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Lessons From Warren Buffett

Lessons From Warren Buffett: How a Hockey Great’s Method Relates to Investing

Warren Buffett cites hockey legend Wayne Gretzky for an important principal in investing when it comes to looking at formulas, such as P/E ratios.

“It’s the future that counts,” Buffett said at the 1995 Berkshire Hathaway annual meeting. “It’s like what I wrote there, what Wayne Gretzky says, to go where the puck is going to be, not where it is.”

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2022 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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Acquisitions

Berkshire’s Exponential Technology Group Acquires Braemac Pty Ltd.

Berkshire Hathaway, through one of its subsidiaries, has reached a definitive agreement to acquire Braemac Pty Ltd., a specialist in product design, development, testing, and the supply of semiconductors, systems, and electronic components. The financial terms of the deal were not disclosed.

Braemac is based in Sydney, Australia, with 17 offices globally and offers support from design through to product realization, driving innovation with industry-leading semiconductor and electronic component partners providing extensive design and supply chain management expertise.

“We welcome the Braemac team to the XTG family of companies,” said Glenn Smith, acting President of the Exponential Technology Group. “Braemac brings a very experienced management team and a business model that fits extremely well into XTG’s vision of helping engineers solve technical problems as well as having the experience and expertise to design a customer’s smart product from scratch, and then managing the bill-of-materials and supply chain through production.”

Behind these companies lies even more – the strength of XTG’s parent company, Mouser Electronics, a global authorized distributor of semiconductors and electronics components, recognized as the world leader in the introduction of new products with the widest selection of in-stock products for new designs.

As a wholly-owned subsidiary of TTI Inc., Mouser and XTG are part of the Berkshire Hathaway family of companies.

According to Braemac President Jonathan Mitchell, “The Exponential Technology Group is a great fit for Braemac. Companies within XTG maintain their own areas of expertise and focus while collaborating within the group to deliver new technological solutions globally.”

Exponential Technology Group (XTG) is a collection of companies specializing in designing products and supplying semiconductors and electronic components that enable smart electronic systems in automotive, medical, wireless, industrial, and IoT.

XTG operates as an independent member of Berkshire Hathaway’s Mouser and TTI family of companies.

The companies within the XTG group include the Design Services Companies of BGM Electronic Services, Connected Development, and Paragon Innovations, plus the supply chain experts and specialty semiconductor distributors of RFMW Ltd, Symmetry Electronics, Changnam I.N.T. LTD.

© 2022 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

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Minority Stock Positions

Berkshire-Backed Paytm Announces Stock Buyback

(BRK.A), (BRK.B)

Berkshire Hathaway-backed financial Paytm Paytm has approved the repurchase of up to $127 million of its shares inclusive of all taxes and other expenses. The buyback was unanimously approved by the company’s board on Tuesday.

Paytm, which stands for Pay through mobile, is India’s largest mobile payments and commerce platform.

Paytm went public late last year at 2,150 Indian rupees ($26) but has lost some 60 percent of its value.

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

© 2022 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 Specialty Insurance

Berkshire Hathaway Specialty Insurance Names Cathy Miller to Head of North America Property Team

(BRK.A), (BRK.B)

Berkshire Hathaway Specialty Insurance has promoted Cathy Miller to Head of North America Property and announced several other promotions within its North America Property team.

As Head of North America Property, Cathy will oversee the insurer’s general property, energy, builder’s risk and marine business in the U.S. and Canada. She was previously Global Property Underwriting Officer. In other newly announced promotions:

• Greg Freeman has been named U.S. Retail Leader, General Property. In addition to his new role, Greg will continue to play an integral role in BHSI’s North America builder’s risk business. He was previously Head of Retail General Property, U.S. Eastern Region.

• Mark Lees has been named Global Property Underwriting Officer. He was previously Head of Retail General Property, U.S. Western Region.

• Scott Johnson has been named Head of Retail General Property, U.S. Eastern Region. He was previously Head of Retail General Property, U.S. Northeast Region.

• Alison McVeigh has been named Head of Retail General Property, U.S. Northeast Region. She was previously Vice President, U.S. Northeast Region Property.

• Manny Dewani has been named Head of Retail General Property, U.S. Western Region. He was previously Vice President, U.S. Western Region Property.

“BHSI has an exceptional team of individuals with excellent capabilities and strong character bringing our reliable capacity, risk engineering and CLAIMS IS OUR PRODUCT philosophy to the marketplace,” said Sanjay Godhwani, President of North America, BHSI. “I am pleased to tap into our deep bench of talent in making these promotions. All of these leaders have pivotal roles to play as we continue to expand our property portfolio in North America and around the globe.”

