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Lessons From Warren Buffett

Lessons From Warren Buffett: You Don’t Have to Do Anything

Investing can be such an active process that it is easy to forget that you don’t have to do anything. It is a point that Warren Buffett makes when he notes that the stock market gives you a constant stream of prices that you can buy or sell at, but you don’t have to accept them.

“The stock market is the most obliging, money-making place in the world because you don’t have to do anything,” Warren Buffett said at the 2012 Berkshire Hathaway Annual Meeting. “You know, you sit there with thousands of businesses being priced at the same price for the buyer and the seller…and it changes every day, and you’ve got lots of information about most of those businesses, and you don’t have to do anything.”

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© 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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Berkshire Hathaway Energy

BHE Renewables and WV Announce $500m Global Aerospace Manufacturing Hub Powered by Renewable Energy Microgrid

(BRK.A), (BRK.B)

Berkshire Hathaway’s BHE Renewables has entered into an agreement with the State of West Virginia to purchase more than 2,000 acres of land in Ravenswood, West Virginia, to be developed as a first-of-its-kind renewable energy microgrid-powered industrial site.

Berkshire’s Precision Castparts will be the first company to locate on the site and will develop a state-of-the-art titanium melt facility that will use 100% renewable energy to manufacture titanium products for the aerospace and other industries.

The West Virginia Economic Development Authority will work with BHE Renewables to bring additional businesses to the site to take advantage of the prime manufacturing location and renewable energy infrastructure.

“This is a monumental announcement that will pay dividends for generations to come,” Gov. Jim Justice said. “The partnership we are forging with BHE Renewables and PCC is testament to West Virginia’s ability to compete on the world stage and recruit world-class companies like these to our state. I couldn’t be more proud of the fact that West Virginia will help lead the way into a new era of renewable energy microgrid-powered manufacturing. I can never thank BHE Renewables and PCC enough for their commitment to West Virginia and for the jobs and economic ripple effects this partnership will bring.”

“This project demonstrates how investing in clean energy can revive economies that have served our country’s energy needs for decades,” BHE Renewables President and CEO Alicia Knapp said.

“We are thrilled to partner with PCC and West Virginia to deliver this landmark renewable energy solution, hundreds of jobs and significant economic development,” PCC Metals President Steve Wright said. “Our future facility is an outstanding opportunity to use clean energy as we invest in further strengthening our position as a world leader in titanium metals. Manufacturing our products with 100% renewable energy benefits PCC and our customers as we strive to minimize the impact of our operations and wisely use natural resources.”

On Saturday, Gov. Justice called a Special Session of the West Virginia Legislature to consider a bill establishing a “Certified Industrial Business Expansion Development Program,” within the Department of Economic Development, to encourage the continued development, construction, operation, maintenance, and expansion in West Virginia of high impact industrial plants and facilities, in certain circumstances where the availability of electricity generated from renewable sources is demonstrated to be necessary.

At the conclusion of the announcement today, Gov. Justice signed the bill after it passed both houses of the West Virginia Legislature.

Earlier today, the West Virginia Economic Development Authority voted to authorize an agreement for Berkshire Hathaway Energy to purchase more than 2,000 acres of land in Ravenswood, West Virginia. They also voted to approve a high-impact economic development project designation for Timet, which is the world’s largest producer of titanium airplane parts and a subsidiary of Precision Castparts.

“Today’s announcement is fantastic news for the people of West Virginia and domestic manufacturing efforts here in the United State,” United States Senator Joe Manchin said. “I’m excited by Berkshire Hathaway’s decision to invest in the Mountain State and look forward to seeing the benefits of this investment – including long-term, good-paying jobs and supporting our regional economies – for years to come.”

“Today’s announcement that Berkshire Hathaway Energy Renewables and West Virginia have reached an agreement to invest in Ravenswood is welcome news,” United States Senator Shelley Moore Capito said. “This unprecedented project has the potential to rapidly transform the Ravenswood area, and spark the economic development our communities need to grow and thrive. My staff and I have been involved in this process from the very beginning because we recognize the importance of smart economic and environmental growth to our state. I am thankful for the work of Governor Justice, Mike Graney, Mitch Carmichael, and especially Senator Glenn Jefferies and the West Virginia Legislature for helping make this possible. There is strong momentum growing behind business in West Virginia right now, and we must continue to build off of this economic success into the future.”

