Going to Omaha? Take along this book!

"Going To The Berkshire Meeting?
Read 'Pilgrimage To Warren Buffett's Omaha.' Excellent. A great read." --William Freehling

"This book does take you inside that secret place, The Mecca of the Midwest" --CNBC.com

"The most insightful analysis of Buffett and Berkshire I've ever read." --Vitaliy Katsenelson


Monday, April 26, 2010

Questions We’d Like to Hear: ‘Pilgrimage to Omaha’ Top Ten List


Well it’s that time of year again.

In a few days something like 35,000 people from literally all around the world will begin suffering United Airlines connections in Chicago, Minneapolis and elsewhere, for Omaha, where the only for-profit annual shareholder meeting among New York Stock Exchange-listed companies is about to take place: the Berkshire Hathaway meeting.

Or, as Warren Buffett likes to call it, “Woodstock for Capitalists.”

(Those Berkshire shareholders who do not suffer commercial airline connections to get to Omaha will either be driving or arriving in style courtesy of NetJets, which Berkshire naturally owns.)

As always, the heart of the three-day extravaganza will be the Saturday morning question-and-answer session held by Buffett and his acerbic Vice-Chairman, Charlie Munger (“The Abominable ‘No’-man,” as Buffett calls him).

When we attended the Berkshire meeting in 2008 while writing “Pilgrimage to Warren Buffett’s Omaha,” the question-and-answer session was dominated by non-financial, non-Berkshire questions, thanks to Buffett’s remarkably democratic question-selection technique (he simply called on anyone who got up early enough to grab a spot at one of the 12 or 13 microphones placed inside the Qwest Center arena).

That led to predominately “What Would Warren Do”-type of questions by adoring Buffett fans, as opposed to hard questions about Berkshire and its businesses.

Last year, Buffett refined the methodology, inserting three reporters into the mix to screen the questions, and the result was a much sharper Q&A, without the WWWD stuff. (Buffett, by the way, loves answering those “WWWD” questions—he’s a natural teacher; he likes the stage; and he’s smarter than anyone else in the room except Munger, so what the heck).

The only refinement at this year’s meeting will be that Buffett is adding 30 minutes to the 5-plus hour Q&A, so instead of handling the usual 50-55 questions, Buffett thinks he’ll be able to accommodate 60.

Which brings us to today’s topic: the Top Ten list of Questions We’d Like to Hear is back at these virtual pages.

Readers should submit their best question—the one they’d like to see Warren Buffett (or Charlie Munger) answer next Saturday in front of 35,000 people.

We’ll select the Top Ten, publish them here Friday and submit them to Andrew Ross Sorkin. (Let us know if you want your name used, should Mr. Sorkin ask it.)

While there is no guarantee at all that any one of our Top Ten will be used, chances are most of them will be asked in one form or other. (Last year’s batting average was .800.)

Following the meeting we’ll publish how well our readers anticipated the reporters themselves.

Send them to
pilgrimagetoomaha@gmail.com. And soon.

JM.




Jeff Matthews
I Am Not Making This Up


© 2010 NotMakingThisUp, LLC

The content contained in this blog represents only the opinions of Mr. Matthews, who also acts as an advisor: clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

Thursday, April 15, 2010

Stotlar to Buffett: “Your Burlington Deal is Working Already: Stuff is Moving Again”



UPS upgraded to Overweight at Piper Jaffray; tgt $79
Piper Jaffray upgrades UPS to Overweight from Neutral and sets target price at $79 following UPS's strong upside 1Q10 pre-report. They believe the report, and operating leverage / margin implications, exhibits UPS has finally taken drastic enough past measures to improve its global network cost structure.—Briefing.com


The least helpful calls an investor will receive today—and there are more than the one from Piper summarized above—all pertain to a single news item: last night’s upside earnings announcement by UPS.

UPS, as long-time readers know, is one of a pair of what we here at NotMakingThisUp consider two of the most important canaries in the global economic coal mine, along with FedEx.

So what exactly did UPS say, aside from the fact that the just-finished quarter’s earnings came in 20% higher than previously expected, which has triggered so many unhelpful calls from Wall Street’s Finest this morning?

Well, for starters, UPS said international volumes “grew significantly” in the quarter (like 9% in the export side and 24% within international boundaries). And that the U.S. turned in its first year-to-year increase since 2007. Finally—and this should really be no surprise to anyone: when good things happen to a company that has been cutting costs like crazy, earnings go higher—UPS raised guidance for the year.

This last is a lesson much of corporate America has been trying to teach Wall Street’s Finest since the economic recovery began.

From a small restaurant chain serving the supposedly dead-and-buried American consumer to a giant integrated circuit company serving the supposedly dead-and-buried American businessperson, companies that cut costs as if the world was coming to an end in 2008 and 2009 are now reaping the benefits of an economic recovery.

And that recovery appears to be quickly gathering steam before the bemused and sardonic eyes of millions of scarred and scared investors, both professional and not, who got off the stock market train when it came off the tracks in 2008 and refused to get back on before it left the station in 2009.

Of course, there is one investor who not only got back on the train before it left the station: he literally bought the train.


We speak of Warren Buffett, of course, who announced his purchase of Burlington Northern last November as an “all-in wager” on the U.S. economy.

Shortly after Buffett made his move—the near-final piece of the Berkshire jigsaw puzzle, we think—your editor wrote about it in these virtual pages.

In “Why Buffett Finished Off Burlington: It’s the Inventories, Stupid” from November 19, 2009, we described some of the dramatic cost-cutting and inventory-draining then rampant in Corporate America, then offered the conclusion that Buffett was going to be proved right fairly quickly.

And if the recent news from UPS, and CSK, and Intel, and California Pizza Kitchen, and Con-way are any indication, Buffett’s already right.

“What exactly is the recent news from Con-way?” sharp-eyed readers may be asking themselves, since that company doesn’t report earnings for another two weeks.

Well, Douglas Stotlar, the CEO of the giant trucker, told Bloomberg news yesterday his company “is turning down as many as 145 load orders because of capacity constraints.”

“A year ago, we were looking at downsizing the workforce and cost control,” Stotlar said in an interview. “Now the issues are how do you take advantage of an economy that appears to be rebounding, how do you take advantage of the surge in demand.”


Con-Way’s truckload volumes were up 30 percent in January and February from the same months in 2009, Stotlar said. The company is also seeing growth in its partial truckload business, where shipments from more than one customer are moved in one truck.

“It appears to be across both retail” and manufacturing, Stotlar said. “We are seeing multiple touch points that are verifying to us that the economy is definitely recovering.”
—Bloomberg News, April 14, 2010

No, Douglas Stotlar didn’t actually tell Warren Buffett “Your Burlington deal is working already: stuff is moving again,” as we titled this piece.

But he doesn’t have to: Buffett already knows it.

After all, he owns a railroad.



Jeff Matthews
I Am Not Making This Up


© 2010 NotMakingThisUp, LLC

The content contained in this blog represents only the opinions of Mr. Matthews, who also acts as an advisor: clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. Also, this blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.