Categories
Lessons From Warren Buffett

Lessons from Warren Buffett: SPACs Show the Danger of Deadlines in Investing

In recent years, Special Purpose Acquisition Companies (SPACs) became a popular investment vehicle, offering a way for private companies to go public without the traditional initial public offering (IPO). This trend attracted retail investors eager to own shares in the next hot company. However, as the initial excitement waned, many investors found themselves holding stocks that significantly declined in value.

Warren Buffett, renowned for his investment wisdom, has been skeptical of SPACs from the start. One critical issue he highlighted is the inherent pressure for SPACs to acquire a company within two years or return the funds to investors. This deadline can drive SPAC managers to make hasty deals, regardless of their long-term benefits for investors.

“If you put a gun to my head and said, ‘You’ve got to buy a big business in two years,’ you know, I’d buy one. But it wouldn’t be much of one,” Buffett remarked at the 2021 Berkshire Hathaway Annual Meeting.

Buffett recalled an interaction with a well-known figure who needed to invest the money quickly to avoid returning it to investors. “I had a call from a very famous figure many years ago who was involved in it and wanted to learn about reinsurance. And I said, ‘Well, I don’t really think it’s a very good business.’ And he said, ‘Yeah, but,’ he says, ‘if I don’t spend this money in six months, I’ve got to give it back to the investors.’ So, you know, it’s a different equation that you have if you’re working with other people’s money, where you get the upside and you have to give it back to them if you don’t do something. ”

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.

Categories
McLane

McLane Engage 2024: Innovation and Culinary Insights Take Center Stage in Nashville

(BRK.A), (BRK.B)

Berkshire Hathaway’s McLane Company, Inc., a leading U.S. distributor and key partner to major retail and restaurant brands, has its annual trade show this week, McLane Engage, in Nashville, Tennessee, with a refreshed format and several product announcements.

The event features keynote speaker Padma Lakshmi, renowned food expert and “Top Chef” personality, who will engage in a conversation with Farley Kaiser, McLane’s senior director of culinary innovation, about her career, cultural influences, and the future of retail foodservice.

This year’s McLane Engage reached full capacity for exhibitor space, with major brands like Hershey, Kraft Heinz, and Mars Wrigley showcasing a wide range of products. McLane’s digital marketplace, Emerging Brands, will feature several new exhibitors, expanding its offerings in health, beauty, wellness, and general merchandise.

Chris Smith, president of McLane Retail, highlighted the event’s role in showcasing industry innovation and providing suppliers with unique opportunities to present their latest products. McLane continues to evolve, aiming to stay ahead of industry trends and meet the changing needs of customers.

Attendees can look forward to new product launches, including McLane Fresh’s Better Case Bakery, a curated on-the-go bakery program, and a seasonal CupZa! pumpkin spice shot. McLane’s private label, Consumer Value Products, Inc., will also introduce new items from its Beau Dacious line of dog treats and accessories.

The three-day event includes educational sessions on AI in retail, convenience store design, and technology-driven transformation. It concludes with a farewell networking breakfast on Friday.

© 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
Lubrizol

Lubrizol Opens Beauty Research Institute in Shanghai to Drive Innovation

(BRK.A), (BRK.B)

Berkshire Hathaway’s Lubrizol, a global leader in specialty chemistry, has launched its Beauty Research Institute in Shanghai, China. This new site is set to become a strategic hub for advancing in vivo beauty testing, leveraging decision science to develop next-generation beauty ingredients. It aims to foster innovation, enhance collaboration, and accelerate time-to-market for Lubrizol’s beauty and personal care customers in the region and worldwide.

The institute expands Lubrizol’s R&D and lab network in the Asia Pacific, featuring advanced clinical testing equipment and collaborative spaces modeled after the company’s renowned testing facilities in Barcelona. It offers state-of-the-art services, including claim substantiation, sensory evaluation, and consumer insight generation, along with training and education programs. By integrating artificial intelligence and computer vision, the center is poised to provide customized support to customers, driving faster and more efficient innovation.

Bernardo Medeiros, Vice President of Lubrizol Beauty, highlighted the significance of the Shanghai institute, noting China’s pivotal role as the fastest-growing beauty market. He emphasized that combining global technologies with local insights will enable Lubrizol to deliver solutions that resonate both locally and globally.

With nearly a century of innovation history, Lubrizol has a strong presence in Asia Pacific, including commercial offices, manufacturing sites, and technical centers. Henry Liu, Vice President of Lubrizol APAC, underscored China’s influence in technological advancement and stated that the new institute reinforces Lubrizol’s commitment to local innovation and talent development.