“It’s teamwork across the board that gets companies just like Berkshire Hathaway Energy Renewables and others to come to the State of West Virginia,” West Virginia State Senate President Craig Blair said. “I hope this is the beginning of a long and fruitful relationship, not just a single announcement”

“To the entire team that made today’s announcement possible, we are deeply thankful for the confidence that you’ve expressed in us,” West Virginia Speaker of the House Roger Hanshaw said. “It’s a privilege for us to be able to create an atmosphere and an environment that allows us to create a 21st century economy and we’re pleased to welcome people who represent everything that a 21st century economy means to the world. Having you here in West Virginia does more than just help the men and women who are going to work in your factory and be in your facility every day. It helps our state, it helps our economy, it helps the entire image of the State of West Virginia to be your partners. Welcome to West Virginia, we are delighted to call you our new friends and our new neighbors.”

“Two world-class companies selected West Virginia because we created the best environment for them to do business,” State Senator Glenn Jeffries said. “That includes being home to a world-class workforce. Something this big doesn’t happen without the ingenuity and work ethic of West Virginians.”

“I’m grateful to Gov. Justice, Secretary Carmichael, and everyone who worked together to secure this transformational development for our Jackson County community,” Delegate Jonathan Pinson said. “Our region and our people have long been poised to kick off this kind of resurgence in manufacturing and 21st century job creation, and I’m incredibly excited about what this most recent economic development announcement will mean for our families and future generations.”

“Our state’s growth-focused economic policies are second-to-none,” West Virginia Secretary of Economic Development Mitch Carmichael said. “West Virginia is investing in smart new ways for businesses to build success around clean energy that’s here to stay.”

© 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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Dairy Queen

International Dairy Queen Appoints New Chief Operating Officer, International

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Berkshire Hathaway’s International Dairy Queen Inc. has appointed Nicolas Boudet as its new chief operating officer, international. Boudet will lead the international business, including operations, franchise development, supply chain and marketing in more than 20 countries outside of the U.S. and Canada. He brings more than 20 years of business leadership experience at well-known, globally recognized hospitality and quick-service restaurant brands.

Boudet most recently served as senior vice president global development and president of international at Wingstop Restaurants, Inc. Before joining Wingstop in 2018, he was executive vice president and group president international at Focus Brands where he was responsible for Auntie Anne’s, Carvel, Cinnabon, McAlister’s, Moe’s and Schlotzky’s. Boudet also held leadership positions at YUM! Brands serving as: head of franchising and development for Taco Bell U.S., and chief development officer Latin America and Caribbean for KFC, Pizza Hut and Taco Bell.

“Our international business is our largest growth opportunity and bringing in a strong international franchise leader is paramount to deliver on our future success,” said Troy Bader, president and CEO at International Dairy Queen. “With decades of increasingly successful franchise experience in the quick-service restaurant industry, Nicolas Boudet brings a vision and growth business mindset as we continue to expand in existing countries and enter new markets.”

“I am honored to join International Dairy Queen at a time when global growth is a key strategic business priority,” said Nicolas Boudet, chief operating officer, international, at International Dairy Queen. “I am committed to empowering this talented team to its full potential, building relationships with current and prospective franchise owners, and introducing new fans around the world to the DQ experience.”

Boudet holds a master’s degree from ESSEC Business School, Paris, France, in a program administered by Institut de Management Hôtelier International (IMHI) and Cornell University. He is based in Dallas, Texas, where he resides with his family.

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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Lubrizol

Lubrizol Expands TPU Manufacturing in China

(BRK.A), (BRK.B)

Despite U.S. and China tensions being much in the news, it is not slowing down Berkshire Hathaway’s wholly-owned companies from expanding their manufacturing capacity in China.

Berkshire’s Lubrizol Corporation has opened a new thermoplastic polyurethane (TPU) production line at its Songjiang manufacturing site in Shanghai.

According to a company statement, this move is another milestone of Lubrizol Engineered Polymers’ investment in Asia Pacific, expanding the company’s TPU production capacity and strengthening regional business support.

