By-products account for 30–40% of the total product yield, but 20−25% of the kernel is processed without added value, even though maize germ oil and maize gluten meal have a higher value than starch in the US market (6). A wide variety of products can be made from wet-milled starch and by-products, while the use of the by-products in human food is limited.

Buffett in his letters used book value as an absolute return measure, the S&P 500 as his benchmark and reported relative return of book versus the S&P. Alpha is a simple formula:

Policosanols are a mixture of long-chain primary aliphatic alcohols mainly abundantly found in sugarcane. These compounds were identified and first approved as dietary supplements in Cuba and are commercialized in the Caribbean and South American countries (45). As mentioned earlier, the pericarp fraction of the wet-milled maize fibre contains policosanols. The maize pericarp has a policosanol content of 72.7–110.9 mg/kg (46). Physiologically they improve health by reducing blood lipid levels and platelet aggregation (15). Octacosanol (C28), triacontanol (C30) and hexacosanol (C26) are primarily reported policosanols that contribute to the lowering of serum cholesterol levels. The distillers' dried grains with solubles obtained after fermentation of dry milled maize by-products contain policosanols and can be converted into health-promoting functional ingredients (15).

The first rule in investment is don’t lose. And the second rule in investment is don’t forget the first rule, and that’s all the rules there are. If you buy things for far below what they’re worth, and you buy a group of them, you basically don’t lose money (Buffett 1985).

The residual maize germ meal left after the maize germ oil extraction is usually discarded but is rich in lecithin. Lecithin is a high-quality additive component, which exhibits advantageous interfacial properties and has aroused increasing interest as a natural emulsifier in the food, pharmaceutical and cosmetic industries (24). It comprises a concentrated mixture of phospholipids such as phosphatidylcholine, phosphatidylethanolamine, phosphatidylinositol, phosphatidic acid and phosphatidylserine (24). Lecithin is usually extracted through multi-stage solvent extraction (24). Phosphatidylcholine, phosphatidylethanolamine, phosphatidylinositol and phosphatidylserine are the significant phospholipids in maize that regulate brain function and are essential for cell membrane function (15). Phospholipids reduce lipid levels in the liver by disrupting sterol absorption in the intestinal cavity. The other phospholipid functions include stimulation of bile acid and cholesterol secretion. Phosphatidylinositol and serine reduce blood triglycerides, fatty liver, bipolar disorders and neurodegenerative diseases (15). Since maize germs are rich in phospholipids, they are a potential source for their development as a functional ingredient.

The wet-milled maize germ was reported to have 11–16% protein and more than 30% oil (18). The maize germ, derived from lab-scale wet milling, had a total tocol content of 8.5 mg/100 g, including 6.6 mg/100 g of γ-tocopherol and 1.9 mg/100 g of α-tocopherol. However, the tocotrienol content was not present in measurable amounts (19). At 16.8 mg/100 g, the phytosterol content in wet-milled maize germ was higher than in wet-milled sorghum germ (20).

Maize germ oil is the product of the mechanical expulsion/solvent extraction of oil from maize germ in the wet milling industry. The significant presence of phytosterol in maize germ oil makes it suitable for reducing cholesterol absorption. The phytosterols limit the absorption of cholesterol mainly in the intestinal area and thus effectively prevent cardiovascular diseases (15). The tocols (tocopherols and tocotrienols) are dietary antioxidants in maize germ oil which enhance its oxidative stability. They also protect against cell damage caused by free radicals and are helpful in maintaining food quality and health. Phenolic acids are about three times higher in cold-pressed maize germ oil than refined maize oil and can be used as functional ingredients (21). It is considered beneficial to health mainly due to its polyunsaturated fatty acids: oleic and linoleic acids. A high oil content (80−84%) in hybrids can improve the commercial prospects of maize germ oil (9).

We also have to factor in some context into how Buffett developed these views. When he worked for Graham-Newman from 1951 to 1956, Ben Graham often trafficked in “secondary issues” or stocks and bonds that traded in the “over-the-counter” market, not on organized exchanges like the New York Stock Exchange. These securities in many cases were extremely illiquid and the quoted price was often not an indication of the security’s true “intrinsic value.” In the Buffett Partnership, which Buffett ran from 1956 to 1969, much of the portfolio was in these types of illiquid securities. Buffett started buying Berkshire in 1964 and until the mid-1970 it traded in the “Pink Sheets.” In 1994 while I was in business school, I did a project for my security analysis class and analyzed Berkshire. When I went back to find historic prices, I notice that in the late 1960s and early 1970s, the stock didn’t trade for weeks at a time - it was extremely illiquid.

