Warren Buffett has been quietly making a huge bet on a well-known conglomerate with thousands of employees around the world:
Berkshire Hathaway Inc.
While Mr. Buffett has increasingly faced pressure this year to use his nearly $150 billion cash pile to purchase significant stakes in or the entire business of a company, the world’s most famous investor has seemingly made few acquisitions. Among the few deals he did make are Berkshire’s purchase of
Dominion Energy Inc.’s
midstream energy business and its investment of $6 billion in five Japanese companies.
Berkshire also made a $250 million investment in the initial public offering for the data-warehousing company
But none of these 2020 investments have risen to the “elephant” scale, Mr. Buffett’s term for a big buy, relative to the conglomerate’s size and available cash.
In fact, the biggest purchase that the Omaha, Neb., company has made is to purchase its own stock. Berkshire bought $9 billion of its own shares in the third quarter, bringing total buybacks for the first three quarters of 2020 to $15.7 billion. These buybacks mean that Berkshire Hathaway stock is now one of Berkshire Hathaway’s biggest investments ever.
It is a contrast to decades of thinking from Mr. Buffett, who for years refused to buy back Berkshire stock.
Analysts said that one main reason Mr. Buffett has done a buyback is that big acquisitions are a taller order these days. For a corporation of Berkshire’s size and depth, with railroads, food manufacturers, insurers, furniture companies and jewelry retailers among the company’s varied subsidiaries, there are fewer companies that meet Mr. Buffett’s standards.
“Berkshire Hathaway has reached a size and maturity that it’s no longer a growth company; it’s a cash cow,” said Whitney Tilson, founder and chief executive of Empire Financial Research. “To move the needle, he needs to make investment decisions where he’s allocating, I would argue, $10 billion or up.”
Even after the billions in buybacks, Berkshire’s cash and Treasury bonds total $145.7 billion, as of the end of September. Mr. Buffett himself didn’t expect to be sitting on this much cash at this point.
At a 2017 annual meeting, he said, “There’s no way I can come back here three years from now and tell you that we hold $150 billion or so in cash or more, and we think we’re doing something brilliant by doing it.”
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He added: “I would say that history is on our side, but it would be more fun if the phone would ring.”
When the phone has rung since then, the deal wasn’t the right price for Mr. Buffett.
Buybacks are Mr. Buffett’s last option for use of cash after reinvesting in Berkshire and buying other companies, said Stephen Biggar, director of financial-institutions research at Argus Research.
Indeed, Mr. Buffett eschewed buybacks until recent years.
“It’s a bit of a recognition that he doesn’t see any sizable acquisition,” Mr. Biggar said.
One surprise for some investors was that Mr. Buffett didn’t make any deals during the market selloff in March.
At the beginning of the 2008 financial crisis, Mr. Buffett invested more than $15 billion in blue-chip companies such as
Goldman Sachs Group Inc.
General Electric Co.
, when corporate debt was difficult to get.
This time, however, the Federal Reserve’s market interventions stabilized the markets more quickly, stymieing Mr. Buffett’s usual game plan.
“The Fed became a very rapid direct competitor to Berkshire,” Mr. Tilson said, adding that the Fed’s terms for debt were much better than Mr. Buffett’s were during the 2008 recession.
Lawrence Cunningham, a George Washington University law professor, sees the buybacks as a way to weed out fair-weather investors who would be willing to sell.
Mr. Buffett has fostered a culture of patient shareholders who hold their Berkshire investments for decades. A breakdown of that investor culture could cause disruption after Mr. Buffett leaves Berkshire, according to Mr. Cunningham.
“That will invite activists to clamor for breaking up Berkshire,” said Mr. Cunningham, director of the quality-shareholders initiative at the university. “If you do all that, Berkshire will lose its distinctiveness.”
By buying back shares from the short-term investors, Mr. Buffett is in effect narrowing the company’s investor pool to the longer-term investors.
