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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.

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Jazwares

Jazwares Announces Master Licensing Agreement With Paramount Global for Avatar: The Last Airbender

(BRK.A), (BRK.B)

Berkshire Hathaway’s Jazwares, known for the popular Squishmallows, has partnered with Paramount Global, a leading media and entertainment company, to release a new line of toys, costumes, and accessories based on some of Paramount’s most iconic franchises.

Under this multi-contract agreement, Jazwares will gain global master rights to produce a wide array of products, including figures, toy vehicles, dolls, plush items, and playsets for Nickelodeon’s Avatar: The Last Airbender.

Additionally, Jazwares will hold the North American rights to create costumes and accessories for not only Avatar but also other popular Paramount properties such as Dora, SpongeBob SquarePants, Star Trek, and Yellowstone.

The new product lines are expected to hit retail shelves in 2025.

“Joining forces with Paramount combines the world’s most beloved entertainment franchises with Jazwares’ unparalleled ability to authentically translate IP across toys and costumes like nobody else in the industry,” said Judd Karofsky, Executive Vice President of Jazwares. “This is an amazing collaboration for Jazwares – to expand our portfolio with some of pop culture’s most iconic stories and characters into products we know fans are going to love.”

Lourdes Arocho, Senior Vice President of Consumer Products & Experiences at Paramount, added, “Jazwares has a proven track record of taking culture-defining brands like Avatar: The Last Airbender and other Paramount franchises and creating outstanding products for consumers to connect with. We are eager to get these product lines of toys and costumes into the hands of fans everywhere.”

© 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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Minority Stock Positions

Berkshire Hathaway-Backed Nubank Surpasses 100 Million Customers, Celebrates Record Growth

(BRK.A), (BRK.B)

Berkshire Hathaway-backed Nubank has reached a significant milestone, surpassing 100 million customers following a record-breaking first quarter in 2024. David Vélez, the founder and CEO, celebrated this achievement at the company’s headquarters in São Paulo, Brazil, on May 15.

Reflecting on the journey, Vélez remarked, “Seven years ago, the goal of 100 million customers seemed unattainable. Even one million or ten million seemed impossible. But here we are.”

Vélez attributed this success to Nubank’s commitment to addressing customer needs with innovative products and top-quality service. The company’s first-quarter results for 2024 showcased a revenue increase to $2.7 billion and a net income rise to $379 million, along with a 23% return on equity for Nu Holdings. Despite being over-capitalized and still in the early stages of profitability in Mexico and Colombia, these new markets are growing faster in customers, deposits, revenue, and credit card market share compared to Brazil at a similar stage.

Throughout the celebration, Vélez emphasized Nubank’s customer-centric culture. “By doing what is best for our customers, we are winning them over for decades. We focus on long-term value creation, not short-term gains. It’s an infinite game. Our strategy and culture evolve with our growing customer base,” he stated.

As of March 31, 2024, Berkshire Hathaway owned 107,118,784 shares of Nu Holdings, representing a 2.32 percent ownership stake in the company.

© 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: It’s the Future That Counts

In the world of stock market analysis, the Price-to-Earnings (P/E) ratio holds significant sway. It’s a metric many investors use to gauge the attractiveness of a stock, dividing its share price by its earnings. However, legendary investor Warren Buffett offers a different perspective that transcends mere numerical ratios based on the past.

Buffett’s wisdom, shared during the 1995 Berkshire Hathaway Annual Meeting, emphasizes the importance of looking beyond present earnings. Drawing an analogy from hockey, he recalls the words of Wayne Gretzky, the iconic sports figure: “Go where the puck is going to be, not where it is.”

For Buffett, the crux of successful investing lies in anticipating the future trajectory of a business. He articulates a long-term vision, emphasizing the pursuit of companies poised for substantial growth over the next decade. Buffett isn’t fixated solely on current earnings; instead, he prioritizes businesses with promising prospects for sustained profitability and value creation.

“We want to be in the business that 10 years from now is earning a whole lot more money than it is now,” Buffett asserts, encapsulating his investment philosophy. He underscores the importance of investing in enterprises with enduring potential, ones that will continue to thrive and generate substantial returns well into the future.

