Categories
Berkshire Hathaway HomeServices

Berkshire Hathaway HomeServices Signs its First Global Franchisee

(BRK.A), (BRK.B)

Berkshire Hathaway HomeServices has signed its first global franchisee, Rubina Real Estate GmbH, an award-winning real estate brokerage serving central Berlin and neighboring regions. The brokerage will operate as Berkshire Hathaway HomeServices Rubina Real Estate starting in April.

“Rubina Real Estate is an ideal fit for our network and we’re excited that it will carry the distinction of Berkshire Hathaway HomeServices’ first franchisee abroad,” said Gino Blefari, president and CEO of the network. “The brokerage’s business acumen and dedication to service and growth mirror our own values and aspirations. As important, Rubina Real Estate is a market leader and is wonderfully positioned in Berlin’s vibrant real estate market.”

Along with serving the German capital region, Rubina Real Estate attracts buyers and investors to Berlin from China, India and the Middle East. The firm is an industry authority on the residential sector and is often used as a source of real estate insight among banks, lenders and real estate developers.

Rubina is a perennial honoree for Germany in the prestigious International Property Awards held each fall in London. In 2017, the brokerage was named Best Real Estate Agency and Best Property Consultant (Marketing) for all of Europe.

“We are proud to bring the Berkshire Hathaway HomeServices brand to Berlin, Germany and other key markets in which we serve clients,” said Carsten Heinrich, co-founder and managing director of Rubina Real Estate. “The brand carries the name of Warren Buffett’s Berkshire Hathaway Inc., one of the world’s most respected and trusted corporations. We believe the brand will be warmly embraced in our markets and will help us build our global brand bridging Europe, Asia and America. We look forward to a new era of growth as Berkshire Hathaway HomeServices Rubina Real Estate.”

Berkshire Hathaway HomeServices continues as America’s fastest-growing real estate brokerage network, with more than 45,000 agents and 1,400 offices named to the brand since its launch in September 2013. The network will provide Rubina Real Estate with a powerful tool suite focusing on lead generation and network referrals, marketing and social media support, international listing syndication, professional education, business consultation and more.

Heinrich, who with his leadership team will be formally introduced to the network March 5 during Berkshire Hathaway HomeServices’ annual Sales Convention in San Antonio, Texas, said he and his team look forward to exchanging client referrals with network brokerages and engaging with the U.S. real estate market. “Our alliance will be mutually beneficial,” he said. “The brand is poised for great success globally; our company is ready and eager to grow, as well.”

Blefari said Rubina Real Estate opens the door to additional global franchisees. “We’ve approached global network expansion very carefully and methodically,” he explained. “We will continue to name high-quality franchisees in the months ahead in Europe, Asia, North America and beyond.”

Berkshire Hathaway HomeServices began global expansion in 2016.

© 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.

Categories
GEICO Insurance

GEICO Adding More Than 1,400 Employees in Indianapolis

(BRK.A), (BRK.B)

Insurer GEICO plans to add more than 1,400 new associates–including hundreds of IT professionals–as the company grows its operations in Greater Indianapolis.

The company’s office, at 101 W. 103rd St. in Carmel, will nearly double in size after an expansion that will add an additional 104,000 square-feet.

With the larger space, GEICO Indianapolis will add IT and claims positions to its existing sales, service and emergency roadside operations.

The GEICO Greater Indianapolis office brought more than 250 jobs to the area when it opened in the summer of 2013. Over the years, the office has more than quadrupled its workforce to more than 1,100 associates to become one of the area’s largest employers.

“The support of this thriving community and our growing customer base in Indiana have made this expansion possible,” said Lona J. Montgomery, general manager of the Indianapolis office. “We are excited to bring on new associates to help us continue to offer excellent service to our customers across the state.”

Nearly 350 IT and claims positions will be added this year, with the others slated to be added over the next five years.

© 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.

Categories
Minority Stock Positions Stock Portfolio

BYD Lauded as One of the Most Innovative Companies

(BRK.A), (BRK.B)

New energy technology company BYD has been named one of the year’s Most Innovative Companies by Fast Company for the fifth time since 2009.

This year, Fast Company is honoring BYD as one of its Top 10 Most Innovative Companies in Energy.

BYD was selected from a list of fifteen hundred companies.

