Month: June 2024

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Lessons From Warren Buffett

Lessons From Warren Buffett: Steering Clear of Gambling-Type Behavior in Investing

In a world where speculative opportunities seem ever more enticing, legendary investor Warren Buffett has a clear message: gambling-type behavior, whether in the stock market or purchasing a lottery ticket, will ultimately lead investors astray.

Buffett’s wisdom, shared at the 2016 Berkshire Hathaway Annual Meeting, underscores the importance of maintaining a rational investment approach. He highlights that while people may win lotteries occasionally, it’s crucial not to let such occurrences influence one’s investment decisions.

“People win lotteries every day, but there’s no reason to have that effect you at all. You shouldn’t be jealous about it,” Buffett remarked. “If they want to do mathematically unsound things, and one of them occasionally gets lucky… don’t get on, it’s nothing to worry about.”

Buffett’s advice emphasizes the need for investors to focus on long-term strategies and view stocks as ownership in businesses rather than mere ticker symbols. He suggests adopting a mindset where buying a stock is akin to purchasing a business, and therefore, fluctuations in stock prices should not prompt constant monitoring or emotional reactions.

“When you buy a stock, you get yourself in the mental frame of mind that you’re buying a business, and if you don’t look at a quote on it for five years, that’s fine,” Buffett advised. “You want to look at your stocks as businesses, and think about their performance as businesses.”

Ultimately, Buffett urges investors to avoid succumbing to the allure of speculative games and instead focus on sound investment principles. As opportunities to gamble may abound, it’s essential to remain steadfast in making decisions based on logic and long-term value rather than short-term fluctuations or trends.

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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NetJets

NetJets and Pilots’ Union Clash Over Safety Concerns Amid New Lawsuit

(BRK.A), (BRK.B)

Just weeks after ratifying their labor agreement, Berkshire Hathaway’s NetJets and its pilots’ union are in a new dispute. On June 3, the NetJets Association of Shared Aircraft Pilots (NJASAP) reported that NetJets filed a surprise lawsuit in the Franklin County Court of Common Pleas.

The lawsuit alleges that the union defamed the company with statements about safety, maintenance, and pilot training concerns over the past year. NJASAP, representing over 3,400 NetJets pilots, asserts that these concerns have intensified recently.

NJASAP President Capt. Pedro Leroux emphasized the union’s stance, stating, “We view the lawsuit as an attempt to silence us. However, NJASAP has a federally protected right and an organizational and moral responsibility to our members – the NetJets pilots – and to our customers to raise safety issues, and we will continue to do just that.”

The union has been vocal about its commitment to addressing safety, training, and maintenance issues with management. Despite their efforts to collaborate, Leroux noted that management has chosen legal action over dialogue. “Management’s retaliatory course of action will not compel us to abandon our mission: NJASAP will not be intimidated into silence by anyone or anything, including a lawsuit,” he said.

This legal battle highlights ongoing tensions between NetJets and its pilots that despite increased pay have yet to be resolved.

© 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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Berkshire Hathaway Energy

Berkshire Hathaway and Occidental Partner to Revolutionize Lithium Extraction

(BRK.A), (BRK.B)

Berkshire Hathaway-backed Occidental and BHE Renewables, a subsidiary of Berkshire Hathaway Energy, have joined forces to demonstrate and deploy TerraLithium’s Direct Lithium Extraction (DLE) technologies. This partnership aims to extract and commercially produce high-purity lithium compounds from geothermal brine, and will lead to Berkshire owning and operating commercial lithium production facilities in California.

TerraLithium, a subsidiary of Occidental, holds patents for DLE technologies capable of converting any lithium-containing brine into a high-purity, responsibly sourced lithium supply. BHE Renewables operates 10 geothermal power plants in California’s Imperial Valley, which handle 50,000 gallons of lithium-rich brine per minute, producing 345 megawatts of clean energy. The joint venture has initiated a project at BHE Renewables’ Imperial Valley facility to demonstrate TerraLithium’s DLE technology’s feasibility for environmentally safe lithium production.

