Schroeder: More on Net Jets

[dcollon]

Not sure what part we are in anymore (i think somewhere around 20), but the following is more from Schroders blog

 

http://www.aliceschroeder.com/blog/sokol-threatens-shut-down-netjets

 

[zarley]

Schroeder's devolution from author to inflammatory shit flinger has been spectacular.

 

Her headline is Sokol threatens to shut down NetJets.  Which is bullshit.  Nowhere in the email she posted does he threaten to shut down NetJets. 

 

I can only guess that this part of Sokol's letter is what is construed as a threat:

We have set the stage for future growth and expansion, and we are positioned to grow. If we are unable to do so because of continued conflict and negative campaigns, we will unfortunately be forced to redirect our plans. You have my commitment that I will do my best for NetJets’ future, and I hope that I will have the same commitment from each of you. As always, please do not hesitate to contact me with any thoughts, questions, or concerns.

From that she gets Sokol threatens to shut down NetJets?  Really?  She's lost it.

[shalab]

As a shareholder, I would rather netjets shutdown rather than continue to waste capital. What I am seeing is that it is profitable finally and hope it can continue to generate adequate returns for the owners.

[Grenville]

Not sure what part we are in anymore (i think somewhere around 20), but the following is more from Schroders blog

 

http://www.aliceschroeder.com/blog/sokol-threatens-shut-down-netjets

 

 

dcollon,

 

Thank you for posting the letter. I don't care much for Alice's commentary, but the letter provides us insight on Sokol and how he's dealing with a sticky situation at Netjets. I see nothing wrong in his letter if it is real. He's laying out the facts in a clear manner and those current employees are undermining the brand and the business. I like how he's clearly identified Berkshire's initial investment.

[Guest ValueCarl]

Zarley, I agree with you entirely except for some more insight into what this really means.

 

For Buffett, "The Indefensible" capital drain which catered to HIS FLYING EGO over something that Walter Scott told him many years ago couldn't be "justified," has played out its course. Warren has finally reached his limit, or pain thresh hold for enduring capital stagnation.

 

The other thing which shouldn't be missed is the fact that, Buffett in addition to Sokol in this business case, don't specialize in AIRLINE businesses, and have lost by agreement after years of frustration, their so called, "business experts."

 

Outside of insurance or finance, Warren Buffett is the first to laugh off to everyone listening, "I can't run those businesses."

 

If the new baton carrying employees aren't buying into keeping this ship running according to the types of financial engineering these money masters want to incorporate, they will simply SELL the BUSINESS. Warren can buy fractional ownership from his competitor after wards, if he doesn't cut a long term based upon his remaining lifespan, sweetheart deal as part of the sale to whichever buyer shows up!

 

Finally, without a doubt, Alice does have the proverbial hard on for Mr. Buffett, etal. I can only wonder what he attempted doing to her when they spent time together. I do remember a shameless attempt by him to force Liz ?, a former cnbc anchor doing a special on him, to purchase jewelry at Borsheim's in Omaha. He can be quite a pushy, persistent old hoot owl when he wants his way, I'm sure. When pushiness is perceived as annoying, it becomes a turn off for many. 

 

 

[stahleyp]

Do you guys know what caused the fallout between Bufffett and Schroeder? I've tried to find information, but didn't find out much.

[shalab]

I guess Buffett didnt endorse her book and pretty much ignored her after the book came out. She was expecting Buffett to say great things about her as a writer? Her expectation was to become a writer with great renown which didnt happen. Just IMHO.

 

[Parsad]

I think the stuff about Susan Buffett and the kids really sparked it.  From what I understand from people close to the situation, Buffett was not pleased at all about the shots at his family.  Other authors I spoke to in Omaha were also very shocked by some of the stuff she put in there about his family and their personal life.

 

Shots at him, that's one thing, but shots at the people who had no choice in his celebrity...he was really put off.  Mind you, have you heard Buffett say a single thing about the situation?  Nope, but you hear Schroeder spouting off everywhere.  Cheers!

[Guest longinvestor]

No matter what Schroeder says, the key point is that Netjets needs to preserve its' marquee convenience, service and safety image. Otherwise it will be just anothe airline biz which WEB hates and avoided it like the plague since Eastern.

 

Behind all the noise it would really take some more time for the jury to decide if there was an investment case or was it a mistake? After all Sokol has just managed to turn it around less than a year ago. Sokol has rightly laid it on the line here and the internal bickering has to be a huge distraction. Calling spade a spade, all the headline risk being a Berkshire company is not helping here either. Something the detractors are playing to the hilt. Just for the moment, it would have been great for Netjets to not have the Berkshire subsidiary baggage and be a self standing niche player.

 

 

 

[Guest ValueCarl]

Seems like there is "buyers remorse" on both sides of the aisle. Buffett not speaking, says much too. These fallibility factors(FF's) should not be missed inclusive of them being attributed to the Greatest Investor walking Mother Earth,  who has ever lived, and quite frankly, who will ever live. Sadly, many times, FF's come with FU's in the human kingdom. People forget things tied to reasonable conduct and behavior once certain levels of comfort have been established in conjunction with sharing intimate thoughts and experiences.

 

If there was a mistake made by Mr. Buffett, it may have been his trust for agreeing to not interfere with parts of the content she provided, which he didn't deem appropriate. He should have maintained final say on what was printed, in order to avoid exposing himself to "the vagaries of Mr. Market."

 

One would think he might have learned from the "non compete clause" he once neglected to incorporate into his purchase contract with Mrs. Blumkin.

 

Then again, who could possibly calculate that a woman of her years, being paid greater than her own expectations for the value of the business, would have went on to do such a thing!

 

Indeed, LIFE is UNPREDICTABLE! imo  

[Buffetteer]

Parsad,

 

I think you are bang-on as to the reason for the fallout. I also spoke to an author at an airport on my way to the AGM last year and she echoed the exact same sentiments as you when I asked her about Buffett & Schroeder. I think she is perceived as a very childish and petty person.

 

And not only has Buffett not said a single thing about the incident, he invites her back every year to the AGM so she can sign/promote her book at the Bookworm.

 

That, I think, is a perfect example of the difference in the quality of their character.

[wiessman]

I think you got it right Buffeteer

 

An empty trash can makes the most noise

[dual_bid]

I think you're all way too harsh on A.S.. She's a woman that decided to write on things she found from close encounters with WB friends and family (that not one of you was privy to). I guess she thought about it hard... knowing 90% of WB's disciples, including the master, would not approve, and still went on with her truth. All in all, she wrote his biography from her point of view. I didn't like the personal touch of the snowball biography, but hope that the book she now writes - a WB investment book, with plenty of practical examples from his past - will be different and interesting. Lastly, I ascribe fully to her interpretation of the Sokol letter.

[twacowfca]

I think you're all way too harsh on A.S.. She's a woman that decided to write on things she found from close encounters with WB friends and family (that not one of you was privy to). I guess she thought about it hard... knowing 90% of WB's disciples, including the master, would not approve, and still went on with her truth. All in all, she wrote his biography from her point of view. I didn't like the personal touch of the snowball biography, but hope that the book she now writes - a WB investment book, with plenty of practical examples from his past - will be different and interesting. Lastly, I ascribe fully to her interpretation of the Sokol letter.

 

 

You mean: Alice really is Alice, and not The Red Queen!