF lose the lawsuit, they could potentially face significant damages.

The Swinomish Indian Tribal Community holds the status of a federally recognized tribe residing in the Pacific Northwest, specifically in the state of Washington. Their ancestral connection to the Skagit River-Delta of Puget Sound spans numerous centuries, during which they have relied on fishing in the region’s brackish waters. The tribe’s historical treaty rights serve to safeguard their cultural heritage and way of life, and their deep-rooted ties to the land and waterways are self-evident.

The tribe’s concerns regarding the threat posed by oil trains to their waterways are not without foundation. The Swinomish Channel, which the trains traverse, stretches over 11 miles and links Skagit Bay in the south to Padilla Bay in the north, forming a separation between Fidalgo Island and mainland Skagit County. Any accidents or spills involving these trains could have dire consequences for the local environment, potentially leading to water contamination, harm to aquatic life and wildlife, as well as damage to tribal lands.

The Swinomish Tribe’s anxieties materialized on March 16 when two BNSF locomotives derailed on the Swinomish Indian Tribal Community Reservation, resulting in the spillage of diesel fuel. As a result, cleanup efforts were undertaken, involving the removal of roughly 2,100 cubic yards of contaminated soil and 4,300 gallons of groundwater from the site.

This struggle for their land rights is not the first instance in which the tribe has had to contend with external forces. The passage of trains through the tribe’s land has a long and contentious history, beginning with the laying of the original tracks in the late 1800s, without the consent of the Swinomish or the U.S. government. These tracks intersect with the northern boundary of the reservation, and the Swinomish, as the contemporary political successor to certain tribes and bands that signed the 1855 Treaty of Point Elliott, initially filed a lawsuit against the railroad in 1976.

© 2023 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
Berkshire Hathaway Specialty Insurance

Berkshire Hathaway Specialty Insurance Promotes Hilary Browne & Cameron Holmes to Global Underwriting Leadership Posts

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance (BHSI) has made two key leadership promotions, according to a recent announcement.

Hilary Browne, a 25-year veteran of the global insurance industry, has been promoted to the role of Deputy Global Chief Underwriting Officer. She joined BHSI in 2019 as Country Manager, Ireland, and Head of Casualty for Europe, and most recently served as Global Chief Underwriting Officer, Casualty and Healthcare, and Deputy Head of Europe. Her new role will see her assume executive oversight for BHSI’s global accident and health (A&H) underwriting, multinational underwriting and support, and underwriting affairs, while retaining responsibility for global casualty and healthcare underwriting.

Cameron Holmes, who has more than 20 years of experience in engineering and technical lines property insurance, has been promoted to Global Underwriting Officer, Property for Energy and Construction. He joined BHSI in 2015 as Property Energy and Construction Manager and has been Head of Property Technical Lines in Australia since 2018. In his new role, Cameron will continue to be based in Sydney and will report to Dean LaPierre, BHSI’s Global Chief Underwriting Officer, Property and Marine.

These leadership promotions come at a time of growth for BHSI’s global underwriting portfolio. The company’s executives have praised Hilary and Cameron for their contributions to BHSI and the wider industry, saying that they are ideal candidates for these new roles. Hilary’s transition to her new position will see her Europe region responsibilities move to Alessandro Cerase, the newly named Head of BHSI Europe Region.

© 2023 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
Precision Castparts

Precision Castparts Rebounds With Strong Aerospace Revenues

(BRK.A), (BRK.B)

Berkshire Hathaway’s Precision Castparts (PCC) has reported robust revenue growth in the first quarter of 2023, buoyed by a recovery in its aerospace business.

PCC’s revenues were $2.25 billion, representing a notable 28.1% surge from the previous year. The company is a leading player in the aerospace industry, and its earnings are heavily dependent on sales of aerospace products. The increase in revenue was primarily driven by a rise in demand for aerospace products, although the power/energy and general and industrial products also contributed to the overall revenue growth.

The long-term industry forecasts suggest that there will be strong demand for air travel and aerospace products, which bodes well for PCC’s future prospects. The company’s pre-tax earnings increased by 23.0% in the first quarter of 2023, reflecting an improvement in manufacturing and operating efficiencies.

PCC is a part of Berkshire’s industrial products group, which comprises The Lubrizol Corporation, metal cutting tools/systems IMC International Metalworking Companies, and Marmon Holdings. Marmon is an umbrella group that comprises over 100 autonomous manufacturing and service businesses. It includes leasing for the rail, intermodal tank container, and mobile crane industries, equipment and systems for the livestock and agricultural industries (CTB International), and a variety of industrial products for diverse markets (Scott Fetzer and LiquidPower Specialty Products).

