Category Archives: Todd Combs and Ted Weschler

Berkshire-Backed Paytm Heading for India’s Largest IPO

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Berkshire Hathaway-backed mobile payment company Paytm will file a draft prospectus for its long-anticipated IPO on July 12, the date the company has set an extraordinary general meeting in Delhi, India.

Paytm is India’s largest mobile payments and commerce platform.

The IPO is projected to be at a valuation of between $24 billion to $25 billion with the company raising around $2.3 billion, the largest in India to date.

Founded in 2009, Paytm is an Indian e-commerce payment system and financial technology company, based in Noida, Uttar Pradesh, India.

In 2018, Berkshire Hathaway made a $356 million investment for a 3-4% stake in One97 Communications Ltd, the parent of Paytm.

In addition to Berkshire Hathaway, China’s Alibaba and Japan’s SoftBank are also stakeholders.

The investment was made by Berkshire portfolio manager Todd Combs, who said at the time, “I have been impressed by Paytm and am excited about being a part of its growth story, as it looks to transform payments and financial services in India.”

“Berkshire’s experience in financial services, and long-term investment horizon is going to be a huge advantage in Paytm’s journey of bringing 500 million Indians to the mainstream economy through financial inclusion,” Paytm’s founder and CEO Vijay Shekhar Sharma said in 2018.

© 2021 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.

Berkshire-Backed Paytm Eying India’s Largest IPO

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Berkshire Hathaway-backed mobile payment company Paytm is aiming for a $3 Billion (218 billion rupees) IPO in 2021. Paytm is India’s largest mobile payments and commerce platform.

Bloomberg reports that the valuation will be between $25 billion and $30 billion.

Founded in 2009, Paytm is an Indian e-commerce payment system and financial technology company, based in Noida, Uttar Pradesh, India. In 2018, Berkshire Hathaway made a $356 million investment for a 3-4% stake in One97 Communications Ltd, the parent of Paytm.

The investment was made by Berkshire portfolio manager Todd Combs, who said at the time, “I have been impressed by Paytm and am excited about being a part of its growth story, as it looks to transform payments and financial services in India.”

“Berkshire’s experience in financial services, and long-term investment horizon is going to be a huge advantage in Paytm’s journey of bringing 500 million Indians to the mainstream economy through financial inclusion,” Paytm’s founder and CEO Vijay Shekhar Sharma said in 2018.

© 2021 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.

Berkshire Hathaway-Backed Paytm Pulled From Google’s Play Store Over Gambling Policy Violation

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Google has pulled Berkshire Hathaway-backed Paytm from its Play Store, claiming the company has violated its gambling policies. Play Store prohibits online casinos and other unregulated gambling apps that enable sports betting in India.

Over the past decade, Paytm has become India’s leading digital payments platform in country where digital payments are projected to grow five-fold by 2023.

Suzanne Frey, Google’s Vice President, Product, Android Security and Privacy, said in a blog post that it doesn’t allow online casinos or support any unregulated gambling apps that facilitate sports betting.

“This includes if an app leads consumers to an external website that allows them to participate in paid tournaments to win real money or cash prizes, it is a violation of our policies,” said Frey in the blog post.

“We have these policies to protect users from potential harm. When an app violates these policies, we notify the developer of the violation and remove the app from Google Play until the developer brings the app into compliance. And in the case where there are repeated policy violations, we may take more serious action which may include terminating Google Play Developer accounts. Our policies are applied and enforced on all developers consistently,” Frey said.

In 2018, Berkshire Hathaway invested $356 million for a 3-4% stake in One97 Communications Ltd, the parent of Indian digital payments company Paytm. The investment was made by Berkshire Hathaway portfolio manager Todd Combs.

“I have been impressed by Paytm and am excited about being a part of its growth story, as it looks to transform payments and financial services in India,” Combs said at the time of the investment.

