As long as they are not given away.
Buffett seems to like the newspapers, according to his take on the industry in the Berkshire Hathaway (BRKA) shareholder meeting today. His purchase of Omaha World-Herald last year has been working out well and he is thinking of buying more. The recent trend of newspapers erecting paywall to monetize their online content is definitely in the right direction. A curious side effect of the pay walls is that New York Times has seen its daily print circulation increase. Interestingly, the long time Buffett holding, Washington Post, is a hold out on walling off its online content.
Earlier this year I changed my thinking on the “decline of newspapers” and recommended a media company for purchase to the premium members. It is now part of the VSG portfolio and I expect the company to generate significant returns for the shareholders over the period of next 2-3 years. Media companies have long been thought of as value traps, but “value trap”ism is not a chronic condition and can be cured by some structural changes in the industry, which is now happening.
The following is a list of some of the other insights from the meeting:
- Amazon (AMZN) is hugely disruptive to the retailers. I briefly touched on this in my post on competitive advantages and building a moat
- They believe that Google and Apple (AAPL) could be worth a lot more in 10 years time, but they would still not buy it. They would not short them either
- Berkshire will not pay a dividend
- Takeover of Berkshire Hathaway is extremely unlikely and Buffett remarked that even after he is long gone, his estate will continue to hold a large stake in Berkshire Hathaway
- Munger thinks a Value Added Tax is eventually coming and probably should
Is Florida Real Estate Market Rebounding?
Two of the savviest investors believe so. Berkadia is a joint venture between Berkshire Hathaway and Leucadia National (LUK) formed to buy the mortgage lending business from the bankrupt Capmark Financial Group in 2009. In the 3 year since, Berkadia has grown to become the 3rd largest commercial and multi-family mortgage servicer in the country. Recently, Berkadia is expanding in Florida by buying banking assets and expanding its organization.
According to this Bloomberg report, sales of commercial properties in Florida are up 40% in the first quarter compared to last year.
This is further corroborated by the fact that one of the insurance companies we own in the Value Stock Guide portfolio has been buying up distressed commercial properties in Florida and has already seen the value of its portfolio increase significantly.
Perhaps the time for St. Joe (JOE) is finally nigh. Berkowitz has been patiently holding this stock for a long many years via Fairholme Fund and has suffered for his conviction. Time for redemption!
How is the real estate market in your neck of the woods? Did you attend Berkshire meeting? Let us know in the comments below