BerkshireHathaway share price class A

Functional carotenoids can be extracted from MGM by solvent extraction (hexane, acetone or ethanol) assisted with mechanical/physical methods (maceration, microwave or ultrasound), supercritical fluid (CO2) extraction or Soxhlet extraction (52). Carotenoids are excellent natural antioxidants used for maintaining food quality and human health (15). They improve eye health, prevent cancer and have anti-aging properties. Lutein and zeaxanthin are the carotenoids in the macula of the retina necessary for sharp and detailed vision. Studies have shown that they protect the eye from phototoxic damage, age-related macular degeneration and cataract formation (53). Lutein also inhibits cancer as a chemopreventive and suppressive agent (54). Extraction and utilization of carotenoids, mainly lutein and zeaxanthin, from maize gluten as dietary supplements or food ingredients is an exciting prospect as it is a rich and cheap source.

Industrially, the starch yield is about 60–70%, maize germ yield is about 7%, maize gluten constitutes 5–6%, maize fibre about 12% and steep water solubles about 7% (9). Starch is the primary product, but the by-product value can significantly affect overall plant economics.

Let us close this section with something in the nature of a parable. Imagine that in some private business you own a small share that cost you $1,000. One of your partners, named Mr. Market, is very obliging indeed. Every day he tells you what he thinks your interest is worth and furthermore offers either to buy you out or to sell you an additional interest on that basis. Sometimes his idea of value appears plausible and justified by business developments and prospects as you know them. Often, on the other hand, Mr. Market lets his enthusiasm or his fears run away with him, and the value he proposes seems to you a little short of silly.

Maize gluten meal (MGM) (corn protein) is a significant maize wet milling by-product containing at least 60% protein and is rich in health-promoting carotenoids (10). Maize protein is not the same as wheat gluten which causes coeliac disease. Maize contains albumins, globulins, prolamines (zein protein) and glutelin proteins (35%), with zein protein contributing more than 50%. A mixture of zein protein and glutelins, known industrially as maize gluten, are endosperm-specific (47). MGM contains adequate quantities of sulfur-containing amino acids, methionine and cysteine, involved in synthesizing intracellular antioxidants (10). The hydrophobic amino acid composition containing leucine, alanine and phenylalanine makes MGM proteins a good source of bioactive peptides (48). However, due to its imbalanced amino acid composition and low water solubility proteins, MGM is mainly marketed as a feedstock or discarded but not used for human food production (49). Nevertheless, maize gluten meal hydrolysis can provide peptides with antioxidant properties and can therefore be revalorized in food or pharmaceutical products (48, 49).

Steep solubles (corn steep liquor) are currently used as a nutrient-rich medium for antibiotic production (e.g. penicillin) and as a feed additive for livestock, aquaculture and poultry. Steep solubles are used as feed additive up to 12% of the diet dry matter without adversely affecting feed intake (10). Corn steep liquor, also known as condensed fermented maize extractives, is a high protein ingredient. It is often used as a maize gluten feed constituent but may be sold as 50% dry solids for cattle feeds or as a pellet binder (10). In some cases, maize germ is used directly to feed ruminants like Holstein cows or mid-lactation dairy cows. Maize gluten feed is a combination of the hulls and fibre fraction with steep water, maize germ meal and other process residuals. Maize gluten meal is the concentrated and dried maize protein obtained after the final separation from starch (11). The gluten/gluten meal is a rich protein source and also contains carotenoids. Maize gluten meal is the main feed for poultry and fish to achieve better pigmentation of egg and flesh. The maize fibre is recombined with steep liquor and used as poultry feed. The maize germ meal, maize fibre and steep solubles are recombined to produce the co-product called maize gluten feed used as animal feed (11). The industrial maize wet milling by-products are shown in Fig. S1.

BerkshireHathaway portfolio

Buffett started including a table of Berkshire’s performance (as measured by changes in book value) versus the S&P 500 at some point before 199615. Figure 5.1 shows the table which included percent change in per share book value, percent change in the S&P 500 and the difference.

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We report our progress in terms of book value because in our case (though not, by any means, in all cases) it is a conservative but reasonably adequate proxy for growth in intrinsic business value - the measurement that really counts. (Buffett 1983).

Benjamin Graham is considered “The Dean of Value Investing” and was Buffett’s professor at Columbia Business School. Upon graduation in 1951, Buffett worked for Graham until Graham’s retirement in 1956.↩︎

Corn fibre gum (CFG) is an alkaline extract of maize fibre comprised of arabinoxylan (hemicellulose) with high solubility and low viscosity (7, 25). CFG contains less than 5% proteins, phenolics (ferulic and p-coumaric acids) and lipids (27). The hemicellulose from maize fibre has properties similar to gum arabic and is often expensive and scarce. Hemicellulose is extracted with hot alkali, NaOH/Ca(OH)2 and bleached with hydrogen peroxide. CFG extracts were obtained as both acid-soluble and acid-insoluble fractions (25). CFG is an excellent emulsifier with improved physicochemical and nutritional properties due to the presence of phenolic acids, lipids and proteins (7). Additionally, it can be an adhesive, thickener, stabilizer and film former. Therefore, the viability of CFG application in expanded snacks, bakery goods, beverages, specialty foods, edible coatings, nutritional supplements and development of functional foods due to its health benefits can be studied.

