Hershey’s company jet flew to Warren Buffett’s hometown, sparking speculation that the investor could buy the candy company

Warren Buffett makes Sees Candies
Warren Buffett.

  • Hershey’s company jet made a rare trip to Warren Buffett’s hometown of Omaha, Nebraska.
  • The candy group’s bosses may have discussed a sale with the investor, an analyst speculated.
  • Buffett’s Berkshire Hathaway owns See’s Candies and financed Mars’ purchase of Wrigley.
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Hershey’s corporate jet recently flew to Warren Buffett’s hometown of Omaha, Nebraska. The candymaker’s bosses may have visited the Berkshire Hathaway CEO to discuss a potential sale, an analyst who correctly predicted a past Buffett deal speculated in a note to clients last week.

The Hershey plane made its first trip to Omaha in at least a year on June 12, Don Bilson, the boss of Gordon Haskett’s event-driven research team, revealed in the note. The plane “stayed in Omaha for a couple of days which is certainly enough time for anyone who made that trip to pay the Big Guy a visit,” Bilson wrote, citing jet-tracking data.

Of course, Hershey’s plane may have landed in Omaha for other reasons. For example, Olympic swimming trials took place on the dates it was in the city, Bilson said. Hershey’s and Berkshire declined requests for comment from CNBC.

Bilson has sniffed out deals before. For example, he spotted that Occidental Petroleum’s corporate jet had visited Omaha in 2019, leading him to correctly predict that Buffett would help finance Occidental’s takeover of Anadarko Petroleum.

Buffett has bet on confectionery companies before. He famously acquired See’s Candies in 1972, and later described the seller of boxed chocolates as his “dream business.” The investor also shelled out $6.5 billion to help Mars purchase Wrigley during the financial crisis. He quipped at the time that he had conducted a “70-year taste test” on the pair’s products, and they had passed.

“We have long thought that he was the perfect buyer for Hershey,” Bilson and his team wrote in their note. “More than that, he may be the only realistic buyer who would win approval from the Hershey Trust.”

The Hershey Trust commands over 80% of Hershey’s voting rights, meaning a suitor would have to secure their support to buy the chocolate company. Buffett has acquired family-owned businesses such as Nebraska Furniture Mart by offering them a permanent home at Berkshire and promising minimal interference in their operations.

Hershey’s market capitalization is about $36 billion, meaning it’s within Buffett’s price range. The Berkshire chief, who has been hunting for an “elephant-sized acquisition” for years, said in May that he’s willing to deploy up to $80 billion of his company’s cash. However, he also ruled out any near-term takeovers because special-purpose acquisition companies (SPACs) and private equity firms would outbid him.

Buffett has also praised Hershey in the past, describing it as a “wonderful business” and powerful hedge against inflation at Berkshire’s 2007 shareholder meeting.

“If you own Coca-Cola, if you own Snickers bars, if you own Hershey bars, if you own anything that people are going to want to give a portion of their current income to keep getting, and it has relatively low capital investment attached to it so that you don’t have to keep plowing tremendous amounts of money in just to meet inflationary demands, that’s the best investment you can probably have in an inflationary world,” he said.

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Warren Buffett admitted a ‘big’ mistake, touted Berkshire Hathaway’s past deals, and cautioned traders in his annual letter

Warren Buffett
Warren Buffett.

  • Warren Buffett published his annual letter to shareholders on Saturday.
  • The Berkshire Hathaway CEO made a “big” mistake in overpaying for Precision Castparts.
  • Buffett reminded stock traders that their transaction fees go straight to Wall Street.
  • Visit Business Insider’s homepage for more stories.

Warren Buffett owned up to a major mistake, trumpeted Berkshire Hathaway’s past successes, and drew a line between his long-term shareholders and the meme-stock crowd in his annual letter on Saturday.

The billionaire investor said Berkshire’s focus is boosting operating earnings and making large, high-quality acquisitions. His conglomerate “met neither goal” in 2020 as its operating earnings slumped 9% and it failed to close any major deals, he said.

Moreover, Buffett admitted to overpaying for Precision Castparts, the aerospace-parts manufacturer that Berkshire purchased for $37 billion in 2016. The price tag was a “big” error that fueled an “ugly” $11 billion writedown last year, he said.

Buffett dedicated most of his letter to reflecting on some of Berkshire’s most famous investments. See’s Candies, Geico, National Indemnity, Nebraska Furniture Mart, and Clayton Homes all received a mention.

The 90-year-old investor argued their US origins were a key factor in their success. “These builders needed America’s framework for prosperity,” he said. “Our unwavering conclusion: Never bet against America.”

