> Warren Buffett Blog: 2018

Monday, May 21, 2018

Warren Buffett as an investor, teacher | DOCUMENTARY 2018



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Monday, May 7, 2018

More Apple purchases and possibly more to come

Berkshire has purchased an additional 75 million AAPL shares during the first quarter of this year 2018. Buffett says he wants to buy even more of Apple shares.

Speaking at the annual Berkshire Hathaway shareholder meeting, Buffett praised Apple for creating “extremely sticky” products that bring customers into its ecosystem.

Furthermore, Buffett said that he would love to see Apple go down in price so Berkshire Hathaway could further increase its ownership. The conglomerate is currently the third largest Apple shareholder:
“We would love to see Apple go down in price.” 



Thursday, May 3, 2018

BYD has been very profitable to Buffett even with recent market weakness

The rout in BYD Co, a Chinese electric vehicle manufacturer shares is nearing $9 billion as investors desert what was the world’s top stock only months ago.

Investors and analysts alike are losing faith in BYD’s ability to thrive with fewer government subsidies and growing competition, with the company last week predicting first-half profit may tumble as much as 83 percent. It’s among the year’s worst performing Chinese companies in Hong Kong, and has given back almost all of the gains triggered by last year’s euphoria over China’s plan to get rid of fossil-fueled cars.

Buffett’s investment in BYD has been quite profitable since a unit of Berkshire Hathaway first bought 225 million shares in September 2008, paying a discounted HK$8 apiece. The billionaire, known for his long-term investing style, held on to the stake even as prices soared to HK$80.45 last October. He once told a Chinese state broadcaster that he “loved” the shares.

BYD has a habit of whipsawing investors. The Hong Kong shares have been either oversold or overbought -- and often both -- every year since its 2002 initial public offering in the city. The company’s mainland-listed shares tumbled 7 percent on Wednesday, the steepest loss among China’s 50 largest firms, as onshore equity traders caught up following a two-day holiday.

Monday, April 9, 2018

Warren Buffett praises Jack Bogle of Vanguard

"Jack Bogle has done probably more for the American investor than any man in the country. Jack Bogle many years ago, he wasn’t the only one talking about an index fund, but it wouldn’t have happened without him. I estimate that Jack, at a minimum, has saved, left in the pockets of investors without hurting them overall in terms of performance, gross performance, he’s put tens, and tens, and tens, of billions into their pockets. And those numbers are going to be hundreds and hundreds of billions over time." 

Thursday, March 22, 2018

Should the wealthy invest in Index Funds ?


In many aspects of life, indeed, wealth does command top-grade products or services. For that reason, the financial 'elites' ... have great trouble meekly signing up for a financial product or service that is available as well to people investing only a few thousand dollars. Both large and small investors should stick with low-cost index funds.

Tuesday, March 20, 2018

Warren Buffett salary is just $100,000

Berkshire Hathaway Inc.’s Warren Buffett is scoring particularly well on a new rule requiring companies to disclose the ratio of a chief executive officer’s pay to that of the median employee.

His annual compensation of $100,000 was just 1.87 times the median employee’s pay of $53,510, a figure calculated from a sample of about two-thirds of Berkshire’s total employees, according to a filing released Friday. He also gives back about $50,000 to the company “for minor items such as postage or phone calls that are personal,” meaning his take-home pay would be less than that median figure.

Wednesday, March 14, 2018

Stocks more attractive than bonds at the moment

If you buy a 30-year government bond, it has a whole bunch of coupons attached. In the old days it does, now it's all electronic. But it has a whole bunch of coupons. And the coupon pays 3%, or whatever it may say. And you know that's what you're going to get between now and 30 years from now. And then they're going to give you the money back. What is a stock? A stock is the same sort of thing. It has a bunch of coupons. It's just they haven't printed the numbers on them yet. And it's your job as an investor to print those numbers on it. If those numbers say 10% and most American businesses earn over 10% on tangible equity. If they say 10%, that bond is worth a hell of a lot more money than a bond that says 3% on it. But if that government bond goes to 10%, it changes the value of this equity bond that, in effect, you're buying.

When you buy an interest in General Motors or Berkshire Hathaway or anything, you are buying something that, over time, is going to return cash to you. Maybe a long time in terms of Berkshire, but it'll be bigger numbers. And those are the coupons. And your job as an investor to decide what you think those coupons will be because that's what you're buying. And you're buying the discounted value. And the higher the yardstick goes, and the yardstick is government bonds, the less attractive these other bonds look. That's just fundamental economics. 

