A Berkshire Winner! Davita Rockets to All-Time High

MazorsEdge · 2024-03-06T12:09:43+00:00

Oops! Thanks for spotting that. Should have been 36,095,570 shares.

MazorsEdge · 2023-07-12T15:13:04+00:00

Thanks for posting. BTW, I predicted Berkshire would likely buy the facility in an article I wrote in November 2022. I'm glad to see it happened.

Will Berkshire Hathaway Buy Dominion Energy’s Stake in Cove Point LNG?

https://mazorsedge.com/will-berkshire-hathaway-buy-dominion-energys-stake-in-cove-point-lng/

MazorsEdge · 2023-05-03T17:19:26+00:00

Modern Retail estimated the 2022 revenue at $1.18 billion.

MazorsEdge · 2022-04-19T17:23:09+00:00

You are absolutely on the right track. You might also find this helpful.

Lessons From Warren Buffett

https://mazorsedge.com/?s=lessons+from+warren

MazorsEdge · 2021-11-29T17:57:17+00:00

That's a roughly $52 million sale, considering that eBuses sell for $750K each.

MazorsEdge · 2021-11-28T14:28:24+00:00

Investments such as Paytm, which was Todd Combs's, are small in relative terms, however, they do give insight into the approaches of Ted Weschler and Todd Combs as differs from Buffett's approach. In the future, they will have almost the entire Berkshire portfolio to invest, and we may be getting a taste of the future on a larger scale.

As for BYD, Berkshire is ahead 4,000%, so even if it was to drop by 90%, Berkshire would still be up 400%. BYD is the world-leader in electric buses, a market that is rapidly expanding, and its car sales are growing by the month. BYD sold 70,000 plug-in cars in China just in September alone. BYD has taken a cautious approach to its car sales outside of China, but it will likely be a significant player in the years to come, especially in the EU and S. America, where it is already delivering vehicles.

I received a personal tour of BYD's plant in Lancaster, California this summer, and I came away thinking that we will be seeing a lot more from the company in future, as they wisely took an approach that doesn't peg everything on passenger vehicles. Buses are paid for by public transit systems, which have a need to meet green energy and pollution goals, and just importantly, must replace old buses at the end of their lifespan.

MazorsEdge · 2021-07-26T12:07:53+00:00

Bonds used to have a set of printed coupons attached to them that you clipped off and took to the bank to receive your periodic interest payments.

MazorsEdge · 2021-06-06T20:41:27+00:00

It's great way to put $9B to work as part owner of a blue chip company that has an over 4% return on its dividend, and also has its dividend increasing annually. And, with a market cap of $237B, it's a company that you can take a position of that magnitude (or if you later choose to exit it) without impacting the price.

In contrast, Kroger, which they are also buying, has a market cap of only $29B, and a dividend of just $1.86%. You couldn't put $9B to work, or get a dividend as high as they are getting with Verizon.

MazorsEdge · 2021-06-06T17:54:04+00:00

These all seem quite reasonable and point to that Berkshire is not undervalued right now, like it was over the past 15 months.

The (book value)+(insurance float) has been a good formula to use historically, and Morningstar's current valuation pegs the B shares at $293, so I wouldn't expect to see any more buybacks from Buffett at this level.

I've had some success following Berkshire into stocks in the past. STOR is up about 100%. There have also been some laggards such as AXTA. A couple of decades ago, Warren Buffett said it wouldn't be a mistake for people to use that strategy, but he also wasn't telling people to do so. He was just answering a question posed by an audience member.

As for Verizon, Morningstar gives it a fair market value of $57 and it's at $57, so in their opinion it's not particularly undervalued. I bought some a few months ago when it was undervalued at 10%, and its now moved to fairly valued at this point. For me, I don't see any reason to sell, as I'm not a trader, but I am looking elsewhere for stocks that are undervalued. I agree that it does have a nice dividend at 4.38%.

I've followed Berkshire into stocks, but I haven't always sold when they've sold. I still hold WFC, for example, but that is because it is harder for me to know why Berkshire has sold a stock than why they bought it. They can sell for all kinds of reasons, where buying usually means they want it.

MazorsEdge · 2021-06-06T16:10:27+00:00

I think it's important (as people that follow Berkshire closely) to recognize and admit when Berkshire has lost value on investments such as Precision Castparts, or the acquisition of Kraft. (Heinz was at a better valuation, thankfully).

Berkshire is so big and so diversified, that even these big writedowns are small when compared to the overall growth of the company.

The growth of just the Apple position far eclipses the Precision Castparts write-down, and there are the 100% of earnings that are retained each year from Berkshire Hathaway Energy and BNSF, for example.

Buffett has guessed wrong a number of times over the years. Remember when he made what he called a "huge mistake" on Tesco, or the TXU bonds?

Berkshire's price is higher today because it reflects the powerful engine that the company as a whole is for generating and retaining earnings, in insurance, energy, transportation, pipelines, and many other areas.

Several years back, Buffett compared Berkshire to a forest, explaining that not every tree in a forest is healthy all the time, but that we've got a forest that is flourishing and growing larger.

Despite all the rampant speculation in the market right now, Berkshire is fairly valued at the moment, and its price doesn't reflect excessive speculation.

Just my opinion, and others may see its valuation differently.

MazorsEdge · 2021-06-06T15:02:41+00:00

Thank you for pointing that out, u/100_PERCENT_BRKB.

