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Monday, July 6, 2020

Notes From All Over -- The Early Evening Edition -- July 6, 2020

A series of unfortunate events, with apologies to Ms Lemony Snicket. I don't know if anyone other than ZeroHedge is following this story but it's getting very, very interesting.



Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

The market: after another huge day on Wall Street, futures are in the green tonight. But this early in the evening is usually a "carry-over" from the close today and will have little "impact"on tomorrow's market. But it's still nice to see. Good luck to everyone.
  • AAPL: not only held today's gains after hours but added another $1.64/share
  • MSFT: ditto
  • BRK-B: ditto  
  • IMUX: ditto
  • AMZN: ditto, but even more so -- LOL
Clearing out the in-box:
Buffett and natural gas. Analysis continues:
"Warren Buffett's bet is a midstream buying signal. Berkshire Hathaway's long-awaited pandemic-era purchase in a seemingly difficult business might seem  like odd time, but there is good logic behind it -- WSJ, July 6, 2020, "Heard On The Street."
This is really pretty cool. Two items.

First: this is really, really quite interesting. Warren Buffett has been looking for an acquisition for quite some. What better time to look at energy? Energy prices are incredibly low but the tea leaves suggest this will only be temporary. If you look at the map of his Berkshire Energy holdings, Buffett was "well-covered" in the west, southwest, and midwest. His big gap was on the east coast.

Buffett's been following the Atlantic Coast Pipeline story for quite some time and knows that the board rooms over at Dominion and Duke Energy were probably well-divided on whether to continue with that "white elephant," the Atlantic Coast Pipeline.

Aha! That's it. Maybe Dominion would like to get rid of that "white elephant." But how to do it? Warren comes up with a solution and gives Dominion a phone call. The rest is history. Love it.

Second: I've read any number of articles on this story since it was announced over the weekend, writers with their analysis. Very informative, very entertaining. But there is one word I've not yet seen used by any writer when discussing this story.

Years ago --- LOL, years ago? -- shoot, it was decades ago, I took a Forbes course on investing, one of the best things I ever did, that was probably back in 1983. One of the words I learned from the course: moat.

In this case, "moat" means any business endeavor ... from Investopedia:
What Is an Economic Moat?
The term economic moat, popularized by Warren Buffett, refers to a business' ability to maintain competitive advantages over its competitors in order to protect its long-term profits and market share from competing firms. .July 7, 2019.
LOL. Connecting the dots. Amazing.

Warren Buffett followed his own advice several years ago when he bought the Burlington Northern Railroad, perhaps the classic example of a "moat."

Now, again, with a $10 billion acquisition, Warren Buffett is following his own advice. In the current political environment, I can't think of any sector with a bigger economic moat than the crude oil and natural gas pipeline sector.

Absolutely brilliant. And anyone who thinks there won't be continued growth along the Atlantic coast from North Carolina to Virginia to DC isn't paying attention.  AOC and New Yorkers may not want growth but folks south of the Mason-Dixon Line certainly do.

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