Xylitol is a naturally occurring five-carbon sugar alcohol derived from xylose by reduction of the carbonyl group. It is used as a low-calorie sweetener in the food industry as it is helpful for people with diabetes and has bulking properties similar to sucrose (7). It does not cause tooth decay, it is slowly absorbed and has a lower glycaemic index (36). The chemical hydrogenation of xylose produces the major part of xylitol, usually obtained from the wood hydrolysate. Maize fibre can be a potential starting material as it has a xylose mass fraction (approx. 200 g/kg) similar to that of hardwood (7).

“The nice thing about it [the market] is this imaginary person out there – Mr. Market – is kind of a drunken psycho. Some days he gets very enthused and some days he gets very depressed. And when he get really enthused, if you happen to be trading stocks you sell to him and if he gets depressed you buy from him” (Gilbert and Farner 2015).

Conventionally, the wet milling process includes grain handling, steeping, separation and product recovery (Fig. 1 (6)).

There is an important distinction to be made between measures of absolute and relative performance because the effect on sentiment can be significant. Absolute return is simply the return generated over a given period. Relative return is the difference between absolute return and a benchmark such as the S&P 500. In finance, relative return is also called alpha. If a portfolio manager is “beating the market” or “producing alpha” that means his absolute return is more than the market. It should be noted that one can have negative absolute return but still generate alpha. For example, if the S&P 500 is down 20% but your portfolio is down 10% you have generated 1000 basis points of alpha. Yet another expression for alpha is “excess return.” I will use these interchangeably.

Maize gluten meal (MGM) contains diverse proteins, including albumins, globulins, glutelins and prolamins (zein protein). It is reported that the bioavailability of proteins of MGM can be remarkably enhanced by enzymatic hydrolysis. As a result, hydrolysates are obtained containing small peptides, especially dipeptides and tripeptides, that can be absorbed more efficiently than the intact proteins or the free amino acids (49). These protein hydrolysates are antioxidative and can effectively inhibit lipid oxidation in foods (55). Additionally, they can be used as food additives and for the preparation of edible coatings and packaging films.

A nutraceutical has a physiological benefit or protects against chronic diseases. Nutraceuticals have demonstrated beneficial effects in combating oxidative stress, chronic diseases and cancer.

Recently, corn peptides, a novel food derived from MGM through enzymatic hydrolysis or microbial fermentation, have been recognized for their various bioactive properties, including antioxidant activity (49, 60), improvements in lipid profiles and the ability to accelerate alcohol metabolism and protect against alcohol-induced liver injury (61). Maize peptides are distinguished as small in size, readily absorbable and safe for consumption. They have been reported to have many inherent bioactive properties such as anti-inflammatory, antioxidant, antihypertensive, hepatoprotective, alcohol metabolism-facilitating, anticancer, antimicrobial and DPP-IV (dipeptidyl-peptidase IV, EC 3.4.14.5) inhibitory activities (48, 49, 58, 60). Maize peptides from maize gluten meal show antihypertensive activity with strong ACE (angiotensin-converting enzyme) inhibitory activity (62). Many studies including a study on obese rats have examined the anti-obesity effects of maize protein hydrolysates and enriched peptides (49). In addition to these properties, some maize peptides also have antimicrobial or metal-binding activities (63). Antimicrobial peptides could find exciting applications in the field of food safety. For example, laboratory tests have shown that they protect fresh meat by inhibiting bacterial growth and blocking bacteria from adhering to meat surfaces (64).

BerkshireHathaway stock class B

So if Buffett didn’t gauge his performance with Berkshire’s stock return, what metric did he use? This isn’t a simple answer as it has changed a few times over the past 50 years. In the 1971 letter (the first one penned by him), Buffett uses operating earnings and return on equity to judge Berkshire’s performance. This was the metric he used until 1983 when he switched to measuring performance by changes in book value. In the 1983 letter he states the reason why. While he provides a longer explanation in the letter, here is a brief excerpt:

It is clear that for over 50 years, Buffett did not use Berkshire’s stock price to measure his performance. Rather, he used book value per share with the S&P 500 as a benchmark. We will use all of these metrics and see which ones, if any, correlate with sentiment.

Wet milling of maize yields 60−70% starch with more than 30% by-products (maize germ, gluten and fibre). These by-products are currently used as low-quality feed for poultry, farm animals, pigs and fish. Research studies confirm that they are rich in phytochemicals, mainly tocols, phytosterols, phospholipids, carotenoids, phenolic compounds and arabinoxylans (dietary fibre). Maize germ is rich in tocols, maize fibre is rich in phytosterols and dietary fibre, whereas maize gluten (protein) is rich in carotenoids and proteins. Some functional foods produced from by-products of maize wet milling include germ oil, fibre oil and gum, and protein hydrolysates and peptides from maize gluten. These functional foods are reported to have beneficial health effects like cholesterol-lowering, cardioprotective, hepatoprotective, anticarcinogenic and prebiotic properties. The by-products can be upcycled to high-quality nutraceutical sources. However, more scientific information about the phytochemical content of maize wet milling by-products is required. Sufficient research is also needed on the effects of technological interventions such as thermal, physical and enzymatic treatments on the nutraceutical quality of maize wet milling by-products to enable the development of functional food ingredients or dietary supplements. Overall, these by-products can establish a lucrative platform for industrial maize wet milling, the bioethanol industry, and farmers to economically transform the agricultural sector.

