Warren’s Letters
The compilation of Warren Buffett’s letters to Berkshire Hathaway (BRK-A/BRK-B) shareholders between 1965 and 2012 is worth the read. These are part of Buffett’s strategy to train his investors to think as he does. Steady investors have given him a strong hand and served long-term thinking. He deserves our trust as much as anyone ever has. Here is his performance since I began investing:
Doing Buffett’s Dirty Work
Andrew Carnegie was folksy and beloved, characteristics that he was able to maintain for years… because he had Henry Clay Frick. Carnegie did not break strikes; Frick broke Carnegie’s strikes for him. Buffett is as folksy and beloved as Carnegie; Buffett’s Frick is a Brazilian named Jorge Paulo Lemann of 3G Capital. While Buffett does not endorse hostile deals, Lemann does. While Buffett bangs on and on about his preference for high taxes, Lemann moves his businesses to the optimal tax locales. In this year’s letter, Buffett indicates that he would like to invest alongside Lemann again after their experience with Tim Hortons, which is now part of Restaurant Brands International (NYSE:QSR). Having invested in both Anheuser Busch Inbev SA (NYSE:BUD) and QSR, I feel the same way. Is the Brazilian team behind 3G the greatest group of business operators on the planet? No one better springs to mind. Buffett knows when he sees a good thing. Paulo and Buffett can each operate at a scale that serves each other’s interests well. This is a great fit and one of the best finds in Buffett’s effort in recent years to expand his horizons beyond the U.S. borders.
Jorge Paulo Lemann, Buffett’s Henry Clay Frick
Buffett has increased his investments in American Express (NYSE:AXP), Coca-Cola (NYSE:KO), International Business Machines (NYSE:IBM), and Wells Fargo (NYSE:WFC). The appeal is beyond me. AXP and WFC were knock-your-socks-off cheap in early 2008, but have recovered strongly since then. Current prices don’t look like any particularly special bargains. IBM appears to be more of a short than a long based on its fundamentals. I have no particular reaction to KO, but would be surprised to find that some egregious mispricing could be hidden in such plain view. I doubt any of these would turn Ben Graham’s head.
