The looting of Omaha is pretty much over…
I got to this years annual meeting a bit late at 10 am or so, having left at 6 am and highballed the 230 miles from my Buffalo Ridge retreat to Omaha. Yet with the Berkshire Hathaway (BRK) all day annual meeting having started just a half hour earlier, people were already leaving. Leaving with their arms and even carts full, having loaded up on the vast array of merchandise on offer at shareholder’s discount prices at what is becoming a pretty substantial enterprise in it’s own right, which I shall term “Grandpa Warren’s Wholesale Club”.
Heads up, Costco! Sam’s Club, you might want to forget about your whole parody of Costco and reflag yourselves as plain old Walmarts. While putting up with the distractions of being the world’s 5th biggest company and having just one of it’s subsidaries, BNSF railway, haul 15% of everything in the country, BRK has managed to create a once a year pop-up warehouse club store that rivals the best. Consider for a moment that just one BRK company, Nebraska Furniture Mart (NFM), sold a million dollars worth of mattresses and 8 million dollars total on just one day of shareholder discount week last year. NFM is a success story in itself, located on a midwest farm sized plot within the city limits of Omaha for decades… No need to migrate to the suburban malls when you’re the market maker. In fact, despite being miles from a freeway, a whole cluster of big box retailers have clustered around NFM. And given the prices and service, no surprise- I bought a case/keyboard combo for my new tablet computer for 15% less than the best online prices, BEFORE the BRK shareholder discount. Scored a nice L-Ion 12 amp/hr 5v battery for $50 too, couldn’t resist.
That’s just the beginning of the bargains offered that make BRK’s annual meeting probably the world’s best attended, by about 40,000 pretty much happy shareholders this year. At 7 am the convention hall doors open, and the feeding frenzy begins, with whole cartons and even pallet loads of Borsheim’s jewelry, Brooks athletic shoes and togs, Fruit of the Loom and Fechheimer wear, H.H. Brown and Justin footwear, Mars and See’s taste temptations, Campbell-Hausfeld power tools, and Well Lamont gloves disappearing. I didn’t get to the gloves ’til noon and over half the varieties were gone, same story over at Campbell-Hausfeld… And I had my heart set on a “prosumer” grade gas power washer!
Now a membership in Grandpa Warren’s Wholesale Club is a bit pricier that Costco or Sam’s, but not in the six figure range like it used to be. Thanks to BRK buying BNSF a few years back, they had to create a new “BRK/B” stock for all us unwashed masses of BNSF shareholders from the wrong side of the tracks. Buy a share of BRK/B for $120 or so, and you get to rub elbows and grab bargains alongside the millionaires that bought BRK decades ago before anyone took the “Oracle of Omaha” seriously. And while Costco and Sam’s will cheerfully refund your membership fee at any time, Grandpa Warren’s Warehouse Club will probably give you a bit more back, being as they’ve been pretty much beating the stock market indices for some time.
BRK stock can do that because while others are chasing the latest Wall Street fads and even scams, BRK under Warren Buffet and Charley Munger’s wise direction have been buying up solid and substantial companies for pennies on the dollar during the recent recession. BNSF is just part of the story, now the biggest railroad and transporting one third as much freight as the whole trucking industry with one fortieth of the employees. No wonder the smart trucking companies just load up the trailer and truck it over to BNSF… UPS is BNSF’s and american railroading’s biggest customer, and their biggest hub, the legendary Chicago CATH, is right next to BNSF tracks. Not content to have the biggest and probably best railroad, with your “membership fee” at “Grandpa Warren’s Wholesale Club”, you become a co-owner of the country’s biggest homebuilder, Clayton homes, too. BRK finances those homes too, with good old fashioned 30 year fixed rate loans… Even during the height of the recession they had less than a 2% delinquency rate. Add to that what is becoming the nation’s largest producer of renewable electricity, Midamerican energy, and the biggest manufacturer of floor coverings, Shaw.
That’s just the big stuff, then there’s the gearhead gems like Marmon. Yup, Marmon, of Indy 500 legends, and the maker of the custom built Marmon trucks that out Peterbuilted Peterbuilt. While the truck plant was sold to Navistar who in typical Navistar stupidity killed off Marmon trucks and more recently closed the plant, Marmon still makes their legendary axles, Fontaine trailers and 5th wheels, Webb brakes and hubs, and Tracmobile and Railserve switching locomotives. Better yet, like their BRK shareholders, BRK has been buying up gems of companies at deep discounts. For example, when legendary Finnish logging truck and spotting tractor maker Sisu sold off their axle making operation, the major reason for buying a Sisu truck, BRK bought it up. The Marmon trademark is inactive and I find no evidence of a non-compete clause with Navistar… With BRK already making truck axles, brakes, hubs, and a bunch of other bits, BRK could easily bring back Marmon trucks!
Well, finally had to head home, and passed by side dump trailer maker Smithco on the way…
Had about 10 off these just built, overwidth with 24 inch tires and oversize 3.5 inch kingpins, and labeled for around 10 tons EMPTY weight each= Clearly headed to an off road haul somewhere, probably at a mine. Note the B-train configuration, nice to see an operator putting safety first. I suspect this combination should be good for around a hundred tons payload at 40 MPH or so on a haul road. They were also building some road legal B-train combinations, road legal at 164,000 pounds in Michigan that is…
Sorry ’bout the lousy pix, was about 8 pm and was “losing the light”. Forgot to stop at Dairy Queen and “check out my investment”… BRK owns Dairy Queen too! Oh well, supposed to be nice riding weather tomorrow…
GearheadGrrrl 