BerkshireHathaway

Maize germ is rich in amphiphilic molecules called phospholipids (14). They have hydrophobic fatty acid chains and hydrophilic units that occur in the cell membrane. They are therefore mainly found in all animal- and plant-based foods.

relative results = annual percent change in per-share book value - annual percent change in S&P 500 with dividends included

Defatted maize germ flour can be a nutritious component of food. In this context, flour was prepared from the wet-milled maize germ containing 30% protein with 5.9% lysine and a balanced ratio of other essential amino acids. Dried maize germs were first aspirated to remove the hull and flake it. The lipid was removed by solvent extraction and the final product contained significantly low lipid levels by a second solvent extraction of the flakes with 82:18 hexane/ethanol azeotrope via refluxing. The maize germ flakes were then ground in a grinder. The analysis showed that ground flour contained 2% ash, 18% starch and 0.6% lignin. The flour contained high amounts of dietary fibre (22–29% pentosans and 11–13% cellulose) (23). Defatted protein-rich maize germ flour can be a functional ingredient that is added with other types of flour to make chapatis or bread.

Bioactive peptides are encoded specific peptide fragments within the primary structure of proteins that remain inactive and have potential health benefits (56). After the protein hydrolysis, bioactive peptides are released that can modulate human metabolism, and also treat chronic diseases with discrete potency and fewer side effects such as toxicity. Enzymatic hydrolysis is predominantly used for the production of protein hydrolysates. Alcalase is used, for example, to produce bioactive peptides (57). Additionally, the integrated utilization of multiple enzymes or enzymes linked to other techniques was standardized for use in the hydrolysis of MGM (58). After hydrolysis, the isolation and purification procedure involves membrane separation (ultrafiltration or nanofiltration) or column chromatography (fast protein liquid chromatography, size-exclusion, and others). The obtained peptides are later characterized by sodium dodecyl sulfate-polyacrylamide gel electrophoresis, mid infrared spectroscopy or mass spectrometry techniques (59).

About 20% of the maize produced in India is used for food purposes, about 47% for poultry feed, 13% for livestock feed, 14% in the wet milling industry to obtain starch and 6% for export and industrial non-food products (4). The maize is mainly processed into food using dry and wet milling procedures. The wet milling process mainly concentrates on starch and its derivatives from maize. Starch undergoes various physical, enzymatic or chemical modifications in order to obtain various products. Some products are maltodextrin, dextrin, dextrose monohydrate, sorbitol, liquid glucose, high maltose syrup, dextrose syrup and anhydrous dextrose. These are used to produce beverages, bakery goods, pastries, meat, soups, sauces or baby food, textiles, dextrins, paper and pharmaceutical products (5). In addition to starch, the by-products corn steep liquor, maize germ, corn fibre and corn gluten (technical term for corn endosperm-specific proteins) are obtained. This review aims to provide current literature on the various studies of the nutraceutical composition of the by-products and the gap existing therein. It also focuses on the used opportunities and prospects for the valorisation of by-products to produce value-added components, functional food ingredients and nutraceuticals.

After steeping, the steep water is drained and dried to form condensed steep solubles. Then, the steeped maize kernels are coarsely ground to form a slurry using disk mills with intermeshed teeth to free the maize germ from endosperm and hull. Following this step, the slurry is pumped through a two-stage hydrocyclone system to recover the maize germ, which is further dried. The germ is usually delivered to oil mills, purified and sold for human consumption. Residual maize germ meal is used as a part of livestock feed. Once the germ is separated from the slurry, constituting maize fibre, maize starch and maize gluten, it is finely ground in the plate or single-disk mills. Maize fibre is extracted from the obtained fine slurry by screening and centrifugation, followed by washing and drying. From this defibred slurry, the maize starch and maize gluten are separated based on their differences in densities by the disk-nozzle centrifuge. Subsequent starch washing in hydrocyclones further removes the maize gluten. A mill stream thickener dewaters maize gluten, which is further passed through a vacuum belt filter and then dried by a ring dryer. Both starch and maize gluten are dried separately (6, 8).

Several dietary supplements are commercially available in the US market containing policosanol, usually derived from sugarcane (15, 46). Numerous scientific studies indicate that the daily consumption of 1–20 mg of policosanols effectively reduces insulin resistance, total blood cholesterol and LDL-cholesterol in older adults (>75 years) (15). Further research is needed to determine the policosanol components in maize fibre.

