Month: April 2024

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BNSF

BNSF Railway Customers Pour $4.1 Billion into Investments, Creating Over 4,200 Jobs

(BRK.A), (BRK.B)

BNSF Railway, a subsidiary of Berkshire Hathaway, has reported that investments from its customers soared to over $4.1 billion in 2023, marking a significant contribution to local economies and job creation. Notable investments hailed from key supply chain partners and customers such as Cenovus Energy and Green Bison Soy Processing LLC. These investments have not only bolstered infrastructure but have also spurred the creation of more than 4,200 new jobs in communities where BNSF operates.

The surge in investments underscores a collaborative effort between BNSF and its customers to tailor rail development solutions to meet specific needs, thereby enhancing supply chains and driving economic growth. Chris Danos, Assistant Vice President of Economic Development at BNSF, emphasized the company’s commitment to creating customizable solutions that not only streamline logistics costs but also foster sustainability.

Throughout 2023, BNSF facilitated various industrial and agricultural projects across its network, aiding in the transportation of commodities crucial to local economies. Two standout examples include:

Cenovus Energy: With a substantial investment, the Superior Refinery in Superior, Wisconsin, acquired by Cenovus Energy in 2021, underwent reconstruction and reopened its doors in 2023. The rail-served refinery, which produces asphalt, vacuum gas oil, light cycle oil, and LPG products, employed over 350 people and contributed significantly to the economic vitality of the Superior-Duluth area. Annual payroll exceeded $29.9 million, while substantial spending with contractors and vendors further boosted local economies.

Green Bison Soy Processing LLC: In Spiritwood, North Dakota, an investment of approximately $350 million saw the establishment of Green Bison Soy Processing, a soybean processing plant operated by ADM & Marathon Petroleum Corporation. This facility addresses the growing demand for renewable fuels, particularly renewable green diesel, sourcing and processing local soybeans. The complex, featuring over 22,000 feet of new track, can annually ship 14,000 carloads of outbound soy meal and vegetable oil. Notably, the plant has created hundreds of regional jobs and generated an additional 75 positions.

The influx of investments in 2023 represents the largest commitment by BNSF customers and local economic development organizations to new or expanded facilities in the past five years. These endeavors highlight the pivotal role of rail infrastructure in driving economic prosperity and fostering sustainable growth in communities across the BNSF network.

© 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: You Have to Be Your Own Analyst

In the world of stock market analysis, there’s no shortage of experts on both the Wall Street buy and sell sides, along with independent analytical services. However, when it comes to evaluating companies, Warren Buffett, the legendary investor and Chairman of Berkshire Hathaway, stands apart.

According to Buffett, relying on the reports that Wall Street analysts produce is futile; instead, investors must conduct their own thorough research, diving into a company’s annual reports, and those of its competitors.

At the 1996 Berkshire Hathaway Annual Meeting, Buffett expressed his skepticism towards Wall Street reports, stating, “You can’t read Wall Street reports and get anything out of them.” He emphasized the necessity of independent research, stressing that in his many decades of experience, he has never stumbled upon a valuable idea from the reports issued by Wall Street firms. Instead, hehas derived numerous insights from meticulously studying a company’s annual reports.

In essence, Buffett advocates for hands-on engagement with company documents, believing that a deep understanding of a company’s fundamentals is crucial for successful investing. This approach aligns with his renowned philosophy of value investing, where thorough analysis and a long-term perspective reign supreme over short-term market fluctuations.

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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Lubrizol

Lubrizol Aims to Double Revenues From India

(BRK.A), (BRK.B)

Lubrizol, a global player in specialty chemicals and a subsidiary of Berkshire Hathaway, has set its sights on doubling its revenue from the lucrative Indian market by 2029.

Currently, India contributes ten percent to the company’s global revenues, a figure set to skyrocket with strategic investments and expansion plans underway.

To fuel this ambitious growth trajectory, Lubrizol is injecting a substantial $150 million into its operations in India. One of the pivotal moves includes the construction of a cutting-edge CPVC resin plant in Vilayat, slated to claim the title of the world’s largest upon its completion in 2025. This state-of-the-art facility is poised to significantly bolster Lubrizol’s production capacity and meet the burgeoning demand for specialty chemicals in India and beyond.

