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Minority Stock Positions

Berkshire Boosts Stakes in Japanese Trading Houses

(BRK.A), (BRK.B)

Berkshire Hathaway’s subsidiary, National Indemnity Company, has announced an increase in its ownership stake in five prominent Japanese trading companies. The companies in question – Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo – hold significant positions in Japan’s economic landscape. Berkshire Hathaway’s investments in these companies are currently the only publicly traded holdings it possesses in Japan, and their combined value surpasses that of any other publicly traded stocks owned by the company outside of the United States.

Berkshire Hathaway’s ownership interest in each of the five companies now averages more than 8.5%, excluding treasury stock shares. This disclosure aligns with how Berkshire Hathaway reports its ownership in publicly traded U.S. companies. The conglomerate intends to maintain its Japanese investments for the long term. While the company might consider increasing its holdings in these companies, it has set a self-imposed limit of 9.9% ownership. Warren Buffett, the CEO of Berkshire Hathaway, has assured that any additional purchases beyond this threshold will only occur with the explicit approval of the investee’s board of directors.

Earlier this year, Mr. Buffett, accompanied by Gregory E. Abel, Berkshire’s Vice Chairman for Non-Insurance Operations, visited Japan to meet with the CEOs of the five companies. The discussions were fruitful, leaving both Mr. Buffett and Mr. Abel extremely pleased with the progress made. Their vision for the future may involve gradually increasing Berkshire Hathaway’s stake in each of these companies to 9.9% ownership, if prices warrant it.

Berkshire Hathaway continues to demonstrate its long-term commitment to the Japanese market and its confidence in the potential of these esteemed trading companies.

© 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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Lessons From Warren Buffett

Lessons From Warren Buffett: Three to Five Years Is Not a Long Time Frame

With so many people trading stocks every day, it might seem wise to look to a longer time horizon than just trying to make money overnight. What is a long term time frame? Warren Buffett points out that even three to five years, a seeming eternity to some trade-happy investors, is not really sufficient to give you the safety you hope to gain as a long term investor.

“If your time frame is three to five years, A.) I wouldn’t advise it being that way, because I think if you think you’re going to get out then, it gets more toward, leaning toward the bigger fool theory,” Buffett said at the 1998 Berkshire Hathaway annual meeting. “The best way to look at any investment is how will I feel if I own it forever? You know, and put all my family’s net worth in it.”

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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BYD

BYD Announces Fifth Brand

(BRK.A), (BRK.B)

BYD has unveiled its new sub-brand, FANG CHENG BAO, which aims to meet the evolving needs of consumers by offering a range of unique and professional-grade new energy vehicle models. As the fifth addition to BYD’s brand matrix, FANG CHENG BAO complements the existing Dynasty series, Ocean series, Denza, and Yangwang.

The FANG CHENG BAO lineup covers a wide spectrum of vehicles, ranging from off-road vehicles to sports cars. The brand’s inaugural model, a rugged SUV with the codename SF, is expected to hit the market later this year. The brand name itself, FANG CHENG BAO, carries a symbolic meaning. In Chinese, it translates to “Formula” and “Leopard,” representing the pursuit of transformative rise and exploration in the digital realm. By blending the standards and rules of Formula with the agility and wild versatility of the Leopard, FANG CHENG BAO embodies the brand’s essence and BYD’s vision of future cars and lifestyles.

According to Wang Chuanfu, Chairman and President of BYD, the global e-mobility transition is often perceived as a revolution where electric cars replace vehicles powered by fossil fuels. However, BYD believes that this perspective only captures a fraction of the true transformation that lies ahead. Wang Chuanfu shared, “A greater realm is unfolding.” FANG CHENG BAO, therefore, serves as the prelude to this revolution in BYD’s vision. The brand embraces an attitude of always staying ahead of trends, envisioning a future where FANG CHENG BAO and its users decode the personalized car life through a diverse range of new energy vehicle products.

© 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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Announcements

Berkshire Hathaway Has Another $50 Million to Put To Work After Seritage Prepayment

(BRK.A), (BRK.B)

Berkshire Hathaway has another $50 million that it needs to invest.

Seritage Growth Properties, a national owner and developer of retail, residential and mixed-use properties, announced that on June 7, 2023, the company made a voluntary prepayment of $50 million toward its $1.6 billion term loan facility provided by Berkshire Hathaway Life Insurance Company of Company of Nebraska.

With the prepayment, $550 million 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 $3.5 million.

© 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.

Categories
Lessons From Warren Buffett

Lessons From Warren Buffett: Make the Best Deal You Can Make Now

Warren Buffett, known for his baseball analogies, compares investing to a batter waiting for the right pitch. Unlike the batter, investors face no called strikes and can patiently seek the perfect opportunity. However, it’s important not to let the pursuit of perfection hinder the recognition of good investments. While aiming for home runs, one must also appreciate the value of solid opportunities. Striking a balance between waiting for ideal prospects and seizing worthwhile investments is the key to long-term success.

“One of the things, one of the errors people make in business, and sometimes it can be a huge error, is that they try and measure every deal against the best deal they’ve ever made,” Buffet said 2011 Berkshire Hathaway Annual Meeting. “The goal is not to make a better deal than you’ve ever made before. The goal is to make a satisfactory deal that’s the best deal you can make at the time.”

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.

Categories
BYD

BYD Posts New Monthly Sales Record

(BRK.A), (BRK.B)

BYD, the Chinese automobile manufacturer backed by Berkshire Hathaway, continues to shatter sales records with its remarkable performance in the market. The company achieved a significant milestone in May, surpassing its previous sales record of 235,197 units, which was accomplished in December 2022. The figures speak volumes about BYD’s unwavering success in the competitive automotive industry.