The new line will provide additional TPU production capability for Lubrizol Engineered Polymers, including the ESTANE® TPU portfolio, meeting increasing demands from various markets such as automotive, footwear and electronics.

“The launch of our new TPU line showcases our strong confidence in this market,” said Jane Cai, senior business director APAC of Lubrizol Engineering Polymers. “We are continually investing in production capacity, product development and innovation in Asia, helping us collaborate with our customers, understand their diverse needs and provide tailored solutions that differentiate their products in the market.”

ESTANE TPUs not only improve performance and aesthetics of finished products, but also ultimately help our customers achieve their sustainability goals. In early 2022, Lubrizol’s Songjiang site was certificated by the International Sustainability Carbon Certification (ISCC Plus). The operation of the new TPU line will comply with the requirements to produce ISCC-certified TPUs and signifies the company’s responsible production to reduce environmental impact.

“Sustainability is a critical part of our business’ strategy,” stated Arnau Pano, vice president and general manager, Lubrizol Engineered Polymers. “As a material solutions provider, Lubrizol Engineered Polymers is dedicated to sustainability and delivering innovative and unique products to our end use markets.”

Lubrizol owns and operates more than 100 manufacturing facilities, sales and technical offices around the world, and has approximately 8,600 employees.

© 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: Buy Stocks Based on What a Company Is Worth

Too many investors focus on price to make their investing decisions. When a stock drops substantially from its all-time high, to them it has become cheap. However, Warren Buffett reminds us that long term investing success is based on buying companies based on what they are worth, not based on the prices they are selling for on any given day.

“The important thing is that you make your decisions based on what you think the business is worth,” Warren Buffett said at the 2012 Berkshire Hathaway Annual Meeting. “And if you make your buy and sell decisions based on what you think a business is worth, and you stick with businesses that you’ve got good reason to think you can value, you simply have to do well in stocks.”

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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BNSF

BNSF Reaches Tentative Labor Agreement With Union Representing BNSF-Montana Rail Link Workers

(BRK.A), (BRK.B)

Ballots will be mailed on September 9 to eligible members of the Brotherhood of Locomotive Engineers and Trainmen (BLET), regarding the union’s tentative BNSF-Montana Rail Link (MRL) implementing agreement and Oregon Short Line Protective Agreement, according to BLET National President Dennis R. Pierce.

In January, MRL announced it would terminate its lease with BNSF, with BNSF resuming operations on the line.

The implementing agreement governs BNSF’s hiring of the BLET-represented MRL employees, their seniority, work rules, pay, benefits, and integration into the BNSF system. The implementing agreement and Oregon Short Line Protective Agreement govern approximately 500 BLET members who work for the MRL.

Before BNSF took over operations, the Montana Rail Link was a Class II regional railroad based in Missoula, Montana, operating over 900 route miles of track in Montana and Idaho and employing nearly 1,200 workers.

© 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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BNSF

BNSF Has Dramatic Decrease in Past Due Grain Shipments

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Berkshire Hathaway-owned BNSF Railway has made dramatic progress in reducing unfilled grain shipments.

According to figures submitted to the Surface Transportation Board for the week of 8/20/22-8/26/2022, there were only 167 orders 1-10 days past due and 34 orders 11+ days past due.

This is a marked contrast to the week of 6/18/2022-6/24/2022 when there were 711 orders 1-10 days past due and 1,199 orders 11+ days past due.

Grain Car Backlog Status Report:

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Following STB’s hearing on “Urgent Issues in Freight Rail Service” in April, BNSF Railway, CSX Transportation, Norfolk Southern Railway, and Union Pacific submitted service recovery plans explaining the specific actions they will take to improve service and identify the specific metrics they will use to evaluate their progress toward such improvements.

Starting June 3, the STB required BNSF Railway, CSX Transportation, Norfolk Southern Railway, and Union Pacific to file service progress reports further explaining efforts to correct service deficiencies. They will continue to file service progress reports every two weeks for six months. Starting June 15, the STB is also requiring all class I railroads to report additional employment data for six months.

