The Berkshire Beat: August 1, 2025

All of the latest Warren Buffett and Berkshire Hathaway news!

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It’s that time again. Berkshire Hathaway will release its Q2 2025 earnings report bright and early tomorrow morning at 8 a.m. ET.

This is one of the last 10-Qs of the Warren Buffett era, so be there or be square.

As an appetizer of sorts for this weekend’s main event, I watched David Rubenstein’s new interview with Berkshire director Chris Davis for Bloomberg Wealth.

Davis, as you probably already know, is one of my favorite people in the Berkshire orbit. An articulate defender of the conglomerate’s unique culture — and everything else that Warren and Charlie so assiduously created — who seems to fully understand the board’s role in preserving this fragile flower against any wolves at the door.

This interview is actually so good that I’m planning on writing more about it in a separate article later this month. But, for the time being, I’ve pulled out a couple of Davis’s more Berkshire-centric comments here.

Of particular note, he explained how a culture of stewardship permeates every corner of the Berkshire machine.

I’ve probably attended Berkshire Hathaway annual meetings since 1989, let’s say. I read every annual report and 10-K. The difference on the inside versus the outside is really very limited. In other words, this is a company that’s valued transparency [and] candor. So I would say there were no surprises being on the inside versus the outside — because of that culture.

It’s just amazing how much Warren — and, before, Warren and Charlie together — think about the durability of the business, how much they think about risk, how much they are determined that they are trying to build something to last, and the sense of responsibility they feel to their shareholders, the people who have their life savings in it.

Davis also shared another great Munger-ism: “Charlie Munger once said that deferring gratification gives him so much gratification that he’s not sure he’s actually deferring it.” 🤣

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

Berkshire Hathaway trimmed its Verisign holding by roughly one-third through a secondary offering — offloading 4.3 million shares at around $285-290 a pop. “The offering is sized in order to reduce Berkshire’s beneficial ownership of the company below the 10% threshold that triggers additional regulatory obligations,” reads the press release. It also locks in a huge profit as Berkshire purchased the lion’s share of its Verisign stock back in 2012 and 2013 at around $40-45 per share. The remaining 9.6% stake in VRSN 0.00%↑ will now be subject to a one-year lockup period.

Brooks Running CEO Dan Sheridan hailed his boss as “the GOAT of capitalism” on the latest episode of Fortune’s Leadership Next podcast. “We are so fortunate,” he said. “Our ownership structure may be the greatest in the world, right? We’re owned by who I would call the GOAT of capitalism: Warren Buffett.” Sheridan recalled Buffett’s visit to Brooks in 2014 as part of the company’s centennial celebration — and how he tasked everyone there with one simple goal. “Make sure the brand is stronger at the end of [every] year than it was at the beginning,” said the Oracle. A seemingly simple directive, but one that actually touched every facet of the Brooks operation — from creating great products to sustaining customer satisfaction and employee morale.

• Charlie didn’t get left out, either. “[Munger] talked a lot about organizations avoiding the ABCs [of corporate decay],” said Sheridan. “Arrogance, bureaucracy, and complacency.” Of those three, the Brooks CEO has an especial distaste for the insidious creep of bureaucracy. “I often say I’m allergic to bureaucracy,” he said. “Even in the nonprofits or school committees that I’m asked to be on, my first question is, ‘Is there a lot of bureaucracy in this organization?’ I can’t function in that. I don’t know how to function in it. And, so, Brooks is a place where there is low bureaucracy.”

It’s been a week of ups and downs for BNSF Railway. I’m a glass-half-full sort of guy, so let’s start with the good news. In June, the Berkshire-owned railroad posted its best average terminal dwell time — just three days — at the major California ports of Los Angeles and Long Beach since December 2021. (Dwell measures how long containers sit on the dock after being unloaded from ships before departing by train. The fewer days, the better.) “That’s our lowest terminal dwell since pandemic lows,” BNSF told Progressive Railroading, “while handling considerably more volume.” BNSF attributes this improvement to network enhancements, strategic train positioning, and the newly-launched Alameda Belt Line. This joint venture with rival Union Pacific aims to optimize freight movement in and out of the SoCal ports through to downtown Los Angeles. “Since launching,” said BNSF, “we have handled record level volumes with better velocity through the Alameda Corridor.”

I don’t know enough about this to definitively declare it bad news for BNSF, but the aforementioned Union Pacific agreed to acquire Norfolk Southern for $85 billion. If approved, this mega-merger would create the first true transcontinental railroad in U.S. history. Union Pacific would no longer be slowed by handing long-distance cargo over to one of the Eastern carriers at Chicago — but, rather, can now deliver coast-to-coast on its own tracks. And there seems to be unanimous consensus among industry observers that this would all but force BNSF to seek a similar deal with CSX. (Yes, it seems entirely un-Berkshire-like to be “forced” into a high-priced acquisition based on the moves of a competitor, but I’m just sharing what others are saying.)

• Greggory Warren of Morningstar wrote that BNSF “can no longer afford to ignore CSX”. (Pre-Covid, Warren served on the analyst panel at Berkshire AGMs — which is probably a fair sign that Buffett considers him to be a sharp analyst.) “With BNSF already trailing Union Pacific, its main competitor in the western U.S. market, the last thing it needs is to worsen its competitive position by not pursuing a transcontinental U.S. railroad footprint.” He added that time is very much of the essence and that “a bid for CSX in the $83 billion range would not be an issue” considering the size of Berkshire’s cash mountain.

• The editor-in-chief from Railway Track & Structures echoed these thoughts. “Everyone correctly assumes that if UP + NS is announced, then BNSF + CSX would follow soon,” he wrote. “Having one transcontinental railroad and two regional Class I’s would not make any sense. We have four Class I’s in the United States. If two become one, then the remaining two will also become one.”

Bloomberg reports that Pilot is exploring the sale of its water management services unit in order to sharpen its focus on its core businesses. Pilot Water Solutions, with more than 850 miles of pipelines, works primarily with energy companies in Texas, Appalachia, and the Rockies. According to the report, Pilot has already begun consulting with financial advisors ahead of the potential divestiture. For its part, Pilot is staying mum — but did tell Bloomberg that it’s “evaluating opportunities to strengthen its core retail and wholesale business”.

Mark Tobak — whose writing appears in Berkshire’s new 60th anniversary book — digs into one of my favorite topics in his latest piece over at Hedge Fund Alpha: Charlie Munger’s humility. Despite joking that he never got his full share of the humble stuff, Charlie nevertheless lived a life of deep humility and never allowed himself to fall prey to overconfidence or irrational optimism. “Charlie did not yield to what is now known as psychology’s Dunning-Kruger Effect,” wrote Tobak, “the base human instinct to exaggerate talents and press your luck rather than face one’s limitations objectively.”