Combs sits on the eight-member board of the company, which at the time of the investment included Alibaba co-founder and executive chairman Joseph Tsai, Shardul Amarchand Mangaldas & Co managing partner Pallavi Shroff, Ant Financial CEO Eric Jing, and Goldman Sachs Asia chairman Mark Schwartz.

© 2020 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.

Berkshire Hathaway’s Todd Combs to Become Head of GEICO

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Berkshire Hathaway’s portfolio manager Todd Combs will be taking over the helm at GEICO as of next week. Current president and CEO Bill Roberts will move to vice chairman.

Roberts began his career with GEICO in 1984 as an officer in the Marketing department. Over his 35-year career, he has helped lead GEICO to become the second largest auto insurance company in the U.S. Roberts will become vice chairman of GEICO effective January 1, 2020.

Roberts has announced that he will retire from GEICO in December 2020.

“Bill told Ajit Jain, vice chairman of Berkshire Hathaway, and I in early November he was about to turn 70 and finishing up his 35th year with GEICO, and that he intended to retire at the end of 2020,” said Tony Nicely, GEICO’s executive chairman. “Bill has done an outstanding job leading and growing GEICO throughout his career. Our results throughout his career have been excellent and our culture is strong. He has put in place a strong plan for the coming year.”

“Todd has a strong career in insurance,” said Ajit Jain. “He initially worked at Progressive Insurance Company before going to graduate school to begin an investing career.”

Since 2010, Combs has been an investment manager at Berkshire Hathaway, and in addition to becoming GEICO’s CEO, Combs will continue to manage $14 billion of investments for Berkshire Hathaway.

“I am looking forward to taking on the responsibilities of CEO at GEICO,” said Combs. “They have a strong senior management team, a great organization of 40,000 employees, a great brand, and are a very successful insurance company.”

Combs will assume his position as GEICO’s CEO effective January 1, 2020.

© 2019 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.

Todd Combs and Ted Weschler’s Portfolios Continue to Grow

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Todd Combs and Ted Weschler, the former hedge fund managers that Warren Buffett hired to manage a portion of Berkshire Hathaway’s stock portfolios, have continued to see their portfolios grow.

Combs was hired in 2010, and Weschler was hired in 2011, and each was initially given a billion dollar portfolio to separately manage. Over the past five years, Buffett has increased their portfolios as he has grown confident in their abilities. The portfolios have now reached $13 billion each, according to Buffett’s recent comment on CNBC.

Warren Buffett says Berkshire stock managers Weschler, Combs have trailed the S&P 500 from CNBC.

Berkshire’s total stock holdings total a whopping $183 billion, according to its most recent 13-F filing.

As Warren Buffett’s handpicked protégés, Buffett has praised their success, noting that “They have made Berkshire billions already that we wouldn’t have otherwise made,” he said on CNBC in 2014. “They both have a fundamental combination of soundness and brilliance.”

While Buffett notes that this past year “Overall, they are a tiny bit behind the S&P, each, by almost the same margin,” Buffett acknowledged to Becky Quick on CNBC’s “Squawk Box” that they were still doing better than he was.

More than Just Portfolio Managers

In addition to portfolio management, Combs sits on the Boards of companies that Berkshire holds sizable stakes in. Combs is on the Board of JPMorgan Chase & Co., and Paytm, and he also is playing a key role in the Amazon, Berkshire Hathaway and J.P. Morgan Chase healthcare joint venture, having been charged with finding the project’s CEO.

It was also Combs’s belief in aerospace manufacturer Precision Castparts that directly led to Buffett’s $32 billion acquisition of the company.

“You have to give Todd Combs credit for the deal,” Buffett said, noting that he had never heard of the company before Combs brought it to his attention. ”Todd told me a lot about it, and over the last few years I have become familiar with it,” he added.

Another winner was Combs and Weschler’s positions in DirecTV in 2014. The satellite broadcaster’s acquisition by AT&T brought an over $3 billion windfall for Berkshire, as its 4.5 million shares were purchased at roughly half the tender price of $95 per share offered by AT&T.