BHSI offers a full line of property, builder’s risk and marine insurance products and services in North America and around the world.

© 2022 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.

Categories
Retail

Berkshire Hathaway’s Jordan’s Furniture to Open New Store in Connecticut

(BRK.A), (BRK.B)

Berkshire Hathaway’s Jordan’s Furniture, a popular Massachusetts-based furniture retailer, will open new store in Connecticut in the Westfarms Mall in Farmington. The town is on the outskirts of the state capital, Hartford.

The store will open in 2024, occupying a former Lord & Taylor anchor store, and will feature more than 120,000 square feet of showroom floor space. The store will also have 5,000-square-feet of restaurant and entertainment attraction.

Jordan’s, with the slogan “Not Just A Store, An Experience,” is known for outfitting many of its stores with large entertainment attractions to enhance the shopping experience. Two of its stores have IMAX 3D theaters, and others have multi-level It Ropes Courses with over 30 activities, including zig-zag beams, spaghetti hand lines, angled rope ladders, crisscross walks, and a zip line.

Most Jordan’s are stand-alone locations, and Westfarms Mall will become its third mall location.

Founded in 1928 by Samuel Tatelman, who originally sold furniture out of a truck before opening his first Jordan’s store in Waltham, Massachusetts, the chain really took off in the early 1970s when his grandsons, Barry and Eliot Tatelman, took over the business and added a unique level of showmanship.

Store openings created great fanfare, and the 1987 opening day of the Avon, Massachusetts store reportedly caused the largest traffic jam ever recorded on Route 24.

The regional chain had four locations when it was sold to Berkshire Hathaway in 1999. The chain has since grown its locations, and Westfarms will become the eight location and second in Connecticut.

At the time of the acquisition, the retailer was approaching a quarter of a billion dollars in sales and sold more furniture per square foot than anyone in the U.S. Warren Buffett said, “Jordan’s Furniture is truly one of the most phenomenal and unique companies that I have ever seen. The reputation that Eliot and Barry have earned from their employees, their customers, and the community is unparalleled. This company is a gem!”

© 2022 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: People Always Want a Formula

Disciplined investors are often trying to find the key investing principals that they can apply that will tell them when to make an investment. However, Warren Buffett points out that it is not that simple.

“People always want a formula. They go to The Intelligent Investor and they think, you know, somewhere they’re going to give me a little formula and then I can plug this in and I know I’ll make lots of money. And it really doesn’t work that way,” Warren Buffett said at the 2002 Berkshire Hathaway Annual Meeting. “What you’re trying to do is look at all the cash a business will produce between now and judgment day, and discount it back at a rate that’s appropriate, and then buy it a lot cheaper than that…So, I wouldn’t want to have a single yardstick, or a, you know, relative P/E that I went by.”

Hear Buffett’s full explanation

See the complete Lessons From Warren Buffett series

© 2022 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

BYD Expands Mexico Presence With Auto Dealer Network

(BRK.A), (BRK.B)

Berkshire Hathaway-backed BYD’s cars are still not available in the U.S., but they are getting closer and closer. BYD recently unveiled its luxury sedan HAN EV and all-electric SUV TANG EV at a test drive event in Mexico.

BYD announced its partnership with eight local dealers: Grupo Continental, Grupo Cleber, Grupo Dalton, Grupo Excelencia, Grupo Farrera, Grupo Fame, Liverpool, and Grupo del Rincón. The global enterprise is expected to expand its local presence in the country and introduce its top-of-the-line new energy vehicles (NEVs) to the Mexican market in 2023.

Zhou Zou, Country Manager of BYD Mexico, stated, “We are happy with this new step BYD is taking in Mexico. We want to be a long-term partner with projects that promote zero-emission solutions in the country. BYD Mexico now boasts more than 9 years of local experience, achieving significant milestones in new energy taxis, trucks, and forklifts. Today marks a new milestone for BYD, and we will bring new energy passenger vehicles to Mexican users in the first half of 2023.”

As BYD’s flagship Sedan, HAN EV comes equipped with BYD’s revolutionary Blade Battery, which offers outstanding performance in terms of safety and range. With a 0-100km/h sprint time of just 3.9 seconds, participants were allowed to enjoy the incredible handling experience of electric vehicles.

Neva Zhang, the Commercial Director of BYD Mexico, noted that BYD is excited to grow its global market presence in Mexico. “To cope with industrial transformation and ever-changing consumer trends, BYD will continue to focus on technological innovation”, said Zhang, “In addition, we will always respond to people’s pursuit of a better life with advanced technologies and diversified products.”

