Warren Buffett's 'Buy American' - One Year Later
Published: Monday, 19 Oct 2009 | 7:00 AM ET
Text Size
By: Alex Crippen
Executive Producer
One year ago, even though the financial world was "a mess" and would probably get messier, Warren Buffett wrote in the New York Times that he was buying U.S. stocks to lock in a "slice of America's future at a marked-down price."
He cited his "simple" rule: "Be fearful when others are greedy, and be greedy when others are fearful."
One year later, the benchmark S&P 500 is 14.9 percent higher than it was the night before Buffett's "Buy American" op-ed (read the complete article) was published on Friday, October 17, 2008.
But that's beside the point.
In his op-ed, Buffett makes clear he wasn't trying to "time" the market. He wrote he didn't have the "faintest idea" whether stocks would be higher or lower one month, or one year later. Both qualify as short-term for Buffett. He was looking five, ten, or twenty years into the future.
And it's a good thing Buffett wasn't trying to pick a short-term bottom, because his timing was awful. The S&P continued to drop that fall and winter, closing at its bear-market low of 676.53 on March 9.
If you had been smart or lucky enough to go all-in on the S&P on that day, you'd be up 60 percent now.
But Buffett's key point is that very few of us are going to be that smart or that lucky. Those waiting for the perfect moment run a big risk of coming in too late, especially if they're looking for hints that things are getting better.
The Oracle of Omaha won't make predictions about specific stock market moves, but he does have one strongly-held prophecy about the future: "The market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over."
четвъртък, 22 октомври 2009 г.
GE: Still a Bargain 4 comments
October 21, 2009 | about: BRK.A / CMCSA / GE
Alexander Wissel
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The country’s largest mutual fund, also know as General Electric (GE), is starting to see renewed interest from small investors and institutional traders alike.
GE is also the ultimate recovery play on the United States and the global economy.
Through General Electric’s fourteen divisions, the company reaches into almost every aspect of our lives. From the trains, planes and automobiles that move people and products, to consumer goods, technologies, financial services, utilities and entertainment, it has a hand in just about every major industry around the world.
But you don’t need to know everything about the intricacies of each division. You just need to know that, if separated, each unit would be a leader in its industry.
These multiple units make GE incredibly diverse and more like a mutual fund than a single company. It also leaves GE more prone to broad economic cycles. This is a good thing, because as the economy turns the corner, GE will as well.
Here’s why GE is a great buy under $16, why the street still hasn’t jumped back in, and what they simply can’t seem to get through their heads.
General Electric’s Capital Finance Problem
GE has been trading in a range tight range since August. And, while it has more than doubled in value from its March lows, it sits well off its 2007 high of $41.
There are a number of reasons for the General’s situation, but the biggest reason is debt. Specifically the debt from GE’s Capital Finance unit, which has been plagued by concerns it would drag the company down with it.
While the impact of their finance unit was severe – a major concern earlier this year – the likelihood of a full-blown collapse now seems improbable. In fact, GE has been shoring up its balance sheets with asset sales and capital infusions. The real estate division is now the only unprofitable unit and, as Immelt reported, they have funded those debt obligations for almost all of next year.
And GE isn’t done yet. CEO Jeff Immelt has been very public about his desire to turn around the struggling NBC Universal unit, over the course of sales negotiations with Comcast (CMCSA) and could possibly sell its entire interest in the next few years. GE owns 80% of NBC.
A few of the highlights from the webcast last week included increased cash flow from operating activities to $4.4 billion and a shrinking of the Finance unit’s balance sheet – and it’s potential negative impact on the stock. In addition, its backlog of industrial products now sits at $174 billion – that’s a lot of product to produce, and income yet to be booked.
Why GE Is a Great Buy Right Now
At the height of the market mayhem last year, the world’s greatest investor – Warren Buffett, through Berkshire Hathaway (BRK.A) invested $3 billion as a measure of confident in GE and its directors. He received a 10% interest payments and warrants to purchase over 134 million shares of GE stock at $22.25. These options expire in 2013.
At the current market price, that’s a 41% increase in the stock.
And it gets even better. While GE has cut its dividend, which angered a lot of shareholders and dividend funds, at 0.10 a share it’s still a respectable 2.55%.
GE is going to fly under the radar for a while as it siphons large amounts of its cash flow to pay down that finance unit debt and reduce its loss exposures. This will take some time. In the meantime, earnings will look like they’re in park. The reality will be like a motorcycle that's rear wheel drive has been held off the ground while at full speed. When the bike is lowered back down – in our case, when the Capital Finance unit’s cash siphoning stops – this stock will take off.
As these capital obligations from the finance unit clear up, it won’t be too improbable to see GE’s dividend start creeping back up. However, GE’s story doesn’t stop with its Capital Finance unit. Here are four more reasons this stock is set to move higher.
Stimulus. The full impact of the stimulus hasn’t been seen yet in the United States or in many of the countries around the world. These efforts should start to take affect in the Q4 and into 2010. GE’s focus on infrastructure and energy are going to pay off big for them.
Green energy. Shipping roughly 1000 wind turbines for each of the last two years puts GE in a good place for domestic energy initiatives. While wind turbines won’t reignite this stock by themselves, their existence, along with the rest of GE’s green energy programs and products give them a leadership position in the sector.
Global economies. Strong emerging markets positions around the world. Because of their global market approach to customers, it makes GE a great way to capitalize on growth around the world without investing in specific economies.
Exchange rates. GE books a large amount of total revenues from overseas. With the dollar in a free fall not seen since earlier this year, a weak dollar helps income earned overseas impact the bottom line better.
After factoring in these factors, an improved economic outlook and Buffett’s investment, one of the biggest reasons that General Electric's stock will climb much higher is simply the return of the baby boomers to the markets. There are still trillions sitting in Treasuries earning little, if no interest.
As these "soon to retire-es" look to rebuild their portfolios, they will be looking for dividend-bearing stocks that can offer them security, income and the potential for price appreciation. GE fits the bill for all three.
And at any price under $16 a share, it’s a bargain.
October 21, 2009 | about: BRK.A / CMCSA / GE
Alexander Wissel
Follow
2
Followers
0
Following
About this author:
Alexander Wissel's articles on Seeking Alpha
Font Size:
TweetThis
The country’s largest mutual fund, also know as General Electric (GE), is starting to see renewed interest from small investors and institutional traders alike.
GE is also the ultimate recovery play on the United States and the global economy.
Through General Electric’s fourteen divisions, the company reaches into almost every aspect of our lives. From the trains, planes and automobiles that move people and products, to consumer goods, technologies, financial services, utilities and entertainment, it has a hand in just about every major industry around the world.
But you don’t need to know everything about the intricacies of each division. You just need to know that, if separated, each unit would be a leader in its industry.
These multiple units make GE incredibly diverse and more like a mutual fund than a single company. It also leaves GE more prone to broad economic cycles. This is a good thing, because as the economy turns the corner, GE will as well.
Here’s why GE is a great buy under $16, why the street still hasn’t jumped back in, and what they simply can’t seem to get through their heads.
General Electric’s Capital Finance Problem
GE has been trading in a range tight range since August. And, while it has more than doubled in value from its March lows, it sits well off its 2007 high of $41.
There are a number of reasons for the General’s situation, but the biggest reason is debt. Specifically the debt from GE’s Capital Finance unit, which has been plagued by concerns it would drag the company down with it.
While the impact of their finance unit was severe – a major concern earlier this year – the likelihood of a full-blown collapse now seems improbable. In fact, GE has been shoring up its balance sheets with asset sales and capital infusions. The real estate division is now the only unprofitable unit and, as Immelt reported, they have funded those debt obligations for almost all of next year.
