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Occidental

OXY Dividend Increase to Pour More Money Into Berkshire’s Coffers

(BRK.A), (BRK.B)

Energy producer Occidental, in which Berkshire Hathaway holds a significant 25.78% stake, has recently announced a substantial 22.2% increase in its quarterly dividend. The move reflects Occidental’s commitment to enhancing shareholder value and aligns with the company’s strategic focus on delivering strong returns to investors.

Starting with the February 2024 declaration, Occidental will raise its quarterly common stock dividend per share by $0.04, reaching a new figure of $0.22.

As of October 26, Berkshire Hathaway owned an impressive 228,051,027 shares in the energy giant. Consequently, the dividend increase will result in an additional $9.1 million payout to Berkshire Hathaway in the upcoming quarter.

The dividend increase comes as Occidental on Monday announced it entered into a purchase agreement to acquire Midland-based oil and gas producer CrownRock L.P., a joint venture of CrownQuest Operating LLC and Lime Rock Partners, for cash and stock in a transaction valued at approximately $12.0 billion, including the assumption of CrownRock’s debt.

According to Occidental, the debt-funded acquisition is expected to deliver increased free cash flow on a diluted share basis, including $1 billion in the first year based on $70 per barrel WTI. The purchase of CrownRock L.P. will add to Occidental’s premier Permian portfolio with the addition of approximately 170 thousand barrels of oil equivalent per day (Mboed) of high-margin, lower-decline unconventional production in 2024, as well as approximately 1,700 undeveloped locations.

© 2023 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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Kraft Heinz

Kraft Heinz Greenlights $3 Billion Share Repurchase Program

The Kraft Heinz Company, backed by Berkshire Hathaway, has given the green light to a significant share repurchase program. The plan authorizes the company to buy back up to $3 billion of its outstanding common stock by December 26, 2026.

Under this share repurchase initiative, Kraft Heinz aims to use excess cash after allocating funds for disciplined capital spending. This includes investments to support organic growth in strategic areas of its business, the payment of a competitive dividend, maintaining a targeted Net Leverage of approximately 3.0x, and evaluating various strategic opportunities such as acquisitions, divestitures, and partnerships.

Miguel Patricio, CEO, and Chair of the Board at Kraft Heinz, emphasized the company’s recent transformation milestones in the third quarter. He stated, “In the third quarter, we hit a milestone in our transformation — reaching our targeted Net Leverage of approximately 3.0x. A stronger balance sheet, along with advancements we have made across the business, gives us further conviction behind our strategy and the belief that company shares are an attractive investment opportunity.”

© 2023 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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Lessons From Warren Buffett

Lessons From Warren Buffett: The Temptation of Shorting Stocks — Buffett’s Wise Advice

In the unpredictable world of stock markets, the temptation to short a company’s stock when it appears overvalued can be strong. However, investing legend Warren Buffett offers a cautionary perspective on this risky strategy.

Buffett, renowned for his successful long-term investment approach, has repeatedly advised against short selling. Speaking at the 2001 Berkshire Hathaway Annual Meeting, he described short selling as “an interesting item to study because it’s, I mean, it’s ruined a lot of people. It’s the sort of thing that you can go broke doing.”

One of the key reasons Buffett discourages short selling is the inherent risk involved. Unlike buying a stock with a capped loss (the amount invested), short selling exposes investors to unlimited losses. This crucial distinction, according to Buffett, makes shorting considerably different from being long on an investment that has already been paid for.

Buffett’s reluctance to engage in short selling is grounded in the observation that overvalued stocks tend to be more prevalent than undervalued ones. He notes, “You see way more stocks that are dramatically overvalued in your career than you will see stocks that are dramatically undervalued.”

This advice from one of the most successful investors of all time serves as a reminder to investors to tread carefully when considering short selling. While the potential gains may seem enticing, the risks associated with unlimited losses should give pause. Buffett’s timeless wisdom suggests that, in the ever-changing landscape of the stock market, a prudent and patient approach to long-term investing may be a more reliable path to success.

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2023 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

Berkshire Hathaway’s Jazwares Teams Up with H&M for Exclusive Squishmallows Fashion Collection

(BRK.A), (BRK.B)

In a groundbreaking collaboration, global toy giant Jazwares, a subsidiary of Berkshire Hathaway, and the company behind the beloved Squishmallows, is joining forces with international fashion brand H&M to unveil an exciting apparel and accessories line inspired by the iconic plush phenomenon.

The collection is set to debut online on December 7, with a global in-store release following on December 21. This marks the inaugural partnership between H&M and Squishmallows, propelling the plush sensation into the realm of high-fashion and solidifying its status as a premier global lifestyle brand.

“Squishmallows is loved by many kids around the world, and we are so excited to be offering a unique collection to all Squishmallows fans,” enthuses Sofia Löfstedt, Head of Creative and Design at H&M Kids.

