Month: January 2024

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Forest River

Forest River Acquires School Bus-Maker Collins Bus

(BRK.A), (BRK.B)

In a move signaling its continued growth and leadership within the transportation industry, Forest River Bus, LLC., a subsidiary of Berkshire Hathaway-owned Forest River, Inc., has acquired Collins Bus, one of the oldest and most esteemed school bus builders in the United States.

The deal was for $303 Million in cash.

A subsidiary of REV Group, Collins Bus boasts a storied legacy spanning over half a century, originating in 1967 in Kansas City, Missouri, before relocating to Hutchinson, Kansas. Recognized for its unwavering dedication to safety, durability, and reliability, Collins Bus revolutionized the industry with its pioneering development of the Type A school bus. This innovation catalyzed a succession of advancements, solidifying Collins buses as the epitome of versatility and trustworthiness nationwide.

Pete Liegl, President and CEO of Forest River, Inc., commented on the acquisition, stating, “The addition of Collins Bus to the Forest River Bus family signifies another milestone in our continued growth and industry leadership. Our Bus and Van division is a beacon of success for Forest River, and this acquisition further elevates our standards.”

David Wright, President of Forest River Bus, expressed excitement about the union, emphasizing, “We are delighted to welcome Collins Bus into the Forest River family. This acquisition merges the strengths and legacies of two industry titans. Collins Bus brings with it a remarkable history, an unwavering commitment to excellence, and a team of dedicated professionals. We cherish their heritage and anticipate building upon their achievements.”

Wright underscored the significance of prioritizing both products and people, stating, “Our focus extends beyond manufacturing to encompass our valued employees. The skilled and passionate individuals at Collins Bus are invaluable assets, and we eagerly anticipate collaborating with them to deliver superior school buses that prioritize student safety and well-being.”

Forest River’s acquisition of Collins Bus underscores a shared dedication to upholding the highest standards in manufacturing, customer service, and product innovation. Forest River pledges to honor Collins Bus’s legacy while integrating its own innovative approaches to enhance product offerings.

REV Group announced it will be exiting transit bus manufacturing by winding down operations at its ElDorado National-California business, which is expected to be substantially completed by the end of fiscal year 2024, once existing customer orders are completed and delivered.

© 2024 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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Lubrizol

Lubrizol and BASF Strike Licensing Deal for Industrial Lubricants

(BRK.A), (BRK.B)

Berkshire Hathaway-owned The Lubrizol Corporation and BASF Corporation have inked a significant licensing agreement for the production and distribution of select EMGARD® and Plurasafe® industrial lubricant products. Effective April 1, 2024, these licensed products will be seamlessly integrated into Lubrizol’s CPI Fluid Engineering brand.

The agreement encompasses a range of BASF products, including EMGARD 2946; EMGARD CL 4046, 4068; EMGARD EP WG 680; EMGARD HT CL 5220, 5320; Plurasafe CL 6032, 6046, 6068; Plurasafe P 44; and Plurasafe WGF 200 E. This collaboration marks a strategic move for both companies to better cater to specific customer requirements in the industrial lubricant market.

Brian Lieberman, Vice President of Fuel and Lubricant Solutions at BASF, expressed confidence in partnering with Lubrizol, citing the company’s expertise and ability to address niche customer needs. Meanwhile, Michael Brubaker, Vice President of Lubrizol Fluid Engineering, emphasized the agreement’s significance in bolstering Lubrizol’s extensive portfolio of Industrial Lubricants, further underscoring the company’s commitment to quality and customer satisfaction.

With Lubrizol boasting over 95 years of experience in researching, developing, and manufacturing specialty high-performance lubricants and BASF’s global presence, the collaboration is poised to deliver enhanced solutions to industrial lubricant customers worldwide.

BASF has taken proactive measures to ensure a smooth transition for affected customers, providing ordering and delivery details for related products. This seamless integration underscores the commitment of both organizations to prioritize customer satisfaction and market leadership in the industrial lubricant sector.

© 2024 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: Distinguishing Between Investing and Gambling

In the world of finance, there exists a fine line between investing and plain gambling, a distinction that renowned investor Warren Buffett finds almost inevitable for a particular type of investor. So, who are these investors? They are the ones constantly fixated on someone else’s portfolio.

During the 2017 Berkshire Hathaway Annual Meeting, Buffett shared his perspective on this phenomenon, stating, “There’s nothing more agonizing than to see your neighbor, who you think has an IQ about 30 points below you, getting richer than you are by buying stocks. And whether it’s internet stocks or whatever… and people succumb to it.” Buffett’s candid observation sheds light on the allure of trying to match or surpass the success of others in the stock market.