The Fast Company accolade continues a legacy of recognition for the most-awarded electric bus manufacturer in the world. BYD has now been honored more than a dozen times by international media outlets, government agencies, nonprofits and trade associations for its work in clean air, energy, transportation and technological innovation.

“At BYD, we never stop working to transform the world. We strive to create innovative ways to power and move the world with safe and sustainable technology,” says Stella Li, President of BYD North America. “We are honored to be recognized for our contribution worldwide.”

In addition to being a global leader in rechargeable-battery manufacturing, BYD is the world’s largest manufacturer of battery-electric vehicles for the third year in a row. BYD is also the largest manufacturer of battery-electric buses in North America.

All of these industries are built on BYD’s proprietary Iron-Phosphate battery -— a fire-safe, completely recyclable and incredibly long- cycle technology.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value almost ten-fold, and is now worth roughly $1.96 billion.

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 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.

Categories
Warren Buffett

“Don’t ask the barber whether you need a haircut,” Says Buffett

(BRK.A), (BRK.B)

With 2017 a quiet year for Berkshire Hathaway’s acquisition activity, save for acquiring a 38.6% partnership interest in travel-center operator Pilot Flying J, Warren Buffett used his 2017 annual letter to shareholders to reassure that Berkshire would continue to make large acquisitions only when the price is right.

Buffett pronounced the Pilot Flying J acquisition as “sensible,” and noted that he would not join other CEOs in paying outlandish prices for companies.

“The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own,” Buffett wrote.

“Why the purchasing frenzy? In part, it’s because the CEO job self-selects for ‘can-do’ types,” Buffett noted. “If Wall Street analysts or board members urge that brand of CEO to consider possible acquisitions, it’s a bit like telling your ripening teenager to be sure to have a normal sex life.

Once a CEO hungers for a deal, he or she will never lack for forecasts that justify the purchase. Subordinates will be cheering, envisioning enlarged domains and the compensation levels that typically increase with corporate size. Investment bankers, smelling huge fees, will be applauding as well. (Don’t ask the barber whether you need a haircut.) If the historical performance of the target falls short of validating its acquisition, large ‘synergies’ will be forecast. Spreadsheets never disappoint.”

© 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.

Categories
Charlie Munger Minority Stock Positions Stock Portfolio Warren Buffett

Warren Buffett on a stock buy so good, “that I’m actually starting to remember that it was my idea.”

(BRK.A), (BRK.B)

Berkshire Hathaway’s investment in Chinese new energy company BYD has worked out so well that it’s now among the company’s top fifteen stock holdings.

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has grown almost ten-fold in just a decade.

Berkshire’s original investment of $230 million is now worth roughly $1.96 billion.

Whose idea was it to purchase a stake in the company?

“Charlie (Munger) called me one day and says, ‘We’ve got to buy BYD. This guy that runs it is better than Thomas Edison,’ Warren Buffett explained while appearing on CNBC’s Squawk Box. “And I said, ‘That isn’t good enough.’ And then he called a little later and said, ‘He’s a combination of Edison and Bill Gates.’ And I said, ‘Well, you’re warming up but it still isn’t good enough.’ Anyway, Charlie wanted to do it. Now, it’s worked out so well that I’m actually starting to remember that it was my idea. As it’s coming back to me. I think I persuaded Charlie. But unfortunately I’m on the record that it’s his deal. But BYD, Charlie’s in love with the company, and it’s done very well. And the fellow that runs it, you know who’s autos and batteries, but he’s got big, big ideas and he’s very good at executing. So, but I leave it to Charlie.”

For More on BYD, read the Special Report: BYD, Berkshire’s Tesla.

© 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.

Categories
Insurance Warren Buffett

Berkshire’s Insurance Losses from Hurricane Season ran to $3 Billion

(BRK.A), (BRK.B)

Last fall’s spate of three mega-catastrophe hurricanes that hit the U.S. has led to billion dollar losses for Berkshire Hathaway’s insurance companies.

“We currently estimate Berkshire’s losses from the three hurricanes to be $3 billion (or about $2 billion after tax),” Warren Buffett stated in his annual letter to shareholders. “If both that estimate and my industry estimate of $100 billion are close to accurate, our share of the industry loss was about 3%. I believe that percentage is also what we may reasonably expect to be our share of losses in future American mega-cats.”

