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Minority Stock Positions

Lease Agreement Gives Occidental Space for up to 3 Billion Metric Tons of Carbon Sequestration

(BRK.A), (BRK.B)

Energy producer Occidental, which is over 20-percent owned by Berkshire Hathaway, and its subsidiary 1PointFive and King Ranch, a privately-held agricultural production and resource management company, today announced a lease agreement to support large-scale Direct Air Capture (DAC) projects for dedicated carbon dioxide (CO2) sequestration on 106,000 acres in Kleberg County, Texas.

The agreement provides access to land for the potential to remove up to 30 million metric tons of CO2 per year through DAC and pore space estimated to store up to 3 billion metric tons of CO2 in geologic reservoirs.

The agreement will advance 1PointFive’s development plans for commercial-scale DAC plants as a decarbonization solution to accelerate a net-zero economy. In addition to DAC emissions capture, the King Ranch acreage is also located near industrial emitters in the Gulf Coast region, including Corpus Christi, where emissions can be captured, transported and sequestered in the pore space. Each DAC plant in the site is expected to be capable of removing up to 1 million metric tons of CO2 per year yielding a total capacity of up to 30 million metric tons per year when all facilities are operational.

“We are excited to work with King Ranch on what will be the largest DAC deployment project in the world, as we continue our plans to provide affordable and practical industrial-scale decarbonization solutions,” said Vicki Hollub, President and CEO, Occidental. “We believe large-scale DAC, which is an innovative engineered CO2 removal solution, will play an important role in helping organizations and nations reduce their net CO2 emissions and provide the scale necessary to make a difference in addressing climate change globally.”

“King Ranch has been focused on conservation for more than a century. While these methods to capture carbon are relatively new, they are consistent with our vision and values. We’re proud to partner with Occidental while continuing a focus on stewardship of our natural resources,” said Robert Hodgen, CEO of King Ranch, Inc.

Occidental’s first DAC plant in the Texas Permian Basin is currently under construction and builds on Occidental’s 50 years of carbon management experience. 1PointFive is working with Carbon Engineering to commercialize their technology and enable the global deployment of large-scale DAC projects. Worley is handling engineering, procurement, and construction (EPC) services for the first DAC plant.

© 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: When It Comes to Money, It All Spends the Same

It is easy for investors to get so wrapped up in a hot sector or company that they can lose sight of the fact that it in the end it is all about making money, and as Warren Buffett points out, a dollar from the hottest high tech company is no better than a dollar from a completely out of fashion industry.

“Whether the money comes from a bank, whether it comes from an internet company, or whether it comes from a brick company, the money all spends the same,” Warren Buffett said at the 2002 Berkshire Hathaway Annual Meeting. “Now the question is, what are the economic characteristics of the internet company or the bank or the brick company that tell you how much cash they’re going to generate over long periods in the future.”

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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Financials

Berkshire Buys Back $1.05 Billion in Stock in 3rd Quarter

(BRK.A), (BRK.B)

Warren Buffett continues to see Berkshire Hathaway stock as a good value and use of Berkshire’s profits. Approximately $1.05 billion was used to repurchase Berkshire shares during the third quarter bringing the nine month total to approximately $5.25 billion.

The buybacks come as Berkshire posted $7,761 billion in operating earnings for the third quarter, up from $6,466 billion for the same quarter in 2021.

At September 30, 2022, insurance float (the net liabilities we assume under insurance contracts) was approximately $150 billion, an increase of $3 billion since yearend 2021.

An analysis of Berkshire’s operating earnings follows (dollar amounts are in millions).

Third Quarter

First Nine Months

2022

2021

2022

2021

Insurance-underwriting

$

(962

)

$

(784

)

$

(334

)

$

356

Insurance-investment income

1,408

1,161

4,484

3,588

Railroad

1,442

1,538

4,477

4,305

Utilities and energy

1,585

1,496

3,101

2,939

Other controlled businesses

3,247

2,706

9,521

8,329

Non controlled businesses*

362

310

874

665

Other**

679

39

1,961

(12

)

Operating earnings

$

7,761

$

6,466

$

24,084

$

20,170

* Includes certain businesses in which Berkshire has between a 20% and 50% ownership interest.

© 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 HomeServices

Berkshire Hathaway HomeServices Expands in Tennessee and Georgia

(BRK.A), (BRK.B)

Berkshire Hathaway HomeServices has announced its further expansion in the Southeastern region with the addition of Berkshire Hathaway HomeServices Southern Routes Realty, which will operate in the states of Tennessee and Georgia.

The office will be owned by industry veteran Vickie McBryar, who brings over two decades of industry experience to the brand. Her son, Chase Jolander, will closely oversee the companies’ daily operations. The mother-son duo plans to lead the company to new heights with this transition.

“We are thrilled to continue servicing our clients, now under the prestigious Berkshire Hathaway HomeServices brand name,” said Jolander. “The global brokerage brand not only supports its network agents globally but also provides us with the tools and support to service our clients effortlessly. We could not be happier to be part of this forward-thinking brand as we approach the new year.”

