Author Topic: Buffett/Berkshire - general news  (Read 494880 times)

longinvestor

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1786
  • Never interrupt compounding unnecessarily -Munger
Re: Buffett/Berkshire - general news
« Reply #310 on: August 03, 2016, 05:10:41 PM »
I spoke to one of the  managers at the Berkshire meeting. He rose through the ranks under Donegan.
Mark is widely admired by many, but he confirmed that working there is not for the faint of heart.
Performance culture is everything - so it's not for everybody, as it gets rough.
Welcome the performance culture at the subsidiaries. Berkshire Hathaway's future performance depends on it. Even better if the culture comes with an acquisition. Here's where the next CEO has a great chance to do better than Buffett. He has admitted to being slow to intervene.


John Hjorth

  • Hero Member
  • *****
  • Posts: 2765
Re: Buffett/Berkshire - general news
« Reply #311 on: August 08, 2016, 05:37:13 PM »
Saturday I spent some hours trying to find out, if SAN had some exposure against Italian banks and/or Italy in general, basicly to no avail, because the needed specifications and notes in the financial statements about the off balance sheet items were not there specified by country. One thing that caught my attention during that work was that SAN has a separate section desribing reputational risk.

To me, Mr. Donegan is adding reputational risk to the whole BRK system, if things mentioned in the Bloomberg article are true. If things mentioned in the Bloomberg article are true, and his is not changing behavior going forward after PCP becoming a part of BRK, and I just don't like it.

A couple of questions here to my fellow board members participating in this topic:

1. What is the overall perception of the credibility of Blomberg as a source? - I was [also] surprised [but not shocked] by Bloomberg taking on hard BRK - so hard - with this article.
2. What do you think might be the reaction [group internally] by Mr. Buffett and Mr. Munger, ref. Mr. Buffetts speaking in interviews and shareholder letters about "the middle of the road"? [Mr. Donegan is not just "some" BRK sub employeé, he is the CEO of a fairly big - and thereby important BRK sub.]

My basis for this line of thinking is my local conditions. I live in a zero tolerance society with regard to violence and threats. One of the situations described in the article is embraced in the Danish civil criminal code, and the penalty bracket goes from a fine to 2 years in jail [threat of serious physical violence against another person - most likely doing this sort of thing in front of wittnesses for the second time will result in an so called "insta-verdict", meaning going directly from the court room to the box to get sunshine in stribes, without getting the opportunity to settle your stuff and kissing your partner/spouse/kids goodbye for so or so long time].

Third question about the situation that I'm focusing on in the Bloomberg article:

3. What does US State or Federal civil criminal code say about punishment for threat of serious physical violence?

Any input from fellow board members on those three questions  would be much appreciated. Thank you in advance.
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

Charlie

  • Sr. Member
  • ****
  • Posts: 291
Re: Buffett/Berkshire - general news
« Reply #312 on: August 11, 2016, 08:40:58 AM »

fareastwarriors

  • Hero Member
  • *****
  • Posts: 3539
Re: Buffett/Berkshire - general news
« Reply #313 on: August 26, 2016, 02:10:06 PM »
Here’s Why the Pundits Are Wrong About Warren Buffett


http://fortune.com/2016/08/25/pundits-wrong-about-warren-buffett/

gfp

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1816
Re: Buffett/Berkshire - general news
« Reply #314 on: August 26, 2016, 02:22:51 PM »
Here's an article talking about Jain's cost cutting memo at General Re from Insurance Insider:
----------------------------

Jain seeks cost cuts at Gen Re: Report
Berkshire Hathaway's reinsurance chief Ajit Jain has told staff at Gen Re to fix the cost "problem" at the subsidiary, according to a memo obtained by Bloomberg.

The letter called on employees to tackle the issue "intelligently" to give the carrier "a shot at making a real dent in the expense-to-premium ratio", according to the newswire.

It reportedly rounded off by saying: "If we can't, we will need to explore other ways to do so."

The executive called for Gen Re to become leaner and less bureaucratic as he looks to slash costs and narrow the expense ratio.

He said this could be achieved by handing more autonomy to individual business units as well as accepting modifications to some reinsurance deals in a bid to reduce complexity.

Jain reportedly said Gen Re had a "cost problem", adding: "The ratio of expenses to premiums is not where it should or could be."

The executive talked about overhauling the reinsurer's compensation structure, arguing that its underwriters had an incentive to turn away business that had the potential to turn a profit.

He blamed this on a model under which bonuses were tied to margins and not overall earnings.

"We are fortunate that Gen Re has so many employees that place the interests of the company above their personal interests," he reportedly wrote.

"But that doesn't justify leaving a plan in place that puts that instinct under stress," he was said to have continued.

He suggested countering that structure with discretionary bonuses that were assessed using subjective metrics. This would see high-achievers compensated at the expense of underperformers.

He discussed reducing bureaucracy in the business by slashing the number of levels of management from six to just four or three.

Also in the crosshairs were travel and entertainment expenses for internal meetings.