And GE isn’t done yet. CEO Jeff Immelt has been very public about his desire to turn around the struggling NBC Universal unit, over the course of sales negotiations with Comcast (CMCSA) and could possibly sell its entire interest in the next few years. GE owns 80% of NBC.
A few of the highlights from the webcast last week included increased cash flow from operating activities to $4.4 billion and a shrinking of the Finance unit’s balance sheet – and it’s potential negative impact on the stock. In addition, its backlog of industrial products now sits at $174 billion – that’s a lot of product to produce, and income yet to be booked.
Why GE Is a Great Buy Right Now
At the height of the market mayhem last year, the world’s greatest investor – Warren Buffett, through Berkshire Hathaway (BRK.A) invested $3 billion as a measure of confident in GE and its directors. He received a 10% interest payments and warrants to purchase over 134 million shares of GE stock at $22.25. These options expire in 2013.
At the current market price, that’s a 41% increase in the stock.
And it gets even better. While GE has cut its dividend, which angered a lot of shareholders and dividend funds, at 0.10 a share it’s still a respectable 2.55%.
GE is going to fly under the radar for a while as it siphons large amounts of its cash flow to pay down that finance unit debt and reduce its loss exposures. This will take some time. In the meantime, earnings will look like they’re in park. The reality will be like a motorcycle that's rear wheel drive has been held off the ground while at full speed. When the bike is lowered back down – in our case, when the Capital Finance unit’s cash siphoning stops – this stock will take off.
As these capital obligations from the finance unit clear up, it won’t be too improbable to see GE’s dividend start creeping back up. However, GE’s story doesn’t stop with its Capital Finance unit. Here are four more reasons this stock is set to move higher.
Stimulus. The full impact of the stimulus hasn’t been seen yet in the United States or in many of the countries around the world. These efforts should start to take affect in the Q4 and into 2010. GE’s focus on infrastructure and energy are going to pay off big for them.
Green energy. Shipping roughly 1000 wind turbines for each of the last two years puts GE in a good place for domestic energy initiatives. While wind turbines won’t reignite this stock by themselves, their existence, along with the rest of GE’s green energy programs and products give them a leadership position in the sector.
Global economies. Strong emerging markets positions around the world. Because of their global market approach to customers, it makes GE a great way to capitalize on growth around the world without investing in specific economies.
Exchange rates. GE books a large amount of total revenues from overseas. With the dollar in a free fall not seen since earlier this year, a weak dollar helps income earned overseas impact the bottom line better.
After factoring in these factors, an improved economic outlook and Buffett’s investment, one of the biggest reasons that General Electric's stock will climb much higher is simply the return of the baby boomers to the markets. There are still trillions sitting in Treasuries earning little, if no interest.
As these "soon to retire-es" look to rebuild their portfolios, they will be looking for dividend-bearing stocks that can offer them security, income and the potential for price appreciation. GE fits the bill for all three.
And at any price under $16 a share, it’s a bargain.
Guru Ownerhship and Insider Trading Activities For U.S.Bancorp.
(GuruFocus, October 21, 2009) U.S. Bancorp (USB) today reported net income of $603 million for the third quarter of 2009, or $.30 per diluted common share. Earnings for the third quarter were driven by record total net revenue of $4.3 billion, the result of strong year-over-year growth in both net interest income and fee revenue.
Investment Guru Warren Buffett ‘s Berkshire Hathaway is the large shareholder of the banking company. In the past, Buffett was very bullish on this stock together with Wells Fargo.
Reflecting on today’s quarterly result announcement, Dick Bove think USB is one of the banking companies standing out:
Chen spreads a Buffett
By Zhang Ran (China Daily)
Updated: 2009-10-21 08:26
Comments(0) PrintMail
Chen Fashu, regarded by many as China's Warren Buffett, yesterday announced that he would donate 45 percent of his personal assets, worth 8.3 billion yuan ($1.17 billion), to set up a charity modeled on the lines of the Bill and Melinda Gates Foundation.
The Newhuadu Philanthropic Foundation, once set up, is expected to be the largest civil charity foundation ever established in the country.
Chen, 48, a Fujian-born businessman who made his first million by selling groceries in his hometown during the 80s, later became a billionaire by investing in stocks on the A and H share markets.
He is currently the president of Fuzhou-based Newhuadu Industrial Group, and is ranked No 15 on Hurun's latest rich list with a personal wealth of 25 billion yuan.
The assets to be transferred to the charity will mainly include stakes that Chen owns in publicly traded companies such as Tsingtao Beer, Yunnan Baiyao Group, and some stock from his own Newhuadu Industrial Group. These will altogether account for 45 percent of his total assets according to current market value, Chen said at a media briefing in Beijing yesterday.
Chen will be the chairman, while Tang Jun, the president and CEO of Newhuadu Industrial Group, will be the managing director of the foundation.
"The charity will be modeled on the Bill & Melinda Gates Foundation. An independent team will be in charge of the operation of the foundation," Tang said. It may later seek a management tie-up with the Bill & Melinda Gates Foundation, he said.
The first batch of funding from the foundation, worth 10 million yuan, was donated to primary schools in poverty-stricken areas and poor university students yesterday.
Chen's fortune comes mainly from the Fujian-based Zijin Mining, a leading gold miner in China. His wealth expanded from 48 million yuan to 20 billion yuan when the gold mining company went public on the Shanghai bourse in 2008 and later at Hong Kong in 2009.
Chen was the second largest stakeholder of Zijin Mining before he sold around 50 percent of his holdings between May and July to buy H shares of Tsingtao Brewery Co Ltd. He is now the second largest shareholder of Shanghai-listed Yunnan Baiyao Group and the third largest shareholder of Hong Kong-listed Tsingtao Brewery Co Ltd.
However, the sale of Zijin Mining shares allegedly thrust Chen into a "tax evasion" scandal. The Beijing-based Securities Daily reported in September that the State Administration of Taxation was investigating Chen and his company for tax fraud in the Zijin Mining share sale. The report said that Chen had sold around 3 billion yuan worth of Zijin Mining shares, for which he would have to pay at least 1 billion yuan in taxes.
Individual investors who trade shares on the stock market do not pay capital investment income tax in China currently. However, experts, including Sun Gang, a researcher from the Research Institute for Fiscal Science, and Zhang Bing, a researcher from the Chinese Academy of Social Sciences, both said that individual investors who sell shares they bought before the companies went public should pay tax.
"But currently, there is no specific regulation on such taxation in China," Zhang said.
Related readings:
Chinese tycoon's charity foundation focuses on education
Huiyuan joins One Foundation as a partner in education efforts
Yao Ming Foundation to help rebuild schools in Sichuan
With Jet Li-One Foundation charity
Chen's setting up of the Newhuadu Philanthropic Foundation was widely speculated as a measure to save himself from the tax fraud accusation.
Chen, however, said yesterday that he had been toying with the idea for two years and had spent over a year to set it up. The Ministry of Civil Affairs approved the foundation on Sept 30, Chen said.
Chen has not been the first billionaire to initiate a philanthropic foundation in China. Cao Dewang, chairman of another Fujian-based company Fuyao Group, said earlier that he planned to donate 70 percent of shares his family owns in the company to set up a 4-billion yuan foundation. However, Cao later gave up on the idea, as regulations do not permit a major shareholder of a company from transferring his shares.
By Zhang Ran (China Daily)
Updated: 2009-10-21 08:26
Comments(0) PrintMail
Chen Fashu, regarded by many as China's Warren Buffett, yesterday announced that he would donate 45 percent of his personal assets, worth 8.3 billion yuan ($1.17 billion), to set up a charity modeled on the lines of the Bill and Melinda Gates Foundation.
The Newhuadu Philanthropic Foundation, once set up, is expected to be the largest civil charity foundation ever established in the country.
