This is my fourth installment of notes and summary tweets of Larry Cunningham’s perspicacious book, Berkshire Beyond Buffett: The Enduring Value of Values. If you’ve missed any of the tweets or posts, see them in order here: I, II, and III (and follow on Twitter: @ActiveInvesting). I’ve selectively shared nuggets from Larry’s book and I’m finding Twitter’s 140 character limit to be just-right for capturing some of the highlights to share with others that will also spark my memory of the greater detail in the book; this also preserves the bulk of Larry’s hard work.
The first note below is from chapter 8 — the full chapter is available online, but as I’ve said previously, if you’re going to spend the time to download it, you might as well get and read the whole book!
In my last installment, I mentioned that while reading Berkshire Beyond Buffett I began thinking out loud whether Buffett’s use of stock in acquisitions over the years, seemingly to avoid debt and to sustain float, was in hindsight a mistake that can be measured on the order of magnitude — and also, it seems it could partially be due to the selling families wanting at least some portion of the deal in Berkshire stock (Cunningham has indeed pointed out this desire at least once thus far). Part of this question about using stock (mostly reluctantly) in acquisitions was addressed as you’ll see below.
Jim Weber, CEO, $BRK.B’s Brooks running shoe sub: I’ve never had so much autonomy in my career and never felt so accountable & responsible.
Re. M&A boom/bust cycle & fallacy of social proof, @CunninghamProf bk Ch 9: $BRK.B’s elong’td time horizon diminishes tempt’n to fllw crowd.
@CunninghamProf’s Berkshire Beyond Buffett Ch 9 also has note re. my ? Buffett/$BRK.B using stock in M&A: used in only 7 parent-level acq.
Another case of $BRK.B enduring value of values & reinforcement of such. Ch9, MiTek in focus. BRK subs look for cultures that fit their own.
Similar to parent-level, $BRK.B subs are able to acq tgts at lower price than seller would demand of a buyer lacking the cultural attract’n.
$BRK.B’s MiTek CEO Tom Manenti: BRK/Buffett give me total autonomy. Being treated that way makes it easy for me to treat our mgrs the same.
$BRK.B subs made $3.1B of acquisitions in ’13, $2.3B in ’12. Berkshire Hathaway Energy a beneficiary of parent CF alloc. and cheap debt.
Ch. 10: NICO’s website says co. “might be one of the largest insurance co’s you’ve never heard of.” Many $BRK.B co’s can make sim claim.
$BRK.B subs w/ instant brand recognition per @CunninghamProf: Dairy Queen, Fruit of the Loom, GEICO, and Justin.
Per @CunninghamProf: What unites all of $BRK.B subs: sense of modesty and simplicity
You might also enjoy another recent post (click the first hyperlink below).