Electromobility is an environmental and economic trend. In Mexico, 50% of polluting emissions are generated from the use of electricity and transportation, with one-fifth stemming from transportation emissions, according to Statista, a global data collecting platform. Thus, reducing the emissions generated by motor transport must be a priority in the future.

For over 20 years, BYD has provided excellent sustainable electric vehicles experience to global users. On November 2022, BYD hit a new milestone with the 3 millionth NEV produced. By working with local partners, BYD will build a localized sales and service system, to ensure better consumer experiences for Mexican users.

© 2022 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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Berkshire Hathaway HomeServices

Berkshire Hathaway HomeServices Expands in Mississippi with Cabin & Creek Real Estate

(BRK.A), (BRK.B)

Berkshire Hathaway HomeServices, a global residential real estate brokerage network, has announced its further expansion in the Southeastern region with the addition of Cabin & Creek Real Estate, which will now operate as Berkshire Hathaway HomeServices Cabin & Creek Real Estate.

The office will be owned by Mississippi state native Chuck Paulk who has 17 years of industry experience and expertise. Headquartered in Summit, Mississippi, the office will serve the Southwestern region of Mississippi. Since its creation Cabin & Creek Real Estate has grown; increasing its annual sales almost 10 times in less than 8 years and will now bring its success to the Berkshire Hathaway HomeServices global brand.

“This is such a monumental milestone for our team,” said Paulk. “We are looking forward to growing and expanding throughout our marketplace under the Berkshire Hathaway HomeServices brand. This step in our business will allow us to better serve our clients, providing invaluable assistance from start to finish.”

By joining the network, Berkshire Hathaway HomeServices Cabin & Creek Real Estate agents gain access to Berkshire Hathaway HomeServices’ active referral and relocation networks, and its “FOREVER Cloud” technology suite, a powerful source for lead generation, marketing support, social media, video production/distribution and more.

The brand also provides an exclusive Luxury Collection marketing program for premier listings. Its Prestige Magazine showcases network members’ premium listings with a strong lineup of feature stories covering topics that appeal to high-end real estate clients.

“Given the demand we are seeing for homes in this area, it made sense for us to expand to better support this growing market,” said Christy Budnick, CEO, Berkshire Hathaway HomeServices. “While the availability of country homes with land, homes in town and beyond are highly competitive, this team will be able to provide on-the-ground knowledge and provide clients with an exceptional experience throughout every part of the homebuying or selling process.”

Berkshire Hathaway HomeServices Cabin & Creek Real Estate will have a team of agents supporting the new office who brings extensive familiarity of the Southwestern Mississippi market.

Gino Blefari, chairman of Berkshire Hathaway HomeServices, welcomed the company to the network, “Berkshire Hathaway HomeServices Cabin & Creek Real Estate is a clear example of our mission. It’s important to us that we align ourselves with individuals who share the same core values, and I have no doubt that this team will carry out these ethics seamlessly.”

© 2022 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 Energy Subsidiary to Move Richmond Headquarters

(BRK.A), (BRK.B)

Berkshire Hathaway’s BHE GT&S, a standalone subsidiary of Berkshire Hathaway Energy, will have move its Richmond, Virginia headquarters to two Innsbrook office buildings that it recently bought from credit card company Capital One.

BHE GT&S paid a total of $20.75 million for 200,000 square feet of office space in buildings Knolls 4 and Knolls 5 located at 10700 and 10750 Capital One Way.

The deal closed Dec. 1.

The buildings are currently empty, and after renovation will replace the current BHE GT&S headquarters located in Reynolds Crossing. Innsbrook, a mixed-use corporate center in Central Virginia founded in 1979 and is just three minute from Richmond.

BHE GT&S operates around 5,400 miles of transmission lines in the eastern U.S and 756 bcf of total natural gas storage – with 420 bcf of working gas capacity – along with gathering, processing and field services businesses. BHE GT&S also provides a variety of LNG solutions through Pivotal LNG, its 25% operating stake in Cove Point LNG – the import, export and liquefaction facility in Lusby, Maryland – and other LNG processing and storage initiatives.

© 2022 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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Insurance

Berkshire Hathaway Receives $100 Million Seritage Prepayment

(BRK.A), (BRK.B)

Berkshire Hathaway has another $100 million that it needs to invest.

Seritage Growth Properties, a national owner and developer of retail, residential and mixed-use properties, announced that on November 30, 2022, the company made a voluntary prepayment of $100 million toward its $1.6 billion term loan facility provided by Berkshire Hathaway Life Insurance Company of Company of Nebraska.

With the prepayment, $1.06 billion of the term loan facility remains outstanding.

The prepayment will also reduce the amount of interest Berkshire receives from Seritage’s total annual interest expense by approximately $7.0 million.

© 2022 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.