> Warren Buffett Blog: November 2013

Friday, November 29, 2013

Harvard turned Warren Buffett down

Warren Buffett, the chairman and CEO of Berkshire Hathaway is a household name, and according to Bloomberg, he has an estimated net worth of $59.3 billion, making him the fourth wealthiest person on the planet-- but there are five things you may not know about the affectionately titled "Oracle of Omaha."

Harvard turned him down
Warren Buffett is rightly characterized as a hometown guy from the Midwest who has a particular affinity for Cherry Coke, McDonald's, and See's Candy (all businesses he owns shares of, or has owned in the case of McDonald's) -- but he is also outrageously intelligent.
Buffett graduated high school at age 16 and promptly enrolled in Ivy League stalwart the University of Pennsylvania, but transferred closer to home to the University of Nebraska after two years. Upon graduating college in 1950, he applied to Harvard business school, and then went to Chicago to be interviewed by a Harvard alum. A 1988 Fortune magazine story chronicles the interview like this:

"What this representative of higher learning surveyed, Buffett says, was ''a scrawny 19-year-old who looked 16 and had the social poise of a 12-year-old.'' After ten minutes the interview was over, and so were Buffett's prospects of going to Harvard. The rejection stung."

Thursday, November 28, 2013

Warren Buffett : My dad was my greatest inspiration

Where did you learn about money?

Warren Buffett : My dad was my greatest inspiration. He was my hero when I was six and he is still my hero now. He is an inspiration to me in every way. What I learned at an early age from him was to have the right habits early. Savings was an important lesson he taught. I had all kinds of small businesses when I was growing up. When I was six I started my first business. I bought a six pack of Coke for 25 cents and sold the cans for a nickel apiece. I also sold magazines and gum door to door.- Article from nbcnews

Wednesday, November 27, 2013

Warren Buffett: How to teach your children about money

Do you think most parents do a good job teaching their kids about money? 

Warren Buffett : Most parents know how important it is to teach kids about money and managing it properly. There was a study many years ago questioning how to predict business success later in life. The answer to the study was the age you started your first business impacted how successful you were later in life. Teaching kids sound financial habits at an early age gives kids the opportunity to be successful when they are an adult. - in nbcnews

Tuesday, November 26, 2013

Why Warren Buffett Bought More of This Bank

Berkshire Hathaway recently disclosed its most up-to-date stock holdings, and the company run by Warren Buffett has recently bought even more stock in one big bank.

While many people know of Berkshire Hathaway's $19.1 billion position in Wells Fargo , some may be surprised to see that Buffett has been steadily adding to his holding of US Bancorp over the past year:

While the biggest gain in position came between the first and second quarter of this year -- it is interesting to note that Berkshire Hathaway has added small incremental gains with each passing quarter. Compare that to Wells Fargo, where Buffett added a sizable position between the first and second quarter of this year, but otherwise his position has remained relatively stable.

Monday, November 25, 2013

Warren Buffett : parents need to start teaching kids about the importance of Managing Money

What do you think is the biggest mistake parents make when teaching their kids about money?

Warren Buffett : I think parents need to start teaching kids about the importance of managing money at an early age. Sometimes parents wait until their kids are in their teens before they start talking about managing money when they could be starting when their kids are in preschool.- in nbcnews

Thursday, November 21, 2013

CCU business students to meet Warren Buffett

Coastal Carolina University's E. Craig Wall Sr. College of Business Administration is one of eight business colleges chosen to travel to Omaha, Neb., for a Q&A session and luncheon with American business magnate Warren Buffett.

Buffett, chairman and CEO of Berkshire Hathaway Inc., entertains business students from colleges across the nation several Fridays a year for the purpose of one-on-one discussions on how to succeed in the business world.

Twenty CCU business students will be traveling to Omaha on Nov. 14, along with Kenneth Small, assistant dean of students for the Wall College of Business, and Gina Cummings, director of CCU's Wall Fellows program.

CCU alumnus Alexander Klaus, a businessman based in Huntersville, N.C., was instrumental in arranging the invitation to meet with Buffett.

"Being chosen to visit with Warren Buffett is a rare opportunity offered only to a select group of business programs," says Barbara Ritter, interim dean of the Wall College of Business.  "It is an honor that the Wall College has been selected as one of these programs. It's an indication of the growing reputation of our college and the increasing alumni presence of the Wall College around the nation."

Wednesday, November 20, 2013

Warren Buffett Cashes In on Railroad Tank Cars

Boomtowns on the prairie, young men heading west to find work as roustabouts—there’s an undeniable throwback quality to the American shale oil industry. The 21st century economy was supposed to be driven by Silicon Valley and Wall Street; instead it’s being pumped out of the ground in North Dakota and Texas. That’s creating growth in unlikely places.

