Category Archives: Uncategorized

Lessons From Warren Buffett: Shorting Stocks, It Just Takes One to Kill You

Warren Buffett is no fan of shorting stocks. His aversion goes back to what he called a “particularly harrowing experience” shorting in 1954 when he found “my net worth was evaporating and my liquid assets were getting less liquid.”

“It just takes one to kill you,” Warren Buffett warned at the 2002 Berkshire Hathaway Annual Meeting. “And you need more and more money as the stock goes up. You don’t need more and more money when a stock goes down, if you paid for it originally and didn’t buy it on margin. You just sit and find out whether you were right or not. But you can’t necessarily sit and find out whether you’re right on being short a stock.”

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2021 David Mazor

Wellfleet Introduces Revolutionary Quote-to-Claim Insurance Platform

(BRK.A), (BRK.B)

Berkshire Hathaway’s Wellfleet Insurance has launched “Lighthouse,” an innovative and proprietary platform designed to make quoting, implementing, and administering workplace benefits more accurate and efficient for brokers and clients.

Built on EIS’ cutting-edge core system and digital experience platform, Lighthouse by Wellfleet supports a personalized, proactive, and connected user experience for brokers, clients and members. Features of the platform include its ability to support a single system of record; smoothly connect with clients’ chosen HR technology platforms; and seamlessly exchange data from quote to claim.

Lighthouse is further enhanced by Wellfleet’s commitment to responsive, personalized service with reliable data. Each Wellfleet client is partnered with a dedicated Client Manager, who ensures benefits solutions are delivered how and when clients want them, while providing ongoing support from implementation through re-enrollment.

“Many carriers use a patchwork of dated legacy systems for quoting, enrollment and claims. These systems were not built to work together, which leads to errors and inefficiencies that brokers and their clients should not have to endure,” stated James Ocampo, Executive Vice President and head of Wellfleet’s Workplace Benefits division. “That’s why Wellfleet chose to invest in the development of Lighthouse, a highly-digital, customer-centric platform that delivers a consistent, multi-channel experience supported by authentic end-to-end service.”

A recent survey conducted by Wellfleet and EIS identified the top five pain points brokers experience with their carrier partners and the solutions Lighthouse delivers:

1. Time to receive quote – Lighthouse supports the crafting of highly-customized and flexible plan designs, which simplifies and expedited the quoting process.

2. Billing errors – As an end-to-end platform, Lighthouse powers the flow of accurate data from quote to claim, ensuring bills are accurate.

3. Quoting errors – Leveraging the clean data input at time of quote, Lighthouse seamlessly deploys the approved case-build file, ensuring the proposal, policy administration system, and enrollment systems are built in sync.

4. Lack of real time data insights for the broker and the client – With its single source of truth, Lighthouse delivers accurate, meaningful data in real-time.

5. Slow data processing time – Lighthouse validates enrollment data in hours or days, not weeks.

“EIS and Wellfleet have invested in the future of workplace benefits by building a groundbreaking, fully digital experience for the market,” said Samantha Chow, LAH Markets Lead at EIS.

“By coupling Wellfleet’s attentive servicing and deep knowledge of broker pain points with EIS’ open, cloud- and API-based technology, we’ve developed a vibrant, customer-centric ecosystem for Wellfleet’s distribution, data and service partners,“ said Chow. Lighthouse leverages the EIS SuiteTM of software solutions to support broker and customer lifecycles from rating and quoting, policy issuance and administration, to billing and claims management.

“Lighthouse has been a highly-anticipated and long-needed market offering,” noted Drew DiGiorgio, Wellfleet President and CEO. “Launching it to the market is the cornerstone of Wellfleet’s long-term strategy to offer next-generation tools and services that give customers what they want – a personalized user experience supported by a team of industry leaders and experienced support staff.”

© 2021 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.

