The Berkshire Beat: February 28, 2025
All of the latest Warren Buffett and Berkshire Hathaway news!
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The late Pete Liegl received a much-deserved shout-out in Warren Buffett’s new annual letter. The Forest River founder’s no-nonsense approach impressed Buffett from the very start — culminating in the funny story about Liegl choosing a $100,000 salary so as not to make more money than his new boss.
Forest River also exemplifies the virtuous cycle of how one Berkshire acquisition can lead to another. This happens more often than you might think.
In his 2021 letter, Buffett reminisced about how a trip to Fort Worth, Texas, to visit new boy TTI led to the eventual purchase of BNSF Railway. In fact, he wrote that the railroad acquisition “would never have happened” without TTI.
Likewise, the Nebraska Furniture Mart deal back in 1983 opened doors to other furniture companies across the country. Most notably, R.C. Willey. When CEO Bill Child made the difficult decision to sell, he reached out to Irv Blumkin of NFM first — who passed along his interest to Buffett. Soon thereafter, the Utah-based retailer joined the Berkshire family.
Knowingly or not, Berkshire’s managers and operating businesses often become the best salespeople for future acquisitions.
Anyways, to circle back around to my point, Liegl’s decision to sell Forest River to Berkshire eventually inspired Business Wire, the electronic press release service, to do the same. (A very abridged version of this story appears as a footnote in the annotated transcript for paid subscribers from earlier this week.)
On a November weekend in 2005, Stephen Tamraz read “Warren Buffett, Unplugged” — which featured the story of Liegl’s unsolicited sales pitch to Berkshire — in the Wall Street Journal. He handed the paper to his wife, Business Wire CEO Cathy Baron Tamraz, and said, “This looks like the place for Business Wire.”
Cathy agreed with her husband. “I loved the way he sounded,” she said of Buffett.
And while Liegl’s story made the biggest impression — “It was easier to sell my business [to Berkshire] than to renew my driver’s license,” he gushed — the profile provided two more bits of reassurance that Warren Buffett is truly one of a kind.
When Berkshire bought McLane from Walmart in 2003, CEO Grady Rosier asked Buffett what kind of reports he should send to Omaha. Buffett waved off the question and said that whatever McLane usually prepared for Walmart would be good enough for Berkshire. “Warren just doesn’t call,” Rosier told the WSJ. “Walmart left us alone, too. But not like this.”
In August 2004, David Sokol of MidAmerican Energy dreaded breaking some bad news to Buffett about a failed zinc project. “David,” said Buffett, “we all make mistakes.” Not the fire-breathing reaction you might expect elsewhere on Wall Street. Sokol couldn’t believe it. “I would have fired me if I was him,” he admitted.
This article — and its focus on Pete Liegl and other examples of Buffett’s stewardship — bowled Tamraz over and convinced her that Business Wire belonged at Berkshire. And the rest, as they say, is history.
And, now, the latest news and notes out of Omaha…
Berkshire Hathaway hit new all-time highs on both Monday and Tuesday after the weekend release of its annual report. The Class A shares soared to $759,923.94 — with the Class B variety reaching as high as $507.00. I hope Warren Buffett has been treating himself to the top-shelf breakfast items at McDonald’s this week.
Speaking of Berkshire’s annual report, I’m hard at work on a full writeup about the 10-K that will go out to all subscribers early next week.
Chris Bloomstran released his novella-sized letter to clients late last week — and, to be honest, I’m still working my way through it. But that didn’t stop me from immediately flipping through to his latest intrinsic value estimates for Berkshire. Bloomstran currently pegs the intrinsic value of the Class A shares at $782,951 and the Class B shares at $522. “The shares are less undervalued heading into 2025 than they have been in quite a while,” he wrote. “We expect to earn Berkshire’s economic earnings over time.”
Berkshire’s AGM will look a little different this year. “[The annual meeting will follow] a somewhat changed schedule this year,” Buffett revealed over the weekend, “but the basics remain the same.” Becky Quick will still be there asking questions (alternating with shareholders in attendance), but the Q&A session will be about an hour shorter this year. There will not be an introductory movie, either. Greg Abel and Ajit Jain will join Buffett on stage during the morning session (8 a.m. to 10 a.m.), though only Abel and Buffett will return in the afternoon (11 a.m. to 1 p.m.).
You can submit questions for Buffett — or either of the vice chairmen — at berkshirequestions@cnbc.com. Becky Quick will “select those she believes will have the widest interest”.
Like last year, with Poor Charlie’s Almanack, only one book will be on sale at the AGM. This year, the all-new 60 Years of Berkshire Hathaway serves as the Charlie Munger-focused follow-up to the 50th anniversary book from 2015. It will include “Charlie’s photos, quotes, and stories that have seldom been made public”. On the downside, it seems that only 5,000 copies will be on sale. I have already resigned myself to paying through the nose for a copy on eBay…
Dividends: This week, Berkshire collected $32.3 million in quarterly dividends from Sirius XM, $8.2 million from Citigroup, and $173,423 from Jefferies Financial Group.
Kraft Heinz CEO Carlos Abrams-Rivera looked back on an “eventful” first year at the Consumer Analyst Group of New York. He acknowledged that Heinz remains the company’s “crown jewel brand” and highlighted overseas growth as a current focus. “Within the U.S.,” he said, “we have household penetration of 96% with eight brands representing approximately 60% of our business.” Globally, though, that household number drops to 19% — quite a way off the 30% mark that “similar iconic brands” manage to achieve. Abrams-Rivera sees 2025 as a year of stabilization — with a shift back into growth mode expected in 2026. Fingers crossed.
The U.S. Consumer Financial Protection Bureau lawsuit against Vanderbilt Mortgage & Finance (owned by Clayton Homes) has been dismissed. Back in January, the CFPB accused Vanderbilt of allowing borrowers to take out loans too big for their income levels — which led to penalties and foreclosures. At the time, the Clayton Homes subsidiary called the lawsuit “unfounded and untrue” and pledged that it “follows the law — and the facts bear that out”.
Annual report weekend always brings with it some excellent Berkshire-related writing. Here are a few of my recent favorites…
- dives into Berkshire’s annual report — including a fascinating look at GEICO’s resurgence and how it measures up against Progressive.
It’s always a treat when something new pops up from The Brooklyn Investor. “Buffett, of course, has no idea what the market will do, but he is, as usual, bullish America.”
- highlights Berkshire’s so-called “T-Bill & Chill” strategy — along with lots of other smart commentary about this year’s 10-K.
- explores the different sides of the Berkshire cash debate. Is Buffett sending a bearish signal about the market? Is the cash buildup related to expected corporate tax hikes? Is he cleaning the slate, so to speak, for Greg Abel? It’s certainly one of the more interesting questions for us Berkshire-heads these days.
I have the 2015 edition of BRK's 50th anniversary. Ready for the 60th anniversary edition!