Now that we have sentiment data for Berkshire’s letters, it would be interesting to combine it with Berkshire’s performance data to see if there are any correlations. As I mentioned previously, it is unlikely that sentiment will be predictive of business or stock performance. At best, it is likely a coincident indicator. But that being said, what metric should we use to measure Berkshire’s performance? What performance measures might influence Buffett’s sentiment when he is writing the letters? The answer isn’t straightforward and we actually have a few different measures to look at.

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Figure 5.3 shows the correlation matrix for performance measures. The correlation of between Berkshire’s stock and the S&P 500 (both absolute return measures) at 0.51 is no surprise. Also, since a large portion of Berkshire’s book value historically has been in US equities, we would also expect book value to be correlated to the S&P 500 (also absolute return measures) which it is at 0.65.

Ferulic acid has many physiological functions, including antioxidant, antimicrobial, anti-inflammatory, antithrombotic and anticancer activities (33). Due to its antioxidant and antimicrobial properties, ferulic acid can be an excellent preservative. An expensive chemical process is used to produce commercial ferulic acid with environmental concerns, and therefore there is a need for natural sources to obtain this product. Maize bran contains good amounts of ferulic acid (30 g/kg) compared to rice bran oil (10–20 g/kg) and can therefore be an alternative source of ferulic acid (7). Unfortunately, ferulic acid in maize bran is bound to the cell wall, thus posing major challenges in its isolation. Experiments on the extraction of bound ferulic acid from maize bran have been conducted. After a more aggressive alkali (NaOH) treatment of maize bran to break the ferulate crosslinks, a high amount of ferulic acid was released into the solution (34). As a result, the corn fibre gum (CFG) and ferulic acid are co-solubilized and the ferulic acid is separated by precipitating CFG in ethanol (34). Another study demonstrated that thermal and enzymatic treatments release ferulic acid from maize bran (35). Obtaining ferulic acid from maize fibre is an attractive opportunity to transform the maize wet milling industry.

According to a previous study (18), the tocopherol content of oil extracted by Soxhlet extraction using n-hexane from unroasted wet-milled maize germ was 59.4 mg/100 g. The oil also had a high γ-tocopherol content of 41.9 mg/100 g, followed by 7.92 mg/100 g of β-tocopherol, 6.26 mg/100 g of α-tocopherol and 3.23 mg/100 g of δ-tocopherol (18).

Maize fibre oil is a unique oil extracted from finely ground maize fibre, usually with hexane, ethanol or supercritical CO2 (41). The total phytosterol content in maize fibre oil is estimated to 7939 mg/100 g compared to 840 mg/100 g of maize germ oil (42), but the yield of maize fibre oil obtained with hexane is about 2–3% (41). The maize fibre contains starch, hemicellulose and cellulose, which must be removed to improve maize fibre oil yield. After treatment with dilute acids and enzymes, the phytosterol mass fraction in maize fibre increased from 19.8 to 1256.2 mg/g (26).

BerkshireHathaway stock Class A

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Xylooligosaccharides (XOS) are potential prebiotics, partially hydrolyzed, water-soluble xylan fragments obtained from maize fibre by enzymatic or high-temperature treatment (7). Microbial xylanases are used for the enzymatic degradation of maize fibre. In contrast, hydronium ions and organic acids are used for high-temperature treatment at 160–220 °C to partially hydrolyze heteroxylan polymers and yield soluble hydrolysates of XOS (31). Preliminary studies of the use of XOS structurally similar to maize fibre in the diet of older Japanese men showed an increase in the number of bifidobacteria after three weeks of their consumption (32). In addition to its prebiotic activity, the XOS may exhibit antioxidant activity due to the bonding of ferulic acid ester moieties to the solubilized oligosaccharides (7).

Buffett often tells the story of “Mr. Market” with a little more color than the original. Here is what Buffett said in a 2015 interview.

Maize (Zea mays L.), which belongs to the family Gramineae and genus Zea, is a staple food in many places worldwide and the third most important crop after rice and wheat (1). World maize production is currently 1136 million metric tonnes (MMT) and in India, it is 30.2 MMT (2). Due to its diverse uses as a food crop, animal feed and important raw material, maize is a crop that is of vital importance around the world. It is used to manufacture various food and industrial products such as starch, animal feed, sweeteners, beverages, oil, glue, industrial alcohol and ethanol for fuel (3).

Dietary fibre is the main constituent of maize fibre and it assists in the proper functioning of the digestive system by acting as a stool bulking agent (29). Arabinoxylans (both soluble and insoluble) can improve colon function, prevent diabetes mellitus, cardiovascular diseases, some cancers and immunological disorders (7). They have a robust prebiotic effect, reduce gut infections, prevent colon cancer and increase the amount of intestinal short-chain fatty acids known to reduce blood cholesterol (7, 29). Arabinoxylans have been used to produce functional gluten-free bread with improved properties (7).