Berkshire’s Intero Continues Expansion in California and Nevada

(BRK.A), (BRK.B)

Intero, a Berkshire Hathaway affiliate and wholly owned subsidiary of HomeServices of America, Inc., has acquired two Intero franchise locations in Gardnerville, NV and Markleeville, CA. The two locations currently house 26 agents and come with nearly 285 active listings.

Business partners and former franchise owners, Teddy Carlson-McKone and Dennis McDuffee, will transition to the roles of Vice President and Managing Officer of both locations.

“We’re thrilled to continue our growth and reach throughout California and Nevada,” said Brian Crane, Co-Founder and Chief Executive Officer of Intero – a Berkshire Hathaway affiliate. “The Carson Valley and Nevada represent a great opportunity for Intero. Teddy and Dennis and the company they have built represent the best of Intero and we’re proud to bring them on to the corporate team. We look forward to growing our presence in northern Nevada and the Greater Tahoe region with Teddy and Dennis leading the way.”

The attraction to these locations was based on the high-quality agents, their production level, and their stellar reputation within the region. The Gardnerville office has been voted by the public as the #1 Real Estate Office by the local newspaper, The Record Courier, in the annual “Best of Carson Valley” section. They have secured this honor for three years running. In addition, Dennis McDuffee was voted as the top commercial real estate agent for the annual awards.

“We couldn’t be happier with this next chapter in our Intero journey,” said Teddy Carlson-McKone, Vice President and Managing Officer of Intero Gardnerville and Markleeville. “We’ve been part of the Intero family for 10 wonderful years and now it gets even better with the support of the corporate team, HomeServices of America and Berkshire Hathaway.”

Intero, a Berkshire Hathaway affiliate and wholly owned subsidiary of HomeServices of America Inc., serves Northern California and Nevada with 22 offices throughout the greater Silicon Valley, San Francisco, Calaveras County, Western Nevada and the Greater Lake Tahoe Region. The Intero Franchise network is comprised of 55 affiliates located in Alabama, California, Nevada, Tennessee and Texas. The company is headquartered in the heart of California’s Silicon Valley.

© 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 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.

Mouser Electronics Honored by Top Electronic Component Manufacturers

(BRK.A), (BRK.B)

Berkshire Hathaway’s Mouser Electronics, Inc., the industry’s leading New Product Introduction (NPI) distributor with the widest selection of semiconductors and electronic components, is pleased to announce that it has received over 20 top business awards from its manufacturer partners for impeccable distribution performance during 2019 and 2020.

Manufacturers gave a variety of reasons for the awards, including best-in-class global logistics, digital excellence, double-digit sales growth, fastest new product introductions (NPIs), commitment to teamwork, investment in inventory and breadth of inventory, successful marketing campaigns, customer growth, and expanding footprint.

“Mouser is immensely grateful to our manufacturer partners for these top recognitions,” said Jeff Newell, Senior Vice President of Products at Mouser Electronics. “These awards honor the hard work and dedication to exceptional customer service inherent to all of our teams.”

Performance awards for excellence in 2019 and 2020 include:

TE Connectivity – Global High Service Distributor of the Year
Amphenol Corporation – 2019 High Service Digital Performance
Vishay Intertechnology – 2019 Americas Catalog Distributor of the Year; 2019 High Service Distribution Award for EMEA; 2019 Americas Catalog Passive Distributor of the Year
Molex – 2019 Global E-Catalog Distributor of the Year; 2019 Americas E-Catalog Distributor of the Year; 2019 Europe E-Catalog Distributor of the Year; 2019 APAC E-Catalog Distributor of the Year
KEMET – High Service Distributor of the Year Award for Fiscal Year 2020
Littelfuse – High Service Distributor of the Year
Bel Fuse, Inc. – 2019 Distributor of the Year
Digilent – Distributor of the Year
TDK Europe – European Senten Manten Bronze Award 2019 — High-Service Distributor
MEAN WELL – 2019 North American Distributor of the Year
Eaton – 2019 Distributor Engagement Award
Neutrik – Distributor of the Year; Outstanding Performance of the Year; Supplier Manager of the Year: Ryan Virostek
Altech – 2019 Sales Achievement Award
ECS Inc. – 2019 Distributor of the Year
Schaffner – Distribution Product Manager of the Year: Leticia Gomez

© 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 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.

