> Warren Buffett Blog: November 2016

Wednesday, November 23, 2016

Buffett buys shares in American Airlines, Delta Airlines and United Airlines


Warren Buffett has updated his third-quarter portfolio Monday afternoon, revealing buys of airline companies.

The three airline stocks purchased by Berkshire were American Airlines, Delta Airlines and United Continental Holdings Inc. 

Buffett has traditionally detested airline stocks, famously saying in 2002, ”If a capitalist had been present at Kitty Hawk back in the early 1900s, he should have shot Orville Wright.”

In 2013 he said "The airline industry has situation where have very, very, very low incremental cost per seat with enormous fixed costs. The temptation to sell that last seat at a very low price is very high and sometimes it’s very hard to distinguish between that seat and the last seat. It’s labor-intensive and capital-intensive and largely commodity-type business. As Bill Miller points out, it’s been a death trap for business since Orville took off. If it ever gets down to one airline it will be a wonderful business and the question will be if having gotten down to relatively few through bankruptcy the question will be whether it is a good business yet. I don’t know the answer but I’m skeptical."

Monday, November 21, 2016

The American dream is still alive


The American Dream
It’s alive for millions and millions. The American dream should be, if you work productively at 40 hours a week, you’re going to have a decent life.

That should be the No. 1 economic goal of this country. You don’t have to worry about having more stuff. You do have to worry about whether people who are perfectly decent citizens, working hard, are getting enough of it so they can live decently.

Monday, November 14, 2016

Monday, November 7, 2016

Rich should pay their fair share of taxes

"Those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.”

“My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice."

“As I got to see more of the world, I started to see there were a lot of things that were unfair and the democrats seem to be doing a little bit more about it."

Thursday, November 3, 2016

It takes minutes for Buffett to make a billion dollar deal

"When somebody calls, I can usually tell within two or three minutes whether a deal is likely to happen or not. There’s just half-a-dozen filters. And it either makes through the filters or not."

One of these unsolicited pitches came from Eitan Wertheimer, chairman of Israeli metalworking company Iscar, back in October 2005. Wertheimer’s proposal came in the form of a letter, and although it was just one and a quarter pages long, it was enough to pique Buffett’s interest. Iscar’s management team visited Omaha a month later.

Buffett decided to buy 80% of Iscar for about $5 billion in May 2006. Berkshire later bought the rest of the company for $2 billion in 2013.

Berkshire Hathaway also decided on its largest acquisition with the same speed. The company agreed to buy Precision Castparts in a $37.2 billion in Aug. 2015.

When asked if Buffett he had spent a year studying the company given the cost of the deal, and Buffett responded with “No.” Buffett said that he met Precision’s CEO, Mark Donegan, just a month before the deal was announced, heard him talk for 30 minutes, liked him, and decided that he was interested in offering a bid.