So in 1982 or '83, when the long government bond got to 15%, a company that was earning 15% on equity was worth no more than book value under those circumstances because you could buy a 30-year strip of bonds and guarantee yourself for 15% a year. And a business that earned 12%, it was a sub-par business then. But a business that earns 12% when the government bond is 3% is one hell of a business now. And that's why they sell for very fancy prices.


Monday, March 12, 2018

Apple VS IBM | I was wrong on IBM

Well I was wrong on at least I felt I was wrong on IBM. Now, I may have been wrong when I sold it, too. But I certainly was wrong when I bought it. And I've felt that Apple has an extraordinary consumer franchise. 

Apple's a different kind of business than IBM. They're both tech, obviously, in a major way. And they even have a joint venture, you know, on some things. But I think I understand consumer behavior perhaps better than I do the tech business. It wouldn't take much to beat it. And I liked it, I like Tim Cook very much. I like their policies. I see how strong that ecosystem is. It's to an extraordinary degree. I mean, I look at my grandchildren, my great grandchildren and everybody in the office, I mean, their families. I talk to the people at the Furniture Mart when the ten hadn't arrived, nobody goes over to, you know, buy an Android. 

I mean, you are very, very, very locked in at least psychologically and mentally, to the product you're using. I mean, you got all kinds of stuff up on there. It's a very sticky product.

Monday, February 26, 2018

Warren Buffett 2017 Shareholder letter

Berkshire has just released its shareholder letter for 2017.

Berkshire’s gain in net worth during 2017 was $65.3 billion, which increased the per-share book value of both our Class A and Class B stock by 23%. Over the last 53 years (that is, since present management took over), per share book value has grown from $19 to $211,750, a rate of 19.1% compounded annually.

The format of that opening paragraph has been standard for 30 years. But 2017 was far from standard: A large portion of our gain did not come from anything we accomplished at Berkshire.

The $65 billion gain is nonetheless real – rest assured of that. But only $36 billion came from Berkshire’s operations. The remaining $29 billion was delivered to us in December when Congress rewrote the U.S. Tax Code. (Details of Berkshire’s tax-related gain appear on page K-32 and pages K-89 – K-90.)

After stating those fiscal facts, I would prefer to turn immediately to discussing Berkshire’s operations. But, in still another interruption, I must first tell you about a new accounting rule – a generally accepted accounting principle (GAAP) – that in future quarterly and annual reports will severely distort Berkshire’s net income figures and very often mislead commentators and investors.

Read the full 2017 Share holder letter here.

Wednesday, February 21, 2018

Teva shorts run to cover | Berkshire buys Teva stake

It has been revealed that Warren Buffett's Berkshire Hathaway made a $358 million investment in Israel-based drug company Teva Pharmaceutical Industries.

Since the drug industry has not traditionally been a big focus for Berkshire, it suggests the investment is led by Combs, 47, and 55-year-old Weschler, the younger generation of stock pickers to which the 87-year-old Buffett has been giving more power over Berkshire's giant portfolio of stock bets, said Lawrence Cunningham, author of Berkshire Beyond Buffett: The Enduring Value of Values.

Monday, February 19, 2018

Buffett buys more Apple stock and Sells IBM


Warren Buffett has increased his stake in Apple by adding 31 million Apple shares in the last three months of 2017, while drastically cutting his stake in International Business Machines Corp. (IBM), according to new 13F SEC filings.

Buffett’s investment firm, Berkshire Hathaway, ended the year with 165.33 million Apple shares, collectively worth some $27.6 billion. Berkshire Hathaway is now Apple’s fourth-largest institutional investor. The firm began buying Apple stock in early 2016.

Meanwhile, Berkshire Hathaway sold off around 35 million shares of IBM in the fourth quarter, and entered 2018 with just 2.05 million shares. The firm began buying up IBM stock in 2011, and at one point held more than 80 million shares.

Monday, February 12, 2018

BlackRock to launch a Buffett style Berkshire Fund

BlackRock is planning to launch a fund designed to replicate the private equity approach of Warren Buffett’s firm Berkshire Hathaway.

It is understood the new fund, which is set to be called the BlackRock Long-Term Private Capital fund, will buy and hold stakes in companies and will be the firm's first direct-investment vehicle.

The launch was first reported by the Wall Street Journal which stated that BlackRock Long-Term Private Capital fund will aim to raise $10 billion (£7.2 billion) from sovereign wealth funds, pensions and other big investors.