Realty Seven Merges with Berkshire Hathaway HomeServices New England

(BRK.A), (BRK.B)

Berkshire Hathaway HomeServices New England, New York and Westchester Properties has merged with Realty Seven, a residential real estate firm based in Wilton, Connecticut.

“Realty Seven is one of the most highly regarded independent brokerages in Fairfield County,” Candace Adams, CEO and president of Berkshire Hathaway HomeServices New England, New York and Westchester Properties, said. “The team’s rich local market expertise, combined with their proven track record of success, makes them a great addition to our growing network of sales professionals.”

A family-owned business founded in 1978, Realty Seven is one of the area’s most respected real estate firms, providing excellent client services and a dedication to being a philanthropic partner in the community. This transaction brings 22 agents, who all live, work, raise their families and volunteer in the local community, to Berkshire Hathaway HomeServices New England Properties.

“Since our inception, Realty Seven has been dedicated to providing the highest service and integrity to our clients, guiding them through all of the stages of selling a home. After meeting Candace and speaking with the Berkshire Hathaway HomeServices’ team, many of which I’ve known for years, I knew this was the best opportunity to provide our team the resources and support to take client services to the next level,” says Peg Koellmer, owner/broker of Realty Seven.

© 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.

Charleston Real Estate Agent Megan Callaghan Named to REALTOR Magazine’s Prestigious 30 Under 30 Class for 2019

(BRK.A), (BRK.B)

Berkshire Hathaway HomeServices has announced that Megan Callaghan, an agent with Berkshire Hathaway HomeServices Great Expectations Realty, has been named to REALTOR® Magazine’s 2019 Class of 30 Under 30 rising stars in residential real estate.

Callaghan was chosen from candidates across America who were judged on their skill, success, creativity, community involvement and leadership in their careers.

“I am truly honored and excited to be named to the 30 Under 30 Class of 2019,” said Callaghan. “I set 30 Under 30 Class membership as a goal of mine when I joined the industry in 2013. For me, this honor and my overall success as an agent result from my drive to go beyond the call of duty for every client. Such consistency and reliability help me be the ‘Forever Agent’ for clients and their referrals.”

Callaghan, who serves the greater Charleston market, is the first real estate professional from West Virginia to be named to a 30 Under 30 list. “We are proud of Megan as she is so deserving of this recognition,” said Michael Callaghan, broker, Great Expectations Realty. “In a short period of time she has grown her business with hard work and dedication. As important, she loves the business and helping people buy and sell homes. Such joy helps her be her very best for clients.”

Callaghan generated $6.4 million in sales volume in 2018 and was active in the West Virginia Association of REALTORS as well as in Generation Charleston, which helps recruit young professionals to the Charleston area. “We are losing population every year, mostly among younger generations. I got involved with Generation Charleston to recruit and retain young professionals in the area. I think the first step to committing to West Virginia is homeownership.”

Gino Blefari, chairman of Berkshire Hathaway HomeServices, congratulated Callaghan on her achievement. “We are proud of Megan and the passion and professionalism she pours into every real estate transaction,” Blefari said. “She is a wonderful ambassador of the entire real estate industry and a powerful example of leadership.”

REALTOR Magazine will feature its 30 Under 30 Class members in its May edition.

© 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.

Ajit Jain’s $20 Mil Stock Purchase Shows His Belief in Berkshire Hathaway

(BRK.A), (BRK.B)

Ajit Jain, Berkshire Hathaway’s Vice Chairman of Insurance Operations, has purchased $20 million in Berkshire Hathaway stock.