“This joint venture with TerraLithium signifies a major step forward in BHE Renewables’ goal to produce lithium in an environmentally responsible and commercially viable way, benefiting the Imperial Valley community,” said Alicia Knapp, President and CEO of BHE Renewables. “We are thrilled to collaborate with Occidental on this opportunity to position the Imperial Valley as a global leader in lithium production.”

Upon successful demonstration, BHE Renewables plans to construct, own, and operate commercial lithium production facilities in the Imperial Valley and potentially license the technology for projects elsewhere.

“By integrating Occidental’s brine management expertise with BHE Renewables’ geothermal operations knowledge, we can advance a more sustainable form of lithium production,” said Richard Jackson, President of U.S. Onshore Resources and Carbon Management Operations at Occidental. “We are eager to work with BHE Renewables to showcase how DLE technology can produce a critical mineral essential for achieving net-zero goals.”

Lithium is crucial for batteries in electric vehicles, consumer electronics, and energy storage, as well as in the production of glass, ceramics, and pharmaceuticals. The International Renewable Energy Agency projects a tenfold increase in battery lithium demand from 2020 to 2030, driven by battery demand growth.

“Securing a reliable and domestic high-purity lithium supply is vital for the energy transition,” said Jeff Alvarez, President and General Manager of TerraLithium. “The partnership with BHE Renewables will accelerate the development and commercial deployment of our Direct Lithium Extraction technologies to meet the growing global lithium demand.”

© 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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McLane

McLane Company Unveils Innovation Kitchen at Texas Headquarters

(BRK.A), (BRK.B)

Berkshire Hathaway-owned McLane Company Inc., one of the nation’s largest distributors and a key partner to retail and restaurant brands, has announced the grand opening of its Innovation Kitchen at its headquarters in Temple, Texas.

“We are excited to unveil the McLane Innovation Kitchen, a space that embodies our dedication to innovation, collaboration, and a world-class customer experience,” said Vito Maurici, McLane’s customer experience officer.

The state-of-the-art Innovation Kitchen is designed as a full-scale replica of a convenience store, showcasing cutting-edge retail foodservice equipment and products. It allows customers to see how various products and equipment fit into different store layouts and planograms. The space also highlights McLane Fresh, Emerging Brands, and CVP private label brands, offering customers the chance to sample products and explore marketing materials.

Beyond its showcase function, the Innovation Kitchen serves as a hub for development and innovation. The McLane Fresh team will use the space to conceptualize and test new menu items, catering to evolving consumer trends and customer requests. Customers are invited to sample these new creations, ensuring McLane stays at the forefront of product innovation and collaboration.

“This facility showcases our commitment to setting new standards for excellence in the industry and underscores our role as a trusted partner in our customers’ success,” Maurici added. “Through this platform for product testing, creation, and display, we have the opportunity to engage with customers at every stage of their retail foodservice journey.”

© 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: Buy a Stock That Never Needs to Be Sold

Warren Buffett, the legendary investor known for his long-term approach to investing, has emphasized the importance of finding stocks that one can hold indefinitely. At the 1998 Berkshire Hathaway annual meeting, Buffett articulated his belief that the ultimate goal for investors should be to identify companies that they never have to sell.

Buffett’s philosophy is simple yet profound: seek out businesses with enduring qualities, solid fundamentals, and robust competitive advantages. When Buffett’s conglomerate, Berkshire Hathaway, acquires companies like GEICO, See’s Candy, or BNSF Railway, it’s not with the intention of flipping them for a quick profit. Instead, Buffett aims to invest in businesses that he would be content to own for the rest of his life.

This buy-and-hold strategy reflects Buffett’s confidence in the power of compounding and the value of patience. By focusing on businesses with long-term growth potential, Buffett believes investors can weather market fluctuations and capitalize on the wealth-building opportunities that come with enduring ownership.

In essence, Buffett’s advice boils down to this: rather than chasing short-term gains, prioritize finding stocks that have the potential to deliver sustained value over the long haul. By aligning your investment strategy with Buffett’s timeless wisdom, you too can aim to build a portfolio of stocks that stand the test of time.

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.