Chen, 48, a Fujian-born businessman who made his first million by selling groceries in his hometown during the 80s, later became a billionaire by investing in stocks on the A and H share markets.
He is currently the president of Fuzhou-based Newhuadu Industrial Group, and is ranked No 15 on Hurun's latest rich list with a personal wealth of 25 billion yuan.
The assets to be transferred to the charity will mainly include stakes that Chen owns in publicly traded companies such as Tsingtao Beer, Yunnan Baiyao Group, and some stock from his own Newhuadu Industrial Group. These will altogether account for 45 percent of his total assets according to current market value, Chen said at a media briefing in Beijing yesterday.
Chen will be the chairman, while Tang Jun, the president and CEO of Newhuadu Industrial Group, will be the managing director of the foundation.
"The charity will be modeled on the Bill & Melinda Gates Foundation. An independent team will be in charge of the operation of the foundation," Tang said. It may later seek a management tie-up with the Bill & Melinda Gates Foundation, he said.
The first batch of funding from the foundation, worth 10 million yuan, was donated to primary schools in poverty-stricken areas and poor university students yesterday.
Chen's fortune comes mainly from the Fujian-based Zijin Mining, a leading gold miner in China. His wealth expanded from 48 million yuan to 20 billion yuan when the gold mining company went public on the Shanghai bourse in 2008 and later at Hong Kong in 2009.
Chen was the second largest stakeholder of Zijin Mining before he sold around 50 percent of his holdings between May and July to buy H shares of Tsingtao Brewery Co Ltd. He is now the second largest shareholder of Shanghai-listed Yunnan Baiyao Group and the third largest shareholder of Hong Kong-listed Tsingtao Brewery Co Ltd.
However, the sale of Zijin Mining shares allegedly thrust Chen into a "tax evasion" scandal. The Beijing-based Securities Daily reported in September that the State Administration of Taxation was investigating Chen and his company for tax fraud in the Zijin Mining share sale. The report said that Chen had sold around 3 billion yuan worth of Zijin Mining shares, for which he would have to pay at least 1 billion yuan in taxes.
Individual investors who trade shares on the stock market do not pay capital investment income tax in China currently. However, experts, including Sun Gang, a researcher from the Research Institute for Fiscal Science, and Zhang Bing, a researcher from the Chinese Academy of Social Sciences, both said that individual investors who sell shares they bought before the companies went public should pay tax.
"But currently, there is no specific regulation on such taxation in China," Zhang said.
Related readings:
Chinese tycoon's charity foundation focuses on education
Huiyuan joins One Foundation as a partner in education efforts
Yao Ming Foundation to help rebuild schools in Sichuan
With Jet Li-One Foundation charity
Chen's setting up of the Newhuadu Philanthropic Foundation was widely speculated as a measure to save himself from the tax fraud accusation.
Chen, however, said yesterday that he had been toying with the idea for two years and had spent over a year to set it up. The Ministry of Civil Affairs approved the foundation on Sept 30, Chen said.
Chen has not been the first billionaire to initiate a philanthropic foundation in China. Cao Dewang, chairman of another Fujian-based company Fuyao Group, said earlier that he planned to donate 70 percent of shares his family owns in the company to set up a 4-billion yuan foundation. However, Cao later gave up on the idea, as regulations do not permit a major shareholder of a company from transferring his shares.
Warren Buffett Opens 4th Annual Lydian Roundtable and Launches New Payments Industry Portal, PYMNTS.com
Tue Oct 20, 2009 12:50pm EDT
Buffett comments on economy, card industry and financial crisis and suggests
that "system works" and points to a focus on the customer as the path forward
for business
NEW YORK--(Business Wire)--
Warren Buffett, Chairman of Berkshire Hathaway Inc., opened the 4th annual
closed-door Lydian Roundtable on the Payments Industry, a closed-door gathering
of senior executives in the payments space, commenting on the resiliency of the
American system, yet cautioning that we`re not "100% there just yet" when asked
about consumer confidence and consumer spending.
Buffett was interviewed by Cathy Baron Tamraz, President and Chief Executive
Officer of Business Wire, a Berkshire Hathaway company which partnered with
Market Platform Dynamics to launch a new online B2B channel dedicated to the
payments sector, PYMNTS.com.
When asked about the economy`s prospects, Buffett said that "enormous" progress
has been made since a year ago, which is a credit, in his view, to what the
government did to in the Fall of 2008 to keep the economy from "going over a
cliff." And although, the economy won`t be back the way it was for a while,
Buffett believes that the worst is behind us. He was more cautious when asked
about unemployment rates, citing that companies must be convinced that demand is
there before hiring and that may take some time.
His comments about the payments industry are based on his experience as an early
investor in American Express in 1964. He was attracted to the company because of
its positioning and their marketing, which included a green card with a
centurion icon, which he described as something akin to looking like "Mr.
Integrity." Buffett said that he was convinced that cardholders preferred
pulling out a card that "made it look you were J.P. Morgan or something." That
drove the merchant demand - and acceptance - for the product.
Buffett cited the lessons of his American Express experience in building a
success business: give the customer what they want. The American consumer -
Buffett says, is king. He goes on to say, "You can push them around for a week
or a month maybe, but you either figure out what`s in your customers` mind and
decide you are going to serve them; or you are not going to be in business. They
are right, and you are wrong. It`s what made this country, to some extent, what
it is. No one who has ever taken good care of a customer has lost." Buffett
suggested that this consumer preference is what "keep people pulling out a card"
rather than taking advantage of the other options that have emerged recently to
replace magnetic stripe cards.
The interview and transcript can be found at PYMNTS.com, an online media channel
that captures user-generated and expert-driven commentary, information, news and
analysis on "what`s next" in the payments sector, worldwide. The site provides a
platform for industry professionals to share content related to their latest
company and product developments, to tap into the collective commentary and
analysis from experts, bloggers and industry pundits, and to interact with
industry thought leaders and other influentials on topics of critical importance
to the future of the sector. PYMNTS.com is a joint venture between Business Wire
and Market Platform Dynamics.
For information on the PYMNTS.com editorial calendar for upcoming topics being
featured on PYMNTS.com, please contact editorial@PYMNTS.com
You can also subscribe to receive the daily PYMNTS.com newsletter at
subscribe@PYMNTS.com
Follow us on Twitter at http://twitter.com/PYMNTS and join the PYMNTS Linked In
group.
For information the PYMNTS.com portal contact us info@PYMNTS.com
About Market Platform Dynamics (MPD):
MPD is a management consulting firm that ignites catalyst businesses by
leveraging new technologies, business models and pricing strategies. MPD has a
wealth of experience within industries that are characterized by complex
platform-centered ecosystems, including payments, mobile/telecoms, digital and
advertising-supported media, and software-based businesses.
MPD works with both incumbents and new entrants, offering a unique lens into the
dynamics that shape the competitive playing field. In addition to traditional
consulting-based services, MPD`s Catalyst Ventures provides intellectual and
human capital to new firms. MPD`s experts include economists, econometricians,
product development specialists, and strategic marketers who apply cutting-edge
business theory and statistical methods to the practical problems of building
and growing a profitable catalyst business. MPD is headquartered in Cambridge,
MA, and has offices in London and Hong Kong.
For more information visit www.marketplatforms.com.
About The Lydian Roundtable
The Lydian Roundtable is an annual closed door summit of ~50 senior executives
in the payments sector. The Roundtable was established in 2004 by Market
Platform Dynamics as a way for those at the heart of decision-making in the
space to assemble and discuss the issues that will shape its future. Unusual in
its format, everyone invited is a participant in the day-long discussion, with
panels and panel moderators focusing the discussion throughout the day. The
Roundtable is invitation only and closed to press and media.
