We learned last week that Warren Buffett sometimes grabs two biscuits from McDonald's and puts the two sausage patties together for a breakfast sandwich that he calls “a Sausage McBuffett.”
We now know that Buffett has studied all of the “elephants” — huge U.S. companies, valued at $20 billion each or so, that he might acquire through Berkshire Hathaway Inc., the Omaha investment company he heads. He keeps track of them all, so he knows how much he would offer to pay if they come up for sale.
And we know that Buffett is such a good friend of Fortune magazine editor and writer Carol Loomis that he accompanied her on what turned out to be his broadest media blitz ever. They hit cable business channels, major networks, public TV and radio and even Jon Stewart's Comedy Central program, not to mention his opinion article for the New York Times that kicked off the week's tour.
The trip combined Buffett's latest foray into the public policy debate over federal taxes with the rollout of Loomis' new book, “Tap Dancing to Work,” a compilation of Fortune articles about Buffett dating to 1966 with added commentary by Loomis.
The extended interview journey also marked the end of Buffett's self-imposed pause in travels while he was treated for prostate cancer this past summer. On TV, the 82-year-old looked like his old self, or actually somewhat younger, cracking jokes during each appearance but making serious points about federal taxes, the economy and other issues.
For Berkshire shareholders, the most interesting comments might have come in an interview with Charlie Rose, who asked about the “elephants.” Because Berkshire is so large, only big acquisitions add significantly to its growth.
“I`m familiar with all the companies when you get to that size,” Buffett told Rose. “I mean, I`ve seen all the elephants.” If a CEO calls and says a company is for sale, Buffett said, he can make an offer in “five or 10 seconds.”
Buffett also told Rose that of 12 Berkshire-owned newspapers that endorsed presidential candidates, 10 endorsed Republican Mitt Romney and two endorsed President Barack Obama. Buffett, a Democrat, said he voted for Obama but doesn't dictate the newspapers' editorial positions.
Not what he said
Sometimes you just gotta set the record straight.
It was July 2011 when Warren Buffett joked on cable TV that he could end the federal government's spending “in five minutes. You just pass a law that says that any time there's a deficit of more than 3 percent of GDP, all sitting members of Congress are ineligible for re-election.”
Harmless enough, right?
Ah, but the grimy grab of the Internet has that old comment — as appealing as it might be to folks tired of government spending more than it takes in — bouncing around in an entirely different context.
The latest version is a sort of electronic chain letter that says Buffett wants people to forward it to 20 of their friends. That's not true, nor does he back a “Congressional Reform Act of 2012,” as some emails imply.
The North Platte (Neb.) Telegraph also printed a clarification after receiving the “Reform Act” email, which supposedly would put the congressional retirement system into Social Security and make other changes regarding Congress.
The Telegraph editor said Buffett has nothing to do with the “Act,” calling it “spam email.”
'Exactly' right CEO
Berkshire has another woman chief executive.
She's Mary Rhinehart, new president and CEO of Johns Manville, the Denver-based building products company. She succeeds Todd Raba, who was praised by Buffett for leading the company through a difficult period when the housing market turned down sharply.
Rhinehart joined the company in 1979 and recently was senior vice president and chief financial officer. Buffett said in a press release that she is “exactly the CEO we like to hire. She is passionate, smart, and she truly cares about Johns Manville customers and employees. She'll add tremendous value to Johns Manville going forward, and I couldn't be more enthused to have her taking on this role after all that she's already accomplished at Johns Manville.”
She joins a half-dozen other women CEOs of Berkshire companies, a group profiled in a book earlier this year called “The Women of Berkshire.” Berkshire owns about 80 businesses.
A midsized BYD
BYD Co. is counting on a new midsized sedan, the Si Rui (pronounced “suh-ray”), to revive its prospects after struggling with other models, the Associated Press reported.
The Chinese company, 10 percent owned by Berkshire, brought the Si Rui to an auto show in southern China. It is to compete with other midsized autos, including the Volkswagen Santana, the Citroen Elysee and the Chevrolet Baojun. Its design is similar to the Honda Accord or Toyota Corolla.
One way Berkshire ownership benefits its companies is when they borrow money.
JPMorgan Chase & Co. said $650 million worth of bonds issued by Berkshire's BNSF Railway gained “significant value” because of Buffett's implicit backing, Bloomberg reported.
That makes the railroad's bonds superior to similar bonds issued by Canadian National Railway, said a report by Chase analysts led by Mark Streeter. The report said BNSF's “robust” freight network has strong positions in shipping coal and oil.
Investors gain an extra 0.43 percent with the BNSF bonds compared with the Canadian National bonds. When you buy $1 million worth of bonds, that's an added $4,300 a year.
A tiramisu Blizzard?
Berkshire's Dairy Queen franchise is back in Singapore after a 14-month absence, the Business Times reported.
A new franchise holder, Treats Haven, opened one DQ without fanfare in the City Square area, followed by three more outlets elsewhere in the nation-city.
Treats Haven owner Leong CM said a chance conversation with someone from Berkshire in 2010 led to the new franchise. The previous franchise holder had dropped the restaurant portion of its business to focus on lodging.
“Nobody does treats the way Dairy Queen does them,” Leong said.
Dairy Queen has 6,200 outlets, about 1,000 of them in Asia, including 600 in China. To appeal to its local market, the Chinese locations offer wolfberry and almond toppings and are looking into tiramisu, gula melaka and chendol flavors.
DaVita dialysis clinics
Berkshire now owns about $1.4 billion worth of stock in DaVita Inc., which puts the national chain of dialysis clinics into the $1 billion-plus investment category that Buffett lists in his annual report to Berkshire shareholders.
The shares — 12.97 million, or 13.6 percent of the company's stock — likely were bought by Berkshire investment manager Ted Weschler. DaVita would represent about one-fourth of the $4 billion or so in Berkshire money that he manages.
Weschler had owned DaVita shares through the investment fund he ran before joining Berkshire last year.
New brand on the way
The purchase of Prudential and Real Living real estate networks by Berkshire's HomeServices of America division will lead to a new brand in the business called Berkshire Hathaway HomeServices, with some 91,000 agents.
Prudential executives from Irvine, Calif., will lead the new brand sometime next year, although some local offices may keep names widely known in their markets.
Mike Huff, owner of Prudential Anderson Properties in Lubbock, Texas, told the Lubbock Avalanche-Journal that joining Berkshire brings worldwide exposure and permanence. “If anything says a company is here to stay, it is Warren Buffett standing behind them.”
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.
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