Crafted with the signature plush softness that defines Squishmallows, the 42-piece collection caters to kids and tweens and boasts a diverse array of apparel and accessories. From cozy slippers and pajamas to trendy t-shirts, dresses, ear muffs, and hoodies, the line encapsulates the essence of the huggable Squishmallows characters.

Each fashion-forward item embodies the distinct personalities of the lovable plush toys, ensuring that the collection is as irresistibly cuddle-worthy as the Squishmallows themselves. Notably, the H&M collaboration introduces ‘Rodry,’ a yellow bearded dragon Squishmallows plush sporting an all-new look.

“Partnering with H&M, a global force in fashion, allows us to authentically translate the world of Squishmallows into stylish apparel and accessories we know consumers will love,” affirms Sam Ferguson, Senior Vice President of Licensing at Jazwares. “We are steadfast in our vision to expand Squishmallows into a full 360-degree lifestyle brand and are eager for fans to add this epic collection to their wardrobes.”

In the past year, Jazwares has strategically worked towards elevating Squishmallows into a comprehensive lifestyle brand through collaborations with top-tier partners in the realms of fashion, gaming, and various lifestyle categories. This collaboration with H&M adds to the illustrious portfolio of over 70 best-in-class licensees, positioning Squishmallows as a cultural and fashionable force to be reckoned with. As the holiday season approaches, the Squishmallows x H&M collection promises to be a must-have for fans seeking to infuse their wardrobes with the charm and playfulness that defines the Squishmallows brand.

© 2023 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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Jazwares

Jazwares Expands With Australian Toy Distributor Big Balloon Acquisition

(BRK.A), (BRK.B)

Berkshire Hathaway’s Jazwares, a prominent global toy company, has expanded its reach by acquiring Big Balloon, Australia’s leading full-service toy distributor. With over 12 years of experience, Big Balloon has played a crucial role in the Australian toy industry, fostering both big and small brands through strategic partnerships with major and independent retailers.

Judd Zebersky, the Founder and CEO of Jazwares, emphasized the significance of the Australian market, a thriving $1.7 billion industry. The acquisition of Big Balloon is seen as a strategic investment in Jazwares’ future global growth, establishing a strong foothold in Australia. Zebersky praised Chris Loverso, Co-Founder of Big Balloon, as an excellent manager and welcomed him and his team to the Jazwares family.

Jazwares Australia is poised to make a lasting impact on the toy industry, focusing on the company’s brands and business. According to Zebersky, the team’s dedicated approach will bring value to retail partners and consumers alike. Arthur Ferreira, Senior Vice President of International Sales and Marketing, highlighted the eight-year collaboration between Jazwares and Big Balloon, expressing the intention to strengthen local relationships with global licensing partners and enhance connections with end consumers.

Chris Loverso, who will now serve as Managing Director of Jazwares Australia, emphasized the natural evolution of the partnership, citing shared cultural alignment and a mutual passion for brands. Loverso sees the collaboration as an opportunity to leverage their extensive experience in the Australian marketplace to contribute to the growth of Jazwares brands and support longstanding partners in the region. The union of the two companies as team members marks a significant step forward in delivering value and expanding their market presence in Australia.

© 2023 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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BYD

BYD Surpasses 6 Million NEVs

(BRK.A), (BRK.B)

Berkshire Hathaway-backed BYD achieved a historic feat with the production of its 6 millionth new energy vehicle, which rolled off the line November 24 at its Zhengzhou factory. This milestone, reached in just three months after surpassing the 5 millionth mark, sets a new record and underscores BYD’s unwavering commitment to pioneering advancements in the electric vehicle industry.

The 6 millionth new energy vehicle, a BAO 5, is a super hybrid hardcore SUV introduced under BYD’s specialized sub-brand, FANGCHENGBAO.

BYD has been actively expanding its global presence since 2010, focusing on public transit electrification by introducing new energy buses and taxis. Over the past decade, BYD’s electric public transport solutions have made a significant impact, operating in more than 400 cities across over 70 countries. The company’s wide-range of new energy businesses includes automobiles, rail transit, new energy, and electronics, with over 30 industrial parks in China, the United States, Canada, Japan, Brazil, Hungary, and India. This sustained effort highlights BYD’s dedication to sustainable transportation solutions on a global scale.

© 2023 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.

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Lessons From Warren Buffett

Lessons From Warren Buffett: When Do You Sell a “Forever Stock”?

(BRK.A), (BRK.B)

Warren Buffett, renowned for advocating a “forever” holding period for stocks, often finds himself clarifying that this philosophy doesn’t equate to never selling. While his enduring positions in Coca Cola and American Express span decades, Buffett has, in fact, parted ways with various holdings over the years, shedding light on the dynamic nature of his investment strategy.

Contrary to the misconception that Buffett rarely sells, recent instances, such as divesting from airline stocks in 2020 (American, Delta, United, and Southwest) amid the COVID-19 impact, emphasize his willingness to make strategic decisions based on changing circumstances.

