The Berkshire Beat: April 4, 2025

All of the latest Warren Buffett and Berkshire Hathaway news!

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In the annotated transcript of Buffett & Munger: A Wealth of Wisdom — released earlier this week — Charlie Munger joked that one of his late wife’s relatives once called him “the oldest young man I’ve ever known”.

Charlie did not argue the point. “I always behaved like I was 100 years old,” he said, “even when I was young.”

But, Warren Buffett countered, “now we’re the youngest old men you’ll run into”.

That’s because neither man just sat back and counted his cash as he aged. Instead, both shared their wisdom (and friendship) with a new generation of investors and business leaders — and, in return, remained engaged with a rapidly-changing world.

In Charlie’s case, one of these next-gen names was Charles Jennings of Stonehouse Corporation — who he met over Zoom during the pandemic. “It’s so weird being 99 because all of my friends are dead,” he told the Australian founder, “so I have to make new friends like you.”

Jennings is a longtime student of Berkshire Hathaway — even writing to Charlie in 2012 in hopes of setting up a meeting during his next trip to California. No dice, but the handwritten reply still hangs in his Stonehouse office.

In 2021, he finally got that meeting — albeit over Zoom — and so impressed his business idol that Charlie eventually invested a portion of his personal wealth in the relatively-unknown Stonehouse Corporation.

“I got interested in one Australian because I think he’s very much like the kind of people that are in Berkshire,” Charlie told the Australian Financial Review in 2022. “Berkshire and Jennings are quite similar. He’s picky and manages things well. He has a mindset very much like ours — business fundamentalism and relentless rationality and doing business in a very high-grade way. If you’re relentlessly rational, you [won’t] make a lot of mistakes other people made. It sounds so obvious. You think everybody’s going to stay rational, but of course they aren’t. The world is full of madmen.”

And part of that relentless rationality is the patience to sit around and wait for exactly the right pitch to cross the plate. “Life is a game where you work very hard and deal only occasionally,” said Charlie.

Jennings took that little pearl to heart. In over a decade of running Stonehouse, he has acquired few companies — a horse transporter, a portable cooling product manufacturer, and a plant supplier — but remains on the lookout for the next permanent addition to the family. (And, like Berkshire, he buys for keeps.)

When Charlie passed away in 2023, Jennings paid tribute in the pages of the AFR. “The world has lost a great capitalist and one of its wisest men. Capitalism can get a bad name from the shonkier practices, but Charlie was an example of a great capitalist who wanted to do win-win deals.”

“He was running a mile from win-lose deals that he could have made massive amounts of money from where counter-parties were going to be worse off,” continued Jennings. “The rule is that you don’t want to be in a business where the counter-parties of the business lose — whether it’s customers, employees, communities, regulators, shareholders, or suppliers. You seek situations where everyone gets a net win from the existence of the business. This isn’t about altruism. Win-lose businesses are inherently unsustainable in their cashflows.”

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And, now, on to the latest news and notes out of Omaha…

Q1 2025 is now in the books — and Berkshire Hathaway is off to a hot start against the S&P 500. The Class A shares (+17.3%) and Class B shares (+17.5%) each hold a twenty-plus point lead over the benchmark index, which stumbled to a 4.3% loss (including dividends) in the first quarter.

Warren Buffett and co. are gearing up to issue more yen-denominated debt in the near future. According to Tuesday’s filing — which did not mention the total amount or anything on interest rates — the proceeds from this sale will be used for “general corporate purposes” including refinancing ¥41.6 billion of 0.879% Senior Notes due 2025. Lots of speculation, too, that some of the raised money will go towards topping up Berkshire’s stakes in the sogo shosha. Time will tell.

Kudos to the FT for noticing that Berkshire’s 10-K no longer contains a “critical audit matter” related to the valuation of Precision Castparts. For the past five years, Berkshire’s auditor Deloitte & Touche flagged PCC as requiring a high degree of auditor judgment to determine its fair valuation. Why? “PCC primarily uses discounted projected future net earnings to estimate fair value, which requires management to make significant estimates and assumptions related to forecasted future revenue, earnings before interest and taxes, and discount rates.” After steady revenue and earnings growth at the subsidiary over the past several quarters, Berkshire now estimates the fair value of Precision Castparts at $34.2 billion.

• Buffett deflected a question from the FT about PCC’s turnaround. “I hope the questions about Precision Castparts get asked at the annual meeting,” he said.

• Unfortunately, the news out of Precision Castparts is not all good. SPS Technologies, one of its subsidiaries, suffered a devastating fire in February that halted all production at its 600,000-square-foot plant in Philadelphia. The company then laid off about half its workforce, signaling that it might be a while before SPS is back up and running at full speed. An unwelcome development for a company just starting to find its footing again.

Speaking of fires, Berkshire Hathaway Energy’s PacifiCorp got some good news for a change. In a report last month, the Oregon Department of Forestry concluded that the 2020 Santiam Canyon wildfire was not caused by downed PacifiCorp power lines — but by embers floating up from another nearby fire. “ODF investigators did not find any evidence that reported power line ignitions had contributed to the overall spread of the fire in Santiam Canyon,” read the report. As such, PacifiCorp has now appealed the James class action verdict that held the company grossly negligent for the fires — though it does not expect the appeal to be heard until 2026.

The great Sidecar Investor unearthed a very cool Buffett video over on X. In it, Dick Holland (who had been investing with Buffett since the partnership days) expressed his gratitude for the Oracle’s incredible financial performance. “I tried to thank Warren once,” he recounted. “I said, ‘I really thank you for making me rich.’ And he said, ‘I didn’t make you rich. You didn’t sell.’”

Last month, Fast Company named Kraft Heinz one of the world’s most innovative companies. Not bad for a boring ol’ consumer goods staple. Kraft Heinz earned its place on the list for “redefining the food industry supply chain to reduce waste and forecast demand”. The company used software to both reduce supply chain waste by 40% and improve sales forecast and inventory demand accuracy by double-digits. In all, Kraft Heinz estimates that these improvements (including artificial intelligence) created $1.1 billion of gross efficiencies from 2023 through Q3 2024.

And a couple of odds and ends to finish off the week…

• This week, Berkshire collected quarterly dividends from two of its largest stock holdings — $204 million from Coca-Cola and $24.6 million from Chubb.

• Jordan’s Furniture president Eliot Tatelman stepped down on Thursday and turned over control of the company to his sons (and co-CEOs) Josh and Michael. “I’ve been fortunate enough to have two great kids who have really been running the day-to-day business for a long time,” he told the Boston Globe. Tatelman broke the news to Buffett in a phone call last month.

• GEICO plans to expand (and add 2,000 more jobs) in Florida and Texas. Senior VP Angela Rinella said that the Berkshire sub is the second-largest auto insurer in the Sunshine State.