WB Letter 1988


Berkshire Hathway has made an investment in the Borsheim’s which is a jewelry business in Omaha. This business is run by family members of Mrs.Blumkins (Founder of The Nebraska Furniture Mart). This business also getting managed by the people who have similar quality as Mrs.B such as an extraordinary combination of brains, integrity, and enthusiasm for work. All members of the Friedman family has been continued with the managing business as they were managing before Berkshire has acquired an interest.

WB 1988 01

Insurance business of the company remains in the pressure since long time and company expect to the float/premiums ratio to be at least three times in the year 1989 and 1990 with help of the team of Mike Goldberg, Ajit Jain, Dinos Iordanou, and the National Indemnity managerial team.

In the year 1988, Berkshire has made an acquisition of Coca-cola and Federal Home Loan Mortgage Pfd. (“Freddie Mac”).

Coca Cola 1988

Mr.Buffett had made an investment into one arbitrage situation – Rockwood & Co. when he worked at Graham-Newman Corp. Rockwood & Co. is a chocolate manufacturing company based in Brooklyn. During the year 1954, the price of the cocoa soared due to the temporary shortage.

WB 1988 02

Mr.Buffett give few points to keep in mind while making an investment into arbitrage opportunities-

WB 1988 03

Efficient Market Theory which is more in trend and many people believe that market knows everything. Yes, Market know many a thing which we also don’t know, but it is also a fact that many a time, the market also provides us an opportunities to make an investment which reward us in future.

Mr.Buffett also mentioned that if a market is efficient and know everything then he has not generated decent returns by investing into the various arbitrage opportunities. We also have seen wealth creation through investing into the equities and if market knows everything then few people are not able to generate good wealth. But with such arguments, we should not forget that market also knows many a thing and already discounted those into a price of securities.

WB Letter 1989

Borsheim’s – Jewelry business focusing more on the controlling cost and this cost control attracts more sales volume.

WB 1989 01

Berkshire has tripled advertising expenditure for the See’s Candies which reach the highest percentage of sales and which has converted into the good sales.

Coca-cola has started a new journey into the year 1981 with the appointment of the Roberto Goizueta as a CEO and Don Keough. Due to both, a product of the company started gaining momentum and sales has been started improving. They transform business in a manner which can benefit the shareholders.

Berkshire Hathway purchased preferred of the Gillette Co. –

WB 1989 02

As Mr.Buffett mentioned, we also need to look for the cover over depreciation as we look for the cover over the interest expenditures. Depreciation & capital expenditure is also a real expense, we can delay it but we cannot avoid it. If the company continuously keeps on avoiding capital expenditure then business will no longer remain into existence.

WB 1989 03

Low depreciation cover companies

Low dep cover

We can see in above image that companies having a low depreciation cover then those companies need to bring external finance (Debt or dilution of capital) for expansion whereas those companies having a good depreciation cover then those companies do not need to bring external finance to fund expansion (repayment of debt or buyback of shares also can be done).

High depreciation cover companies

High dep cover

Mr.Buffett has mentioned his past mistakes for the review purpose. He believes that before committing a new mistake, we need to review our old mistakes.

WB 1989 04

WB 1989 05

WB 1989 06

WB 1989 07

WB 1989 08

WB 1989 09

WB 1989 10

We can learn and correct our mistakes from the learning from the mistakes of Mr.Buffett. These mistakes show us a transformation of Mr.Buffett from buying a “cigar butt” to a business which has an economic value.

Warren Buffett’s Letters 1957 – 2012



TI Cycles setup with BSA and Hercules Brands in the year 1949.

Manufacturing Businesses of the company includes –

• Engineering Segment (Tubes, Value Added Cold Rolled Strips, & Tubular Components)
• Cycles and Accessories (Bicycles & Fitness Products)
• Metal Formed Products (Chains for Automobile sector & Industrial applications, Doorframe & Channels for Passenger Cars)
• Gears and Gears Products (Investment in Shanthi Gears Limited – Industrial Gears)
• Others (Investment in TI Tsubamex Private Limited – Designing & Manufacturing of Dies)
• 25 Manufacturing Locations and Suppliers to all major automotive OEM’s or Tier 2/3 Suppliers
• TI Absolute Concepts is formed as a 50:50 Joint Venture in the business line of Bicycle Theme based Restaurant and Retail.

Annual Report Review FY17-18FY16-17.

Disclaimer: This is not a recommendation to Buy-Sell-Hold. And I am not a SEBI registered analyst.

Avenue Supermarts Ltd. (DMART) ANNUAL REPORT REVIEW FY2017-18


The supermarket chain of DMart stores is owned and operated by Avenue Supermarts Ltd. (ASL). DMart was started by Mr. Radhakishan Damani. From the launch of its first store in Powai in 2002, DMart today has a well-established presence in 158 locations across Maharashtra, Gujarat, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab, and Rajasthan.

Annual Report Review FY2017-18.

Disclaimer: This is not a recommendation to Buy-Sell-Hold. And I am not a SEBI registered analyst.

Wonderla Holidays Limited ANNUAL REPORT REVIEW FY 2017-18

Wonderla Amusement Parks & Resort  Logo wonderla amusement Park and Resorts

Wonderla Holidays Limited operates three largest amusement parks in Kochi, Bangalore and Hyderabad; and the Wonderla resort in Bangalore under the brand name Wonderla.

Annual Report Review FY2017-18

Disclaimer: This is not a recommendation to Buy-Sell-Hold. And I am not a SEBI registered analyst.


Piramal Enterprises is a diversified conglomerate having three virtual companies – Financial Services (47% revenue contribution), Pharma (42% revenue contribution) and Information Management (11% revenue contribution).

Mr. Ajay Piramal having a good track record with capital allocation, with acquisitions and one of the shareholder-friendly promoter.

Annual Report Review FY2017-18FY2015-16FY2014-15.

Disclaimer: This is not a recommendation to Buy-Sell-Hold. And I am not a SEBI registered analyst.