Professor Glen Arnold

Since Covid-19 struck Warren Buffett has been active in selling a number of long-held shares and in spending billions purchasing stakes in other companies. I’m going to speculate about his motivations.         First, the cash holdings Berkshire’s cash and cash equivalents rose over the first six months of the year from $125bn […]

Andy Haldane was the only member of the Bank of England Monetary Policy Committee to vote against expansion of quantitative easing in June.  His reasoning was that the glass was half full, in the sense that the economy was on track to recover about half of the lost output. He had been gathering real time […]

It’s important at this time of enormous economic threat to listen to people who possess, through decades of intellectual effort, an informed long-term perspective on markets. I’ve been reading recent work by James Montier, Andy Haldane and Warren Buffett. In today’s newsletter I’ll try to summarise James Montier’s views on the American market. James has […]

When I bought Tandem’s shares (LSE:TND) at £1.59 in April 2019 I figured the average historical owner earnings to be £1.282m over seven years, which gave an estimated intrinsic value of £16.0m or 320p per share (see newsletter posted 10th April 2019). Now that the shares are over £3.70 I thought I’d update the numbers. We […]

I bought into Tandem (LSE:TND), a bicycle, outdoor toy and furniture company, in April 2019 at 159p – see previous newsletters 3rd – 11th April 2019, 1st – 2nd July 2019. After receiving 9.49p in dividends over the 16 months I’ve now sold at 370.7p for an overall return of 139% Normally I would not have sold given that […]

Profits from the Berkshire Hathaway’s Shoe Group jumped from $28.8m in 1993 to $55.8m in 1994 with about nine-tenths of the increase down to Dexter coming into the fold.  And Buffett and Munger were looking forward to 1995, “Management was pleased with Dexter’s 1994 performance and better results are anticipated during 1995. This optimism results […]

Today I’ll describe how Warren Buffett got into his worst investing mistake, and tomorrow I’ll cover the tragedy that started to unfold almost immediately after buying. Dexter Shoes Harold Alfond, the son of blue-collar Russian-Jewish immigrants, worked his way up from 25c an hour shop floor work making shoes in the Depression to factory superintendent. […]

Lowell Shoe Inc. was the second firm to go into Berkshire Hathaway’s Shoe Group. Warren Buffett was encouraged to buy it because he had witnessed the first shoe company bought, H. H. Brown, performing well in the the six months after purchase on July 1, 1991. Turnover was $104m and after-tax earnings $8.6m.   Then in its first […]

When the creator of the specialist boots and shoes company H. H. Brown died in December 1990 aged 92 his family concluded that it was best if the company were sold. Frank Rooney, CEO and son-in-law, took up the task of finding a buyer with the help of Goldman Sachs and their pack of material […]

This story covers what Buffett himself declared as his “most gruesome error”. Within a few short years the value of $433m paid for the third company bought to build Berkshire Hathaway’s Shoe Group, Dexter, had evaporated completely.  It wouldn’t be quite so painfully seared on Buffett’s mind if he had paid cash. Okay, that’s $433m […]