Buffett Bets on Trucking

Last week, Berkshire Hathaway announced an agreement to purchase a 38.6% stake in Pilot Travel Centers LLC for an undisclosed amount, according to a Wall Street Journal article that calls it “Berkshire’s latest wager on traditional forms of transportation and U.S. economic growth.” According to the article, the Tennessee-based company, better known as Pilot Flying J., is the largest operator of truck stops in the U.S. as well as one of the country’s largest private companies. Through its 750 locations in the U.S. and Canada, the company reports it generates over $20 billion in annual revenue and employs 27,000 people. […]

Would You Fire this Guy?

By John Reese — If there’s one thing that’s hard to persuade investors to be, it’s patient. The urge to chase the hot idea or the manager with the dazzling recent track record is incredibly powerful. The resolve to resist crowd mentality can falter when it seems as if everyone else is winning and you’ve been left behind. Imagine hiring a manager in 1997 and for the three year period to 2000, he clocks a gain of 65 per cent. That sounds pretty good, but remember: It was the roaring 1990s, and the technology-fuelled boom was all anyone could talk […]

Finding Your Edge a Key to Investing Success

By John P. Reese The mathematician Ed Thorp figured out how to beat Las Vegas casinos at blackjack and baccarat and they didn’t like it. But the MIT and University of California Irvine professor didn’t get discouraged. He applied those same mathematical principles to the markets, and also won. Mr. Thorp knows that good ideas have limited runs. As more investors pile into a winning trade, the returns start to diminish and the idea can no longer outperform the market. During a recent Bloomberg interview with Barry Ritholtz, Mr. Thorp discusses this phenomenon in the context of Berkshire Hathaway, whose […]

Buffett and Berkshire Focusing More on Running Businesses than Stock-Picking

In his February letter to shareholders, Warren Buffett wrote that Berkshire Hathaway is seeing a “gradual shift from a company obtaining most of its gains from investment activities to one that grows in value by owning businesses.” This according to a Wall Street Journal article from earlier this month. The trend is being underscored by the company’s recent bid to purchase the bankrupt power-transmission company Energy Future Holdings Corp. (including utility company Oncor) for $9 billion. The shift began in 1999, the article says, with Berkshire’s first utility purchase, and gained steam with the conglomerate’s acquisition of Burlington Northern Santa […]

Buffett’s Airline Bet and Four Picks

In anticipation of its Prime Day this month, Amazon prepared for an onslaught of orders by “getting its delivery ducks in a row, including a fleet of over 20 dedicated Prime Air Cargo planes,” writes Validea CEO John Reese in a recent article for Nasdaq. Reese segued into Warren Buffett’s bet on major airlines and his general investment approach. Using stock screening models he created based on the methodology of Buffett and other market greats, he identified the following high-scoring airline stocks: Delta Air Lines Inc. (DAL) provides scheduled air transportation for passengers and cargo throughout the United States and […]