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Warren Buffett Buying Lubrizol...
- Thread starter Big O Dave
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How do you know this?
I saw this too, in the Globe and Mail - was actually just looking to see if someone else had posted it!
Obviously, BIG priofits to be made from oil additives - add-packs are what determine an oils quality now, not necessarily base oils. Add-packs are what are making oil pass API certs now.
Obviously, BIG priofits to be made from oil additives - add-packs are what determine an oils quality now, not necessarily base oils. Add-packs are what are making oil pass API certs now.
Seriously Eddie? Did you not make it past the subject line?
Originally Posted By: GMorg
Seriously Eddie? Did you not make it past the subject line?
I added the link after he posted.
Seriously Eddie? Did you not make it past the subject line?
I added the link after he posted.
Originally Posted By: addyguy
I saw this too, in the Globe and Mail - was actually just looking to see if someone else had posted it!
Obviously, BIG priofits to be made from oil additives - add-packs are what determine an oils quality now, not necessarily base oils. Add-packs are what are making oil pass API certs now.
What I was just thinking also....
I saw this too, in the Globe and Mail - was actually just looking to see if someone else had posted it!
Obviously, BIG priofits to be made from oil additives - add-packs are what determine an oils quality now, not necessarily base oils. Add-packs are what are making oil pass API certs now.
What I was just thinking also....
It Buffet buying businesses with a moat around them. Many companies make oil, but just a few make additives. As Addyguy said
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add-packs are what determine an oils quality now, not necessarily base oils. Add-packs are what are making oil pass API certs now.
Buffett has played in the field of oil companies, but this time he is buying a company that likely has high margins and is relied on by major oil companies.
Quote:
add-packs are what determine an oils quality now, not necessarily base oils. Add-packs are what are making oil pass API certs now.
Buffett has played in the field of oil companies, but this time he is buying a company that likely has high margins and is relied on by major oil companies.
My apologies Eddie...
Buffett said one of the best indicators of a successful business is its ability to raise prices and not lose any customers. Think about that.
Up over $20/share this morning last time I looked.
Originally Posted By: dparm
Buffett said one of the best indicators of a successful business is its ability to raise prices and not lose any customers. Think about that.
In essence, that's what I've been thinking about lately. With the majors now selling high-end synthetics made with Group III base stocks (Castrol Edge w/Titanium, Pennzoil Ultra and others), it has occurred to me that they've discovered a niche wherein they can make good money.
And, to top that, all of the latest certifications require high-end additive packages.
Perhaps the lesson with this purchase could be that ALL motor oils that meet GF-5/SN and the latest ACEA standards are what would have been classified in the past as "high-end" motor oils.
Hmmm...
Buffett said one of the best indicators of a successful business is its ability to raise prices and not lose any customers. Think about that.
In essence, that's what I've been thinking about lately. With the majors now selling high-end synthetics made with Group III base stocks (Castrol Edge w/Titanium, Pennzoil Ultra and others), it has occurred to me that they've discovered a niche wherein they can make good money.
And, to top that, all of the latest certifications require high-end additive packages.
Perhaps the lesson with this purchase could be that ALL motor oils that meet GF-5/SN and the latest ACEA standards are what would have been classified in the past as "high-end" motor oils.
Hmmm...
I think what Buffett is doing is getting a piece of the action with most of the oil blenders w/o having to own stock in the actual oil blenders. But I'm pretty sure he owns a few of the oil blender stocks as well.
CNBC had reported on it this morning. David Faber had some commentary on the purchase. All cash. The whole deal was apparently done in just a few weeks.
I thought Pablo would buy it.
Originally Posted By: demarpaint
I think what Buffett is doing is getting a piece of the action with most of the oil blenders w/o having to own stock in the actual oil blenders. But I'm pretty sure he owns a few of the oil blender stocks as well.
Makes sense.
I think what Buffett is doing is getting a piece of the action with most of the oil blenders w/o having to own stock in the actual oil blenders. But I'm pretty sure he owns a few of the oil blender stocks as well.
Makes sense.
Originally Posted By: demarpaint
I think what Buffett is doing is getting a piece of the action with most of the oil blenders w/o having to own stock in the actual oil blenders. But I'm pretty sure he owns a few of the oil blender stocks as well.
His philosophy is to buy companies that have pricing power, i.e. are not swayed by market forces when setting their prices. It's a bonus for him if the company is badly managed because it affects the purchase price in his favor.
Not knowing much, I don't know if Lubrizol is either badly managed or is a dominant player in the oil additive market.
I think what Buffett is doing is getting a piece of the action with most of the oil blenders w/o having to own stock in the actual oil blenders. But I'm pretty sure he owns a few of the oil blender stocks as well.
His philosophy is to buy companies that have pricing power, i.e. are not swayed by market forces when setting their prices. It's a bonus for him if the company is badly managed because it affects the purchase price in his favor.
Not knowing much, I don't know if Lubrizol is either badly managed or is a dominant player in the oil additive market.
Buffet's Berkshire Hathaway holding company owns about 2% of Conoco Philips and a few hundred thousand shares of Exxon Mobil. I think demarpaint is right when he says that by owning Lubrizol Buffet gets a piece of the action across the entire oil blending segment of the industry.
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His philosophy is to buy companies that have pricing power, i.e. are not swayed by market forces when setting their prices. It's a bonus for him if the company is badly managed because it affects the purchase price in his favor.
Your first point is correct, your second couldn't be farther from the truth. He likes to buy businesses where they can run on autopilot. He likes management that is involved and stay on after the acquisition - think Nebraska Furniture Mart, Borsheims and many more that I can't think of now.
He likes taking advantage of pricing abnormalities that temporary underprice a business. But bad management (think US Airways) can torpedo a company's vaule quicker than anything.
His philosophy is to buy companies that have pricing power, i.e. are not swayed by market forces when setting their prices. It's a bonus for him if the company is badly managed because it affects the purchase price in his favor.
Your first point is correct, your second couldn't be farther from the truth. He likes to buy businesses where they can run on autopilot. He likes management that is involved and stay on after the acquisition - think Nebraska Furniture Mart, Borsheims and many more that I can't think of now.
He likes taking advantage of pricing abnormalities that temporary underprice a business. But bad management (think US Airways) can torpedo a company's vaule quicker than anything.
What is the symbol of Lubrizol ? and what exchange is it on ?
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