Berkshire
TV show “60 Minutes” had a profile of Howard Buffett following Buffett’s appointment of him as his preferred choice for non-Executive Chairman after Buffett somehow relinquishes that role. As a guardian of Berkshire’s unique culture, he is as good as it gets. We collect a few links and videos about Howard Buffett.
Much noise has been generated by MidAmerican’s purchase of First Solar’s $2 billion Topaz solar energy project. Yes, MidAmerican is Berkshire’s utility/ energy subsidiary and this sizable acquisition has certainly been cleared by Warren Buffett. That does not mean that “Buffett is buying/ betting on solar” as a category. It is Berkshire taking advantage of an opportunity.
Today we have both a big, weekend-reading type article and a smaller one. The small one is a summary of Warren Buffett’s impressions about Japan, which he visited in another trip to an Iscar (IMC) plant abroad. The larger one is a New Yorker profile on Peter Thiel, the “dystopian utopian” VC/ hedge fund investor who founded Paypal and was the first outside investor in Facebook. No easy takeaways but he remains one of the most provocative thinkers in our realm.
Landmark announcement today: the Berkshire board of directors has approved an “authorization” for a share repurchase program. Berkshire being what it is, it’s a bit different from the usual buyback: there’s no maximum amount, no set period of time and nor is there the obligation to buy any stock at all. There are only two rules: if share purchases do occur, Berkshire will not pay above 110% of book value per share and it must maintain a cash balance superior to US$ 20 billion. As Buffett likes it, there’s no “mandate” other than “intelligent investing”.
We’d usually prefer to post “beefier” updates, but this article grabbed our attention. Alice Schroeder has a very interesting piece that, in the first part, sheds more light on Ted Weschler’s background and achievements. The next part is “noisy” and speculative, but it’s still thought-provoking enough to merit a highlight: Ms. Schroeder then looks at the details of the press release and comes up with interesting questions about Buffett’s succession – mainly that Mr. Weschler appears to have qualities that could make him more than a capital allocator.
Buffett has hired another manager to join Todd Combs: Ted Weschler, hailing from Peninsula Capital Advisors, a US$ 2 bi highly-concentrated equities manager. The point here is not (yet) to try to distill Mr. Weschler’s experience, holdings over the last year and – much more importantly – investment processes. We don’t know much about him yet, although a story by Carol Loomis certainly helps in establishing “motivation”. The point is the interesting dynamic this creates – Mr. Buffett will now have two managers whose performance he will review, and who can learn from him and – we hope – collaborate with one another. That collaboration will be a vital aspect: whether there’s true “team spirit” or unchecked competition – declared or not – may determine whether both, or even of them, stay on and prosper.
Buffett turns 81 today and, according to Berkshire staff, he’s celebrating it by running the company just like any other day. Almost so: Berkshire has had to issue a press release to counter a Wall Street Journal editorial that came out today. Buffett’s tax editorial caused extreme reactions – some of the harshest coming from the WSJ. We have no problem with differences of opinion. The problem is basing a personal attack story on a factual error. Fact-checking is never out of season…
First a quick interview (yes, that’s right) with Stephen Hawking. Off-topic for sure, but still inspiring. His sense of humor is impressive. Now for the meat of this post, a one-hour video (also embedded below) with Buffett and Ajit Jain, who emerged from the Dave Sokol affair as a very likely “candidate” for Buffett’s succession [...]
A Bloomberg news story on Buffett’s “interest” in Brazil has the local markets reacting today. Explaining: Bloomberg compiled a list of 27 companies that “fulfill Buffett’s criteria” as explained in his Owner’s Manual – but while Buffett’s criteria are subjective, Bloomberg had to put numbers to the qualitative descriptions, so it’s little more than guesswork. The market reacted as if Buffett himself was issuing buy orders… We could easily see Buffett warming up to Odontoprev or Marcopolo, but it still wasn’t this time around.
We provide links to the best stories we’ve found on the web about the 2011 Berkshire Hathaway annual meeting. When reading the stories or watching the videos, always remember to keep an open eye to the writer’s biases, experiences, leanings and incentives – as well as to your own, of course. Also keep in mind the relevant subjects discussed in the meeting that just weren’t given enough media because of the Sokol affair, such as the insurance cycle.