Trains, for example. Much of the shale oil is coming from parts of the U.S. and Canada that don’t have the infrastructure to pipe it to refiners, so it’s going by rail. That’s good news for railroads, and it’s really good news for a sector of the American economy most people never think about: companies that make and lease tank cars.

Tank cars, those torpedo-shaped rail cars built to carry liquids, anything from milk to industrial chemicals, are increasingly being used to carry shale oil. “The traffic has grown significantly, from probably 50,000 carloads a year in 2010 to over 700,000 this year,” says Toby Kolstad, president of the consulting firm Rail Theory Forecasts. “It probably will rise above a million carloads a year in the next year or two.”

Monday, November 18, 2013

Warren Buffett buys Exxon Mobil stake

Warren Buffett’s Berkshire Hathaway Inc on Thursday disclosed a new US$3.45-billion stake in Exxon Mobil Corp, after buying 40.1 million shares in the world’s largest publicly traded oil company.

Although the investment represents just 0.9% of Houston-based Exxon’s shares, analysts said it reflects strong support by the second-richest American of one of the world’s largest and most profitable companies.

In June, Berkshire Hathaway announced it had taken a $500-million stake in Suncor Energy Inc., Canada’s largest integrated operator and major oil sands company. Exxon also has sizable exposure to Canada with a 70% stake in Imperial Oil Ltd., another major oil sands operator in Canada. The deal gives the Oracle of Omaha exposure to growing oil markets across a number of hot oil markets such as U.S. shale, the Canadian oil sands, Kurdistan and Russia, among others.

“When Warren Buffett gives his seal of approval to any company, that is never a bad thing,” said Pavel Molchanov, energy analyst at Raymond James & Associates, who rates Exxon shares a “strong buy.”

Sunday, November 17, 2013

How Warren Buffett defines integrity

When Warren Buffett looks for companies to buy, he looks for two qualities in the CEO: energy and integrity. The benefits of energy are obvious -- every entrepreneur and leader needs stamina to keep going through tough times and take advantage of good ones. What's more intriguing about Buffett's second requirement -- integrity -- is the way he defines it: The ability to say "no."

One company Buffett bought was Pampered Chef, founded by Doris Christopher. She said "no" to runaway growth when the food products marketing company was starting to take off because Christopher felt the business needed a year of consolidation before taking on any more people or customers. That takes nerve.

But I wonder how many corporate executives display this kind of integrity. If you're asked to sell a product you think isn't quite good enough, do you dare to refuse? If you're asked to lead a project that is underfunded and understaffed, do you accept the challenge or point out that it's doomed?

Friday, November 15, 2013

Warren Buffett's Real Estate network, Berkshire Hathaway HomeServices, to debut in Portland

Warren BuffettWarren Buffett is throwing his flagship company’s name behind a new chain of real estate companies assembled last year, and the change comes to Portland this week.Prudential Northwest Properties, a Portland real estate services company acquired by a Berkshire Hathaway affiliate in 2012, will adopt the Berkshire Hathaway HomeServices brand starting Wednesday. The company will be ceremonially unveiling its new for-sale yard sign in the morning, then swapping out signs all around the Portland area the same day.

The Oracle of Omaha doesn’t typically put Berkshire’s name on consumer-facing brands. Instead, the conglomerate owns brands like Geico, Dairy Queen and the BNSF railroad.

Thursday, November 14, 2013

Warren Buffett & Technology Stocks

It's widely assumed that Warren Buffett doesn't invest in technology stocks, but in recent years, this belief has contrasted with reality. After accounting for 0% of his equity portfolio at the end of 2010, the tech sector now makes up one sixth of Buffett's stock holdings. At Insider Monkey, we believe that hedge funds and other prominent investors' best stock picks exhibit market-beating potential, so it's worth paying attention to these developments.

In the case of Buffett and Berkshire Hathaway, they're not your typical technology investors. They follow a very strict set of rules when selecting investm
ents in this space, which, through our observations, boil down to finding tech companies that:
1) trade at very cheap multiples,
2) pay a dividend, and
3) have sustainable product offerings that will safeguard their survival over the next 15 to 20 years.

Wednesday, November 13, 2013

Financial Literacy: Warren Buffett Invites Kids to Join the "Club"

In Hollywood, success is often predicated on who you know. Andy Heyward and Amy Moynihan know Warren Buffet. And Warren Buffet knows Andy Heyward and Amy Moynihan, co-presidents of A-Squared Entertainment. Together, they have created “The Secret Millionaires Club,” an animated financial literacy series in which Buffett serves as mentor to a group of kids whose entrepreneurial endeavors introduce and reinforce basic concepts of business and personal finance.