This year, the Lydian Roundtable launched PYMNTS.com, the partnership between
Business Wire and Market Platform Dynamics to create a dynamic new media channel
serving the payments sector. A key feature of PYMNTS.com is the Lydian Payments
Journal which is an online journal focused exclusively on the global payments
sector.
About Business Wire
Business Wire, a Berkshire Hathaway company, is utilized by tens of thousands of
member companies and organizations worldwide to functionally enhance and
communicate investor relations and public relations content to target audiences.
As a recognized disclosure service in the United States, Canada and a dozen
European countries, Business Wire facilitates the simultaneous flow of
market-moving press releases from corporations to financial markets and their
audiences, including regulatory authorities, media, investors, financial
information systems and consumer news services. Business Wire also handles XBRL
tagging, document formatting and regulatory filing into EDGAR, SEDAR, FSA and
other systems.
Communications professionals turn to Business Wire to optimize and issue press
releases, photos and multimedia to news organizations, journalists, trade
publications, search engines, and individuals, with full-text posting to web
sites, online services and databases. A range of distribution options enables
members to target by geography, industry, news theme and audience demographics.
Tue Oct 20, 2009 12:50pm EDT
Buffett comments on economy, card industry and financial crisis and suggests
that "system works" and points to a focus on the customer as the path forward
for business
NEW YORK--(Business Wire)--
Warren Buffett, Chairman of Berkshire Hathaway Inc., opened the 4th annual
closed-door Lydian Roundtable on the Payments Industry, a closed-door gathering
of senior executives in the payments space, commenting on the resiliency of the
American system, yet cautioning that we`re not "100% there just yet" when asked
about consumer confidence and consumer spending.
Buffett was interviewed by Cathy Baron Tamraz, President and Chief Executive
Officer of Business Wire, a Berkshire Hathaway company which partnered with
Market Platform Dynamics to launch a new online B2B channel dedicated to the
payments sector, PYMNTS.com.
When asked about the economy`s prospects, Buffett said that "enormous" progress
has been made since a year ago, which is a credit, in his view, to what the
government did to in the Fall of 2008 to keep the economy from "going over a
cliff." And although, the economy won`t be back the way it was for a while,
Buffett believes that the worst is behind us. He was more cautious when asked
about unemployment rates, citing that companies must be convinced that demand is
there before hiring and that may take some time.
His comments about the payments industry are based on his experience as an early
investor in American Express in 1964. He was attracted to the company because of
its positioning and their marketing, which included a green card with a
centurion icon, which he described as something akin to looking like "Mr.
Integrity." Buffett said that he was convinced that cardholders preferred
pulling out a card that "made it look you were J.P. Morgan or something." That
drove the merchant demand - and acceptance - for the product.
Buffett cited the lessons of his American Express experience in building a
success business: give the customer what they want. The American consumer -
Buffett says, is king. He goes on to say, "You can push them around for a week
or a month maybe, but you either figure out what`s in your customers` mind and
decide you are going to serve them; or you are not going to be in business. They
are right, and you are wrong. It`s what made this country, to some extent, what
it is. No one who has ever taken good care of a customer has lost." Buffett
suggested that this consumer preference is what "keep people pulling out a card"
rather than taking advantage of the other options that have emerged recently to
replace magnetic stripe cards.
The interview and transcript can be found at PYMNTS.com, an online media channel
that captures user-generated and expert-driven commentary, information, news and
analysis on "what`s next" in the payments sector, worldwide. The site provides a
platform for industry professionals to share content related to their latest
company and product developments, to tap into the collective commentary and
analysis from experts, bloggers and industry pundits, and to interact with
industry thought leaders and other influentials on topics of critical importance
to the future of the sector. PYMNTS.com is a joint venture between Business Wire
and Market Platform Dynamics.
For information on the PYMNTS.com editorial calendar for upcoming topics being
featured on PYMNTS.com, please contact editorial@PYMNTS.com
You can also subscribe to receive the daily PYMNTS.com newsletter at
subscribe@PYMNTS.com
Follow us on Twitter at http://twitter.com/PYMNTS and join the PYMNTS Linked In
group.
For information the PYMNTS.com portal contact us info@PYMNTS.com
About Market Platform Dynamics (MPD):
MPD is a management consulting firm that ignites catalyst businesses by
leveraging new technologies, business models and pricing strategies. MPD has a
wealth of experience within industries that are characterized by complex
platform-centered ecosystems, including payments, mobile/telecoms, digital and
advertising-supported media, and software-based businesses.
MPD works with both incumbents and new entrants, offering a unique lens into the
dynamics that shape the competitive playing field. In addition to traditional
consulting-based services, MPD`s Catalyst Ventures provides intellectual and
human capital to new firms. MPD`s experts include economists, econometricians,
product development specialists, and strategic marketers who apply cutting-edge
business theory and statistical methods to the practical problems of building
and growing a profitable catalyst business. MPD is headquartered in Cambridge,
MA, and has offices in London and Hong Kong.
For more information visit www.marketplatforms.com.
About The Lydian Roundtable
The Lydian Roundtable is an annual closed door summit of ~50 senior executives
in the payments sector. The Roundtable was established in 2004 by Market
Platform Dynamics as a way for those at the heart of decision-making in the
space to assemble and discuss the issues that will shape its future. Unusual in
its format, everyone invited is a participant in the day-long discussion, with
panels and panel moderators focusing the discussion throughout the day. The
Roundtable is invitation only and closed to press and media.
This year, the Lydian Roundtable launched PYMNTS.com, the partnership between
Business Wire and Market Platform Dynamics to create a dynamic new media channel
serving the payments sector. A key feature of PYMNTS.com is the Lydian Payments
Journal which is an online journal focused exclusively on the global payments
sector.
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Warren Buffett's Unconventional Approach to Charitable Donations
Warren Buffett’s approach to philanthropy has been unconventional. Rather than establishing the infrastructure required to administer a foundation bearing his own name, the majority of Mr. Buffett’s wealth has been given to The Bill and Melinda Gates Foundation. Many super-rich individuals set up foundations that will exist in perpetuity, but Mr. Buffett’s instructions call for using his donations soon after they are made.
Many wealthy individuals have taken note of the Buffett approach to philanthropy and have set up similar arrangements in which their wealth is used to fund current projects. The Philadelphia Inquirer published an article Sunday regarding Barbara Dodd Anderson’s donation to the George School located in Bucks County Pennsylvania. Ms. Dodd Anderson is the daughter of David Dodd who was co-author of Security Analysis along with Benjamin Graham.
Ms. Dodd Anderson’s 2007 donation consisted of Berkshire Hathaway (BRK.A) shares and have declined in market value over the past two years. At a news conference dedicating a new library funded by this donation, Mr. Buffett made the following comment:
On Sept. 18, 2007, shares were trading at $118,700. That was when Dodd Anderson gave George the largest gift to an existing independent school in the nation.
She created an irrevocable trust designed to pay out a record $128.5 million over 20 years. The value of that $70 million trust is now $68.5 million, down just as Berkshire Hathaway shares have dropped.
“It’ll change,” Buffett said. “There are only two [share] prices that matter – the price on the day you buy it and the price on the day you sell it. If you own good businesses and you don’t do anything stupid with your money, value tends to rise.”
The article also had an amusing story, which I have not seen elsewhere, regarding Mr. Buffett’s application to Columbia Business School in 1950. Let’s just say that the application used an unconventional approach:
When he was 9 or 10, growing up in Omaha, he read every book on finance in the public library, Buffett said.
He particularly admired Security Analysis, a 1934 investing classic cowritten by David Dodd.
Later, after Buffett had been rejected from Harvard University’s graduate school of business, he was thumbing through a Columbia University catalog and noticed that Dodd was assistant dean.
