No. of Recommendations: 22
Additional annual meeting observations:
a. I walked into the Pilot booth and said my estimate is the typical Buc-ee's location takes in an estimated 750 million or more dollars annually. I said this would be a great bolt-on acquisition for Berkshire. They smiled at each other and one person made the mouth zip motion to her fellow managers. Buc-ee's is owned by two guys in their early 60s and has 58 locations at last count.
b. Berkshire's TerraPower nuclear project is now not expected to come on-line until 2032 because of sourcing issues with the HALEU fuel. The previous supplier when the project started is in Russia and now is caught in geopolitics. The new USA based source is working to get DOE certification.
c. I asked about re-conductoring transmission lines and where this stands within Berkshire's utilities and I got basically nothing answers with shoulder shrugs. I would think this is a no-brainer investment IF Berkshire were allowed to receive a fair return on investment.
https://www.utilitydive.com/spons/how-composite-co...d. The BNSF manager I spoke with said there is only one (1) bridge remaining to be rebuilt to double-stack height standards on the main line between Chicago and Los Angeles.
e. I was impressed with continuing innovation in a number of subsidiaries. For example, I asked about the exterior paint with UV and mildew resistance Benjamin Moore was touting in their booth. It has some impressive chemistry innovations. Lubrizol was another company that is forging ahead with innovation. CompuZol, a dielectric fluid designed for data centers appears to be getting traction against other fluids in this category. Lubrizol featured its additives for many well known consumer products in the cosmetic, automotive and other fields.
My opinion is obviously worth zero and here goes:
Methinks Warren is raising cash to buy a collection of companies with annual revenues of 20B to 60B at fair prices. Private equity firms are having a bit of an existential crisis as they cannot unload their holdings that were time stamped to be unloaded in 2022, 2023 and now 2024. The flipping game between private equity firms still exists, just that the potential buying firms are discounting more heavily. A fellow I stood in line with Saturday morning at the meeting works in one of the largest banks as a regional private wealth manager mostly to wealthy individuals needing loans to buy jets or real estate without selling a portion of their asset holdings. He gave an example of a client whose fund last sold a holding in 2019 and has now been working five years to sell its second holding. It is looking like the deal will go through later in 2024 but not at the valuation originally projected. Today I read an article about how the Swensen-nification of college funds has put many of them heavily into alternative (not bonds and not public stocks) investments. What is known of these these funds is many are seeing lower returns than the S&P on their holdings. Additionally, collectively these institutions that were harvesting 4% of their AUM ten years ago and now averaging 14% annual harvesting to cover scholarships, salaries, and other collegiate expenses. Yes, there is said to be huge amounts of dry powder $$ available to private equity, but what happens if we get a big market downdraft and maybe some other factors spooking the asset holders? If this happens is maybe Warren goes out in a blaze of acquisition glory snapping up the best of the private equity holdings for a fair price (I remember the Green Mail era of the 1980s. Fortune 500 companies sold their best holdings and not their less attractive divisions because the buyers balked at the unattractive candidates and only wanted the good stuff). Hey, but what do I know? I'm just throwing an opinion into the Berkshire strategy pile.
Uwharrie
