Big In Japan? - Berkshire's 2019– Bet On Japan Inc
It was August 31, 2020. U.S. value investor and businessman Warren Buffett’s insurance conglomerate Berkshire Hathaway $BRK.A $BRK.B sent out a press release. The heading may have surprised U.S.-focused Berkshire-watchers:

Berkshire Hathaway acquires 5% passive stakes in each of five leading Japanese trading companies”

Berkshire had acquired stakes in Itochu $ITOCY, Marubeni $MARUY, Mitsubishi $MSBHF, Mitsui $MITSY, and Sumitomo $SSUMY. Via regular share purchases on the Tokyo Stock Exchange over “approximately” 12 months.

But why?
As businesses, $BRKA's Japanese trading houses are very exposed to the physical trading of commodities and goods. They are cyclical. They were already recovering from a cyclical commodities bear market of the mid-2010s before Buffett stepped in.

Notice how the ROE% follows commodities?

What about the price $BRKA paid?

Not surprising to the value investing community, Buffett can still wait for opportunistic discounts. Sogo Shoshas got there after the 2010s commodities bear market.

For our takeaways after "piggybacking" Buffett & Berkshire to Japan, please read this week's @piggyback Letter Buffett's Inflation Bet With The House(s)
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I remember when Buffett made this investment! Nice piece--thanks for sharing it. Do you do much other investing abroad/in Japan?
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Vincent Poy's avatar
$2.2m follower assets
Many people respect Warren Buffett as the stock god. My question is, since Buffett is consistent with his gains, would it be a bad idea investing in $BRK.A buy buying fractional shares as I know people avoided it in the old days when one can only buy whole shares which meant you had to have the monetary resources or would it still be better to buy something like SPY?


Just at quick glance, they’ve actually performed pretty similarly over the last five years.

There was a broader variance at their peaks prior to the crash, $BRKA was up 114%, while the S&P was up 99%.

It certainly wouldn’t be the worst company to take a large position in.

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StockOpine's avatar
$31.7m follower assets
Old but gold on Stock based compensation
As Warren Buffet mentioned in his $BRK.A letter in 1992.
“If options aren’t a form of compensation, what are they? If compensation isn’t an expense, what is it? And, if expenses shouldn’t go into the calculation of earnings, where in the world should they go?”
Sachiv's avatar
$772.8k follower assets
Honest management @ $BRK.A and $TSLA insurance
While reading the cnbc blog of the $BRK.A $BRK.B AGM, I read a quote from Ajit Jain, the vice-chairman, “there’s no question that recently $PGR has done a much better job than Geico…both in terms of margin and in terms of growth….the biggest culprit as far as Geico is concerned…is telematics”
  1. He points out clear, honest takeaways of one of their well known earners… and gives shareholders a direction they know they need to head - not all management are so honest and forthcoming in public
  1. He points out something that #tesla has been working on since it’s early AP days - and why it’s using sensors and video cameras (and neural nets & vector mapping) vs LIDAR (sorry $INTC and $QCOM..!) - Tesla’s AP safety rating currently used to see if you qualify for self driving beta can Be (and probably already is) used easily for insurance ratings and pricing… add to that the fact that $TSLA continues to expand geographies in which it offers car insurance every few months, and it could be a very large income stream in the next 3 years. Could they offer their telematics systems out to other manufacturers as a black box? Maybe…🤷🏾‍♂️🌟
Note re transparency - Tesla shows you your safety rating…unlike regular insurance companies who just send you a price quote!
Thoughts? Am I way off here? Is there still a lot of growth not priced in today?
Disc: Long both BRK and TSLA
The Slow Rise of $BOC
While many investors are transfixed on the Oracle of Omaha at this year's Annual Meeting for Berkshire Hathaway Shareholders $BRK.A/$BRK.B I want to investigate another Omaha, Nebraska-based company that, much like Berkshire is putting together an impressive collection of companies.

Boston Omaha $BOC has flown under the radar for the last few years. This is for a number of reasons.

1.) Market Cap is only $620m, so still a fairly small company.

2.) They haven't been around very long. After taking over REO Plus the newly formed Boston Omaha was incorporated in 2015.

3.) Most of the areas the company operates in a relatively low-growth, older industries. Most of their product portfolio consists of Billboards, Broadband, and Insurance Underwriting.

Investors willing to dig a little deeper into the company will find that Boston Omaha has the capacity to be one of the greatest capital compounders since that of Berkshire Hathaway.

$BOC is often referred to as a "Serial Acquirer." This is an entity that grows primarily by making acquisitions. And boy has Boston Omaha made some acquisitions in its short life span.

This chart from their website details all the deals the company has been involved with since 2015 as well as the size of the purchases.

From the very beginning of Boston Omaha, the company has been focused on buying primarily billboards and using the cash flow generated to invest in other lines of business.

In 2016 $BOC would enter its 3rd line of business, Insurance underwriting with the formation of General Indemnity Group - or GIG. Placing Dave Herman as the Chairman of the business segment he was tasked with making great acquisitions to grow that line of business.

Under his leadership, the business has grown nicely.

In 2018 $BOC would invest $19m in Crescent Bank and Trust. This makes Boston Omaha the largest shareholder owning nearly 15% of the bank.

While all of these investments are important on their own none are as important, in my opinion, as their most recent investments. Broadband and Home Building.

Just 2 years ago Boston Omaha entered its 5th line of business, Broadband, with the acquisition of AireBeam and Utah Broadband.

With these purchases, $BOC created Fiber Fast Homes. The stated purpose is to provide Fiber Fast Internet to homes across the country.

Just 6 days after the formation of FIF $BOC announced a $10m investment in Dream Finders Homes. DFH is a fairly small home builder building homes and communities across the country.

Just a few days after this announcement came another announcement. This time a partnership was formed between Dream Finders Homes and Fiber Fast Homes called Dream Fiber Homes. This entity provides Fiber-Fast internet to all homes and communities built by Dream Finders Homes.

And this incredible use of investor capital is just the beginning. In 2021 $BOC formed BOAM - Boston Omaha Asset Management.

Some of the things that have occurred under BOAM include taking Sky Harbour public via SPAC as well as another new operating segment Build for Rent.

In particular Build For Rent is a fund offered by BOAM for investors to allocate capital along with Boston Omaha to build "For-Rent" properties across the country.

All-In-All Boston Omaha is staying pretty busy. I also believe that over time $BOC has the ability to create long-term value for shareholders who are willing to stick with management over the long term.

Speaking of management I want to quickly mention that Boston Omaha has a fairly unique management structure. Instead of the usual one CEO making the majority of the acquisitions there are actually two.

I believe this can lead to fewer mistakes as there are two heads involved in each decision being made.

Overall I think $BOC has a lot of potential. And if want even more information I made an entire Youtube video covering almost every facet of the company I felt was important that you can watch it here:

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Nate Pabrai's avatar
$17.3m follower assets
I’m going to the Berkshire meeting
I’ve wanted to go for the past few years and will be going this year to see Warren and hopefully Charlie.

Will anyone else be in Omaha the last weekend of the month?

Eric's avatar
$10.5m follower assets
$BRK.A $BRK.B recent buys
With all the recent $BRK moves recently I wanted to take a look at how this impacts their cash pile. Back of the envelope math has Warren deploying roughly 18.4% of their cash since Q3 2021. Someone has been busy!
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