Author Topic: Buffett/Berkshire - general news  (Read 491888 times)



John Hjorth

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Re: Buffett/Berkshire - general news
« Reply #331 on: October 21, 2016, 10:53:51 AM »
reinsurance
http://www.bloomberg.com/news/articles/2016-10-20/warren-buffett-loves-this-business-maybe-a-little-too-much

Don't we all have those attractions to certain industries? [<- place smiley here]. Mr. Buffett was quite candid about it at the last shareholder AGM, that both insurance and reinsurance as industries aren't any longer what they used to be.
« Last Edit: October 21, 2016, 10:55:29 AM by John Hjorth »
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dajidali

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Re: Buffett/Berkshire - general news
« Reply #332 on: October 24, 2016, 12:10:49 PM »

gfp

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Re: Buffett/Berkshire - general news
« Reply #333 on: October 25, 2016, 06:49:44 AM »
Insurance Insider article ->
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Swiss Re and Berkshire Hathaway explore legacy alliance
David Bull and Dan Ascher

Swiss Re is in talks with Berkshire Hathaway as part of a $1bn+ internal restructure of its legacy business that will put important new regulations for run-off books in the US to the test, The Insurance Insider can reveal.

If the transaction goes ahead it could pave the way for the two industry titans to collaborate on future deals enabled by the new Rhode Island legislation, carving up legacy books between themselves.

Sources said that Swiss Re is considering using the new rules - which are expected to be a boon for the $100bn US legacy market - to divest itself of the $1bn portfolio, freeing up capital.

The pioneering transaction would see Swiss Re transfer those liabilities into a separately capitalised cell company in Rhode Island, for which it would then write the retro programme in conjunction with Berkshire.

If the precedent-setting deal goes ahead, the two carriers would look to benefit from first-mover advantage in order to grow their foothold in the US legacy sector.

The complex deal is still in its formative stages but the wheels have already been put into motion, with industry outsourcer and consultancy Pro Global Insurance Solutions - which used to be owned by the Swiss reinsurer - in the process of establishing a cell company.

The vehicle, named ProTucket, would be used to house the mammoth book of liabilities.

Swiss Re is hoping to transfer the business into the new entity and put in place a 100 percent retrocession programme to protect the cell.

Sources have said that the Swiss giant is locked in talks with Berkshire about the structure of the proposed cover.

It is understood that Berkshire would write the cover for any asbestos, pollution and health (APH) liabilities in the portfolio as Swiss Re looks to reduce its exposure to such risks.

Swiss Re would write the retro for all other liabilities contained within the cell.

Both Swiss Re and Pro are understood to be working closely with Rhode Island's regulator to get the deal completed.

If it is rubber-stamped, the Swiss reinsurer would have to seek commercial court approval.

Swiss Re, Pro and Berkshire would then look to replicate the process for other carriers with legacy books, which could effectively be lifted and dropped into a similar structure to ProTucket.

The new regulations are intended to give US carriers an exit mechanism much like that offered by the Part VII transfer in Europe.

Pro announced its intention to test the new legislation earlier this year.

The new Rhode Island regulations provide a way for run-off portfolios to be transferred in a way that offers legal finality. Previous methods of disposing of discontinued US insurance books did not provide true final risk transfer.

Swiss Re said it does not comment on market rumour and Pro declined to comment. Berkshire could not be reached.

Dynamic

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Re: Buffett/Berkshire - general news
« Reply #334 on: October 26, 2016, 06:15:25 AM »
Berkshire Portfolio Manager Explains Apple Investment

http://blogs.wsj.com/moneybeat/2016/10/24/berkshire-portfolio-manager-explains-apple-investment/?mod=WSJBlog

If you don't subscribe to WSJ, ValueWalk also had this story the other day:
http://www.valuewalk.com/2016/10/interview-ted-weschler-says-likes-apples-subscription-element/

Re-reading my purchase notes (bought at $95, mostly by selling BRK.B at $142), I pretty much concur with Ted's views on the customer loyalty and lock-in and the consistent services revenue which should remain healthy even if the device upgrade cycle slows down. I have almost 30% of my concentrated portfolio in Apple right now. I was slightly nervous of having the stake get too high. While it still COULD "do a Nokia" and be supplanted by something new, I believe it's less risky than that, but 25% of my portfolio was a pretty big bet for this kind of company (whereas I'd be comfortable with 100% in BRK.B) and I'd be tempted to trim my position if it rose to nearer 50% of my portfolio, and/or if the price/value margin of safety was very much reduced.

longinvestor

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Re: Buffett/Berkshire - general news
« Reply #335 on: November 10, 2016, 03:45:10 PM »
Today, I had the chance to visit Chemtool in IL. Very well run company that makes primarily manufacturing/industrial specialty greases/lubricants.

 http://chemtool.com/

Turns out they were bought by Lubrizol, in Dec 2011, almost immediately after joining Berkshire. Terms of purchase unknown. Also read that Lubrizol was a supplier to Chemtool for a long time. Sort of explains the connection.

Chemtool is the archetype of BRK's MSR businesses. Products that will likely be used for as far as the eye can see, well run family business (son of founder in charge now). Don't know the moat for this business but being a manufacturing guy myself, once something like a specialty grease/lubricant is specified for an application, it is very unlikely to be switched out. Maintenance guys typically don't take that kind of risk. "no messin around". This is rather similar to ISCAR's moat, metalworking tools tends to be very sticky business.

To paraphrase Munger, I'd love for them to keep buying more such businesses; Most importantly this kind of deal gets made from somewhere other than Omaha. Good for the future.
« Last Edit: November 10, 2016, 03:50:44 PM by longinvestor »

Jurgis

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Re: Buffett/Berkshire - general news
« Reply #336 on: November 11, 2016, 08:24:11 AM »
Edit: I'm double posting this here for BRK/Buffett info completeness: http://money.cnn.com/2016/11/11/investing/warren-buffett-donald-trump-stock/

However, most of the interview is on politics, so I also posted it on General and IMO any further discussion probably should go there. ;)
« Last Edit: November 11, 2016, 08:42:49 AM by Jurgis »
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dcollon

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Re: Buffett/Berkshire - general news
« Reply #337 on: November 11, 2016, 09:05:24 AM »
Thanks for posting the interview Jurgis

John Hjorth

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Re: Buffett/Berkshire - general news
« Reply #338 on: November 11, 2016, 09:10:21 AM »
Thanks for posting the interview Jurgis

+1. And actually nice to see and hear Mr. Buffett out again of his selfinduced "media hibernation" / silent period.
”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