Jain effectively took the helm of Gen Re earlier this year as his oversight was broadened across Berkshire's reinsurance operations.

He appointed long-time Gen Re executive Kara Raiguel as CEO of the unit, replacing Tad Montross, and signaled a change in strategy at the reinsurer to widen its distribution platform from its traditional direct model.

The reinsurer subsequently signed a deal with TransRe for the Alleghany subsidiary to act as its MGA in the US broker market.


longinvestor

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1786
  • Never interrupt compounding unnecessarily -Munger
Re: Buffett/Berkshire - general news
« Reply #315 on: August 26, 2016, 04:06:13 PM »
Here's an article talking about Jain's cost cutting memo at General Re from Insurance Insider:
----------------------------

Jain seeks cost cuts at Gen Re: Report
Berkshire Hathaway's reinsurance chief Ajit Jain has told staff at Gen Re to fix the cost "problem" at the subsidiary, according to a memo obtained by Bloomberg.

The letter called on employees to tackle the issue "intelligently" to give the carrier "a shot at making a real dent in the expense-to-premium ratio", according to the newswire.

It reportedly rounded off by saying: "If we can't, we will need to explore other ways to do so."

The executive called for Gen Re to become leaner and less bureaucratic as he looks to slash costs and narrow the expense ratio.

He said this could be achieved by handing more autonomy to individual business units as well as accepting modifications to some reinsurance deals in a bid to reduce complexity.

Jain reportedly said Gen Re had a "cost problem", adding: "The ratio of expenses to premiums is not where it should or could be."

The executive talked about overhauling the reinsurer's compensation structure, arguing that its underwriters had an incentive to turn away business that had the potential to turn a profit.

He blamed this on a model under which bonuses were tied to margins and not overall earnings.

"We are fortunate that Gen Re has so many employees that place the interests of the company above their personal interests," he reportedly wrote.

"But that doesn't justify leaving a plan in place that puts that instinct under stress," he was said to have continued.

He suggested countering that structure with discretionary bonuses that were assessed using subjective metrics. This would see high-achievers compensated at the expense of underperformers.

He discussed reducing bureaucracy in the business by slashing the number of levels of management from six to just four or three.

Also in the crosshairs were travel and entertainment expenses for internal meetings.

Jain effectively took the helm of Gen Re earlier this year as his oversight was broadened across Berkshire's reinsurance operations.

He appointed long-time Gen Re executive Kara Raiguel as CEO of the unit, replacing Tad Montross, and signaled a change in strategy at the reinsurer to widen its distribution platform from its traditional direct model.

The reinsurer subsequently signed a deal with TransRe for the Alleghany subsidiary to act as its MGA in the US broker market.

The float generated at BHRG per associate in comparison to General Re is huge. For Berkshire, General Re has brought on way more headaches than it being a gem. Any big benefit could come only after Jain is done righting it.

If BHSI turns out to be a gem, the lesson @ Berkshire would be that make is way better than buy in insurance.

« Last Edit: August 26, 2016, 04:08:32 PM by longinvestor »

longinvestor

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1786
  • Never interrupt compounding unnecessarily -Munger
Re: Buffett/Berkshire - general news
« Reply #316 on: August 30, 2016, 08:33:33 AM »
http://finance.yahoo.com/quote/PSX/holders?p=PSX

Now own 15% of the company. Market cap at $41B. Does this become a wholly owned target?

fareastwarriors

  • Hero Member
  • *****
  • Posts: 3539
Re: Buffett/Berkshire - general news
« Reply #317 on: August 30, 2016, 10:32:05 AM »
http://finance.yahoo.com/quote/PSX/holders?p=PSX

Now own 15% of the company. Market cap at $41B. Does this become a wholly owned target?

I was thinking the same for DVA.

longinvestor

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 1786
  • Never interrupt compounding unnecessarily -Munger
Re: Buffett/Berkshire - general news
« Reply #318 on: August 30, 2016, 10:43:11 AM »
http://finance.yahoo.com/quote/PSX/holders?p=PSX

Now own 15% of the company. Market cap at $41B. Does this become a wholly owned target?

I was thinking the same for DVA.

Seems like the script. Take a stake, watch how it does and buy whole. BNSF, PCP followed the script. To a certain extent, Duracell  was also like that.

" Buy shares as if you own the whole thing" . Then own the whole thing.
« Last Edit: August 30, 2016, 10:46:42 AM by longinvestor »

John Hjorth

  • Hero Member
  • *****
  • Posts: 2765
Re: Buffett/Berkshire - general news
« Reply #319 on: August 30, 2016, 12:28:23 PM »
http://finance.yahoo.com/quote/PSX/holders?p=PSX

Now own 15% of the company. Market cap at $41B. Does this become a wholly owned target?

I was thinking the same for DVA.

Seems like the script. Take a stake, watch how it does and buy whole. BNSF, PCP followed the script. To a certain extent, Duracell  was also like that.

" Buy shares as if you own the whole thing" . Then own the whole thing.
longinvestor,

To me, this looks like an educated guess. Let's see what the [near?] future brings.
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai