Author Topic: Buffett/Berkshire - general news  (Read 494903 times)

longinvestor

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Re: Buffett/Berkshire - general news
« Reply #450 on: April 15, 2017, 08:24:44 AM »
Interesting aspect on Lubrizol's loss for the year: http://www.crainscleveland.com/article/20170228/NEWS01/170229809/berkshire-hathaways-lubrizol-takes-365-million-loss-on-oilfield

It is amazing how Buffet has this public persona where if you went to work for him, you had a job till you die.  But in reality, if you made mistake, you get the boot or as they say "retire".   

Despite this, I think Berkshire has some of the best executive/employee retention track record.  Does anyone here know how Berkshire pays its managers and what are the tools to keep them on?
It seems to me he has this low risk culture for subsidiary executives. If they just dividend the money back to him they get paid more; if they risk some money: they better get it right; if they do get it right, then they get to manage a bigger subsidiary and get paid even more; if they get it wrong, they'd have been better off not taking unnecessary risks and letting Buffett manage the money... In other words: they are allowed to shoot fishes inside a dry barrel; if there is still water then they shouldn't risk it.


This kind of low risk culture is the exact opposite we see in public companies CEOs and seems to me is a big advantage for Berkshire wealth maintenance objective.

I suspect the acquired business weren't that great and t wasn't just the decline in the price of crude that impaired the,. WFT for example appears to run their business very poorly, or they become poor business while they own them. The executive probably was canned, because that was an unforced error - WEB encourages bold on acquisitions, but does so, because they are supposedly low risk. I think he sees the acquisition price and probably was Ok will what they paid, but if the business owners twelfth is crap, it's on the executive and in my opinion should be dealt with,
From my perspective, the due diligence that a lot is of executives do on these acquisitions is laughable. I have experienced a few as an engineer where I thought that sending a few good engineers and operations people into the to be acquire company for some due diligence would have uncovered issues very quickly, the came later back to haunt. in public companies, failure with acquisitions are rarely acknowledged an much less leads firings, at least not at the executives ve level. It can lead to consequences at a mid r upper management levels, when they can't get a handle on fixing something that supposedly did not need to get fixed to begin with.

My favorite quote from the Sopranos applies to the business wowners world as well, maybe even more so than for the Mafia:

"Money flows up, shit flows down"

Agreed on the poor due diligence. I've found that short term bonuses drive deals and it's funny that the guy who put the white paper justifying the deal is rarely in position to seethe purported synergies through. Lots of Bullshit happens with acquisitions, shareholder benefits are far from clear.


DooDiligence

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Re: Buffett/Berkshire - general news
« Reply #451 on: April 15, 2017, 11:49:37 AM »
If they say synergy more than 5 times when touting an acquisition, run the other way...
Healthcare 25.9% - CVS EW NVO // BRK.B - 23.1% // Auto's & Oil 15.0% - CLB GPC VDE

Entertainment 4.8% - DIS // Banking 9.9% - WFC // Drinkers & Smokers 4.9% - MO

%'s held @ MV 08/29/2019 minus 16.4% investable cash

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Spekulatius

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Re: Buffett/Berkshire - general news
« Reply #452 on: April 15, 2017, 02:19:22 PM »
To be a realist, one has to believe in miracles.

DooDiligence

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Healthcare 25.9% - CVS EW NVO // BRK.B - 23.1% // Auto's & Oil 15.0% - CLB GPC VDE

Entertainment 4.8% - DIS // Banking 9.9% - WFC // Drinkers & Smokers 4.9% - MO

%'s held @ MV 08/29/2019 minus 16.4% investable cash

i trumpet my ignorance

https://twitter.com/tunawish

alpha

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Re: Buffett/Berkshire - general news
« Reply #454 on: April 17, 2017, 01:49:20 PM »
Berkshire Hathaway Home Services announced a partnership with Juwai.com:

http://www.bnn.ca/berkshire-hathaway-partners-with-chinese-real-estate-site-juwai-com-1.726283


gfp

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Re: Buffett/Berkshire - general news
« Reply #456 on: May 04, 2017, 07:12:30 AM »
QSR did a bond issue with the stated intention to redeem BRK's 9% preferred:
https://www.sec.gov/Archives/edgar/data/1618755/000119312517156640/d390898dex991.htm


from the original securities purchase agreement - looks like they will redeem in full or in part before October, no redemption premium:
"Optional Redemption
The Issuers may redeem some or all of the Notes at any time prior to October 1, 2017 at a price equal to 100% of the principal amount of the Notes redeemed plus a “make whole” premium and, at any time on or after October 1, 2017, at the redemption prices set forth in the Indenture. In addition, at any time prior to October 1, 2017, up to 40% of the aggregate principal amount of the Notes may be redeemed with the net proceeds of certain equity offerings, at the redemption price specified in the Indenture."
« Last Edit: May 04, 2017, 07:56:14 AM by globalfinancepartners »

gfp

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Txvestor

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Re: Buffett/Berkshire - general news
« Reply #458 on: May 04, 2017, 06:34:54 PM »
I had wondered how long it would take for him to finally throw in the towel. This last Q of declining revenues was what did it for me. Management has zero credibility left. They have misread the trends and underestimated the new entrants and I fear permanently impaired their competitive position. They have further compounded their woes by weakening their balance sheet with recent stock buybacks and dividend hikes. All of this can only work when you later find the growth and increased profitability. All their financial shenenigans are now coming home to roost.

sleepydragon

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Re: Buffett/Berkshire - general news
« Reply #459 on: May 04, 2017, 06:48:15 PM »
I had wondered how long it would take for him to finally throw in the towel. This last Q of declining revenues was what did it for me. Management has zero credibility left. They have misread the trends and underestimated the new entrants and I fear permanently impaired their competitive position. They have further compounded their woes by weakening their balance sheet with recent stock buybacks and dividend hikes. All of this can only work when you later find the growth and increased profitability. All their financial shenenigans are now coming home to roost.

Plus the excessive CEO compensation.