Starting from October 19, 2022, Marmon also includes businesses acquired in connection with Alleghany, such as the structural steel fabrication products business conducted through W&W|AFCO Steel, as well as other businesses that became part of Marmon.

The combined revenues of Berkshire Hathaway’s industrial products group increased by $1.4 billion (18.6%) in the first quarter of 2023 compared to 2022, and pre-tax earnings grew by $225 million (18.5%). The pre-tax earnings as a percentage of revenues for the group were 16.3% for both the first quarters of 2023 and 2022. The operating results of the group in the first quarter of 2023 were impacted by business acquisitions and overall improved operating results at the pre-existing businesses.

Berkshire Hathaway’s overall operating earnings for Q1 2023 were a remarkable $8.065 billion, representing a significant increase from the first quarter of 2022, which recorded earnings of $7.160 billion. The conglomerate’s performance has been commendable, considering the challenges posed by the pandemic and the changing economic landscape.

© 2023 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
Lessons From Warren Buffett

Lessons From Warren Buffett: Don’t Let Investment Bankers Tell You What Company to Acquire

Warren Buffett’s approach to acquiring companies involves relying on his own research and analysis rather than depending on the opinion of investment bankers. He believes that investment bankers may not always provide trustworthy advice, as they may be incentivized to prioritize their own interests over those of the acquiring company.

“The idea of asking investment bankers or somebody to evaluate the businesses you’re going to buy, I mean, that strikes us as idiocy,” Buffett said at the 2000 Berkshire Hathaway annual meeting. “If you don’t know enough about a business to decide whether to buy it yourself, you’d better forget it. It does not make sense. You bring in somebody who’s going to get a very large check if you buy it, and a very small check if you don’t, that displays a faith in human nature that would strain Charlie and me.”

Hear Buffett’s full explanation

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© 2023 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
NetJets

NetJets to Add Fleet of Embraer Praetor 500s

(BRK.A), (BRK.B)

Berkshire Hathaway’s NetJets, the world’s largest private jet operator, has signed a new deal with Embraer for up to 250 Praetor 500 jet options. This partnership also includes a comprehensive services and support agreement, making the deal valued at over US $5 billion. The deliveries for this aircraft are expected to begin in 2025.

The Praetor 500 jet will be a new addition to NetJets’ fleet, which for over a decade has operated Embraer’s Phenom 300 series, one of the company’s most requested aircraft. This partnership between Embraer and NetJets began in 2010 when NetJets signed a purchase agreement for 50 Phenom 300 aircraft, with up to 75 additional options. In 2021, the companies signed a continuing deal for up to 100 additional Phenom 300/E jets, valued at over $1.2 billion, after Embraer successfully delivered over 100 aircraft.

NetJets’ commitment to creating an enhanced customer experience and its trust in Embraer’s industry-leading portfolio and top-ranked support has made this deal possible. NetJets is averaging over 1,200 worldwide flights per day.

“We are eager to add the Embraer Praetor 500, one of today’s most state-of-the-art business jets, to our midsize fleet,” said Doug Henneberry, Executive Vice President of NetJets Aircraft Asset Management. “This historic fleet agreement is another way that we are growing our fleet for the benefit of our loyal customers. By adding up to 250 aircraft to our fleet, we will continue providing NetJets Owners with exceptional service and seamless access to all corners of the globe.”

The Praetor 500 is the world’s most disruptive and technologically advanced midsize business jet. It has an impressive best-in-class range, enabling U.S. coast-to-coast capability, industry-leading speed, and unparalleled runway performance. It’s the only aircraft in its category with full fly-by-wire flight controls.

The Praetor 500 also offers exceptional comfort in its cabin. It features the lowest cabin altitude in its class, as well as the tallest and widest cross-section in the segment. Additionally, it offers a flat-floor cabin, stone flooring, a vacuum lavatory, and ample baggage space, including a fully enclosed internal baggage compartment.

“Since 2010, Embraer has enjoyed NetJets’ ongoing commitment to our industry-leading aircraft, which is a true testament to the value of our brand and our ability to deliver the ultimate experience in business aviation,” said Michael Amalfitano, President and CEO of Embraer Executive Jets. “Our strategic partnership has been an integral part of our business growth, with NetJets taking all aircraft delivery options that have been ordered with Embraer since inception. After building this successful foundation with the Phenom 300 series, it’s our pleasure to have now signed this monumental deal for the Praetor 500 midsize jet, and we look forward to an even more exciting future ahead.”

© 2023 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.