Maize (corn) consists of germ, endosperm and pericarp, with different chemical compositions. During wet milling, the maize is disintegrated into the main product starch and by-products, including maize germ, maize fibre and maize gluten (the technical term for maize/corn endosperm-specific proteins and not the same as wheat gluten). These by-products are used as low-value animal feed products. The maize germ contains high amounts of tocols and phospholipids, the maize gluten is rich in carotenoids and the maize fibre fraction is rich in phytosterols and complex carbohydrates. Each by-product has a potential to serve as a precursor in the manufacture of functional food ingredients or nutraceuticals that have antioxidant, anti-inflammatory, hypocholesterolaemic, hypolipidaemic and hypoglycaemic properties. These food ingredients/nutraceuticals can be obtained through physical, chemical or enzymatic processes. Some nutraceuticals and food ingredients with market potential include maize/corn fibre gum, oil, arabinoxylans and xylooligosaccharides from maize fibre; maize germ oil and phospholipid ester from maize germ; and carotenoids and oligopeptides from maize gluten. This review focuses on current and prospective research into the use of maize germ, maize fibre and maize gluten in the production of potentially high-quality food ingredients or nutraceuticals.

The chart in Figure 5.6 shows the regression of sp500 on alpha_book. What this shows is that Buffett tended to generate huge alpha in years when the S&P was negative and less alpha when the S&P was positive.

The authors thank the ICMR (Indian Council of Medical Research), New Delhi, India, for the funding support through the Senior Research Fellowship. The authors also thank CSIR-CFTRI, Mysore, and AcSIR, Ghaziabad, for the provided facilities.

伯克希尔哈撒韦

Dietary fibre consists of insoluble non-starchy polysaccharides present in maize fibre that helps the physiological processes in the grain (29). The total dietary fibre mass fraction was 52.6–73.5 g/100 g in wet-milled maize fibre (30). Based on previous studies, maize fibre is a potential source of arabinoxylans, a typical dietary fibre (25). The soluble fibre components of maize are arabinoxylans, fundamentally situated in pericarp cell walls, where they support the kernel structurally and functionally. These arabinoxylans have arabinose side chains esterified with phenolics like ferulic acid and exert antioxidant properties (29).

The use of maize wet milling is increasing, mainly to obtain compounds used in industrial ethanol production. Biofuel (ethanol) production from corn in the US and Brazil and the conversion of food into fuel is a cause for concern (12). There will be a justification for the biofuel industry if it adds value to by-products for functional foods. Bioethanol production from corn in the US is growing rapidly as an alternative to increasing gasoline prices and the national renewable fuel program (13). Due to increased bioethanol production by maize wet milling, the volume of the by-products has also grown substantially, creating a need for the ethanol industry to find new uses for these by-products and an opportunity for the food ingredient and nutraceutical manufacturers (13).

Phytochemicals from the by-products mentioned above are usually associated with antioxidant and antiradical activities, antimutagenesis, anticarcinogenesis, antimicrobial, anti-inflammatory activities, antilipidaemic and hypocholesterolaemic properties. These phytochemicals may be partially degraded during storage, milling and processing. These aspects have to be examined to study the effects of processing on the nutraceutical quality of the food ingredients. Nevertheless, the maize wet milling by-products are rich in nutraceuticals. Nutraceuticals are nutritional supplements containing concentrated bioactive components from a specific food, incorporated into a non-food matrix, that promote health, applied in dosages that may exceed those obtained from regular food (65). Table 1 (9, 10, 12, 19, 20, 30, 50, 66-73) shows the phytochemical/nutraceutical composition of maize wet milling by-products. It can be seen that the studies on phytonutrients in maize wet milling by-products are scarce and therefore worth investigating.

Maize fibre oil has recently been of interest due to high content of ferulate phytosterol esters, the most predominant being sitostanyl ferulate (42, 43). Additional animal studies have confirmed its cholesterol-lowering effects (43, 44).

Low phytosterol mass fractions of 4.8 mg/100 g were detected in the wet-milled gluten (20). Phytochemically, yellow maize contains 74–86% carotenoids (primarily xanthophylls) in the endosperm trapped in the gluten matrix (1). The MGM contained around 195–491 mg/kg xanthophylls (lutein, zeaxanthin and cryptoxanthin), whereas the feed maize kernels had only 40.1 mg/kg xanthophylls (10, 50). The carotene mass fraction of MGM was 49–73 mg/kg, while it was 22 mg/kg in the feed maize material (10). These studies indicate that xanthophylls and carotenes are concentrated in the MGM obtained from the maize wet milling. Zeaxanthin is a significant component in cooked maize compared to other foods such as spinach, lettuce and parsley (51). MGM is characterized by high protein and energy content making it a potential high energy source of nutrition.