This isn’t Buffett in name only. Unlike the animated feature Yellow Submarine, in which the Beatles offered no creative input and actors voiced John, Paul, George and Ringo, Buffett has been hands-on in the series’ development, from supplying key financial and life lessons he felt it was important for children to learn to voicing himself and meeting with finalists in the series’ annual Grow Your Own Business Challenge. His name, too, was a useful calling card to attract such stellar guest stars as Jay-Z, Shaquille O'Neal and Bill Gates

Tuesday, November 12, 2013

Warren Buffett & Charlie Munger Best Advice

The Chairman and Vice Chairman of Berkshire Hathaway Corporation reveal what is easier for them that's difficult for most people.
Buffett (about Munger): He's given me a lot more advice than I've given him. He lives a very rational life. I've never heard him say a word that expressed envy of anyone. He doesn't waste time on senseless emotions.

Munger: There's an old saying, "What good is envy? It's the one sin you can't have any fun at." It's 100% destructive. Resentment is crazy. Revenge is crazy. Envy is crazy. If you get those things out of your life early, life works a lot better.

Buffett: It so clearly makes sense.

Munger: We've learned how to outsmart people who are clearly smarter [than we are.]

Buffett: Temperament is more important than IQ. You need reasonable intelligence, but you absolutely have to have the right temperament. Otherwise, something will snap you.

Munger: The other big secret is that we're good at lifelong learning. Warren is better in his 70s and 80s, in many ways, that he was when he was younger. If you keep learning all the time, you have a wonderful advantage.

Monday, November 11, 2013

Warren Buffett Invests in Tech Stocks, But Probably Not Twitter

It’s widely assumed that Warren Buffett doesn’t invest in technology stocks, but in recent years, this belief has contrasted with reality. 

After accounting for zero percent of his equity portfolio at the end of 2010, the tech sector now makes up one sixth of Buffett’s stock holdings.

Friday, November 8, 2013

Warren Buffett watch: Amid conservative split, blog takes aim at Charles Munger Jr.

Charles Munger Jr., the physicist son of Warren Buffett's longtime business partner, is a “dominant force in reviving the (Republican) party and in reshaping California politics,” the San Francisco Chronicle reported. Munger Jr., from Palo Alto., Calif., has donated nearly $100 million to campaigns on ballot measures since 2003 and more than $1.5 million this year to the Republican Party.

He also is involved in a lawsuit that illustrates a split between the party's conservative and less-conservative wings, with Munger on the less-conservative side. His father, also a Republican, is vice chairman of Berkshire Hathaway Inc. of Omaha and lives in Southern California.

Warren Buffett & Technology Stocks

It's widely assumed that Warren Buffett doesn't invest in technology stocks, but in recent years, this belief has contrasted with reality. After accounting for 0% of his equity portfolio at the end of 2010, the tech sector now makes up one sixth of Buffett's stock holdings. At Insider Monkey, we believe that hedge funds and other prominent investors' best stock picks exhibit market-beating potential, so it's worth paying attention to these developments.

In the case of Buffett and Berkshire Hathaway, they're not your typical technology investors. They follow a very strict set of rules when selecting investm
ents in this space, which, through our observations, boil down to finding tech companies that:

1) trade at very cheap multiples,
2) pay a dividend, and
3) have sustainable product offerings that will safeguard their survival over the next 15 to 20 years.

Thursday, November 7, 2013

WARREN BUFFETT makes another big bet on newspapers, buying 63 from Media General

Just three years ago, billionaire Warren Buffett told stockholders at his Berkshire Hathaway Inc. annual meeting that newspapers were doomed to be money-losing propositions. “For most newspapers in the United States, we would not buy them at any price,” he said at the time.

But last November he paid $200 million to buy his hometown daily, the Omaha World-Herald. And on May 17, he announced he was buying 63 dailies and weeklies from Media General Inc. for $142 million in cash. The deal includes such notable titles as the Richmond Times-Dispatch and the Winston-Salem Journal, but not its biggest property, the Tampa Tribune. Media General said it was in discussions with other perspective buyers for the Tribune.

Some of Warren Buffet's excellent tips

Wednesday, November 6, 2013

Is Warren Buffet's Berkshire Hathaway a Safe Bet? - Wall St. Cheat Sheet

Berkshire Hathaway Inc.  the multinational conglomerate holding company run by Warren Buffett, announced late last week that third-quarter profit had climbed 29 percent on investments and gains at non-insurance businesses including the railroad company Burlington Northern Santa Fe (BNSF), Bloomberg reports.

Berkshire’s subsidiaries — which include businesses that haul freight, insure cars, generate electricity, make building supplies, and sell various products — has positioned itself as one of the safest investments as the U.S. economy improves and consumer demand and the housing market continue to improve over time. Bill Smead, chief executive officer of Smead Capital Management, told Bloomberg that acquisitions and investments had positioned Berskhire as “an all-in bet on the U.S.,” with a “lot of earnings leverage.”