The global head of active equities at the firm Mark Wiseman, who is also chairman of BlackRock Alternative Investors, is set to take charge of the new strategy.

Wednesday, January 17, 2018

Cryptocurrencies will come to a bad ending



"In terms of crypto-currencies, generally, I can say with almost certainty that they will come to a bad ending. When it happens or how or anything else, I don't know. If I could buy a five-year put on every one of the crypto-currencies, I'd be glad to do it but I would never short a dime's worth."

Monday, January 8, 2018

America will continue to grow and provide a decent life for all

Excerpts from Warren Buffett's letter published in Time.com


I was born in 1930, when the symbol of American wealth was John D. Rockefeller Sr. Today my upper-middle-class neighbors enjoy options in travel, entertainment, medicine and education that were simply not available to Rockefeller and his family. With all of his riches, John D. couldn’t buy the pleasures and conveniences we now take for granted.

Two words explain this miracle: innovation and productivity. Conversely, were today’s Americans doing the same things in the same ways as they did in 1776, we would be leading the same sort of lives as our forebears.

Replicating those early days would require that 80% or so of today’s workers be employed on farms simply to provide the food and cotton we need. So why does it take only 2% of today’s workers to do this job? Give the credit to those who brought us tractors, planters, cotton gins, combines, fertilizer, irrigation and a host of other productivity improvements.

To all this good news there is, of course, an important offset: in our 241 years, the progress that I’ve described has disrupted and displaced almost all of our country’s labor force. If that level of upheaval had been foreseen–which it clearly wasn’t–strong worker opposition would surely have formed and possibly doomed innovation. How, Americans would have asked, could all these unemployed farmers find work?

We know today that the staggering productivity gains in farming were a blessing. They freed nearly 80% of the nation’s workforce to redeploy their efforts into new industries that have changed our way of life.

You can describe these develop-ments as productivity gains or disruptions. Whatever the label, they explain why we now have our amazing $59,000 of GDP per capita.

This game of economic miracles is in its early innings. Americans will benefit from far more and better “stuff” in the future. The challenge will be to have this bounty deliver a better life to the disrupted as well as to the disrupters. And on this matter, many Americans are justifiably worried.

Let’s think again about 1930. Imagine someone then predicting that real per capita GDP would increase sixfold during my lifetime. My parents would have immediately dismissed such a gain as impossible. If somehow, though, they could have imagined it actually transpiring, they would concurrently have predicted something close to universal prosperity.

Instead, another invention of the ensuing decades, the Forbes 400, paints a far different picture. Between the first computation in 1982 and today, the wealth of the 400 increased 29-fold–from $93 billion to $2.7 trillion–while many millions of hardworking citizens remained stuck on an economic treadmill. During this period, the tsunami of wealth didn’t trickle down. It surged upward.

In 1776, America set off to unleash human potential by combining market economics, the rule of law and equality of opportunity. This foundation was an act of genius that in only 241 years converted our original villages and prairies into $96 trillion of wealth.

The market system, however, has also left many people hopelessly behind, particularly as it has become ever more specialized. These devastating side effects can be ameliorated: a rich family takes care of all its children, not just those with talents valued by the marketplace.

In the years of growth that certainly lie ahead, I have no doubt that America can both deliver riches to many and a decent life to all. We must not settle for less.

Monday, January 1, 2018

Warren Buffett just won a $1 million bet made 10 years ago

Nearly a decade ago, in the midst of the global financial crisis, Ted Seides, the former CIO of Protege Partners, placed a very public, million-dollar bet on behalf of his firm. His counterparty in that bet was none other than Warren Buffett. Seides wagered that over the course of the subsequent decade, a bespoke portfolio of 5 funds of funds, would outperform a low-cost Vanguard index fund selected by Mr. Buffett.


When he placed the bet a decade ago Buffett said he would hand over any proceeds from the victory to charity. The charity he chose was his local Girls Inc. affiliate, The Wall Street Journal reports. The charity provides after-school care as well as summer programs for girls ages 5 to 18.


Buffett officially “won” the wager last week, but said throughout 2017 that he was confident that he would win. Over the course of the bet the S&P 500 index fund returned 7.1% compounded annually, significantly more than the basket of funds selected by an asset manager at Protégé Partners. That basket only returned an average of 2.2%.

Both Buffett and Protégé Partners originally put around $320,000 into bonds for the bet that was expected to appreciate to $1 million over the course of the 10 years. The bonds ended up appreciating faster than either party expected, and in 2012 the duo decided to purchase Berkshire B shares, which are now worth $2.22 million.