Moreover, Lubrizol is establishing a Global Capacity Center (GCC) in Pune, India, aimed at fostering innovation and enhancing operational efficiency in the region. This strategic initiative not only underscores the company’s commitment to driving technological advancements but also positions India as a vital hub in Lubrizol’s global network.

In addition to infrastructure development, Lubrizol is ramping up its manpower, anticipating the creation of approximately 4,000 direct and indirect jobs through its new investments. This move not only bolsters employment opportunities but also underscores Lubrizol’s role as a catalyst for economic growth and development in the Indian market.

Furthermore, recognizing the burgeoning demand for CPVC compounds, Lubrizol has doubled its compound capacity at its Dahej, Gujarat, facility. This expansion reinforces Lubrizol’s commitment to meeting the evolving needs of its customers in India, further solidifying its position as a trusted partner in the specialty chemicals 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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Dairy Queen

Dairy Queen Names New VP of Franchise Development for U.S. & Canada

(BRK.A), (BRK.B)

Berkshire Hathaway-owned American Dairy Queen Corporation, a prominent player in the quick-service restaurant industry and a subsidiary of International Dairy Queen, Inc., has announced the appointment of Gregg Benvenuto as its new Vice President of Franchise Development for the U.S. and Canada.

In his new role, Benvenuto will spearhead efforts to drive the company’s development market planning and franchise unit sales across both countries.

Bringing with him a wealth of experience spanning decades in restaurant franchise development, Benvenuto has previously held executive positions at renowned establishments such as Dine Brands, Papa Murphy’s, and The Coffee Bean and Tea Leaf. Additionally, his tenure as a franchise business consultant at Yum! Brands further solidifies his expertise in the field.

Dan Kropp, Chief Operating Officer, U.S. and Canada at American Dairy Queen Corporation, expressed confidence in Benvenuto’s abilities, stating, “We have aggressive five-year goals to open new DQ Grill & Chill restaurants in the U.S. and Canada. Gregg brings impressive franchise development leadership in the restaurant industry in roles of increasing responsibility. His contributions will help us grow DQ restaurants in key markets to ensure we are ubiquitous in every state and every province.”

Benvenuto himself conveyed his excitement about joining the Dairy Queen team during a period of significant growth and opportunity. “I’m pleased to join the Dairy Queen team at a time of tremendous growth and continuous opportunity,” said Benvenuto. “I look forward to leading a team of franchise development professionals to reach new levels of success. Together, we can make DQ restaurants a household name in every part of the U.S. and Canada.”

With a bachelor’s degree in business administration from Towson State University in Baltimore, Maryland, Benvenuto’s hands-on experience positions himself as a key asset in driving American Dairy Queen Corporation’s expansion efforts in the North American market.

© 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
Lessons From Warren Buffett

Lessons From Warren Buffett: Stocks Can Sell at Silly Prices

(BRK.A), (BRK.B)

The Efficient Market Hypothesis (EMH) has long been a cornerstone theory in understanding stock market behavior. It posits that at any given moment, stock prices accurately reflect all available information about a company. This theory gained significant traction during the 1970s, buoyed by the rapid expansion of the Information Age, which revolutionized data storage and exchange.

In an era where even casual investors wield valuation tools that would have seemed like science fiction to traders of the past, one might assume that market efficiency has reached unprecedented levels. However, Warren Buffett challenges this notion, noting that the market is mostly efficient but not completely efficient.

Buffett contends that in some cases the market is far from efficient. Contrary to the belief that stock prices consistently reflect a company’s true value, Buffett argues that market inefficiencies are inherent. He asserts that stocks often become mispriced due to various factors.

Speaking at the 2012 Berkshire Hathaway Annual Meeting, Buffett referenced Benjamin Graham’s seminal work, “The Intelligent Investor.” In particular, he highlighted Chapter 8, which introduces the concept of “Mr. Market.” According to Graham, Mr. Market is an erratic and unpredictable figure, prone to irrational behavior akin to a “psychotic drunk.” Buffett emphasizes that investors should view Mr. Market as a partner rather than an advisor, seizing opportunities when prices deviate from intrinsic value.

