My 3 Berkshire videos (plus FB, TSLA, and GOOG); invitation to my two parties at the Berkshire meeting; Rich Rockwood; BH Energy; FB & GOOG scammed; Bezos

By Whitney Tilson

Monday, April 8, 2019

1. I recorded three videos on Berkshire Hathaway recently, totaling 36 minutes. They are available for free. To access them, simply sign up here for the webinar for my new newsletter, the Empire Investment Report, which is coming up on Wednesday, April 17, at 8 p.m. Eastern. It only takes a moment to register and then you will get instant access to the videos (just click FREE RESOURCES at the top of the page). You don’t even have to watch the webinar – though I hope you will!

  • In the first video (11 minutes), I share the history and overview of the company.
  • In the second (10 minutes), I analyze Berkshire’s financials.
  • In the third (15 minutes), I look at what could go right (and wrong).
  • Stay tuned for details on how to access the fourth video, where I value Berkshire and outline the upside I see for the stock over the next year.

In addition to the Berkshire videos, when you register you will also get access to my report on why I think Facebook’s stock (FB) is a good bet to double and Glenn Tongue’s special report on why Tesla’s stock (TSLA) is likely to collapse. And if you enter your cellphone number to receive a text reminder before the webinar, you’ll also get our report on Alphabet (GOOG).

Again, click here to immediately access all of this for free. After the webinar, it will only be available to paid subscribers.

2. Speaking of Berkshire, on May 4 (only three weeks from Saturday!) I will be attending my 22nd consecutive annual meeting. If you’re going to Omaha that weekend (which I highly recommend!), I’d like to invite you to two parties I’m hosting on Friday evening and Saturday afternoon.

They are free, open to all, and will take place in the St. Nicholas Room (2nd Floor) at the Hilton Omaha, right across the street from the CenturyLink Center where the meeting is held:

  1. My annual cocktail party from 8pm-midnight on Friday, May 3rd. No agenda, no speeches, no dress code – just come, enjoy the drinks and snacks, and meet other value investors.
  2. A casual get-together immediately following the annual meeting (~3pm) on Saturday, May 4th. It will end at 6pm.

To RSVP for either/both of these events, please click here.

I hope to see you there!

3. While I’m looking forward to the meeting, I’m saddened by the realization that for the first time in two decades I won’t see Rich Rockwood, who passed away in December at the age of 47 after a long, hard-fought battle with cancer (you can read his obituary here). Rich was a hard-core Buffett/Munger/Berkshire follower and wrote a book on focus investing: The Focused Few: Taking a Multidisciplinary Approach to Focus Investing.

4) Here’s an interesting article about Berkshire Hathaway Energy: The Big Berkshire Hathaway Buyback No One Is Talking About. I had no idea that BH Energy was buying back stock… Excerpt:

Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B) shareholders undoubtedly noticed that the company repurchased a small amount of stock in the fourth quarter, with purchases at prices as high as $207.17 and as low as $197.30 per Class B share. That activity suggests that at prices around $197 to $207, Warren Buffett views Berkshire Hathaway’s Class B shares as a bargain.

But there was an equally important Berkshire buyback that went largely unnoticed. This month, Berkshire Hathaway Energy (BH Energy), one of the company’s largest operating businesses, spent about $293 million buying back its shares, giving investors rare insight into how Berkshire values one of its most important units.

…BH Energy shares aren’t publicly traded and haven’t been since Berkshire acquired its predecessor, MidAmerican Energy, from the public markets. Thus, when owners want to buy or sell shares, they transact with one another, albeit indirectly, by selling shares back to BH Energy. That happened most recently in February 2019, when BH Energy disclosed that it bought back 447,712 shares of stock at a cost of $293 million, or $654 per share.

Using this buyback as a guide, this suggests that BH Energy’s equity is worth just over $50 billion, or about 1.7 times book value, 19.5 times earnings in 2018, and 17.5 times earnings in 2017.

5. I’m shocked that Facebook and Alphabet got scammed for this much for so long: A man stole $122m from Google and Facebook by invoicing them for items they had never bought. Excerpt:

A man has admitted to stealing more than $100 million from tech giants by forging invoices for purchases the companies had never made.

He devised a blatant scheme to fleece US companies out of $100 million.

Evaldas Rimasauskas, from Lithuania, sent fraudulent demands for money to Google and Facebook between 2013 and 2015 totalling $122 million.

The companies paid the bills, after seemingly not checking if the invoices corresponded with their own records.

6. This cracked me up:

Whitney Tilson

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About Whitney Tilson

Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to nearly $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor's degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

Click here for the full bio