Buffett’s approach challenges the conventional fixation on short-term metrics like P/E ratios. While these metrics offer valuable insights into a company’s current performance, they often fail to capture its long-term growth trajectory. By focusing on the future earnings potential and the durability of a business model, Buffett advocates for a more nuanced and forward-thinking approach to 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 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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Jazwares

Jazwares to Launch Five Nights at Freddy’s Toys in 2025

(BRK.A), (BRK.B)

Berkshire Hathaway’s Jazwares, known for the popular Squishmallows, has entered into a multiyear global toy licensing agreement with Scottgames, LLC to create a toy line inspired by the Five Nights at Freddy’s survival horror video game & film franchise. This new collection will bring the game’s immersive settings and characters to life through a diverse range of toys, set to launch at mass retail in 2025.

The product line will include character figures of various scales, detailed playsets, plush toys, pet toys, unique collector’s items, and more, allowing fans to engage with the franchise in new and exciting ways. Judd Karofsky, Executive Vice President of Jazwares, expressed excitement about connecting with fans and expanding the Five Nights at Freddy’s universe beyond the screen.

Russell Binder, CEO of Striker Entertainment, highlighted the franchise’s growth into a top media brand over the past decade, attributing its success to a strong fanbase and the steady release of new content. Binder believes Jazwares, being fans themselves, will deliver high-quality, innovative products that will resonate with both new and existing fans.

© 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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Berkadia

Berkadia Facilitates Sale of Killeen-Corpus Christi Portfolio

(BRK.A), (BRK.B)

Berkadia, Berkshire Hathaway’s joint venture with Jefferies Financial Group, has announced the sale of the Killeen-Corpus Christi Portfolio, a 544-site manufactured housing portfolio in Killeen, Corpus Christi, and Huntsville, Texas markets.

Managing Director Ian Hilpl, Senior Managing Director Kevan Enger, and Directors Brian Hummell and Hunter LaRocca of Berkadia Manufactured Housing led the transaction on behalf of the seller.

The Kileen-Corpus Christi Portfolio consists of four manufactured housing communities in Central and East Texas consisting of the following properties:

• Gateway MHC is a 259-site community located at 1545 N Lexington Blvd, Corpus Christi, Texas.
• Clear Creek is a 126-site community located at 6000 S Clear Creek Road, Killeen, Texas.
• Cimarron Park Estates is a 98-site community located at 1400 E Ave H 74B, Nolanville, Texas.
• Hidden Valley is a 61-site community located at 3307 Powell Road, Huntsville, Texas.

“The portfolio was an attractive acquisition for the buyer as Texas is a primary target market and this offered them immediate scale across multiple well performing MSA’s,” said Hilpl, the lead broker on the sale. “The portfolio offered multiple value-add opportunities to increase performance across the four communities.”

© 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: Understanding Price/Earnings Ratios

Warren Buffett provides valuable insights into the dynamics behind Price/Earnings (P/E) ratios. At the 1998 Berkshire Hathaway Annual Meeting, he delved into the two factors driving the movement of these ratios.

According to Buffett, rising P/E ratios can be attributed to two primary factors. Firstly, relative P/E ratios increase when investors anticipate improved prospects for either the industry or the specific company compared to other investment options. This shift reflects a change in perception regarding future performance relative to past assessments. However, Buffett cautions that whether this optimism is justified remains to be seen.

Secondly, absolute P/E ratios rise concerning the earning power, or prospective earning power, as perceived by investors. This aspect is closely tied to expectations of future returns on equity. Additionally, changes in interest rates play a significant role in influencing absolute P/E ratios. As interest rates fluctuate, they impact the attractiveness of equities relative to alternative investments, thus influencing investors’ valuation metrics.

Buffett’s comments underscores the nuanced interplay of market perceptions, future expectations, and external economic factors in shaping P/E ratios. Investors must discern between justified optimism and speculative fervor when interpreting movements in these ratios. Moreover, an understanding of the underlying factors driving P/E fluctuations is essential for making informed investment decisions.

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.