Buffett goes on to explain that during periods of a hot market, with new issues performing well and individuals leveraging their investments, many are drawn not only to speculation but what he describes as outright gambling. The temptation to chase after quick profits and follow the crowd can lead investors down a risky path.

The key takeaway from Buffett’s insight is the importance of staying true to sound investment principles rather than succumbing to the allure of others’ seemingly successful strategies. The comparison game in the market, driven by the fear of missing out, may often lead to speculative behavior that resembles more of a gamble than a calculated investment.

In conclusion, Warren Buffett’s wisdom serves as a reminder for investors to resist the urge to engage in speculative and impulsive actions driven by the success of others. Instead, a focus on informed and disciplined investing is crucial for building long-term wealth and financial stability.

Hear Buffett’s full explanation


See the complete Lessons From Warren Buffett series

© 2024 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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BNSF

BNSF Railway Unveils $3.92 Billion Investment Plan for 2024

(BRK.A), (BRK.B)

BNSF Railway Company (BNSF) has revealed its ambitious capital investment plan for the year 2024, totaling a whopping $3.92 billion.

According to Katie Farmer, President and CEO of BNSF, this year’s capital plan epitomizes the company’s steadfast commitment to expansion and enhancement. Farmer emphasized the crucial role these investments play in bolstering BNSF’s operational capacity and ensuring optimal service delivery to customers.

A substantial portion of the investment, approximately $2.88 billion, is earmarked for the maintenance of BNSF’s core network and associated assets. This allocation underscores BNSF’s proactive approach to infrastructure upkeep, aimed at minimizing service disruptions and optimizing network efficiency.

Key maintenance initiatives include the replacement and upgrading of rail infrastructure, including ballast and rail ties, along with the maintenance of rolling stock. Noteworthy projects in this domain encompass track surfacing spanning nearly 13,000 miles, the replacement of 365 miles of rail, and approximately 2.8 million rail ties. Additionally, a significant portion of the capital plan, totaling approximately $440 million, is dedicated to equipment acquisitions, ensuring BNSF’s fleet remains modern and efficient.

In line with its commitment to expansion and efficiency, BNSF has allocated just under $600 million for various expansion projects. This allocation builds upon the company’s substantial investments in expansion endeavors over the past five years, totaling nearly $2.6 billion. These expansion initiatives are designed to accommodate the growth trajectories of BNSF’s diverse clientele across its expansive network.

Noteworthy expansion projects include enhancements along the Southern Transcon route, facilitating increased traffic flow between the West Coast and the Midwest. These initiatives encompass the addition of new track segments in Eastern Kansas, as well as terminal and fueling improvements near Belen, New Mexico. Additionally, in Illinois, BNSF is advancing multi-year intermodal facility expansion projects in Chicago (Cicero), aimed at enhancing operational capabilities. In California, the company is actively pursuing property acquisitions and development for the Barstow International Gateway project, while also completing a multi-year track efficiency improvement project in San Bernardino.

© 2024 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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Lubrizol

Lubrizol Engineered Polymers Sites Achieve ISCC PLUS Certification, Advancing Sustainability Goals

(BRK.A), (BRK.B)

In a significant stride towards sustainability, Lubrizol Advanced Materials proudly announces that three additional sites within Lubrizol Engineered Polymers have secured the International Sustainability and Carbon Certification (ISCC) PLUS certification. This achievement, obtained at the close of the previous year, underscores Lubrizol’s commitment to environmentally responsible practices.

ISCC PLUS is an esteemed international sustainability certification designed for industrial applications. It sets the standard for fully traceable and sustainable supply chains, enabling companies to monitor and attribute environmentally friendly raw materials throughout the entire value chain. This is accomplished through transparent record-keeping, all without altering the production process.

The three sites that have attained this third-party qualification are Lubrizol Advanced Materials’ headquarters in Brecksville, along with the production plants in Avon Lake, Ohio, U.S., and Oevel, Belgium. This accomplishment follows the ISCC PLUS certification received by Lubrizol’s facility in Songjiang, China, last year. These certifications align with Lubrizol’s dedication to sustainability and the expansion of its ESTANE® TPU sustainable solutions, applicable in various industries such as footwear, electronics, and industrial applications.

Dr. Jesús Santamaria, Global Sustainability Business Director for Lubrizol Engineered Polymers, highlighted the impact of ISCC PLUS on their products, stating, “ISCC PLUS enables a fully transparent biomass balance approach and leads to the decrease of the Product Carbon Footprint (PCF) of our final product. This builds up on the launch of our ESTANE RNW TPU solutions which reduces the PCF with the existing equipment used by our customers, without any change in the production process or final material properties.”