Jain purchased the stock on December 18, at prices ranging from $295,750 to $297,000 a share for Berkshire Hathaway’s A shares, which had been as high as $335,900 in October.

In January 2018, Jain, who along with Greg Abel, who was elevated to Vice Chairman of Non-insurance Operations, became vice chairmen, a move that puts them in line for the long term leadership of Berkshire Hathaway.

Jain’s stock purchase shows that he not only believes in leading Berkshire, but owning it as well.

© 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.

Kraft Heinz to Acquire Primal Kitchen

(BRK.A), (BRK.B)

The Kraft Heinz Company has entered into a definitive agreement to acquire Primal Nutrition, LLC,

Founded by Mark Sisson and Morgan Buehler, Primal Kitchen is a young, vibrant, better-for-you brand primarily focused on Condiments, Sauces and Dressings including Mayonnaise, Salad Dressings and Avocado Oil, with growing product lines in Healthy Snacks and other categories.

The brand holds leading positions in both e-commerce and natural channels, and is expected to generate approximately $50 million in net sales this year.

Primal Kitchen will join Kraft Heinz under Springboard, which is Kraft Heinz’s dynamic platform created to partner with founders and brands that will disrupt the food industry. The combination of Primal Kitchen and Springboard will help to realize Mark Sisson’s vision to change the way the world eats.

Primal Kitchen will leverage Kraft Heinz’s assets and infrastructure, while still operating as an autonomous company. Primal Kitchen will continue to be led by its current leadership team. Its headquarters will remain in Oxnard, California.

“The proposed partnership with Primal Kitchen is consistent with Kraft Heinz’s vision to be the best food company, growing a better world. The Primal Kitchen team has built an amazing portfolio of the world’s best-tasting, health-enhancing, real-food pantry staples,” said Paulo Basilio, U.S. Zone President for Kraft Heinz. “Primal Kitchen is an authentic, premium and growing brand that fits perfectly with our core Condiments & Sauces categories, and we are excited to partner with the Company’s strong existing team to drive growth across multiple categories going forward.”

Mark Sisson, Co-Founder of Primal Kitchen said, “My mission has always been to change the way the world eats. With that goal in mind, Primal Kitchen launched in 2015 to offer health-conscious consumers the best possible choices in Condiments, Sauces, Dressings and Healthy Snacks. While our growth to date has exceeded all industry standards and expectations, our partnership with an industry leader like Kraft Heinz now offers an unrivaled opportunity to reach millions more of the consumers who have been seeking products like ours for years. Based on the significant time I’ve spent with the Kraft Heinz team, we share a common vision regarding the future of food and the importance of consumer choices. I look forward to working with them to grow this amazing brand.”

The transaction is subject to customary closing conditions and is expected to be completed in early 2019. Terms of the agreement were not disclosed.

© 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.

Berkshire Hathaway Specialty Insurance Opens New Office in Munich, Germany

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance (BHSI) has opened a new office in Munich, Germany, marking the latest advance in BHSI’s steady, strategic expansion of its global footprint and capabilities for customers and brokers worldwide.

“Our new presence in southeastern Germany enhances our ability to bring our full line of specialty insurance products, our financial strength, and our focus on service excellence to the German and European marketplace,” said Chris Colahan, President, BHSI in Europe and the UK. “We are excited to be in Munich, continuing to build our global team of individuals with stellar capabilities and character.”

The new office in Munich, along with the BHSI office in Dusseldorf, will underwrite property, casualty, medical malpractice, marine and executive & professional lines for a broad range of business segments in Germany.

BHSI also announced that it intends to build substantial local underwriting and claims capabilities in the new office and has filled its first two posts in Munich with Lars Messutat, Senior Underwriter, Property, and Florian Biebrach, Senior Underwriter, Financial Lines, both of whom relocated from BHSI in Dusseldorf.

© 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.

