Berkshire Hathaway Sells Applied Underwriters
By Lonce Lamonte - October 17, 2019
Warren Buffett’s company, Berkshire Hathaway, has sold its company Applied Underwriters which sells workers’ compensation insurance.
Buffett said in February 2019 that he agreed to sell Applied Underwriters because it’s a smaller firm that competes against two larger insurance companies Berkshire owns that also sell workers’ compensation coverage.
Terms of the deal weren’t disclosed. Berkshire rarely sells or closes any of its companies because Buffett’s preferred holding period is forever. In the past, the only exception Buffett has made to this policy is for businesses that face the prospect of never-ending operating losses.
As an aside, Berkshire Hathaway lost a long time investor of late. David Rolfe, the investing chief of Wedgewood Partners, dumped his stock after more than 20 years, according to his third quarter letter to his clients. He blamed Buffett's failure to capitalize on gains in several stocks, bad investments, and reluctance to deploy his vast pile of cash.
David Rolfe expressed that a few stocks stand out as considerable errors that should have been in Buffet’s portfolio as good for Berkshire shareholders.
He highlighted Mastercard's 1,521% gain and Visa's 1,137% gain between the start of the bull market on March 9, 2009, and the end of last month. He censored the fact those two stocks together make up just 1.5% of Berkshire Hathaway's equity portfolio while he complained that the current combined weight should be 15%.
Rolfe also pointed to Costco and Microsoft as missed opportunities.
With Berkshire Hathaway only holding a 0.55% stake in Costco, Rolfe added, it largely lost out on Costco's 522% gain during the bull market.
lonce@adjustercom.com, Lonce Lamonte, journalist
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