When the day come that the entire Berkshire portfolio is in Todd Combs and Ted Weschler’s hands, Berkshire’s shareholders will be able to sleep well at night knowing it is well-managed.

© 2019 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.

Commentary: With Investment in India’s Paytm, Berkshire Moving Beyond Technology Aversion

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Insurance, manufacturing, transportation, retail, these are all things Berkshire Hathaway are known for but not technology.

Warren Buffett’s famed aversion to technology has been fading with Berkshire’s $46.6 billion stake in Apple, and now comes word that the company has taken a 3-4% stake in One97 Communications Ltd, the parent of Indian digital payments company Paytm.

In just eight years, Paytm has become India’s leading digital payments platform in country where digital payments are projected to grow five-fold by 2023.

The investment was actually made by Berkshire portfolio manager Todd Combs, and the main thing it shows is that the next generation of Berkshire’s investment management may not stick to a strictly value investing strategy.

“I have been impressed by Paytm and am excited about being a part of its growth story, as it looks to transform payments and financial services in India,” Combs said.

In addition to the investment, Combs will also join the eight-member board of the company, which includes Alibaba co-founder and executive chairman Joseph Tsai, Shardul Amarchand Mangaldas & Co managing partner Pallavi Shroff, Ant Financial CEO Eric Jing, and Goldman Sachs Asia chairman Mark Schwartz.

“Berkshire’s experience in financial services, and long-term investment horizon is going to be a huge advantage in Paytm’s journey of bringing 500 million Indians to the mainstream economy through financial inclusion,” Paytm’s founder and CEO Vijay Shekhar Sharma noted.

For a company the size of Berkshire, the $356 million investment in One97 Communications Ltd hardly makes a dent in its mountain of cash, which totaled $111 billion at the end of the second quarter. In fact, it represents just over a week’s profit at the rate Berkshire is currently generating it. However, the investment, while small, shows that Berkshire is both looking beyond the U.S. for investment opportunities and beyond its traditional investment parameters.

© 2018 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.

Commentary: What Does Sale of DaVita Medical Group Mean for Berkshire Hathaway?

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The news that health services company Optum is purchasing DaVita Medical Group, a subsidiary of DaVita Inc., for $4.9 billion may bring a windfall for Berkshire Hathaway.

Berkshire has a $2.27 billion stake in DaVita Inc., which works out to roughly 22.03% of the company’s market cap and approximately 23.57% of the institutional ownership, and news of the sale gave Berkshire an immediate paper profit boost of $230 million.

The longer term prospect is good for Berkshire, as well.

According to DaVita, the company plans to use the proceeds from the transaction for significant stock repurchases over the one to two years following the closing of the transaction, as well as to repay debt and for general corporate purposes.

“Following this transaction, DaVita will continue to be a leader in population health management, with a focus on our U.S. and international kidney care businesses,” DaVita CEO Kent Thiry said. “We also expect to pursue other investments in health care services outside of kidney care.

Berkshire has long been rumored to be interested in acquiring DaVita, and entered into a standstill agreement with Davita in May 2014, pledging not purchase more than 25% of the company.

And while Berkshire doesn’t reveal whether Warren Buffett, or his portfolio managers Ted Weschler and Todd Combs, purchased or sold a particular security, the push to acquire shares in DaVita is generally credited to Ted Weschler.

It looks like he was right on this one.

© 2017 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.

Todd Combs Joins Board of JPMorgan Chase

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One of Berkshire Hathaway’s top stock pickers, Todd Combs, has joined the board of JPMorgan Chase/

JPMorgan Chase elected Todd Combs, 45, a director of the company, effective September 19, 2016.

Mr. Combs’ appointment to a Board Committee will be announced when determined. He was named a director of the company’s JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. subsidiaries.