Despite the scale of the disasters, Buffett noted that the impact on Berkshire was minor, with it reducing Berkshire’s GAAP net worth by less than 1%.

He went on to note that other reinsurers “suffered losses in net worth ranging from 7% to more than 15%.”

Buffett wrote that a mega-catastrophe hurricane that caused $400 billion in damage, which the company estimates has a 2% probability annually, would see Berkshire incurring losses in the $12 billion range.

A loss of that magnitude would in no way jeopardize the conglomerate, as it is below the annual income generated by Berkshire’s non-insurance activities.

© 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.

Categories
Warren Buffett

Buffett Decries Effects of New GAAP Accounting Rule

(BRK.A), (BRK.B)

Warren Buffett warned in in his annual letter to shareholders that a new GAAP accounting rule on unrealized capital gains would lead to “truly wild and capricious swings in our GAAP bottom-line.”

The rule impacts Berkshire’s Hathaway’s portfolio of $170 billion in marketable stocks, not including the company’s shares of Kraft Heinz.

“For analytical purposes, Berkshire’s ‘bottom-line’ will be useless,” Buffett warned, noting that swings in Berkshire’s equity holdings could obscure the actual performance of its operating companies.

“The new rule compounds the communication problems we have long had in dealing with the realized gains (or losses) that accounting rules compel us to include in our net income,” Buffett wrote. “In past quarterly and annual press releases, we have regularly warned you not to pay attention to these realized gains, because they – just like our unrealized gains – fluctuate randomly.”

© 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.

Categories
Warren Buffett

Berkshire’s Per Share Book Value Soared 23% in 2017

(BRK.A), (BRK.B)

Despite losses from three mega-catastrophe hurricanes that hit the U.S. in the fall of 2017, Berkshire Hathaway’s per share book value still rose by 23% in 2017, Warren Buffett noted in his annual letter to shareholders.

Of the total gain of $63 billion, $36 billion were generated by Berkshire’s operations, and $29 billion resulted from the impact of the recently passed tax bill.

Buffett wrote that Berkshire’s disaster-related reinsurance losses, which ran to $3 billion, reduced the company’s GAAP net worth by less than 1%.

Among the company’s ongoing operations, the 2017 earnings from BNSF Railway rose 11% over 2016 levels to roughly $4 billion, and Clayton Homes’ revenues grew to $5.0 billion in 2017, up $780 million (18%) from 2016.

© 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.

Categories
Kraft Heinz Warren Buffett

Warren Buffett Steps Down from Kraft Heinz Board of Directors

(BRK.A), (BRK.B)

The Kraft Heinz Company has announced that Warren Buffett will retire from the Company’s Board of Directors following the end of his term at the upcoming Kraft Heinz 2018 Annual Meeting of Stockholders.

Mr. Buffett decided to retire from the Board as he decreases his travel commitments. The Company also announced that the Board of Directors intends to nominate Alexandre Van Damme to stand for election at the 2018 Annual Meeting to fill Mr. Buffett’s vacancy.

“It has been an honor to work with Warren for the past five years,” said Alex Behring, Chairman of the Board of Directors. “His many invaluable contributions to Kraft Heinz will have a lasting impact on the Company for years to come. The Board of Directors looks forward to his continued partnership as Chairman of our largest shareholder, Berkshire Hathaway. We are thrilled to add Alexandre’s expertise and perspective to Kraft Heinz, and believe that his executive experience and leadership will be extremely valuable to the Board, our leadership and company as a whole.”

© 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.

Categories
Warren Buffett

Warren Buffett’s Annual Letter to Shareholders to be Released Saturday

(BRK.A), (BRK.B)

Tomorrow is the big day for Warren Buffett’s annual letter to shareholders.

Berkshire Hathaway’s 2017 Annual Report to the shareholders will be posted on the Internet on Saturday, February 24, 2018, at approximately 8:00 a.m. eastern time where it can be accessed at www.berkshirehathaway.com.

The Annual Report will include Warren Buffett’s annual letter to shareholders as well as information about Berkshire’s financial position and results of operations.

Concurrent with the posting of the Annual Report, Berkshire will also issue an earnings release.

© 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.