“It’s a very helpful positive for a post-Buffett Berkshire,” said Mr. Cunningham. “You’re going to maintain the quality of the shareholder base.”
Manulife Investment Management Launches Five Smart Exchange-Traded Funds – Canada NewsWire
C$ unless otherwise stated
TSX/NYSE/PSE: MFC SEHK: 945
TORONTO, Nov. 25, 2020 /CNW/ – Manulife Investment Management announced five new Smart Exchange-Traded Funds (ETFs) have closed their initial offering of units and will begin trading on the Toronto Stock Exchange today. The three Canadian fixed income ETFs and two equity ETFs will provide investors with the opportunity to access the growing popularity of the ETF structure while taking advantage of Manulife’s investment expertise with active quantitative strategies.
Manulife Smart Dividend ETF and Manulife Smart U.S. Dividend ETF are tailored for Canadian investors looking for income producing investments that can provide a steady cash flow stream. They seek to provide a steady flow of income and long-term capital appreciation by investing in a diversified portfolio of dividend paying securities.
Manulife Smart Short-Term Bond ETF, Manulife Smart Core Bond ETF and Manulife Smart Corporate Bond ETF aim to support investors looking to generate steady income in their investment. They seek to earn the highest level of income consistent with the preservation of capital by investing in a diversified portfolio of fixed income securities.
“Manulife Investment Management’s new exchange-traded funds have an attractive price point within their respective categories, which offer a good balance between price and the potential to outperform,” said Bernard Letendre, Head of Wealth and Asset Management, Canada. “Adding these new Manulife ETFs are part of our commitment to investors to provide them with the most amount of value.”
Manulife Smart Short-Term Bond ETF
Manulife Smart Core Bond ETF
Manulife Smart Corporate Bond ETF
Manulife Smart Dividend ETF
Manulife Smart U.S. Dividend ETF
Manulife Investment Management is always looking to expand its line up to meet the growing and diverse needs of investors. The new Manulife Smart ETFs showcase our active management capabilities and commitment to offering investors investment options at different price points.
Manulife ETFs are managed by Manulife Investment Management Limited (formerly named Manulife Asset Management Limited). Manulife Investment Management is a trade name of Manulife Investment Management Limited. Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs). Investment objectives, risks, fees, expenses and other important information are contained in the ETF Facts as well as the prospectus, please read before investing. ETFs are not guaranteed, their values change frequently, and past performance may not be repeated.
About Manulife Investment Management
Manulife Investment Management is the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship and the full resources of our parent company to serve individuals, institutions, and retirement plan members worldwide. Headquartered in Toronto, our leading capabilities in public and private markets are strengthened by an investment footprint that spans 17 countries and territories. We complement these capabilities by providing access to a network of unaffiliated asset managers from around the world. We’re committed to investing responsibly across our businesses. We develop innovative global frameworks for sustainable investing, collaboratively engage with companies in our securities portfolios, and maintain a high standard of stewardship where we own and operate assets, and we believe in supporting financial well-being through our workplace retirement plans. Today, plan sponsors around the world rely on our retirement plan administration and investment expertise to help their employees plan for, save for, and live a better retirement.
As of September 30, 2020, Manulife Investment Management had CAD$923 billion (US$692 billion) in assets under management and administration. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.
Manulife Financial Corporation is a leading international financial services group that helps people make their decisions easier and lives better. With our global headquarters in Toronto, Canada, we operate as Manulife across our offices in Canada, Asia, and Europe, and primarily as John Hancock in the United States. We provide financial advice, insurance, and wealth and asset management solutions for individuals, groups and institutions. At the end of 2019, we had more than 35,000 employees, over 98,000 agents, and thousands of distribution partners, serving almost 30 million customers. As of September 30, 2020, we had $1.3 trillion (US$943 billion) in assets under management and administration, and in the previous 12 months we made $31.2 billion in payments to our customers. Our principal operations are in Asia, Canada and the United States where we have served customers for more than 155 years. We trade as ‘MFC’ on the Toronto, New York, and the Philippine stock exchanges and under ‘945’ in Hong Kong.