The raw numbers showed Berkshire’s net income rose $5.05 billion, or $3,074 per share, from $3.92 billion, or $2,373, year over year. Operating earnings, which exclude some investment results, ended up slightly lower than the estimates by three analysts surveyed by Bloomberg — estimated to hit a $2,403 average, the operating earnings were reported at $2,228 per share. Class B shares fell 0.2 percent to $114.99 in New York after the results were released.

Tuesday, November 5, 2013

Warren Buffet Goes Against Twains Advice

Over a century ago, Mark Twain observed “Never pick a fight with people who buy ink by the barrel.” We are about to ignore Twain’s sage advice.

What follows is almost 4,000 words of fighting with people who buy ink by the barrel — in this case, with the editors of Scripps News. Their owners, The E.W. Scripps Company, publish more than a dozen U.S. newspapers, as well as newswire the Scripps Howard News Service.

What got Berkshire so riled up? A Scripps report on two of the holding company’s insurance businesses, which claimed, among other things, that the units “wrongfully delay or deny compensation to cancer victims and others to boost Berkshire’s profits.” The story is long and complicated and is best read rather than summarized — the entire piece is here. Berkshire says it contains “material inaccuracies and misleading statements,” which it outlines in its statement.

The merits of the story, and of Berkshire’s pushback, are best left for readers to judge. But what’s clear is the story irked the company enough to inspire such a lengthy response — a rarity for Berkshire.

“Although it is not our practice or preference to comment about matters in litigations where we defend our insureds or reinsureds, we will, where and when we deem appropriate, act to correct misinformation that may be inappropriately used against our subsidiaries, our insureds and reinsureds and our people in such matters,” the company said, “especially where the circumstances suggest the misinformation has been published for this purpose.”

Monday, November 4, 2013

Warren Buffett Not Surprised By Obamacare Technical Problems

Buffett : I’m not totally surprised. I’ve been involved in enough rollouts of big tech project before, so when you look at the scope of this, I’m not totally surprised [by the problems]. But it’s very bad that this has happened. Understandably it affects people’s attitude toward the whole concept of Obamacare. I’m glad I wasn’t in charge—I’ll put it that way [laughs].

Sunday, November 3, 2013

Warren Buffett: Top 3 investing mistakes to avoid

Warren Buffett, the billionaire investor with the Midas touch, has a message for Main Street stock investors: "Don't beat yourself."

"The nice thing about investing in stocks is that, over time, equities are going to do well," Buffett tells USA TODAY. "American business is going to do well. America is going to do well. So you have the tide with you. Building wealth in stocks is still the way to go, even though the ride can get bumpy from time to time."

Warren Buffett Warns Amateur Investors Against This Common Mistake

"You don't need to look at the prices of the stocks you own from week-to-week, or month-to-month, or even year-to-year," says Buffett. "If you own a cross-section of American businesses, and you don't get excited (and buy) just at the very top, and if you buy in over time, you are going to do well."

Saturday, November 2, 2013

US housing market coming back

Business magnate Warren Buffett says the US housing market has made progress but has not yet made a full recovery. "It's coming back," the billionaire chairman and chief executive officer of Berkshire Hathaway said at an event at the New York Public Library.

"Pricing is better in almost all markets by a reasonable percentage from a few years ago. Housing starts are up somewhat. They still are not where I would regard as an equilibrium point, where they match household formation."

A rebounding housing market has helped Berkshire's subsidiaries that make carpet, bricks, insulation and houses. Some of those businesses have expanded in recent years through acquisitions as the industry recovers from the worst slump in seven decades.

Buffett, 83, has been predicting a real estate revival for years and positioning his company to benefit from it. He said in early 2010 that the turnaround would probably begin "within a year or so". While that call proved wrong, he has since reiterated that the industry would rebound because of increasing population and limited supply.

Friday, November 1, 2013

Why Warren Buffett Sold Tesco PLC

There has been much debate recently about whether supermarkets are a good investment. The news that Warren Buffett has reduced his stake in Tesco (LSE:TSCO) (NASDAQOTH: TSCDY.US) has just added to this debate. In this article, I try to work out why he has sold shares in Tesco.

Buffett bought Tesco because he thought that supermarkets are gaining market share from corner shops and the high street, plus Tesco is expanding in the rapidly growing retail sectors of emerging markets.
A fragmenting retail market

But the reality has been a whole lot harsher. In the UK, the big supermarket chains (Tesco, Asda, Sainsburys, Morrisons) have not only been competing fiercely against each other, but against both high and low-end rivals such as Aldi, Lidl and Waitrose. Whereas a decade ago it seemed the grocery market was being gobbled up by fewer and bigger players, it has now begun to fragment again. Because of this, Tesco is no longer growing in the UK. What about emerging markets? Well, growth here has also been lacklustre. Profits in both Europe and Asia have fallen.