© 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: Always Think of Stocks as Businesses

Warren Buffett doesn’t just see stocks as a series of buy and sell prices that are constantly being offered. He always looks at investing as an opportunity to buy a business, whether it is buying the whole business or just a small number of shares.

“It’s very important to have that mindset that we are buying businesses, whether we’re buying 100 shares of something or whether we’re buying the entire company,” Warren Buffett said at the 2013 Berkshire Hathaway Annual Meeting. “We always think of them as businesses.”

Buffett’s full explanation on evaluating the qualitative and the quantitative properties of a business

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 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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Lubrizol

Rebecca Liebert Appointed President and CEO of Lubrizol

(BRK.A), (BRK.B)

Berkshire Hathaway’s Lubrizol Corporation has named Rebecca Liebert as the company’s President and CEO, effective October 3, 2022.

Interim President and CEO Mary Rhinehart will continue as Board Chair.

Liebert was most recently Executive Vice President of PPG Industries, a global leader in paints, coatings and specialty materials. She joined PPG in June 2018 leading the automotive OEM coatings business, including PPG’s mobility initiatives. Her final responsibilities included PPG’s global industrial segment businesses, Asia Pacific region oversight, and functional responsibility for global procurement, resin and industrial segment manufacturing.

Prior to PPG, Liebert served as President and CEO of Honeywell UOP, a leading international supplier to the petroleum refining, gas processing, petrochemical production and major manufacturing industries. Prior to joining Honeywell, Liebert served as President of Reynolds Food Packaging.

“Rebecca is a dynamic, passionate and results-driven leader,” said Greg Abel, Vice Chairman of Berkshire Hathaway’s non-insurance operations. “She brings tremendous experience and a record of accomplishments in leading global organizations and driving operational excellence. Most importantly, she is an individual of the highest integrity – a vital quality for leaders. I thank Mary Rhinehart for her strong interim leadership at Lubrizol and for helping position the company for future growth and success.”

“Rebecca is the right CEO at the right time to lead the company,” said Rhinehart. “I am confident Rebecca has the results-driven and employee- and customer-centric mindset that is critical as we move forward. In addition to her impressive career accomplishments, she is an inspirational leader and innovator who will foster a strong culture, while respecting the legacy and values that make Lubrizol the company it is today.”

“I am proud to be part of an organization with over 90 years of innovation in the areas of technology, societal advancement and sustainability,” Liebert said. “I am also excited to be a member of the team building Lubrizol’s future and look forward to working alongside Lubrizol’s dedicated employees to continue delivering solutions and value for our customers and supporting our communities.”

© 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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BNSF

BNSF Reaches Labor Agreement With 3 Unions

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Berkshire Hathaway’s BNSF, as well as Union Pacific, and CSX, have reached a tentative agreement with three of their labor unions. The agreement, which covers some 15,000 employees, came about after a Presidential Emergency Board, was created on July 18, 2022.

The three unions are the Transportation Communications Union/IAM, the Brotherhood of Railway Carmen, and the International Association of Machinists and Aerospace Workers.

In a statement released by Transportation Communications Union/IAM, the union noted:

“The Tentative Agreement secures all of the recommendations of PEB 250. Under the terms of this Agreement, employees will receive the highest General Wage Increases ever achieved through National Bargaining – 24% in compounded GWIs over 5 years. The TA protects all great benefits of our Healthcare Plans and includes Healthcare Design enhancements related to the coverage and treatment for Autism Disorder and hearing benefits. It also provides an additional day of paid leave to be designated as an additional Personal Leave Day, Vacation Day or Personal Holiday. The Tentative Agreement also contains a ‘Me-Too’ provision which ensures that in the event any other union reaches an agreement that improves on the terms of this Agreement, TCU/IAM members will receive the same additional value.

This Agreement ensures that every single penny of the recommendations contained in PEB 250 go directly into our member’s pockets. TCU/IAM members will receive thousands of dollars in back pay as well as thousands of dollars from increased wages through this agreement. There is no question – getting to a PEB and receiving these recommendations would never have been possible without all of Rail Labor coming together. The Unions stood together, determined to fight the Carriers proposals to slash healthcare benefits, attack our work rules and eliminate two-man crews. We were successful in that fight.”

© 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.