Combs will continue to work at Berkshire Hathaway, which he joined in 2010. Prior to that, he was Chief Executive Officer and Managing Member of Castle Point Capital, an investment partnership he founded in 2005. In that role, he managed capital for endowments, family foundations and institutions. Earlier in his career, he was an analyst for Florida’s state financial regulator, and he analyzed risks for insurer Progressive Corp.

“Todd Combs is an extraordinary leader, investor and thinker, with a deep understanding of finance and business,” said Jamie Dimon, Chairman and Chief Executive Officer of JPMorgan Chase. “We’re pleased he has agreed to serve on our Board of Directors, and our company and our Board will benefit from his wisdom and judgment,” Dimon added.

“I deeply appreciate this opportunity with JPMorgan Chase and look forward to working closely with my new colleagues on the Board of Directors,” said Todd Combs. “I’m pleased to join a team committed to serving the interests of customers, clients and shareholders.”

© 2016 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.

Buffett’s Belief in Todd Combs and Ted Weschler Continues to Grow

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Todd Combs and Ted Weschler, the former hedge fund managers that Warren Buffett hired to manage a portion of Berkshire Hathaway’s stock portfolios, have continued to see their portfolios grow.

Combs was hired in 2010, and Weschler was hired in 2011, and each was initially given a billion dollar portfolio to separately manage. Over the past five years Buffett has increased their portfolios as he has grown confident in their abilities, with the portfolios reaching $7 billion each in 2014.

Those portfolios have now reached $9 billion each, according to information in Warren Buffett’s 2015 annual shareholder’s letter.

The total stock holdings for Berkshire total a whopping $132 billion.

As Warren Buffett’s handpicked protégés, Buffett has praised their success, noting that “They have made Berkshire billions already that we wouldn’t have otherwise made,” Buffett said on CNBC in 2014. “They both have a fundamental combination of soundness and brilliance.”

That brilliance has certainly played out big in 2014 and 2015.

It was Todd Combs’s belief in aerospace manufacturer Precision Castparts that directly led to Buffett’s $32 billion acquisition of the company.

“You have to give Todd Combs credit for the deal,” Buffett said, noting that he had never heard of the company before Combs brought it to his attention. ”Todd told me a lot about it, and over the last few years I have become familiar with it,” he added.

Another winner was Combs and Weschler’s positions in DirecTV in 2014. The satellite broadcaster’s acquisition by AT&T brought an over $3 billion windfall for Berkshire, as its 4.5 million shares were purchased at roughly half the tender price of $95 per share offered by AT&T.

Sooner or later, the day will come when the entire Berkshire portfolio will be in Todd Combs and Ted Weschler’s hands, and Berkshire’s shareholders will be able to sleep well at night knowing it is well-managed.

© 2016 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.

Heavyweights Agree with Berkshire on Kinder Morgan

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George Soros’s Soros Fund Management has moved into Kinder Morgan, as other heavyweight investors seem to see the opportunity in the pipeline company that Berkshire Hathaway does.

Berkshire Hathaway recently reported that it had acquired 26.53 million shares of Kinder Morgan in the fourth quarter of 2015, with a market value of roughly $456 million.

In the fourth quarter of 2015, Soros Fund Management purchased 50,700 shares of Kinder Morgan, and hedge fund manager David Tepper of Appaloosa Management acquired 9,445,321 shares of the company.

As with many of Berkshire’s stock holdings in recent years, it’s not known whether the purchase was made my Warren Buffet, or his lieutenants Todd Combs and Ted Wechsler.

While global oil prices have tumbled, they haven’t kept Berkshire from investing in Kinder Morgan and refiner Phillips 66.

Berkshire recently raised its Phillips 66 stake to 72,293,310 shares. The new purchases bring Berkshire’s stake in the refiner to roughly 13.7%. In contrast, its stake in Kinder Morgan is only 1.2% of the company.

Kinder Morgan owns an interest in or operate approximately 84,000 miles of pipelines and approximately 180 terminals. Its stock price has dropped by two-thirds in a year.

Apparently, now is the time to buy.

© 2016 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.