Buffett didn’t miss the chance to highlight that Berkshire owns $154 billion in US-based assets such as factories and equipment – more than any other US company. AT&T is the runner-up with $127 billion worth, he said.

The Berkshire chief also discussed his shareholder base. He emphasized the “special kinship” he feels to the million-plus individual investors who trust him with their money and embrace Berkshire’s culture of partnership.

Buffett made a distinction between Berkshire’s long-term shareholders and people who buy into the hype around the likes of Tesla, GameStop, and Bitcoin. He reminded traders that the fees they pay to constantly tweak their portfolios flow straight into Wall Street’s pockets.

“The tens of millions of other investors and speculators in the United States and elsewhere have a wide variety of equity choices to fit their tastes,” Buffett wrote. “They will find CEOs and market gurus with enticing ideas.”

“If they want price targets, managed earnings and ‘stories,’ they will not lack suitors,” he continued. “‘Technicians’ will confidently instruct them as to what some wiggles on a chart portend for a stock’s next move. The calls for action will never stop.”

Finally, Buffett revealed that his 97-year-old business partner and Berkshire’s vice-chairman, Charlie Munger, will join him on stage at Berkshire’s shareholder meeting in May.

The event will be held in Munger’s home state of California, after he decided not to fly to its usual Nebraska location last year due to the pandemic.

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Warren Buffett gave $10,000 in cash to each of his relatives at Christmas

Warren Buffett
Warren Buffett

  • Warren Buffett’s favorite Christmas presents over the years have included dresses, chocolates, and stacks of cash.
  • “He would always give each of us $10,000 in hundred-dollar bills,” Mary Buffett, the famed investor’s former daughter-in-law, told ThinkAdvisor. “As soon as we got home, we’d spend it – whooo!”
  • Berkshire Hathaway’s billionaire boss has also bought dresses in bulk from a local store, and he sends boxes of See’s Candies with funny Christmas cards to friends and relatives every year.
  • View Business Insider’s homepage for more stories.

Warren Buffett’s favorite Christmas presents include dresses, chocolates, and envelopes of cash.

The famed investor and billionaire CEO of Berkshire Hathaway certainly makes an effort when the holidays come around. Here are the details of his signature gifts.

Cash and stock

“He would always give each of us $10,000 in hundred-dollar bills,” Mary Buffett, who was married to Warren’s son Peter from 1980 to 1993, recently told ThinkAdvisor. “As soon as we got home, we’d spend it – whooo!”

Warren switched things up after realizing his family were blowing through the lump sum – worth more than $30,000 in today’s dollars.

“One Christmas there was an envelope with a letter from him,” Mary told ThinkAdvisor. “Instead of cash, he’d given us $10,000 worth of shares in a company he’d recently bought, a trust Coca-Cola had. He said to either cash them in or keep them.”

Mary decided the stock was worth more than $10,000, so she held onto the shares. After they rose in value, she repeated the strategy with Warren’s future gifts.

“Every year when he’d give us stock – Wells Fargo being one of them – I would just buy more of it because I knew it was going to go up,” she said.

‘Wheel out the dresses’

Buffett is famously prudent in allocating resources across Berkshire’s companies. He also prizes efficiency in his Christmas shopping.

The billionaire’s strategy in the 1960s was to visit Topps, a dress shop in his hometown of Omaha, Nebraska, and hand an employee a list of the dress sizes of all the women in his life, Alice Schroeder wrote in “The Snowball: Warren Buffett and the Business of Life.”

“I would go over and they’d wheel out the dresses,” Buffett said. “I’d make a variety of decisions and buy presents for my sisters, Susie, Gladys, and so forth. I kind of enjoyed it.”

Christmas cards and chocolates

Buffett sends boxes of See’s Candies – one of Berkshire’s best investments ever – to dozens of relatives and friends each year, his longtime friend Carol Loomis wrote in Fortune. Each box comes with his annual Christmas card attached.

In 2013, the card showed Buffett dressed as Walter White from “Breaking Bad” with the message “Have yourself a Meth-y Little Christmas.”

In 2016, it featured Buffett and his Berkshire partner, Charlie Munger, dressed in black tie for their induction into the Texas Business Hall of Fame with the caption “Butch & Sundance.” 

In 2018, the card showed Buffett wearing a T-shirt reading “The Next Charlie Munger” with the caption “Aiming High in 2019.”

Buffett’s Christmas card for 2020 shows him with his arm around a metal bust of Munger, who was unable to join him at Berkshire’s annual meeting due to the pandemic. His sweater reads,”You can never have too much love or too much gravy.”  The caption below reads, “…. or too much Charlie.”

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