Warren Buffett has a traditional pattern to buy companies, he waits patiently, his insurance companies build up cash reserves, he buys a company at decent price which tends to have a monopoly or near monopoly and then waits till the company regains its growth as the stock rises. One of the cases which fit the Oracle fashion according to Tara LaChapelle and Liam Denning of Bloomberg News is Berkshire Hathaway Inc purchase of Oncor – an electrical distribution company in Texas.

Oncor has an interesting history its parent company is Energy Future Holdings Corp formerly known as TXU Corp and back in 2007 was one of the biggest leveraged buyout in history. This means a lot of debt and since 2008 energy prices have soared, collapsed and flatten out. Berkshire group owns a number of utilities in the Midwest and Oncor is expected to be integrated into them. The 10 million Texans who are customers will be reasonably happy the company is doing what it is supposed to do; the energy regulators will see Berkshire as a well capitalized company and will not fleece the customers and will continually invest in infrastructure.

In terms of Berkshire Hathaway stock a $ 9 billion dollar deal is wonderful, but with an estimated $100 billion in cash to buy acquisitions, the street was looking for something bigger to be announced.

Linking to dividend paying stocks, Oncor has 10 million customers and distributes electrical energy to those homes and businesses or is a plain utility. There is consistency in customers; consistency in energy usage; the regulators will give an inflation plus increase every year; the company can be boring but highly desirable to own. Boring often works.

There are more questions than answers, till the next time – to raising questions.