Professor Glen Arnold

Haynes (LSE:HYNS) started as a paper-based automotive manual business to help people maintain/repair cars and light commercial vehicles. This business was once very profitable – see table – but in recent years demand has declined as cars became more complex, some people wanted a professional mechanic to do it for them and Youtube videos supplied […]

One-third of Haynes’ (LSE:HYNS) revenue comes from a nicely profitable online information service for professional mechanics. Turnover in this business, HaynesPro, has doubled in eight years to about £8m, after rising by a very impressive 29% last year. Furthermore, in the Report and Accounts just published the directors say that the 2016/17 year has started […]

The SEC investigations into the tangle of Buffett’s holdings and his and Munger’s actions at Blue Chip and Wesco dragged on through 1975. Clearly, the complexity of the Buffett investment structure had exacerbated the situation by opening them to deepening suspicion that something nefarious was going on. Buffett became increasingly determined to simplify his businesses. […]

We now come to a milestone in the career of Warren Buffett. He is worth about £100m in the mid-1970s, but his funds are spread between investment vehicles. Some is in a personal portfolio, some in Berkshire Hathaway, some in Diversified and some in Blue Chip Stamps. To confuse things even further these organisation held […]

The AGM was interesting; an opportunity to hear Fletcher King’s (LSE:FLK) directors’ perspective on the state of play in the UK commercial property market; their plans for future SHIPS investments and the absence of value in maintaining a stock market quotation. Note that my financial interest in FLK in very limited now, having sold most […]

Can’t get enough of that float The year 1996 saw Wesco advance further into insurance with the purchase of Kansas Bankers Surety (KBS) for approximately $80m in cash. The following year KBS contributed $6m to the net operating income of the insurance businesses. This may not seem a great return on the $80m, but Buffett […]

The most important shift in Wesco’s capital allocation came about in 1985. It established Wesco-Financial Insurance Company (“Wes-FIC”). This insurance and reinsurance company (insuring insurers) was to have an intimate relationship with National Indemnity, the lead Berkshire Hathaway insurance operation. It started with a deal with Fireman’s Fund. This former subsidiary of American Express...

Just in the nick of time Buffett, Munger and Koeppel took a large proportion of the money devoted to supporting Wesco’s savings and loan business and made it available for investment elsewhere. Some of that money was sent up the ownership chain. Indeed, by early 1982, almost as much as Blue Chip had paid for […]

Buffett and Munger joined the Wesco board in 1974, while Blue Chip continued to purchase shares – by the end of 1974 it had 64% of Wesco. It wasn’t until 1977 that it held 80%, the limit agreed with Betty Caspers Peters. Wesco performed well, for example, the 80% of its profits after tax attributable […]

To stop the directors of Wesco giving away too much of the company to shareholders of Santa Barbara savings and loans Buffett and Munger came up with a two-pronged strategy. First, Blue Chip needed to increase its voting rights. It bought more shares, paying up to $17, until it had 17% (The regulators prevented an […]