Even though it was August, just weeks from the start of the fall term, he wrote to Dodd: “I thought you guys were dead, but now that I realize you are alive, I’d like to come and study with you.”
While most aspiring Columbia Business School students would do well to emulate Warren Buffett’s history, they may wish to choose a more conventional strategy when writing their essay to the admissions committee!
FINANCE | 'Too many have walked away from troubles they created for society'
Comments
October 21, 2009
BY ANDREW FRYE
Billionaire Warren Buffett, who collects a $100,000-a-year salary for running Berkshire Hathaway Inc., said Wall Street pay needs a "downside" when profits deteriorate because of reckless bets.
"You have to put in something where there is downside to people who really mess up large institutions," Buffett said in an interview conducted by Business Wire, the Berkshire subsidiary that posts corporate press releases. "Too many people have walked away from the troubles they have created for society, not just for their own institution, and they have walked away rich."
» Click to enlarge image
Warren Buffett said Wall Street needs a "downside" when profits deteriorate because of reckless bets.
(AP)
Wall Street bonuses for 2009 might jump 40 percent to $26 billion, a year after bad bets on subprime mortgages sent financial firms to the government for bailouts, according to estimates by compensation consultant Johnson Associates Inc. Buffett became the second-richest American by building Omaha, Neb.-based Berkshire into a $150 billion company.
"What you have to change in Wall Street, is you have to make sure that in addition to carrots, there are sticks," he said. "And it can't be a one-way street where they are making ungodly amounts of money when things are good and then they move on to someplace else for a while when things are bad."
Buffett invested $5 billion of Berkshire's money last year into Goldman Sachs Group Inc., Wall Street's highest-paying and most profitable firm. He said in the interview that the securities industry is essential to economic growth.
"I don't look at Wall Street as 'evil,' " he said. "I look at Wall Street as given to huge excess sometimes."
Banks worldwide reported more than $1.1 trillion of credit losses and writedowns tied to the mortgage meltdown since 2007, according to Bloomberg data.
Wall Street bonuses in 2008 fell 44 percent from the prior year to $18.4 billion, according to the New York state Comptroller.
Goldman, led by CEO Lloyd Blankfein, set aside $16.7 billion to pay employees so far this year. That's enough to pay each worker $527,192. The New York-based bank repaid $10 billion it got from Treasury and reported a jump in third-quarter profit. JPMorgan Chase & Co., which repaid $25 billion of U.S. funds, said profit surged almost sevenfold in the quarter.
Warren Buffett said Wall Street needs a "downside" when profits deteriorate because of reckless bets.
Cash-Distressed Business Offers Investors Way to Follow Buffett
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By Alexis Leondis
Oct. 22 (Bloomberg) -- John Edelman, a former business owner, is taking Warren Buffett’s advice by investing in what he knows: home furnishings.
“I feel so much safer doing this than buying stocks randomly,” said Edelman, of Ridgefield, Connecticut, who sold his high-end leather supply business for $67 million in October 2007 and started investing directly in three private cash- distressed home-furnishing companies last year. “Smaller investors can have more power now because they’re buying at lower values and their dollars go further.”
The potential for average annual returns as high as 25 percent is luring some investors who are putting money in struggling businesses that aren’t publicly traded and unable to access traditional sources of capital, according to Mark Hancock, senior managing director of New York-based Tiedemann Wealth Management. That’s because some investors became disillusioned with the returns on equity and fixed-income investments last year, he said.
“Many wealthy investors retreated at the right time, built up significant cash hoards and now want to redeploy that cash in distressed situations,” said Hancock, whose firm advises on $5.8 billion of assets for high-net worth families and institutions. The focus is on investments within industries that families have specific knowledge of, said Hancock, who estimates 10 percent to 15 percent of the firm’s 70 clients are evaluating investments in businesses that they know.
The 2.7 million millionaires in the U.S. and Canada had $1.3 trillion in cash in 2008, based on a survey released in June by Capgemini SA and Merrill Lynch & Co. Investors put $19.2 billion into 55,480 companies last year, according to the Center for Venture Research at the University of New Hampshire in Durham.
Supply Funds
Government efforts, including an initiative announced yesterday by President Barack Obama, to ease lending to small businesses are not workable and some businesses are having difficulty accessing capital from banks because of weak balance sheets, said Sam Graves, a Missouri Republican, and ranking member of the House Small Business Committee, in an interview. That means individual investors can step in and supply funds, Graves said.
Eighty percent of U.S. companies with fewer than 500 employees said access to capital was a major issue compared with 67 percent a year earlier, according to a July survey of 300 firms by the Washington-based National Small Business Association, a trade group with more than 150,000 members.
Purchase Equity
Investors interested in distressed investments can lend money to the business directly or purchase equity, said Darell Krasnoff, managing director of Bel Air Investment Advisors in Los Angeles, who counsels clients with at least $20 million in investable assets. They can also form limited partnerships, which pool funds from several investors and may be managed professionally, said Krasnoff, whose firm’s clients include Lee Iacocca and Barbra Streisand.
Investing directly in cash-starved businesses is appropriate for sophisticated investors with at least $500,000 in capital who have expertise in the industry, said Jospeh Massoud, chief executive officer of Compass Diversified Holdings, a Westport, Connecticut-based owner of manufacturing, distribution and business service companies.
“Just like Buffett says, invest in what you know,” said Massoud, referring to the chief executive officer of Berkshire Hathaway Inc., who has overseen more than $50 billion in acquisitions ranging from insurance and ice cream companies to corporate jet leasing and power plants.
Investor’s Payoff
An investor’s payoff can be tied to the success of the company, which can come in the form of an initial public offering, operational improvement of the business, sale of the business to another firm or dividends, said Chris Hyzy, New York-based chief investment officer at U.S. Trust, Bank of America Corp.’s private wealth management unit overseeing $180 billion.
Illiquid investments, which lock up cash for more than one year and include distressed investments, should be from 5 percent to 12.5 percent of an investor’s portfolio, according to Arun Bharath, director of research at Bel Air Investment Advisors.
Investments in companies, not just those that are distressed, have returned 20 percent to 25 percent on average since 2004, said Jeffrey Sohl, professor of entrepreneurship and director of the Center for Venture Research at UNH. The returns take into account companies that have failed or filed for bankruptcy, Sohl said.
In 2008, investors in the Standard & Poor’s 500 Index lost 37 percent and a composite of high-yield bond funds declined 26 percent, according to data compiled by Bloomberg and Merrill Indexes.
‘Substantial Returns’
“It’s an industry I know and one that’s suffering -- my gut is, it’s bottomed, said Edelman, 42, referring to the luxury-furnishing business. “Ideally in four to six years, I hope to get substantial returns.”
Investors should be aware that putting money directly in cash-distressed businesses is illiquid, labor-intensive and risky, said Jon Goldstein, co-chief executive officer of Constellation Wealth Advisors, which manages almost $4 billion in assets for clients who have a minimum of $10 million in investable assets. Investors should expect to have their cash frozen for at least three years, said Goldstein, who is based in Menlo Park, California.
There were 64,554 commercial bankruptcy filings in 2008 and almost 67,000 through September, according to data compiled from court records by Automated Access to Court Electronic Records, a service of Jupiter ESources LLC in Oklahoma City.
Concentration Risk
Some clients are still risk-averse and thinking about how to protect and preserve wealth, said Krasnoff of Bel Air Investment Advisors. Lending money to a private business also comes with concentration risk, as significant amounts of money are tied up in one business, he said.
Goldstein of Constellation Wealth says he has several clients who made their fortunes in the technology industry and are considering investing in startups. The difficulty new companies are having raising venture financing means these investors are taking advantage of low prices and their expertise, he said.