Elizabeth Grove, Chief Sustainable Officer at The Lubrizol Corporation, emphasized the strategic importance of ISCC PLUS certification, stating, “Obtaining ISCC PLUS certification is an important step in ensuring that Lubrizol has a single, consistent, corporate-wide process across our organization to track materials. As we increase our use of bio-based and renewable materials, Lubrizol’s customers are provided even more confidence in our ability to credibly trace these materials through our manufacturing process.”

By adopting the mass balance approach and incorporating the ISCC PLUS external verification system, Lubrizol aims to expand the use of alternative feedstocks. This move supports the acceleration of Lubrizol’s global sustainability journey, demonstrating a commitment to collaborating with partners and building alliances to develop solutions that have positive impacts on the environment and society, outweighing the footprint it takes to produce them.

© 2024 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
BNSF

BNSF Railway Achieves Unprecedented Workplace Safety Milestone in 2023

(BRK.A), (BRK.B)

BNSF Railway marked a historic achievement in workplace safety in 2023, recording the lowest injury frequency rate in its 175-year history. The company, comprised of 37,000 dedicated employees, operated its extensive 32,500-mile network without a single loss of life and achieved the lowest number of employee injuries ever. Notably, employee injury rates witnessed a significant reduction of over 20 percent, and injury severity decreased by nearly 35 percent, year-over-year, positioning BNSF as an industry leader in safety.

Katie Farmer, the President and CEO of BNSF, expressed pride in the outstanding performance, stating, “Our success in 2023 is a giant leap towards realizing our ultimate safety vision of a workplace free of accidents and injuries. This monumental achievement is a testament to the commitment and passion for safety demonstrated by everyone at BNSF, especially our Operations teams. We extend our gratitude to all our frontline employees, whose dedication to safety made this significant milestone possible.”

This exceptional safety record in 2023 builds upon a groundbreaking Transportation Safety Agreement (TSA) initiated by BNSF in 2022 with its transportation workforce. The TSA has played a crucial role in enhancing collaboration and communication between management and employees, setting a positive precedent for the industry.

Rich O’Connell, SMART-TD General Chairman, emphasized the commitment to safety among the workforce, stating, “Our membership is committed to safety, and having those closest to the work lead this effort is showing positive results.” Rob Cunningham, Brotherhood of Locomotive Engineers and Trainmen (BLET) General Chairman, added, “We take great pride in our dedicated members who prioritize safety in their daily work. The successful collaboration between labor and management, as evidenced by the TSA, stands as a testament to our effective model.”

As BNSF looks ahead to 2024 and beyond, its safety vision remains unwavering – a workplace completely free of accidents and injuries. Matt Igoe, Executive Vice President and COO, commended the people of BNSF for their commitment to safety, stating, “Our commitment and passion for safety set the people of BNSF apart. The strong finish to the year is clear proof of that. A special thanks to everyone who contributed throughout the year to elevate our safety performance to the next level.” The success of BNSF in 2023 not only reflects a dedication to safety but also underscores the effectiveness of collaborative efforts between employees and management in creating a secure and accident-free workplace.

© 2024 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: Why Timing the Market Might Not Be a Wise Move

Investing in a winning stock that has seen a meteoric rise might tempt some to cash in and buy back later at a lower price. However, two of the most revered figures in the investment world, Warren Buffett and Charlie Munger, caution against such market timing strategies.

During the 1999 Berkshire Hathaway Annual Meeting, Charlie Munger shared his wisdom, stating, “Generally speaking, trying to dance in and out of the companies you really love, on a long-term basis, has not been a good idea for most investors.” Munger’s insight underscores the challenges associated with attempting to time the market for long-term success.

Warren Buffett, known for his successful investment strategies, echoed Munger’s sentiments. “I know of no one that has been successful at, and really made a lot of money, predicting the actions of the market itself. I know a lot of people who have done well picking businesses and buying them at sensible prices, said Buffett.

Buffett emphasized the difficulty of executing market-timing moves, saying, “It’s pretty tough to do. You have to make two decisions right… you have to sell it right first, and then you have to buy it right later on. If you get into a wonderful business, the best thing to do is stick with it.”

The essence of their advice lies in the acknowledgment of the complexities involved in accurately predicting market movements. Successfully selling a stock at its peak and then reinvesting at a lower price requires not only impeccable timing but also the ability to make two crucial decisions with precision.

Buffett and Munger advocate for a more steadfast approach. Instead of trying to navigate the market’s short-term fluctuations, they recommend sticking with companies that one truly believes in for the long haul. Their philosophy underscores the importance of thorough research and confidence in the fundamental strength of a business.

