Buffett asks Alexander Payne about that other Warren - Omaha.com
Published Sunday, February 3, 2013 at 1:00 am / Updated at 12:02 pm
WARREN WATCH
Buffett asks Alexander Payne about that other Warren

Warren Buffett met a fellow Omahan, filmmaker Alexander Payne, for the first time last weekend, not in Omaha but at the Alfalfa Club's annual banquet in Washington, D.C.

“Alexander still works Nebraska into his movies,” Buffett, chairman and CEO of Berkshire Hathaway Inc., noted last week. At the D.C. event, Buffett jokingly questioned Payne about his intentions with “About Schmidt,” a 2002 movie filmed mostly in Omaha.

After all, Buffett said, the movie's main character, played by Jack Nicholson, is “an aging insurance guy named Warren.”

The Alfalfa Club is named after a “thirsty” plant that supposedly will do anything for a drink. The dinner is a social networking affair that includes side events, according to the GeorgetownDish.com. Speakers at a “pre-Alfalfa luncheon” at the Willard Hotel were former Secretaries of State George Shultz and Henry Kissinger, former national security adviser Zbigniew Brzezinski and former Sen. Sam Nunn.

The club was founded in 1913 by a group of Southerners in honor of the birthday of Confederate Gen. Robert E. Lee, which prompted President Barack Obama's one-liner at the 2009 Alfalfa Dinner: “If he were with us tonight, the general would be 202 years old. And very confused.”

NYSE rules

Buffett's reported attempt to buy the New York Stock Exchange carries a touch of irony because Berkshire was slow to be listed on the Big Board.

Various news outlets, quoting unidentified sources, reported last week that Berkshire made an unsuccessful bid last November to buy the exchange. Intercontinental Exchange Inc. ended up as the buyer, at $8.2 billion.

Until 1988, Berkshire was listed on the Nasdaq exchange. Because Buffett didn't believe in splitting his stock, Berkshire didn't fit NYSE rules that required trading in 100-share “round lots.” When Berkshire applied to join the exchange, its shares cost $4,725 each, meaning a 100-share lot would have cost $472,500 — out of the reach of all but the biggest investors.

So the exchange agreed to allow Berkshire to trade in 10-share lots, a rule since modified to allow single-share trades. At the time, 10 shares of Berkshire were worth more than 100 shares of any other stock on the NYSE.

Berkshire also fell short of a rule that required at least 1.1 million shares to be publicly held and at least 2,000 shareholders with 100 or more shares. The NYSE changed that rule, too, allowing companies with 10-share lots, like Berkshire, to have only 110,000 shares publicly held and at least 2,000 shareholders with 10 or more shares.

Buffett also had added Walter Scott Jr., who was chairman of Peter Kiewit Sons' Inc. of Omaha, to the Berkshire board, meeting the exchange's requirement of having at least two independent directors.

17,000 more workers

Berkshire added about 17,000 employees during 2012, with expansions in manufacturing, media, insurance and retail operations, Bloomberg reported.

The company's 70-plus operating divisions have about 288,000 workers, up 6.3 percent from 270,585 a year ago and up 91 percent from 147,000 10 years ago.

The new additions included more than 60 newspapers and Oriental Trading Co., the Omaha party supplier. Berkshire's employment dropped by about 20,000 people in 2009 because of manufacturing, retail and housing declines during the recession.

Billionaire to share fortune

Patrice Motsepe

One of Africa's richest men is the first from his continent to make a philanthropic pledge matching the Giving Pledge originated by Buffett and Microsoft co-founder Bill Gates, the Agence France Presse reported.

He's Patrice Motsepe, 51, a South African whose fortune comes from a mining business through the black empowerment deals intended to redress white economic dominance stemming from apartheid laws.

Motsepe said Buffett and Gates influenced his decision to give half his family's fortune to charity. Although his name isn't listed yet on the Giving Pledge's website, he said he would sign the pledge soon.

Motsepe was born in Soweto and is worth an estimated $2.7 billion. “The need and challenges are great,” he said in a statement. “We hope that our Giving Pledge will encourage others in South Africa and other emerging economies to give and make the world a better place.”

The money would go to help “poor and other disadvantaged and marginalized South Africans” through the Motsepe Family Foundation, which he started in 1999 with his wife, Precious.

Steel sales sluggish

South Korean steel maker Posco, which is 5 percent owned by Berkshire Hathaway, said sluggish world demand cut its operating profit in the fourth quarter of 2012 by 51 percent to $346.7 million, the Middle East and North Africa Financial Network reported.

Sales were down 20 percent to $7.43 billion. Posco makes alloys used in the auto, ship, construction and home appliance sectors. For 2013, the company said it expects sales to drop 10 percent but investments to rise 11 percent.

Division acquisitions

Berkshire divisions are growing by acquisition.

Jewelry company Richline Group recently purchased Rio Grande, a jewelry supplier based in Albuquerque, N.M., for an undisclosed amount, the Albuquerque Journal reported.

Rio Grande, which employs about 300 people, supplies metals, gemstones, diamonds, displays and packing materials to the jewelry industry and sells metal-casting machines and laser welders.

The Bell family will continue to run Rio Grande, with Alan Bell as president, his sister Molly as vice president and their brother Eddie overseeing the Santa Fe Symposium, an annual industry convention. Brother Hugh, who has been president, recently retired.

Separately, Berkshire's HomeServices of America bought Prudential Gaslight Realtors of Blue Springs, Mo., near Kansas City, and renamed it Prudential KC Realty, the Minneapolis-St. Paul Business Journal reported.

HomeServices bought Guarantee Real Estate, a real estate brokerage in central California, in December, Prudential's real estate network in October, Northwest Realty Associates of Seattle in April, Northwest Properties of Portland, Ore., in February 2012 and Dauphin Realty of Mobile, Ala., in October 2011.

The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.

Contact the writer: 402-444-1080, steve.jordon@owh.com

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Have a question for Steve Jordon about the Oracle of Omaha? Submit your questions now, then join Steve at 11:30 on Tuesday to discuss the latest news about Warren Buffett.

Find more of The World-Herald's coverage of Warren Buffett here.

Contact the writer: Steve Jordon

steve.jordon@owh.com    |   402-444-1080    |  

Steve covers banking, insurance, the economy and other topics, including Berkshire Hathaway, Mutual of Omaha and other businesses.

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