SOURCE Manulife Investment Management
For further information: Media Contact, Olivia Jones, Manulife, 438-340-3416, [email protected]
Council varies its investment policy – BC Local News – BCLocalNews
The District of Houston has bolstered its policy of placing public monies in local financial institutions by allowing the amount to be invested to exceed othwerwise specified limits.
It means that $7.5 million in investments coming due Dec. 31 can be placed with either the Bulkley Valley Credit Union or the Royal Bank or with both and not placed elsewhere.
In a detailed presentation made to council Nov. 17, District of Houston chief administrative officer Gerald Pinchbeck, also the District’s financial officer, noted the District’s existing policy sets dollar amount limits based on a percentage of the District’s total investment account and on a percentage of the assets of the Bulkley Valley Credit Union.
The same policy also sets limits on what can be invested with the Royal Bank, the only other financial institution in the community, based on the percentage of securities within the District’s total investment portfolio.
“If there are any overages, then upon maturity the investments woud need to be made elsewhere,” he said.
The District’s investment mix includes term deposits now at the credit union which are guaranteed and senior government and corporate bonds.
In approving of the move to exceed the investment limits in the policy, council directed that the policy be brought back for a further review at a future date.
“Investments under the temporary policy variance will be made by reviewing the rates being offered, the security of the investments available, and the expected return on investment,” said Pinchbeck.
The money the District invests are not required for its current operating or capital spending obligations.
The District’s long-standing policy of placing investments with financial institutions that have a presence in the community reflects its commitment to recognize and support local businesses.
Feedback Isn’t Just A Gift-It’s An Investment – Forbes
It’s often said that feedback is a gift. But the truth is—feedback is an investment.
A colleague and I recently received feedback from a client about a session we had facilitated that did not meet their expectations. The client reported that participants were not adequately engaged by the content and that we didn’t leave enough room for discussion. They even complained about our choice of closing music. (I guess not everyone appreciates Kelly Clarkson.) The feedback was thoughtfully delivered, but it still hit hard. I took a few deep breaths, thanked the client and discussed how to improve the next session. My colleague and I incorporated the feedback into our next workshop plan, and they loved it. Their critical feedback was key to our success.
If someone cares enough about you to give you feedback, it is a sign that they care about the relationship. Our client was able to deliver important critical feedback to us because we had built a foundation of trust. We had been working with them for more than a year, conducting workshops, having frequent calls, getting to know one another as professionals and as human beings. We had also invested in the relationship in big and small ways. This meant that when we stumbled, our client did not see us as just another vendor who could be easily replaced. Instead, they came to us and shared their concerns. And though the feedback was a bit painful, it helped us grow and strengthen the relationship.
For many people, the investment of giving critical feedback feels risky. A 2017 study of managers, whose job it is to give feedback, found that 44% report discomfort giving negative feedback and 21% avoid it. Why? In my experience conducting feedback trainings, many professionals express fear that they will encounter defensiveness, worry that the feedback will damage the relationship, and hopelessness about people’s ability to change. These perceived risks are a lot to overcome.
So if someone who is not required to give you feedback takes the risk of offering you what Warren Buffet calls the “very expensive gift” of honesty and gives you critical feedback, they are signaling that (1) the issue matters to them, (2) the relationship matters to them, and (3) they believe—or at least hope—that improvement is possible. That is good news.
Getting critical feedback stings. When someone tells you that something you did harmed them or bugged them or didn’t work for them, it is natural to feel embarrassed, hurt or defensive. But there is something even worse than getting critical feedback about a blind spot: when someone withholds important feedback, denying you the opportunity to learn, improve and repair. So the next time someone gives you critical feedback, even if it stings, remember that it signals that they are investing some of their personal capital in you. Really listen with curiosity. How can you make their investment pay off for both of you?
Manulife Investment Management Launches Five Smart Exchange-Traded Funds – Canada NewsWire
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