In conclusion, while the allure of timing the market and maximizing profits can be tempting, the seasoned advice of Warren Buffett and Charlie Munger suggests that for most investors, a patient and unwavering commitment to quality businesses is the key to long-term success in the unpredictable world of investing.

Hear Buffett and Munger on market timing

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© 2024 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 Pilot Flying J

Berkshire Acquires Remaining 20 Percent of Pilot From Haslems

(BRK.A), (BRK.B)

Berkshire Hathaway now has another wholly-owned company, as it has completed its purchase of the remaining 20 percent share of the Pilot Corporation that the Haslems owned.

Recently, the two sides had settled their dispute over the valuation of the remaining 20 percent share of the Pilot Corporation that the Haslems owned.

The Haslem family had sued Berkshire contending that its change to pushdown accounting had hurt their valuation in regards to Berkshire’s buyout of the remaining 20 percent stake that the Haslems still owned of the travel center company. Berkshire counter sued contending that the Haslems had illegally engaged in a bribery scheme where top executives received payments in exchange for inflating earnings in a manner that would benefit Haslems on the price Berkshire would ultimately pay to the Haslems.

The matter was due to be fought out in two-day trial in early January in Delaware court, but a settlement ended all litigation.

On Tuesday, Berkshire Hathaway announced that “Pursuant to the terms of a settlement agreement reached with Pilot Corporation, Berkshire Hathaway Inc. has acquired Pilot Corporation’s remaining 20% interest in Pilot Travel Centers LLC effective today. Berkshire Hathaway now owns 100% of Pilot Travel Centers.”

© 2024 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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BYD

BYD’s 2023, A Global Triumph in NEV Sales and International Expansion

(BRK.A), (BRK.B)

Berkshire Hathaway-backed BYD’s global presence experienced a significant boost in 2023, with exports soaring by 334.2% to 242,765 units. The company expanded its footprint to over 70 countries on six continents. BYD’s technological prowess, commitment to eco-friendly mobility solutions, and collaboration with global top-tier partners contributed to this success.

Extensive Brand Matrix and Market Response

BYD solidified its position in the global new energy sector with the completion of its brand matrix, including the Dynasty series, Ocean series, DENZA, FANGCHENGBAO, and YANGWANG. Sales of the Dynasty and Ocean series reached 2,877,353 units, reflecting a remarkable 55.3% increase. DENZA, with 127,840 units sold in 2023, witnessed the DENZA D9 emerging as the annual MPV sales champion.

YANGWANG and FANGCHENGBAO, introduced in 2023, garnered positive market responses. YANGWANG U8 became a top seller in the million-level NEV segment, while BAO 5 established a strong presence in the off-road segment.

Continued Commitment to a Greener Future

From leading China’s NEV market to achieving the top global NEV seller status and ranking among the top ten in the global automotive industry, BYD has demonstrated the vast potential of the new energy sector. With a commitment to leveraging technological innovations for a better life, BYD aims to accelerate the transition towards a greener future, contributing to its vision to “Cool the Earth by 1°C.”

© 2024 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.

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Lessons From Warren Buffett

Lessons From Warren Buffett: There’s No Magic Formula

Warren Buffett places a significant emphasis on a company’s intrinsic value when making investment decisions. Whether considering the acquisition of an entire company or a partial stake, Buffett believes that understanding the intrinsic value is crucial. The key factor in this assessment is whether a company is undervalued or overvalued, a principle that extends to the broader stock market.

Unlike some might hope for, Buffett dismisses the idea of a straightforward formula for determining valuation. According to him, the complexity of evaluating a company’s worth cannot be distilled into a neat mathematical equation. Speaking at the 2017 Berkshire Hathaway Annual Meeting, Buffett remarked, “It’s not reducible to any formula where you can actually put in the variables perfectly.” He emphasized that the process is far from simple, and it’s not a matter of plugging in one or two formulas to declare a market or a company undervalued or overvalued.

Buffett acknowledged the existence of formulas but stressed that the challenge lies in identifying the right variables to input. It’s not just about having a formula; it’s about discerning the nuances and intricacies that affect a company’s true value. This perspective underscores Buffett’s nuanced approach to investing, where a deeper understanding of the qualitative aspects of a business is crucial alongside any quantitative analysis.

In essence, Buffett’s wisdom suggests that successful investing requires a blend of financial acumen, qualitative judgment, and a keen understanding of the ever-evolving dynamics of the market. While there may not be a magic formula, the pursuit of intrinsic value remains at the heart of Buffett’s investment philosophy, emphasizing the importance of a thoughtful and nuanced approach to valuation in the world of finance.

Hear Warren Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2024 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.