Again, while one could eyeball the matrix and see correlations, using hierarchical clustering order in the corrplot package really makes this relationship jump out. We see the correlation between the S&P 500 and book value (absolute) in one cluster in Figure 5.4. In the other cluster, we see correlations of Berkshire stock price (absolute) and alpha of book as well as alpha of stock over S&P 500 (both relative). What is interesting is the negative correlation of alpha of book versus the S&P 500 (relative).

The phytosterol content of the same maize germ oil mentioned above was 713.9 mg/100 g with 504.64 mg/100 g sitosterol, 155.8 mg/100 g campesterol and 53.3 mg/100 g stigmasterol (18). In a comparative study (22), the tocopherol content in maize germ oil was around 28 times higher than in maize fibre oil.

BerkshireHathaway stock class a Chart

Vanillin is an essential flavour and aroma compound used in the food, pharmaceutical and cosmetic industries. It is obtained from properly cured vanilla (Vanilla planifolia Andrews) pods with a mass fraction of 10–30 g/kg. Vanillin is also found in agricultural products, including pine, tobacco and citrus fruits (7). In maize bran, vanillin mass fraction is about 55 g/100 g (39). The demand for vanillin exceeds its production from vanilla beans. Many researchers have turned to the microbiological conversion of ferulic acid to vanillin (40).

A procedure involving Aspergillus niger was used to produce vanillin from ferulic acid obtained from autoclaved maize bran (40). Recently, one process used pressurized subcritical water (low polarity water) to convert ferulic acid to vanillin by breaking its aliphatic double bond (39). It is also known that maize fibre contains sufficient amounts of ferulic acid and, therefore, can be used for vanillin production.

An analysis of Berkshire’s performance is beyond the scope of this project. The only reason for discussing it is the effect it might have on sentiment. The purpose of these letters is to communicate to shareholders the results of the previous year and the outlook going forward16. Berkshire usually releases its year end letter in the last week of February. The sentiment valence in the letter is obviously influence heavily by the performance in the previous year and the outlook going forward. But outlook could also be influenced by developments between the year end and the date the letter is released. It would be interesting to see if the performance of the S&P 500 between January 1 and February 28 is correlated. This might influence outlook at this is what the market is doing while Buffett is writing the letter. We could also look at changes in book value in the first quarter which ends March 31st which would give us a window into how the businesses are performing while he is writing the letter.

Data were taken from the 2018 (just book value) and 2019 annual report (stock and market return). These were copied to an excel spreadsheet and imported into a dataframe perf_data using this code. I used the package kable and kabelExtra to make the html tables as shown in Table 5.1.

Adequate research and commercial interest in improving the existing by-products can help identify new industrial uses or nutraceuticals from by-products (6). Traditionally these by-products of maize wet milling are mainly used as animal feed, which has lower value. Therefore, specific research is needed to study and improve the use of these by-products. Nutraceuticals and functional food ingredients are highly valued, profitable and offer economic relief to farmers by increasing income. It would benefit the wet milling industry and consumers by reducing fuel and food costs.

You might think the obvious choice is the annual return of Berkshire stock. But this actually wasn’t what I thought of first. You see, Buffett historically didn’t really measure himself by the moves in Berkshire’s stock price. He feels that the stock market is “…there to serve you” and that “…you can ignore it…” Someone who thinks like this wouldn’t judge themselves by stock performance. Buffett views on the irrationality of the stock market can be traced to the end of Chapter 8 of The Intelligent Investor (first published in 1949) where Ben Graham14 talks about “Mr. Market,” his personification of the stock market:

The maize germ makes up 9–11% of the kernel mass, 80−84% of the total kernel oil is located in the maize germ, 12% in the aleurone layer and 5% in the endosperm (9). Characterized by a 39–47% lipid content, the maize germ has an 18−19% protein content and starch content of 8% (9, 14). The health-beneficial phytochemicals present in maize germ are antioxidant tocols, cholesterol-lowering phospholipids, phytosterols and policosanols (15). Weber (16) found 63–91% of tocols in the maize germ and tip cap, 3−11% in the floury endosperm and 6–26% in the horny endosperm. In the case of dry milling, the obtained germ contains 46.3 mg/100 g of total tocols (17). The phospholipid content in the maize germ of dissected kernels of high amylose maize (amylomaize), LG-11 hybrid maize and waxy maize was 1224, 1453 and 1363 mg/100 g, respectively (14). The serum lipid-reducing policosanol content in the maize germ was 1.93–3.71 mg/100 g (15).

This table demonstrates that the maize wet milling by-products are rich in phytochemicals and can be transformed into functional food ingredients or nutraceuticals. Functional food ingredients/nutraceutical supplements are available from various expensive sources, such as the carotenoids from marigold flowers, policosanols from sugarcane or beeswax. However, the by-products of the maize wet milling process are an alternative source for manufacturing nutraceuticals and functional food ingredients.

I wanted to explore the negative correlation of -0.55 between alpha_book and the S&P 500. As a reminder, book value is the primary measure Buffett uses to gauge his performance and he uses the S&P 500 as a benchmark so his performance would be:

T.S. Deepak collected, analysed and interpreted the data and drafted the article. P.A. Jayadeep conceptualised and designed the work, analysed and interpreted data, critically revised and approved the final version to be published.