The amount of venture capital provided to startup businesses dropped 33 percent in the third quarter to $4.81 billion in 637 deals from $7.16 billion in 994 deals a year earlier, according to the National Venture Capital Association and PricewaterhouseCoopers.
Cash Reserves
Richard Caruso, 66, is chairman and founder of Integra LifeSciences Holdings Corp. in Plainsboro, New Jersey, which manufactures medical devices. He invested $3 million last year in Colmar, Pennsylvania-based CeeLite Technologies LLC, a maker of flat-panel lighting products. CeeLite’s predecessor company didn’t have enough capital to manufacture and sell its products worldwide.
“Entrepreneurs are not just investors, they are visionaries and like to actively get involved in something they know and believe can be successful,” Caruso said.
The most attractive opportunities are in industries that have been affected by the decline in retail spending, which include consumer products and capital equipment, according to Massoud of Compass Holdings.
“I could lose all my money and could be wrong that the desire for luxury will rebound,” said Edelman, whose leather adorns the chairs in Le Cirque, the New York restaurant. “But I’ve done this with proper cash reserves. If you can’t do that, you shouldn’t be in the game.”
Share | Email | Print | A A A
By Alexis Leondis
Oct. 22 (Bloomberg) -- John Edelman, a former business owner, is taking Warren Buffett’s advice by investing in what he knows: home furnishings.
“I feel so much safer doing this than buying stocks randomly,” said Edelman, of Ridgefield, Connecticut, who sold his high-end leather supply business for $67 million in October 2007 and started investing directly in three private cash- distressed home-furnishing companies last year. “Smaller investors can have more power now because they’re buying at lower values and their dollars go further.”
The potential for average annual returns as high as 25 percent is luring some investors who are putting money in struggling businesses that aren’t publicly traded and unable to access traditional sources of capital, according to Mark Hancock, senior managing director of New York-based Tiedemann Wealth Management. That’s because some investors became disillusioned with the returns on equity and fixed-income investments last year, he said.
“Many wealthy investors retreated at the right time, built up significant cash hoards and now want to redeploy that cash in distressed situations,” said Hancock, whose firm advises on $5.8 billion of assets for high-net worth families and institutions. The focus is on investments within industries that families have specific knowledge of, said Hancock, who estimates 10 percent to 15 percent of the firm’s 70 clients are evaluating investments in businesses that they know.
The 2.7 million millionaires in the U.S. and Canada had $1.3 trillion in cash in 2008, based on a survey released in June by Capgemini SA and Merrill Lynch & Co. Investors put $19.2 billion into 55,480 companies last year, according to the Center for Venture Research at the University of New Hampshire in Durham.
Supply Funds
Government efforts, including an initiative announced yesterday by President Barack Obama, to ease lending to small businesses are not workable and some businesses are having difficulty accessing capital from banks because of weak balance sheets, said Sam Graves, a Missouri Republican, and ranking member of the House Small Business Committee, in an interview. That means individual investors can step in and supply funds, Graves said.
Eighty percent of U.S. companies with fewer than 500 employees said access to capital was a major issue compared with 67 percent a year earlier, according to a July survey of 300 firms by the Washington-based National Small Business Association, a trade group with more than 150,000 members.
Purchase Equity
Investors interested in distressed investments can lend money to the business directly or purchase equity, said Darell Krasnoff, managing director of Bel Air Investment Advisors in Los Angeles, who counsels clients with at least $20 million in investable assets. They can also form limited partnerships, which pool funds from several investors and may be managed professionally, said Krasnoff, whose firm’s clients include Lee Iacocca and Barbra Streisand.
Investing directly in cash-starved businesses is appropriate for sophisticated investors with at least $500,000 in capital who have expertise in the industry, said Jospeh Massoud, chief executive officer of Compass Diversified Holdings, a Westport, Connecticut-based owner of manufacturing, distribution and business service companies.
“Just like Buffett says, invest in what you know,” said Massoud, referring to the chief executive officer of Berkshire Hathaway Inc., who has overseen more than $50 billion in acquisitions ranging from insurance and ice cream companies to corporate jet leasing and power plants.
Investor’s Payoff
An investor’s payoff can be tied to the success of the company, which can come in the form of an initial public offering, operational improvement of the business, sale of the business to another firm or dividends, said Chris Hyzy, New York-based chief investment officer at U.S. Trust, Bank of America Corp.’s private wealth management unit overseeing $180 billion.
Illiquid investments, which lock up cash for more than one year and include distressed investments, should be from 5 percent to 12.5 percent of an investor’s portfolio, according to Arun Bharath, director of research at Bel Air Investment Advisors.
Investments in companies, not just those that are distressed, have returned 20 percent to 25 percent on average since 2004, said Jeffrey Sohl, professor of entrepreneurship and director of the Center for Venture Research at UNH. The returns take into account companies that have failed or filed for bankruptcy, Sohl said.
In 2008, investors in the Standard & Poor’s 500 Index lost 37 percent and a composite of high-yield bond funds declined 26 percent, according to data compiled by Bloomberg and Merrill Indexes.
‘Substantial Returns’
“It’s an industry I know and one that’s suffering -- my gut is, it’s bottomed, said Edelman, 42, referring to the luxury-furnishing business. “Ideally in four to six years, I hope to get substantial returns.”
Investors should be aware that putting money directly in cash-distressed businesses is illiquid, labor-intensive and risky, said Jon Goldstein, co-chief executive officer of Constellation Wealth Advisors, which manages almost $4 billion in assets for clients who have a minimum of $10 million in investable assets. Investors should expect to have their cash frozen for at least three years, said Goldstein, who is based in Menlo Park, California.
There were 64,554 commercial bankruptcy filings in 2008 and almost 67,000 through September, according to data compiled from court records by Automated Access to Court Electronic Records, a service of Jupiter ESources LLC in Oklahoma City.
Concentration Risk
Some clients are still risk-averse and thinking about how to protect and preserve wealth, said Krasnoff of Bel Air Investment Advisors. Lending money to a private business also comes with concentration risk, as significant amounts of money are tied up in one business, he said.
Goldstein of Constellation Wealth says he has several clients who made their fortunes in the technology industry and are considering investing in startups. The difficulty new companies are having raising venture financing means these investors are taking advantage of low prices and their expertise, he said.
The amount of venture capital provided to startup businesses dropped 33 percent in the third quarter to $4.81 billion in 637 deals from $7.16 billion in 994 deals a year earlier, according to the National Venture Capital Association and PricewaterhouseCoopers.
Cash Reserves
Richard Caruso, 66, is chairman and founder of Integra LifeSciences Holdings Corp. in Plainsboro, New Jersey, which manufactures medical devices. He invested $3 million last year in Colmar, Pennsylvania-based CeeLite Technologies LLC, a maker of flat-panel lighting products. CeeLite’s predecessor company didn’t have enough capital to manufacture and sell its products worldwide.
“Entrepreneurs are not just investors, they are visionaries and like to actively get involved in something they know and believe can be successful,” Caruso said.
The most attractive opportunities are in industries that have been affected by the decline in retail spending, which include consumer products and capital equipment, according to Massoud of Compass Holdings.
“I could lose all my money and could be wrong that the desire for luxury will rebound,” said Edelman, whose leather adorns the chairs in Le Cirque, the New York restaurant. “But I’ve done this with proper cash reserves. If you can’t do that, you shouldn’t be in the game.”
Buffett group wins big in stock buy of Chinese car firm
Christine Tierney / The Detroit News
Legendary investor Warren Buffett hasn't been fortunate with all his holdings over the past year, but one of his picks turned out to be a big winner.