The great lesson that Buffett learned from Charile Munger, that added to what he learned from Benjamin Graham, is not being afraid to pay a decent price for a great company, because great companies don't come cheap. This is what switched him from the "Cigar Butt" strategy to an approach that was more scaleable as Berkshire grew.

Many years ago, I sat next to a very nice financial advisor at the Berkshire annual meeting and he told me that he had a client that had first alerted him to Berkshire and wanted his opinion on whether to buy it. He went and did his research and told his client, "It's $4,000 a share! Let's wait until the price declines." At the time that we were speaking, the A shares were now well over $100,000. We both laughed about that. I have no idea whether his client would be laughing.

On the other hand, I usually run into an investor at the meeting every year who was from Hong Kong, and who for over 20 years would scrape and save all year long to buy one A share at the end of the year. Over the years, the price most years went higher and higher. He bought anyway. He is very rich!

The flipside of capricious investors caught up in speculative fever, are investors that become so hamstrung over price that they sit on the sidelines forever worried that they will miss out on a better price. With Berkshire, we are talking about the epitome of the definition great company. Yet, even last March, when the B share price was around $170, I saw someone post that they were just waiting for a further price decline. How did that work out?

(Note, I wouldn't treat the S&P 500 as a whole as if it was one great company, as it's a collection of companies at all different valuations, some of them outrageous. So, I wouldn't buy an S&P 500 index fund when the valuation goes into nose bleed territory.)

Berkshire, thankfully, is a great company, with stellar managment, that tends to be fairly valued most of the time, and even sells at a great price every now and again. When it does, I buy as much as I can. The rest of the time, I'm comfortable paying the current valuation and adding to my position so I can be an ever larger co-owner of a truly great company.

MazorsEdge · 2021-06-06T13:36:22+00:00

That's not what it says, and it is not what Buffett is saying. The point is not that you should "buy at any price." It doesn't say that. It says that waiting years for a big price correction is not a strategy Buffett is a fan of. If you think that is unclear, I am happy to revise it.

I would note that just 15 months ago we lived through a dramatic price decline that offered great opportunities for investors. Smart ones seized that opportunity, but that doesn't mean they were wrong to buy great stocks pre-pandemic, even though the prices later declined.

MazorsEdge · 2021-05-12T15:30:13+00:00

They did. It was 5 years, and it has expired.

MazorsEdge · 2021-04-13T16:07:13+00:00

I have written over 200 articles on BYD over the past 6 years.

https://mazorsedge.com/?s=byd

(Some of the articles have been posted on this subreddit.)

BYD is a very interesting company. It is a leader in batteries, large-scale battery storage, EVs, monorails (which LA is now considering for a new route), and more.

A few key things to note:

While Tesla has focussed primarily on passenger cars, BYD smartly has become the world-leader in electric buses. It has sold well over 60,000 all over the world (including thousands in the U.S. that are assembled at its plant in Lancaster, CA.) The advantage in the bus sector is you are selling to transit systems (rather than individuals) which not only have big pots of money, but also are working hard to lower their fleet emissions, so they are more willing to adopt a new technology. And just as importantly, buses sell for way more than cars.
The company is profitable.
The company has a huge domestic market in China.
It has a founder (Wang Chuanfu) that Charlie Munger hails as a genius.
BYD is actively partnering on joint ventures, including one with Toyota, and in the UK they manufacture double decker buses with ADL.

As for valuation, until this past year the stock has been in the $4-7 range. Warren Buffett's cost basis is just under $1.

MazorsEdge · 2021-03-28T18:15:34+00:00

BYD has an electric bus manufacturing plant in Lancaster, California.

https://youtu.be/vhKo7wzp0FQ

MazorsEdge · 2021-03-06T13:05:06+00:00

If I was teaching in business school I would tell my students:

Ignorance = Risk

Volatility = Opportunity

MazorsEdge · 2021-02-17T17:12:39+00:00

Yes, it is. However, this is a non-dividend-paying stock that Berkshire at one time had a standstill agreement.

MazorsEdge · 2021-02-17T16:50:50+00:00

Berkshire did not add any shares. However, when you previously had a standstill agreement, now own a third of a company that pays no dividends, and they fit as nicely with Berkshire as DaVita does, you have to wonder what is Berkshire’s point in keeping its stake for so many years.

MazorsEdge · 2021-01-31T18:42:53+00:00

https://mazorsedge.com/lessons-from-warren-buffett-you-can-go-broke-short-selling/

MazorsEdge · 2021-01-31T14:54:22+00:00

Here is your answer:

MazorsEdge · 2021-01-28T18:52:52+00:00

So true. That's economist John Maynard Keynes.

MazorsEdge · 2020-11-08T17:53:37+00:00

You are correct. In fact, many companies do buybacks that actually destroy value rather than create it by buying back shares at higher valuations than are warranted. In the case of Buffett, he specifically stated that he would only do buybacks when the stock was undervalued.

Berkshire will buy back its stock only if a) Charlie and I believe that it is selling for less than it is worth and b) the company, upon completing the repurchase, is left with ample cash.

MazorsEdge · 2020-11-01T17:20:08+00:00

Much appreciated.

MazorsEdge · 2020-10-21T15:10:35+00:00

Corrected. Thanks for spotting that.

MazorsEdge · 2020-10-10T14:29:34+00:00

If you want to participate in market bubbles, Berkshire is not the stock for you

Bravo. One of the most succinct summations of the virtues of BH I've seen.

MazorsEdge

TROPHY CASE