Maize fibre is a by-product with a second high yield after starch in the maize wet milling process. It is commonly known as ‘white fibre’, a mixture of fibres of the pericarp (bran) and hull (coarse fibre) and fibre of the maize germ cell wall and endosperm (fine fibre) (25). The wet-milled maize fibre consists of complex carbohydrates (non-starchy polysaccharides), composed of 40% hemicellulose, 25% starch, 12% cellulose, 10% protein, 3% oil and 10% other substances such as phenolic antioxidants, ferulate phytosterol esters, lignin and ash (26). The hemicelluloses (arabinoxylans and β-glucans) are reported to have antioxidant activity (27, 28). Phytochemicals, mainly phytosterols and tocopherols, are also present in maize fibre. Hexane extract of maize fibre was found to contain a phytosterol mass fraction of 19.3 mg/100 g, which was the highest among the wet-milled by-products compared to maize germ (16.8 mg/100 g) and maize gluten (4.8 mg/100 g) (20). The tocols were extracted using ethanol from wet-milled maize fibre (lab-scale) and the total tocol levels were observed to be 5.4 mg/100 g (19). The homologues, γ-tocopherol (1.47 mg/100 g), α-tocopherol (0.73 mg/100 g), α-tocotrienol (1.29 mg/100 g) and γ-tocotrienol (1.98 mg/100 g) were found in the lab-scale wet-milled maize fibre fraction (19).

In an experiment employing yeast, xylose is initially hydrolyzed with dilute acid or enzyme treatment in a cost-effective step. The resulting syrup is then fermented by a yeast Candida tropicalis and treated with activated charcoal to remove xylitol inhibitors and increase xylitol yield (37, 38).

The bioactive components are intrinsic to by-products: maize germ is rich in phytosterols and tocopherols, maize gluten is rich in carotenoids and proteins, and maize fibre is rich in phytosterols and dietary fibre, as mentioned above.

The kernels are cleaned, separated according to their quality and conveyed to steeping tanks. In this process, maize kernels are steeped in SO2 (0.2%) and lactic acid (0.5%) solution for 24 to 48 h to facilitate kernel hydration and leaching, and induce mechanical stress for efficient separation of the kernel components (6). Initially, lactic acid hydrates the kernels followed by leaching of the soluble materials into the steep water. The soluble carbohydrates of the maize are fermented to produce lactic acid. Later, water uptake results in the swelling and loosening of the connecting cells between the component parts. When SO2 starts reacting with the mixture, it restricts fermentation and facilitates starch separation from the protein matrix in the endosperm (6). Consequently, the components are then sequentially separated through industrial processes to obtain the end products.

Some functional food ingredients containing nutraceutical compounds have been developed from maize wet milling by-products. Table 2 (10, 14, 15, 20, 22, 27, 42, 43, 45, 46, 49, 53, 54, 60, 62, 74-80) shows the nutraceuticals and functional food ingredients from maize and their beneficial effects.

Finally, we combine the performance data with sentiment data to produce a dataframe perf_and_sentiment as shown in Table ??

The corn wet milling industry started in 1844 in the United States of America by Thomas Kingsford of the William Colgate and Company in Jersey City, NJ, using a new alkali process to extract starch from maize (5). At the initial stages, the maize industry discarded the maize fibre, maize germ and protein obtained during the processing. Over time, however, the wet milling process gradually changed so the non-starch components have found applications in animal feed, oil, polymer and pharmaceutical industries (5).

Maize wet milling involves the process of various physical, chemical, biochemical and mechanical operations to separate the components of the maize grain (germ, steep liquor, starch and maize gluten) into valuable products that are far more worthy than the raw grain (6). Maize starch and maize germ oil are the main profitable products of the maize wet milling industry (7). With starch (60- 70%) being the main product, the by-products include steep liquor/solubles, maize germ, maize fibre and maize gluten (6).

As a value investor, this kind of makes sense, you outperform over time by not loosing money. As shown in Table 5.2, Berkshire only had a decrease in book value twice - in 2001 and 2008 - and in both years did better than the S&P 500.

If you are a prudent investor or a sensible businessman, will you let Mr. Market’s daily communication determine your view of the value of a $1,000 interest in the enterprise? Only in case you agree with him, or in case you want to trade with him. You may be happy to sell out to him when he quotes you a ridiculously high price, and equally happy to buy from him when his price is low. But the rest of the time you will be wiser to form your own ideas of the value of your holdings, based on full reports from the company about its operations and financial position (Graham 1973).

Articles from Food Technology and Biotechnology are provided here courtesy of Faculty of Food Technology and Biotechnology University of Zagreb

The bottom line is that given his education and experience, we actually wouldn’t expect Buffett to use Berkshire’s stock price as a measure of performance.