During the month of May alone, BYD sold an impressive total of 240,220 new energy vehicles (NEVs), exhibiting a remarkable growth rate of 108% compared to May 2022. This tremendous surge in sales reflects the increasing demand for BYD’s innovative and eco-friendly vehicles, which have captured the attention of consumers worldwide.

Furthermore, the year-to-date sales for BYD have reached an impressive figure of 507,314 units, marking a staggering 97% increase over the first five months of 2022. This remarkable growth signifies the company’s ability to consistently deliver high-quality vehicles that cater to the evolving needs and preferences of the modern consumer.

© 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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NetJets

NetJets Opens New Maintence facility in Paris

(BRK.A), (BRK.B)

Berkshire Hathaway’s NetJets, the world’s largest private jet operator, has recently unveiled its state-of-the-art Maintenance Service Hub at Paris Airport-Le Bourget. This new facility aims to provide round-the-clock maintenance services for all NetJets aircraft operating in Europe, catering to the growing demand in the region.

In collaboration with JetSupport, the Le Bourget Maintenance Service Hub offers a comprehensive 24/7/365 MRO (maintenance, repairs, and operations) service. With this strategic expansion, NetJets seeks to ensure the smooth functioning of its impressive annual tally of 450,000 global flights. In addition to the new Paris hub, NetJets also operates a maintenance hub at London Luton Airport.

Spanning an area of 4,014 square meters, the Le Bourget service hub hangar boasts an additional 11,329 square meters of ramp space. This extensive facility can comfortably accommodate NetJets’ largest aircraft models, such as the Bombardier Global 6000 and Bombardier Challenger 650. By providing ample capacity, the company aims to maximize aircraft availability and minimize downtime.

Christian Luwisch, the executive director of NetJets Europe, expressed his delight in officially inaugurating the Maintenance Service Hub at Le Bourget. With NetJets’ continued fleet expansion in Europe, Luwisch emphasized the importance of scaling up operational capabilities to ensure uninterrupted service for aircraft owners. Safety remains the company’s utmost priority, and the strategic locations of both Le Bourget and Luton hubs play a crucial role in delivering seamless and proactive servicing.

NetJets’ new Maintenance Service Hub at Paris Airport-Le Bourget is a testament to the company’s commitment to excellence in aircraft maintenance and customer satisfaction. By establishing this 24-hour facility, NetJets reinforces its position as a leader in the private aviation industry, providing reliable and efficient services to its discerning clientele.

© 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.

Categories
Lessons From Warren Buffett

Lessons From Warren Buffett: Start From a Good Base

Warren Buffett is renowned for his brilliant investment decisions, but even he admits that some of his early ones were not so great. In particular, he acknowledges that his initial purchase of Berkshire Hathaway was a costly mistake, resulting in a missed opportunity worth $200 billion. Although the company was ailing in the textile industry, he thought it was a cheap opportunity to acquire assets below their book value. However, he later realized that the money required to keep it afloat would have been better spent on acquiring a high-quality business instead.

“Start from a good base,” Buffett said at the 2000 Berkshire Hathaway annual meeting. “Don’t follow our example in that respect. Start out with a good business and then keep adding on good businesses.”

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.

Categories
Announcements

Berkshire Hathaway Has Another $200 Million to Put To Work After Seritage Prepayment

(BRK.A), (BRK.B)

Berkshire Hathaway has another $200 million that it needs to invest.

Seritage Growth Properties, a national owner and developer of retail, residential and mixed-use properties, announced that on May 25, 2023, the company made a voluntary prepayment of $200 million toward its $1.6 billion term loan facility provided by Berkshire Hathaway Life Insurance Company of Company of Nebraska.

With the prepayment, $600 million 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 $14 million.

© 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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Dairy Queen

Dairy Queen Appoints Two Executives

(BRK.A), (BRK.B)

Berkshire Hathway’s American Dairy Queen Corporation (ADQ), a prominent player in the quick-service restaurant (QSR) industry, has recently made two significant additions to its international business team.

The company, a subsidiary of International Dairy Queen, Inc. (IDQ), announced the hiring of Chris Wren as the vice president of development, international, and Greg Kirian as the vice president of marketing, international. These appointments aim to bolster brand awareness and facilitate restaurant growth outside of the United States and Canada.

Chris Wren brings an impressive background of nearly three decades in franchising and the restaurant industry to ADQ. His extensive executive finance and development experience at renowned companies such as CIT Bank, Dine Brands Global, Wingstop, and Yum! Brands make him a valuable asset. In his new role, Wren will be responsible for overseeing the strategic direction and execution of international business development in both new and existing markets.

Greg Kirian has over two decades of experience in the global food and beverage industry. Having held leadership positions in international marketing at esteemed companies like Little Caesar’s, Wingstop, and Yum! Brands, Kirian is well-equipped to lead brand and marketing strategies for ADQ’s international markets.

The decision to hire strong leaders in marketing and development roles aligns with ADQ’s ambitious business goals of expanding their global footprint beyond the United States and Canada.

Nicolas Boudet, the chief operating officer, international at American Dairy Queen Corporation, emphasized the criticality of such leadership to achieve their objectives. Boudet expressed confidence in both Wren and Kirian, commending their impressive and diverse portfolios of experience in global businesses. Their expertise will be instrumental in driving DQ restaurant growth and enhancing brand awareness in new and existing markets worldwide.

Chris Wren and Greg Kirian both hold master’s degrees in business administration from Southern Methodist University in Dallas, Texas.

International Dairy Queen, Inc. (IDQ), headquartered in Minneapolis, Minnesota, acts as the parent company for American Dairy Queen Corporation (ADQ) and Dairy Queen Canada, Inc. With a presence in over 20 countries, IDQ operates a system of more than 7,000 restaurants.

© 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.