Buffett's Berkshire Hathaway Inc. agreed last September to pay $230 million for a 10 percent stake in Chinese automaker BYD Co. that had soared in value by the time the deal was finalized in August. BYD shares, listed on the Hong Kong Stock Exchange, have risen from $1.21 last November to $10.55 on Wednesday.
The runup in BYD's stock, due partly to Buffett's interest, has made its founder Wang Chuanfu the richest man in China, according to the Hurun Report, a list of the wealthiest Chinese.
Advertisement
Based in the southern Chinese city of Shenzhen, BYD is a young company that started out making batteries and only entered the car business in 2003.
But its expertise in lithium-ion batteries, coupled with the rapid growth in the Chinese vehicle market, have attracted a great deal of investor interest.
China is on track to become the world's No. 1 vehicle market this year, and the government in Beijing is intent on developing a strong domestic auto sector with expertise in clean technologies.
BYD developed its first electric car, the F3e, in 2006, and is rolling out the e6, a crossover which it displayed early this year at the North American International Auto Show in Detroit.
BYD expects to sell 400,000 vehicles this year, and its exports are limited to small markets such as Ukraine. But it has ambitious goals and hopes to sell electric cars in the United States, possibly as early as next year.
"They're a very good company. They have a lot of knowledge on batteries," said Nick Reilly, General Motor Co.'s Shanghai-based executive vice president of international operations.
Volkswagen AG is considering a battery deal with BYD.
While its prospects look bright, some analysts caution that the stock has risen too quickly. "Payback might be distant," Deutsche Bank analysts Vincent Ha and Alan Hellawell said in a report assigning a sell rating to BYD shares.
Christine Tierney / The Detroit News
Legendary investor Warren Buffett hasn't been fortunate with all his holdings over the past year, but one of his picks turned out to be a big winner.
Buffett's Berkshire Hathaway Inc. agreed last September to pay $230 million for a 10 percent stake in Chinese automaker BYD Co. that had soared in value by the time the deal was finalized in August. BYD shares, listed on the Hong Kong Stock Exchange, have risen from $1.21 last November to $10.55 on Wednesday.
The runup in BYD's stock, due partly to Buffett's interest, has made its founder Wang Chuanfu the richest man in China, according to the Hurun Report, a list of the wealthiest Chinese.
Advertisement
Based in the southern Chinese city of Shenzhen, BYD is a young company that started out making batteries and only entered the car business in 2003.
But its expertise in lithium-ion batteries, coupled with the rapid growth in the Chinese vehicle market, have attracted a great deal of investor interest.
China is on track to become the world's No. 1 vehicle market this year, and the government in Beijing is intent on developing a strong domestic auto sector with expertise in clean technologies.
BYD developed its first electric car, the F3e, in 2006, and is rolling out the e6, a crossover which it displayed early this year at the North American International Auto Show in Detroit.
BYD expects to sell 400,000 vehicles this year, and its exports are limited to small markets such as Ukraine. But it has ambitious goals and hopes to sell electric cars in the United States, possibly as early as next year.
"They're a very good company. They have a lot of knowledge on batteries," said Nick Reilly, General Motor Co.'s Shanghai-based executive vice president of international operations.
Volkswagen AG is considering a battery deal with BYD.
While its prospects look bright, some analysts caution that the stock has risen too quickly. "Payback might be distant," Deutsche Bank analysts Vincent Ha and Alan Hellawell said in a report assigning a sell rating to BYD shares.
Buffett’s General Re Gets $9 Million to Stay in Connecticut
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Oct. 22 (Bloomberg) -- Warren Buffett’s General Reinsurance Corp., the most profitable of the billionaire’s insurance units, got a deal for a $9 million loan from Connecticut to keep the Stamford-based company in state for at least four more years.
The funding “ensures that a company based in our state since 1974 is not lost to a neighboring state,” Governor Jodi Rell said in an Oct. 20 statement. The 20-year, 2 percent loan requires General Re to keep an average of 820 workers in Stamford through 2013, said Jim Watson, a spokesman for the state’s Department of Economic and Commercial Development.
Buffett, the second-richest American, oversees businesses ranging from jewelry to jet rentals from the Omaha, Nebraska headquarters of Berkshire Hathaway Inc. Buffett said this year he would cut jobs and close facilities at Berkshire units as the recession weighs on results. General Re, with more than 1,900 employees in 45 locations, earned $260 million on underwriting before taxes in this year’s first half.
“Gen Re had to make a decision -- stay in Stamford or relocate to Westchester County, New York -- and we were not going to lose those dependable jobs,” Rell said. “Smart, targeted loans and investments by the state will prevent” the loss of insurance-industry positions.
Buffett didn’t respond to a request for comment e-mailed to his assistant Carrie Kizer. Berkshire had about 246,000 employees at the end of 2008, just 19 of whom worked at the company’s headquarters.
Berkshire Earnings
Berkshire, which Buffett built into a $150 billion company by investing in out-of-favor companies, reported its first quarterly loss since 2001 on slumping investments earlier this year. The company, which typically makes a quarter to half its profits from insurance, returned to profit in the second quarter with a $3.3 billion net income.
Geico Corp., Berkshire’s car insurer, made a deal with New York Governor David Paterson in August to receive tax credits valued by the state at about $1.5 million over five years as the company opens a new site and hires 300 people in Amherst. In September, NetJets Inc., Berkshire’s unprofitable plane-leasing unit, announced cuts of more than 300 jobs, or about 5 percent of the workforce.
The Connecticut loan is the first such deal between General Re and the state. It will be used for “fixtures and equipment” at the company’s new facility, Rell said.
сряда, 21 октомври 2009 г.
Придобиването на Wachovia увеличи печалбата на Wells Fargo с 98%
21.10.2009 16:30
Американската банка Wells Fargo, която се превърна в най-големия ипотечен кредитор в САЩ през тази година, е отчела рекордна печалба за третото тримесечие. Чрез успешното управление на рисковите заеми и придобиването на Wachovia печалбата се увеличава с 98% на годишна база.
Нетната печалба на Wells Fargo за третото тримесечие нараства до 3,24 млрд. долара, или 56 цента на акция. За сравнение положителният финансов резултат е бил 1,64 млрд. долара, или 49 цента на акция, за същия период на 2008 г. Анализаторите очакваха печалба на акция от 37 цента.
Приходите на Wells Fargo нарастват близо два пъти до 22,5 млрд. долара през третото тримесечие. Въпреки добрите финансови резултати книжата на Wells Fargo поевтиняха с 2,3% до 29,82 долара за акция по време на електронната търговия на Нюйоркската фондова борса, предаде Wall Street Journal.
Wells Fargo е последната от четирите големи щатски банки, която публикува своите финансови резултати за третото тримесечие. JPMorgan, която е втората по активи банка, постигна печалба от 3,6 млрд. долара. Citigroup, която е четвърта в класацията, спечели 101 млн. долара за периода от юли до септември.
Bank of America, която е най-голямата банка в САЩ по размера на своите депозити и активи, отчете загуба от 1 млрд. долара поради нарастването на просрочените заеми. Банката е отделила 11,7 млрд. долара за покриването на кредитни загуби през третото тримесечие.
От началото на тази година пазарната капитализация на Wells Fargo се е повишила с 3,3% и това я превръща в най-печелившата банка на Нюйоркската фондова борса. Инвестиционната компания Berkshire Hathaway на милиардера Уорън Бъфет е най-големият инвеститор в банката с дял от 6,5%.
21.10.2009 16:30
Американската банка Wells Fargo, която се превърна в най-големия ипотечен кредитор в САЩ през тази година, е отчела рекордна печалба за третото тримесечие. Чрез успешното управление на рисковите заеми и придобиването на Wachovia печалбата се увеличава с 98% на годишна база.
