> Warren Buffett Blog: June 2014

Monday, June 30, 2014

Should not always give the rich more money

The rich are always going to say that, you know, just give us more money and we'll go out and spend more and then it will all trickle down to the rest of you. But that has not worked the last 10 years, and I hope the American public is catching on.

Thursday, June 26, 2014

Wednesday, June 25, 2014

Warren Buffetts Hero is Chuck Feeney

Warren Buffett's role model is Chuck Feeney, a former billionaire who gave away his entire fortune.

“Chuck has set an example,” Buffett said while presenting Feeney with the Forbes 400 Lifetime Achievement Award for Philanthropy. “It’s a real honor to talk about a fellow who is my hero and Bill Gates’ hero. He should be everybody’s hero.”

Chuck Feeney cofounded Duty Free Shoppers and made a fortune selling cigarettes, booze and bags to travelers. In 1984, he secretly transferred his 38.75% ownership of Duty Free to what became the Atlantic Philanthropies, his foundation. By the time Atlantic Philanthropies shuts down in 2016, it will have given away $7.5 billion to promote education, human rights, science and healthcare around the world. 

No one has ever given away the entirety of such a large fortune while they were still alive.

Thursday, June 19, 2014

Buffett to continue investing in energy sector

We’ve poured billions and billions and billions of dollars in retained earnings, and several billion of additional equity [into the energy business]. And we’re going to keep doing that as far as the eye can see.

Wednesday, June 18, 2014

What Warren would do if he were President of USA

Well, if I were in charge of running the United States for the next 500 years, I would want the ability to produce energy in a way that would take care of national defense under all circumstances. Because I would not want to be dependent on the rest of the world in that respect.

But if otherwise I could use up, you know, as important an item to the planet as energy and use the other guy's, and like I said, if I have responsibility for hundreds and hundreds of years, I would use the other guy's and trade him little pieces of paper for it. But I would always want to have an up-to-date national defense.

Monday, June 16, 2014

Warren Buffett on business and Berkshire results

What we see is just steady, but far from spectacular, gains and that’s been going on now for five years. And autos are getting very strong now, they’ve really come back. Housing looked like it was catching a big tailwind, and it’s still doing OK, but it’s disappointing.

Thursday, June 12, 2014

Buffett: Stocks vs Dollars

Well, the option is to own equities or own fixed dollars. I think it's clear you own equities. I do not think they're in crazy territory. But most of the time stocks have been in a zone of reasonableness over my lifetime. I think they're in the zone of reasonableness now. And certainly if you said to me it's either going to have to be long the 30-year bond and short an index fund for 30 years or vice versa, it would be long index fund. I would be long in stocks. 

Wednesday, June 11, 2014

Berkshire board terrific

[In] Berkshire we look for directors that were shareholder-oriented, business-savvy, and interested in Berkshire. And we think those criteria make sense. Other people have a whole bunch of different checklists. But we have a group of directors that get paid virtually nothing, and they have to — their interest has to come about because they find the place interesting, and in many cases because they have huge investments. And they made those investments themselves. Nobody gave them shares. So it's a very unusual board. But it's a terrific board.

Tuesday, June 10, 2014

Warren Buffett praises Brian Moynihan

I think Brian Moynihan is doing a terrific job. He's got a lot of problems to deal with, not of his making. He's just methodically worked his way through. And one of the problems is when he thinks he's worked his way through, there's a few more.

He's done the right things. He's simplified the bank dramatically, brought down the balance sheet. He's brought it back to the fundamentals. Bank of America has a wonderful deposit franchise, and it will do well over time. When I first bought the stock, when I was talking to Brian, I said you have a long period ahead of you. You'll work through all of this. 

Monday, June 9, 2014

Buffett on Nebraska Furniture Mart and its dominance

Nobody is going to be able to compete with the Nebraska Furniture Mart. I mean, this store does more home furnishing business than any store in the country. And what are we in, I don't know, the 50th market in the country? 

This store does $450 million annually. It's doing $40 million during the Berkshire shareholders week. But there's no store that remotely can offer the variety. There's no store that can undersell us.

Thursday, June 5, 2014

Warren Buffett praises Mary Barra

Mary, I think she's terrific. She loves cars. I told her she was a car guy. Just all the way through, and she knows cars. Every aspect of it that you get into, she knows the impact, the trade-offs involved between weight and style and price. 

I mean, she just has cars down forward and backward. And she loves General Motors. Her father was there a long period of time. She's made for the job.

Wednesday, June 4, 2014

Warren Buffett on human behaviour

I've been involved with a couple situations where a proposal to buy a company has come to the board and been shot down. What happens in that case is one person finally pipes up. 

It's a little like the kid saying the Emperor is wearing no clothes and everybody will come on board. But the first person to speak is like belching at the dinner table. And then sometimes other people start belching and the move away from you. Depends on the situation, but there are some people that have bravery to be followers in a situation like that but not to initiate it. You've seen that in other aspects of human behavior.

Tuesday, June 3, 2014

Bufffett praises Berkshire way of management

Our approach makes sense: great managers, great businesses, conservatively capitalized. Capitalism is about allocating capital, and we can do that without tax consequences. We can take money from See's and move it to the place of best return, as the situation says, be it wind farms or whatever. And nobody is better to do that than Berkshire. But, it needs to be done with business-like principles, not stock promotion. You can see what happened with Tyco.

Monday, June 2, 2014

Warren Buffett 2014 lunch auction

For anyone interested in a private luncheon with Warren Buffett, your yearly chance has once again arrived. The 15th annual Glide Foundation Warren Buffet lunch auction begins June 1, 2014 and ends Friday, June 6 at 7:30 pm PDT. The auction has raised over $15 million for the charity since it started in 2000.

In order to be able to bid on the auction, you’ll need to fork over a minimum of $25,000. 

Sunday, June 1, 2014

Warren Buffett on HFT

It's[High Frequency Trading] not a liquidity provider. It may create more volume. But that's not the same as being a liquidity provider. To the extent that it's front-running, I think society generally has been against front-running for good reasons and where it's — in the old-fashioned front-running, they had rules against it.

Here they gained a natural advantage by speed just by figuring out how the system worked and then getting there first, and that adds nothing to GDP or anything, a real output of goods and services. On the other hand, the market isn't regulated. And for the small investor, they've never had it so good. And high-frequency trading I don't think costs them a penny probably.