Lubrizol’s Beauty business offers a wide range of ingredients and expertise for various beauty products, continually winning industry awards for its contributions to active and functional beauty ingredients.

© 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
Berkshire Hathaway Specialty Insurance

BHSI Expands Leadership Team in Asia Amid Strong Regional Growth

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance (BHSI) has made key leadership changes in its Asia operations. Kiran Prakash has been appointed as Head of First Party Lines, where he will oversee Energy, Construction, and General Property in the region. Additionally, Jessie Yuen has been promoted to Head of Energy, Asia, succeeding Min Ong, who has moved to London as Underwriting Manager for Energy Property at BHSI. Jess Au will continue in her role as Head of General Property, Asia.

Marc Breuil, Head of Asia and the Middle East at BHSI, highlighted the company’s strong and profitable growth in Asia, attributing this success to the efforts of Kiran and Jessie. Kiran, who joined BHSI in 2015 and has nearly two decades of industry experience, has been instrumental in developing the company’s Construction business. Jessie, with over 20 years of experience in first-party lines, has played a key role in strategically positioning BHSI’s Energy Property portfolio in the market since joining the company in 2019.

These leadership changes reflect BHSI’s commitment to strengthening its presence in Asia and continuing its growth trajectory in the region.

© 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
CORT

CORT Events Continues to Enhance Service with Strategic Orlando Warehouse Expansion

(BRK.A), (BRK.B)

Berkshire Hathaway’s CORT Events, the trade show and event division of CORT Furniture Rental, the nation’s premier provider of furniture rental and destination services, is excited to announce its strategic expansion. As part of this growth, CORT Events is relocating its Orlando warehouse to a larger facility as of August 15, 2024, enhancing its ability to serve trade shows, exhibits, and events in Orlando and southern Florida.

Daniel Tiepelman, vice president of operations, highlighted the practical benefits of the expansion. “This larger warehouse is a testament to our dedication to customer service. By doubling our space, we can stock more products in demand and meet our clients’ needs promptly,” he said.

Damon Ross, senior vice president of CORT Events, further emphasized the strategic significance of the move. “This strategic relocation allows us to broaden our reach and better meet our clients’ and market’s evolving needs. By positioning the CORT Events warehouse closer to our sister division, we aim to foster growth and improve our service in the trade show market,” Ross explained.

The new warehouse, at 8550 McCoy Rd, Suite 200, is 5 miles from the former warehouse and will streamline operations with CORT Furniture Rental, CORT’s business-to-consumer division. This collaboration is designed to enhance efficiency and service delivery within this important market.

“This location and increased warehouse size enables CORT Events to continue to stay focused on improving the customer experience and offer increased product volume and diversity to the Florida region,” noted Phil DeSarno, vice president of sales, marketing and merchandising.

CORT Events’ expansion efforts extend beyond Orlando. In late June, they opened a warehouse in Round Rock, TX, to cater to the dynamic Austin and San Antonio markets.

As the nation’s largest event and trade show furniture rental company, CORT Events boasts 17 warehouses across the country. They offer a wide selection of furnishings, lighting, and event drape, as well as free interactive design tools, positioning CORT Events as a one-stop solution for creating engaging, functional spaces.

© 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
Lessons From Warren Buffett

Lessons From Warren Buffett: Why Investors Keep Repeating the Same Mistakes

Warren Buffett, one of the most successful investors of all time, emphasizes a critical lesson for investors: history often repeats itself because people fail to learn from it. Speaking at the 2004 Berkshire Hathaway Annual Meeting, Buffett remarked, “What we learn from history is that people don’t learn from history.”

This observation is particularly relevant in financial markets, where boom and bust cycles are common. Despite past experiences with market excesses, investors frequently make the same mistakes, chasing quick profits during booms and panicking during busts.

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.

Categories
BYD

BYD Leaps to No. 143 on Fortune Global 500, Leading Automotive Growth

BYD, backed by Berkshire Hathaway, has made a significant leap in the Fortune Global 500, rising from No. 212 to No. 143 in just a year. This marks BYD’s third consecutive year on the list, underscoring its rapid growth in the automotive sector. In 2023, BYD achieved remarkable success, with annual revenue soaring to 602.32 billion CNY—a 42% increase compared to the previous year. This impressive growth cements BYD’s position as the fastest-growing brand in the automotive category.

