My understanding is that Buffett handles the supercat float, namely National Indemnity, among others (namely Gen Re), while Simpson handles the GEICO float. According to the latest filing, GEICO and its subsidiaries own 5.9% of GATX. Berskhire Hathaway through National Indemnity appears to own 14.9%. There's a difference there - 9% absolute - that I'm attributing to Buffett. I have never heard nor read that Lou Simpson stretches outside of GEICO to manage Berkshire's other float.
Moreover, there is a similar arrangement for Dun & Bradstreet (14.9% for National Indemnity reported, then 4.9% for GEICO) and I know that there were comments on DNB at the annual meeting from the chieftans themselves. Pretty specific too. Why would they pay less attention to a stake in GATX, especially when the fundamentals of the investments (unlocking value by corporate action) are so similar?
I could be mistaken, as the ways of Buffett are never entirely clear. Nevertheless, it appears that GATX has had a fire lit under it since Berkshire took a stake. Sold off 81% of its Logistics and now will sell off 100% of its Terminals, both pieces that have great asset and strategic values but generate little in operating profit. We're getting left with the cash-generating machines of the company and the investment arm.
Whatever the reason, the investment is panning out for the reasons I bought it.
With all due respect,
Mike |