In essence, Buffett’s perspective underscores the importance of recognizing and capitalizing on market fluctuations, leveraging them to make sound investment decisions, especially when stocks in rare instances sell at “silly prices.”

Despite advancements in technology and access to information, the market remains a realm where irrationality and opportunity coexist, shaping the dynamics of investing.

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 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
Occidental

Berkshire Hathaway Granted Approval to Substantially Increase Stake in Occidental Petroleum

(BRK.A), (BRK.B)

The Federal Energy Regulatory Commission (FERC) has greenlit Berkshire Hathaway’s expansion of its stake in Occidental Petroleum, deeming it “consistent with the public interest.” This move permits Berkshire to boost its ownership in the energy giant up to fifty percent.

Warren Buffett, the driving force behind Berkshire Hathaway’s major investment decisions, has articulated the company’s positive stance on Occidental Petroleum. At the 2023 Berkshire Hathaway Annual Meeting, Buffett expressed favor towards Occidental’s position in the Permian Basin, highlighting its strategic significance. However, he emphasized that Berkshire has no intentions of acquiring a controlling interest in the company. Buffett reiterated confidence in Occidental’s existing management, asserting, “we wouldn’t know what to do with it.”

In addition to its ongoing open market purchases, Berkshire Hathaway holds warrants enabling it to acquire 80 million Occidental shares at an exercise price of $62.50 per share. These warrants were obtained in 2019 when Berkshire provided $10 billion, facilitating Occidental’s successful bid of $38 billion to acquire Anadarko Petroleum, outbidding industry heavyweight Chevron.

Berkshire Hathaway’s increasing stake in Occidental Petroleum underscores its continued confidence in the energy sector and strategic investments aligned with its long-term vision.

© 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
BYD

BYD’s New-Energy Vehicle Sales Surge in March, Rebounding Strongly

(BRK.A), (BRK.B)

BYD, the Chinese automaker backed by Berkshire Hathaway, has had a remarkable resurgence in its new-energy vehicle sales for the month of March. The company reported selling a total of 626,263 new-energy vehicles, encompassing both plug-in electric vehicles (EVs) and battery EVs. This figure marks a significant 13% increase compared to the same period last year.

After facing a decline in sales during the initial months of the year, BYD experienced a robust rebound in March, with sales soaring by an impressive 46%.

BYD’s Chairman and President, Wang Chuanfu, noted at an investors’ conference on Wednesday that total deliveries in 2024 may exceed 3.6 million vehicles. He predicted that total global exports could reach 500,000 units.

The increase in sales, despite growing competition from other Chinese automakers, reflects the growing demand for eco-friendly transportation solutions, driven by increasing environmental consciousness and a shift towards sustainable mobility options.

© 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.

Categories
Berkshire Hathaway Specialty Insurance

Berkshire Hathaway Specialty Insurance Names Chres Lee to Head of Transactional Liability in Canada

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance (BHSI) has bolstered its global Transactional Liability team with the addition of Chres Lee as Head of Transactional Liability in Canada, the company has announced.

Michael Brooks, Head of Transactional Liability, North America, expressed the significance of this move, stating, “With this latest appointment, we continue to strengthen our Transactional Liability team and capabilities around the globe. Chres has deep M&A expertise, strong market relationships, and shares BHSI’s commitment to ensuring excellent service for our customers and brokers throughout Canada.”

Lee brings a wealth of experience to her new role, having served as M&A Underwriting Counsel at another major insurer prior to joining BHSI. Before that, she spent eight years practicing M&A law at two leading Canadian law firms. Based in Ontario, Canada, Lee is poised to contribute significantly to BHSI’s presence and operations in the Canadian market.

This expansion underscores BHSI’s dedication to providing top-notch services and expertise in transactional liability insurance, reinforcing its position as a trusted partner for clients and brokers worldwide.

© 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.