Buffett acknowledges that selling isn’t his default inclination, stating, “It’s not their inclination to sell,” but the reality is that he engages in selling stocks regularly. The key determinant for Buffett to part with a stock is often a negative shift in the company’s competitive advantage.

Reflecting on this aspect, Buffett noted at the 2002 Berkshire Hathaway Annual Meeting, “We probably had one view of the long-term competitive advantage of the company at the time we bought it, and we may have modified that.” He emphasized that while the original decision might have been based on a perceived strong competitive position, changes over time could erode those strengths.

Illustrating this, Buffett cited the example of the newspaper industry in 1970, where he and Charlie Munger considered it an impregnable franchise. However, industry dynamics shifted over time, prompting a reassessment of their initial views.

For stocks exhibiting robust revenues, consistent dividends, and a promising future, Buffett advocates holding onto them without setting arbitrary selling prices. As he once emphasized, “The real thing to do with a great business is just hang on for dear life.” However, when a company’s prospects falter, Buffett sees no need to cling to it indefinitely, acknowledging the importance of adaptability in investment decisions.

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2023 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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Commentary

Honoring the Legacy of Charlie Munger: A Maverick in American Investing

As we bid farewell to Charlie Munger, who gracefully concluded his journey at the remarkable age of 99, we mourn the loss of a titan in the world of investing. His departure has left a void, robbing the financial landscape of not only sagacity but also the sharpness of his acerbic wit.

Charlie Munger, distinguished as one of the most astute investors, held a unique perspective. Contrary to the common belief that investment success hinged solely on shrewdness, Munger contended that true triumph lay in steering clear of the pitfalls that transformed intelligent investors into imprudent gamblers. In his own words, he advised, “What you’ve got to do is be averse to the standard stupidities. You just keep those out. You don’t have to be smart.”

The legacy Munger leaves behind is a treasure trove of investing wisdom and life insights, a legacy that will continue to enrich the minds of investors across the globe for decades to come. His teachings, a blend of intelligence and practicality, serve as a guiding light for those navigating the intricate realms of finance.

In the annals of investment history, Charlie Munger’s name will be etched as an American original–a trailblazer who not only accumulated wealth but shared the invaluable lessons learned along the way. His absence will be keenly felt, leaving a void that resonates with the collective sentiment of investors who recognized the profound impact of his wisdom.

© 2023 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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Charlie Munger

Charlie Munger: 1924-2023

Berkshire Hathaway Inc. News Release

November 28, 2023 03:57 PM Eastern Standard Time

OMAHA, Neb.–(BUSINESS WIRE)–(BRK.A; BRK.B) – Berkshire Hathaway a few minutes ago was advised by members of Charlie Munger’s family that he peacefully died this morning at a California hospital.

Warren Buffett, CEO of Berkshire Hathaway, wishes to say: “Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation.”

The family will handle all affairs pursuant to Charlie’s instructions.

About Berkshire

Berkshire Hathaway and its subsidiaries engage in diverse business activities including insurance and reinsurance, utilities and energy, freight rail transportation, manufacturing, retailing and services. Common stock of the company is listed on the New York Stock Exchange, trading symbols BRK.A and BRK.B.

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Minority Stock Positions

Berkshire Hathaway’s Paytm Investment Ends in a $140 Million Loss

(BRK.A), (BRK.B)

Berkshire Hathaway’s foray into India’s payment platform, Paytm, has concluded on a sour note, as the conglomerate exits its position with a substantial $140 million loss.

Back in 2018, Berkshire made a strategic investment by acquiring a stake in One97 Communications Ltd, the parent company of Paytm.

In a recent development, Berkshire opted to sell its stake for $164.7 million (13.71 billion rupees) through a bulk deal on Friday. Notably, this investment reflected a departure from the traditional investment strategies championed by Warren Buffett, who has historically been averse to technology stocks, save for his large position in Apple.

The Paytm investment was orchestrated by Berkshire portfolio manager Todd Combs, signaling a potential shift in the next generation of Berkshire’s investment management towards a more diverse approach.

Expressing optimism at the time of the investment, Combs stated, “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.” Unfortunately, the anticipated success of the venture did not materialize as Paytm encountered hurdles early on.

In 2020, Paytm faced a setback when it was removed from Google’s Play Store for violating gambling policies. The Play Store’s prohibition on unregulated gambling apps, including online casinos facilitating sports betting in India, led to Paytm’s removal. The challenges persisted into 2021 when Paytm’s initial public offering (IPO) underperformed expectations.

During its stock market debut, Paytm’s share price plummeted by 26 percent, with intraday trading pushing the stock down as much as 28 percent from its issue price. This turn of events underscores the volatility and challenges present in the dynamic fintech landscape, demonstrating that even strategic investments made by established entities like Berkshire Hathaway can face unforeseen obstacles.

© 2023 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.