The company recently inaugurated its Thailand plant in Rayong, and produced its 8 millionth new energy vehicle.

In 2023, BYD achieved a staggering 337% year-on-year increase in exports, totaling 243,000 vehicles. During the first half of this year, BYD sold 1.607 million new energy vehicles worldwide—a 28% year-on-year growth. Impressively, over 203,000 of these vehicles were exported, reflecting a remarkable 173.8% year-on-year increase.

© 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
BNSF

BNSF Finishes Mainline Improvement Project in Becker, New Mexico

(BRK.A), (BRK.B)

BNSF Railway has completed its multi-year, mainline improvement project in Becker, New Mexico. This new investment is adjacent to the railroad’s Belen facility, the largest fueling facility in North America, and will improve the railroad’s total train capacity through the Southern Transcon route by roughly 30 percent.

“Belen, New Mexico is really the heartbeat of our Southern Transcon, accounting for about a quarter of BNSF’s entire fuel usage and 25% of our volume,” said VP of Service Design Jon Gabriel, who will take over as group vice president of Consumer Products in September. “Having this new added capacity in Becker positions us for tremendous growth, while improving service consistency for all our current customer traffic further reducing our carbon emissions across this key intermodal route.”

The Becker facility includes two new processing tracks at approximately 20,000 feet available for fueling, inspections and crew changes. These additions will minimize the time it takes for trains to stop and get moving again toward their destination.

BNSF’s Belen, New Mexico facility, located on the Clovis Subdivision, serves as the primary hub for BNSF fueling and inspections between Los Angeles and Chicago.

© 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
Lessons From Warren Buffett

Lessons From Warren Buffett: Why Warren Buffett Avoids IPOs

When bull markets reach their zenith, a familiar spectacle unfolds: a flurry of companies rushing to go public through Initial Public Offerings (IPOs). Yet, amidst the fervor of investors clamoring for shares, one legendary investor remains notably aloof: Warren Buffett.

To Buffett, the allure of IPOs fades in comparison to the potential pitfalls they harbor.

Buffett’s skepticism stems from a fundamental principle: the pursuit of value. In his eyes, the frenzy surrounding IPOs often fails to yield favorable pricing. Unlike scanning through established companies in the stock market, where bargains may be unearthed, the IPO landscape presents a different dynamic. Negotiated sales dominate, making it arduous to secure advantageous deals. Drawing parallels to real estate transactions in his hometown of Omaha, Buffett illustrates how sellers in negotiated deals are keenly aware of market prices, thereby limiting the scope for bargains.

Central to Buffett’s argument is the concept of auction markets versus negotiated sales. In auction markets, where shares of established companies trade, the possibility of stumbling upon undervalued assets is more pronounced. This stands in stark contrast to IPOs, which mirror negotiated sales. Here, the seller dictates the terms, often without regard to the buyer’s interests or market conditions.

Buffett’s insights, articulated at the 2004 Berkshire Hathaway Annual Meeting, offer a timeless lesson in market dynamics. He underscores the importance of understanding the fundamental differences between auction markets and negotiated deals, highlighting the potential for occasional extraordinary bargains in the former.

In essence, Buffett’s stance on IPOs serves as a reminder to investors: the allure of new offerings may be enticing, but true value often lies in the patient pursuit of opportunities in the stocks that are already trading.

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.

Categories
Appointments

TransRe Restructures Data Science Team to Boost AI Capabilities

(BRK.A), (BRK.B)

Berkshire Hathaway’s TransRe has restructured its data science team to enhance the development and adoption of Artificial Intelligence, Machine Learning, and Large Language Models.

Otakar Hubschmann has been promoted to the newly created role of Chief Artificial Intelligence Officer, where he will lead TransRe’s Artificial Intelligence Team (TRAIT). Otakar joined TransRe in 2016 from a quantitative trading background and has since established a data science group. Under his leadership, the team has worked on automating data extraction and ingestion from submissions and contracts, and enabling rapid document comparison.

Socrates Pichardo, TransRe’s Chief Technology Officer, will also join TRAIT. Socrates, who has been with TransRe since 1993, has led several major IT projects, including the development of TransRe’s property underwriting platform and the company’s business cloud migration. He was appointed group CTO in 2017.

TRAIT aims to integrate AI’s rapidly developing capabilities with TransRe’s existing expertise to deliver additional insights for colleagues and clients. To ensure these capabilities are embedded within the operating units, TRAIT will report to TransRe’s Chief Operating Officer, Matt Mahoney.

© 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.