> Warren Buffett Blog

Monday, January 9, 2017

Buffett's airline stocks soaring sky high

Buffett's Berkshire Hathaway disclosed in mid-November 2016 that it bought stakes in American, United Continental and Delta at some point during the third quarter.

On the same day as that filing, Buffett told CNBC that Berkshire also bought shares of Southwest in the fourth quarter. The Oracle of Omaha cited his friendship with Southwest co-founder, former CEO and chairman emeritus Herb Kelleher as a reason.

Since Berkshire's airline bets became public knowledge, shares of all four companies have been gaining in altitude. Delta (DAL) has risen 6%. American (AAL) is up 7%. Southwest (LUV) has soared nearly 13%. And United (UAL) has skyrocketed 14%.

Stocks often get a Buffett bump after Berkshire buys new stakes in them. Buffett is known as a consummate value investor, sifting through the rubble for bargains.

He's only recently begun to dip his toe into higher growth tech stocks -- and even there, Berkshire has limited itself to more mature (i.e. slower growth, gigantic and relatively cheap) tech companies like Apple, IBM and Verizon.

It's also worth noting that airline stocks took a breather last year after a couple of strong years, buffeted by terrorism fears, several high-profile technical glitches that led to major cancellations, rising jet fuel prices and a new round of fare wars sparked by discount carriers like Spirit (SAVE) and JetBlue (JBLU).

The airlines might be slowly getting back on track though. Delta reported on Wednesday that its passenger unit revenue -- a key measure of financial health for airlines -- was flat in December. 


Warren Buffett documentary on HBO preview

Wednesday, January 4, 2017

Owning Berkshire similar to diversification ?


In line with Berkshire's owner-orientation, most of our directors have a major portion of their net worth invested in the company. We eat our own cooking.

Charlie's family has 90% or more of its net worth in Berkshire shares [that's Charlie Munger, Berkshire's vice chairman]; my wife, Susie, and I have more than 99%. In addition, many of my relatives -- my sisters and cousins, for example -- keep a huge portion of their net worth in Berkshire stock."

Charlie and I feel totally comfortable with this eggs-in-one-basket situation because Berkshire itself owns a wide variety of truly extraordinary businesses. Indeed, we believe that Berkshire is close to being unique in the quality and diversity of the businesses in which it owns either a controlling interest or a minority interest of significance.

Tuesday, December 27, 2016

Berkshire owned Dairy Queen to expand to South Korea

Dairy Queen, the restaurant chain owned by Warren Buffett’s Berkshire Hathaway Inc., is extending its international push by expanding in South Korea, with a plan to open 50 locations there in five years.

The ice cream seller is teaming with M2G USA Investment Inc., which is also a partner in the ownership of Taco Bell restaurants in the U.S. and Korea, according to a statement Tuesday from Minneapolis-based Dairy Queen.

Dairy Queen has been expanding globally with more than 2,200 locations outside of the U.S., and some of the recent growth has been concentrated in nations known for hot weather, such as Kuwait and Saudi Arabia. The company also opened locations in Taiwan and Vietnam in recent years and often tweaks menus to appeal to local cultures, offering ice cream flavors such as green tea with red bean. In the Middle East, the chain rolled out beef kofta, a spicier, gyro-type sandwich. The Korean stores will start with traditional Dairy Queen menus, a spokesperson said.


Monday, December 19, 2016

2017 Berkshire conference to include more content on Index funds and passive investments

I don’t know about ETF, but passive will beat active over time. But not for the manager. The manager’s going to make money out of active and the investor’s going to do better with passive. I’m writing a lot about this subject in next year’s annual report. I really am..... A lot.