“Given the demand we are seeing for homes in this region, we are thrilled to welcome Vickie, Chase, and their team to help service clients while they support this growing market,” said Christy Budnick, CEO, Berkshire Hathaway HomeServices. “Their team can now provide first-hand knowledge and service only a Forever Agent can supply, through our global network assets.”

© 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
Insurance

Berkshire Receives Loan Prepayment From Seritage

(BRK.A), (BRK.B)

Berkshire Hathaway now has another $110 million that it needs to invest.

Seritage Growth Properties, a national owner and developer of 150 retail, residential and mixed-use properties, has announced that on October 28, 2022, the Company made a voluntary prepayment of $110 million toward its $1.6 billion term loan facility provided by Berkshire Hathaway Life Insurance Company of Nebraska.

With the prepayment, $1.16 billion of the term loan facility remains outstanding. The prepayment will also reduce Seritage’s total annual interest expense related to the term loan facility by approximately $7.7 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.

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BYD

BYD Plans Rapid Retail Expansion in Brazil

(BRK.A), (BRK.B)

Berkshire Hathaway-backed BYD is aiming for rapid expansion of its retail stores across Brazil, as it boosts its sales of automobiles in the country and partners with Santander Bank to offer customers auto financing.

Currently, BYD has nine stores in the Brazilian market. Its local presence is projected to reach 45 cities by the end of 2022 and reach 100 locations by the end of 2023.

Besides vehicles, BYD Brazil also offers customers overall new energy solutions, which include the generation of clean energy by photovoltaic modules manufactured by BYD.

BYD Brazil has signed a strategic partnership with Santander Bank, the leading bank in automotive financing in Brazil. This will furnish one-stop auto financing services for the customers, from credit analysis, and credit approval, to payment options through a fully digital platform. Also, the partnership will benefit the local dealers to manage and grow their business of electric passenger vehicles.

© 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.

Categories
Lessons From Warren Buffett

Lessons From Warren Buffett: No One Has Been Successful at Predicting the Market

“Where Are Markets Headed? Six Pros Take Their Best Guess” was the headline in The Wall Street Journal. Clearly, much is written, and even more is probably spoken on financial shows, about where the market is headed. Is it at a peak? Is it at the bottom? Will it be higher or lower a week, month or year from now? Warren Buffett thinks that such prognostications are ultimately useless when it comes to actually making money.

“I know of no one that has been successful at, and really made a lot of money, predicting the actions of the market itself,” Buffett said at the 1999 Berkshire Hathaway annual meeting. “I know a lot of people who have done well picking businesses and buying them at sensible prices.”

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
Mouser Electronics

Mouser is Qorvo’s Global Distributor of the Year

Berkshire Hathaway’s Mouser Electronics, Inc. has received the 2022 Global Distributor of the Year — Pinnacle Award from Qorvo, a leading global provider of connectivity and power solutions.

Chosen by Qorvo’s executive sales team, the award recognizes Mouser for its role in strengthening Qorvo’s leadership in cellular and broadband networking, the Internet of Things, and defense and aerospace applications.

“We are pleased to congratulate Mouser Electronics and express our gratitude for their hard work in supporting Qorvo’s growth throughout the world,” said Rodney Hsing, Sr. Sales Director of Major Defense Accounts and IDP Global Distribution at Qorvo. “This award recognizes the important role Mouser has played as our lead internet channel partner, helping us to grow market share in key technology areas, ensuring that all engineers have access to our exceptional connectivity and power devices.”

“We are truly grateful for our ongoing partnership with Qorvo, and we are honored to receive the Global Distributor of the Year award for the second time,” said Jeff Newell, Senior Vice President of Products at Mouser Electronics. “This award reflects the committed efforts of our team in efficiently promoting and distributing Qorvo’s solutions to our global customer base.”

Mouser was previously named Global Distributor of the Year by Qorvo in 2018.

© 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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BYD

BYD-Mercedes D9 MPV Sales Go Through The Roof

(BRK.A), (BRK.B)

Sales of Berkshire Hathaway-backed BYD’s joint venture with Mercedes-Benz, the D9 premium MPV, started deliveries Sunday, and sales are already going through the roof. Presales racked up 30,000 orders for the multipurpose vehicle that they market under the upscale Denza brand.

Engineered and produced in and for the China market, the DENZA brand combines Daimler’s vehicle architecture expertise with BYD’s leading battery technology.

The D9 is offered as both a plug-in hybrid and pure electric vehicle, and the EV boasts a 500KM range.

© 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.

Categories
Lessons From Warren Buffett

Lessons From Warren Buffett: If Their Accounting Confuses You, Stay Away

If in reading a company’s financial reports it doesn’t make any sense to you, then avoid the company all together, Warren Buffett advises.

“I would say that when the accounting confuses you, I would just tend to forget about it as a company,” Warren Buffett said at the 1995 Berkshire Hathaway Annual Meeting. “We have never had any great investment results from companies whose accounting we regarded as suspect. I can’t think of a one.”

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.