Нетната печалба на Wells Fargo за третото тримесечие нараства до 3,24 млрд. долара, или 56 цента на акция. За сравнение положителният финансов резултат е бил 1,64 млрд. долара, или 49 цента на акция, за същия период на 2008 г. Анализаторите очакваха печалба на акция от 37 цента.
Приходите на Wells Fargo нарастват близо два пъти до 22,5 млрд. долара през третото тримесечие. Въпреки добрите финансови резултати книжата на Wells Fargo поевтиняха с 2,3% до 29,82 долара за акция по време на електронната търговия на Нюйоркската фондова борса, предаде Wall Street Journal.
Wells Fargo е последната от четирите големи щатски банки, която публикува своите финансови резултати за третото тримесечие. JPMorgan, която е втората по активи банка, постигна печалба от 3,6 млрд. долара. Citigroup, която е четвърта в класацията, спечели 101 млн. долара за периода от юли до септември.
Bank of America, която е най-голямата банка в САЩ по размера на своите депозити и активи, отчете загуба от 1 млрд. долара поради нарастването на просрочените заеми. Банката е отделила 11,7 млрд. долара за покриването на кредитни загуби през третото тримесечие.
От началото на тази година пазарната капитализация на Wells Fargo се е повишила с 3,3% и това я превръща в най-печелившата банка на Нюйоркската фондова борса. Инвестиционната компания Berkshire Hathaway на милиардера Уорън Бъфет е най-големият инвеститор в банката с дял от 6,5%.
„огромен прогрес“
21.10.2009 09:12
Милиардерът Уорън Бъфет обяви, че през последната година в икономиката се наблюдава „огромен прогрес“. Въпреки това обаче той се въздържа от прогнози какво би могло да се случи през следващите три или шест месеца.
Във видео интервю, записано преди месец и публикувано вчера, към Бъфет е бил отправен въпроса какво ще се случи с икономиката през последното тримесечие на настоящата и първото тримесечие на следващата година, предава CNBC.
Бъфет е заявил, че „не може да бъде сигурен какво ще се случва в конкретните тримесечия“. Според него икономиката е отбелязала изключителен прогрес, след като е имало голяма паника. „И ако някой не е изпаднал в паника, то той не е разбрал какво се е случвало“, убеден е милиардерът.
„Това, което се случи през септември и октомври 2008 година в частност, ще се помни много, много време. Макар правителствата често да объркват нещата, те за щастие направиха някои много правилни стъпки, много важни неща. Направиха го правилно и ни предпазиха от това да паднем от борда“, смята Бъфет.
„Като следствие от финансовата паника през четвъртото тримесечие реалната икономика бе ударена като с чук. Ние се възстановяваме от това. Пациентът отиде в залата за спешна помощ и няма да излезе напълно от болницата за доста дълго време“, посочва специалистът.
21.10.2009 09:12
Милиардерът Уорън Бъфет обяви, че през последната година в икономиката се наблюдава „огромен прогрес“. Въпреки това обаче той се въздържа от прогнози какво би могло да се случи през следващите три или шест месеца.
Във видео интервю, записано преди месец и публикувано вчера, към Бъфет е бил отправен въпроса какво ще се случи с икономиката през последното тримесечие на настоящата и първото тримесечие на следващата година, предава CNBC.
Бъфет е заявил, че „не може да бъде сигурен какво ще се случва в конкретните тримесечия“. Според него икономиката е отбелязала изключителен прогрес, след като е имало голяма паника. „И ако някой не е изпаднал в паника, то той не е разбрал какво се е случвало“, убеден е милиардерът.
„Това, което се случи през септември и октомври 2008 година в частност, ще се помни много, много време. Макар правителствата често да объркват нещата, те за щастие направиха някои много правилни стъпки, много важни неща. Направиха го правилно и ни предпазиха от това да паднем от борда“, смята Бъфет.
„Като следствие от финансовата паника през четвъртото тримесечие реалната икономика бе ударена като с чук. Ние се възстановяваме от това. Пациентът отиде в залата за спешна помощ и няма да излезе напълно от болницата за доста дълго време“, посочва специалистът.
понеделник, 19 октомври 2009 г.
Съветът на Бъфет да се купуват американски акции се отплати с 15% за година
19.10.2009 17:02
Преди точно една година милиардерът Уорън Бъфет отправи препоръка към инвеститорите да се насочат към американски акции. Това се случи в момент на тотална паника на пазарите и с очаквания за още по-голяма нестабилност.
Въпреки всичко обаче Бъфет написа коментар за New York Times, в който обяви, че купува американски акции, за да си осигури „парче от бъдещето на Америка на подценени нива“, припомня CNBC. Тогава милиардерът повтори добре известното правило: „Страхувай се, когато другите са алчни и бъди алчен тогава, когато другите се страхуват“.
Година след съвета на Бъфет, отправен на 17 октомври, широкият американски борсов индекс е напреднал с 14,9 на сто. Не това обаче е основното.
В статията си специалистът посочи, че не се опитва да уцели „момента“ на пазара и че не е залагал на това дали след месец или година пазарите ще му се отплатят. Това е така, тъй като и двата периода се разглеждат от Бъфет като краткосрочни. Практиката на милиардера е да се търсят хоризонти от 5, 10 или 20 години.
Това е добра новина за Бъфет, тъй като моментът тогава бе ужасен за краткосрочно влизане на пазара. Причината е, че предстоеше мощен спад на S&P 500 до дъното от 676,53 пункта, регистрирано на 9 март. Ако някой е успял да уцели това дъно, е получил доходност от над 60 на сто досега.
Основната препоръка на Бъфет е това, че онези, които чакат перфектния момент, поемат огромен риск да закъснеят с влизането си на пазара. Особено ако търсят сигнали, че нещата са започнали да се подобряват.
Поради тази причина Оракулът от Омаха не дава конкретни прогнози за движението на акциите. Единственото, което казва, е това, че „пазарите ще се движат нагоре, може би значително силно, преди сентиментът или икономиката да се подобрят“.
19.10.2009 17:02
Преди точно една година милиардерът Уорън Бъфет отправи препоръка към инвеститорите да се насочат към американски акции. Това се случи в момент на тотална паника на пазарите и с очаквания за още по-голяма нестабилност.
Въпреки всичко обаче Бъфет написа коментар за New York Times, в който обяви, че купува американски акции, за да си осигури „парче от бъдещето на Америка на подценени нива“, припомня CNBC. Тогава милиардерът повтори добре известното правило: „Страхувай се, когато другите са алчни и бъди алчен тогава, когато другите се страхуват“.
Година след съвета на Бъфет, отправен на 17 октомври, широкият американски борсов индекс е напреднал с 14,9 на сто. Не това обаче е основното.
В статията си специалистът посочи, че не се опитва да уцели „момента“ на пазара и че не е залагал на това дали след месец или година пазарите ще му се отплатят. Това е така, тъй като и двата периода се разглеждат от Бъфет като краткосрочни. Практиката на милиардера е да се търсят хоризонти от 5, 10 или 20 години.
Това е добра новина за Бъфет, тъй като моментът тогава бе ужасен за краткосрочно влизане на пазара. Причината е, че предстоеше мощен спад на S&P 500 до дъното от 676,53 пункта, регистрирано на 9 март. Ако някой е успял да уцели това дъно, е получил доходност от над 60 на сто досега.
Основната препоръка на Бъфет е това, че онези, които чакат перфектния момент, поемат огромен риск да закъснеят с влизането си на пазара. Особено ако търсят сигнали, че нещата са започнали да се подобряват.
Поради тази причина Оракулът от Омаха не дава конкретни прогнози за движението на акциите. Единственото, което казва, е това, че „пазарите ще се движат нагоре, може би значително силно, преди сентиментът или икономиката да се подобрят“.
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