Berkshire Operating Profits Soar 67% in Second Quarter

(BRK.A), (BRK.B)

Berkshire’s operating results for the second quarter and first six months of 2018 and 2017 are summarized in the following paragraphs. However, we urge investors and reporters to read our 10-Q, which has been posted at www.berkshirehathaway.com.The limited information that follows in this press release is not adequate for making an informed investment judgment.

Earnings of Berkshire Hathaway Inc. and its consolidated subsidiaries for the second quarter and first six months of 2018 and 2017 are summarized below. Earnings are stated on an after-tax basis. (Dollar amounts are in millions, except for per share amounts).

Second Quarter

First Six Months

2018

2017

2018

2017

Net earnings attributable to Berkshire shareholders $12,011 $4,262 $10,873 $8,322
Net earnings includes:
Investment and derivative gains/losses –
Investments 4,824 185 (1,439 ) 390
Derivatives 294 (42 ) 131 257
5,118 143 (1,308 ) 647
Operating earnings 6,893 4,119 12,181 7,675
Net earnings attributable to Berkshire shareholders $12,011 $4,262 $10,873 $8,322
Net earnings per Class A equivalent share attributable to Berkshire shareholders

$7,301

$2,592

$6,610

$5,060

Average Class A equivalent shares outstanding 1,645,057 1,644,580 1,645,008 1,644,503

Note: Per share amounts for the Class B shares are 1/1,500th of those shown for the Class A.

In 2018, due to a change in Generally Accepted Accounting Principles (“GAAP”), we are now required to include the changes in unrealized gains/losses of our equity security investments as a component of investment gains/losses in our earnings statements. In the table above, investment gains/losses in 2018 include a gain of approximately $4.5 billion in the second quarter and a loss of approximately $1.7 billion in the first six months of 2018 due to changes during the second quarter of 2018 and changes during the first six months of 2018 in the unrealized gains/losses of equity security investments held at June 30, 2018. In 2017 and in prior years, while changes in unrealized gains/losses were reflected in our shareholders’ equity, they were not included in our earnings statements. Accordingly, the following statement which has been included in each of Berkshire’s earnings releases for many years along with some additional comments (additional comments underlined) is even more important when analyzing Berkshire’s periodic results. The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be misleading to investors who have little or no knowledge of accounting rules.

An analysis of Berkshire’s operating earnings follows (dollar amounts are in millions).

Second Quarter

First Six Months

2018

2017

2018

2017

Insurance-underwriting $943 $(22 ) $1,350 $(289 )
Insurance-investment income 1,142 965 2,154 1,873
Railroad, utilities and energy 1,890 1,467 3,620 2,785
Other businesses 2,570 1,985 4,766 3,593
Other 348 (276 ) 291 (287 )
Operating earnings $6,893 $4,119 $12,181 $7,675

At June 30, 2018, our book value per Class A equivalent share was $217,677. Insurance float (the net liabilities we assume under insurance contracts) was approximately $116 billion at June 30, 2018, an increase of $2 billion since yearend 2017.

Use of Non-GAAP Financial Measures

This press release includes certain non-GAAP financial measures. The reconciliations of such measures to the most comparable GAAP figures in accordance with Regulation G are included herein.

Berkshire presents its results in the way it believes will be most meaningful and useful, as well as most transparent, to the investing public and others who use Berkshire’s financial information. That presentation includes the use of certain non-GAAP financial measures. In addition to the GAAP presentations of net earnings, Berkshire shows operating earnings defined as net earnings exclusive of investment and derivative gains/losses.

Although the investment of insurance and reinsurance premiums to generate investment income and investment gains or losses is an integral part of Berkshire’s operations, the generation of investment gains or losses is independent of the insurance underwriting process. Moreover, as previously described, under applicable GAAP accounting requirements, we are now required to include the changes in unrealized gains/losses of our equity security investments as a component of investment gains/losses in our periodic earnings statements. In sum, investment gains/losses for any particular period are not indicative of quarterly business performance.

© 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.