> Warren Buffett Blog: October 2014

Monday, October 27, 2014

Short Sellers beating Warren Buffett at the moment

When short-sellers take positions opposite from Warren Buffett, it appears to be wise to side with the short-sellers. In the past year, activist short-sellers have clashed with Berkshire Hathaway at three companies: International Business Machines Corp. (IBM), Chicago Bridge & Iron Company N.V. (CBI) and Exxon Mobil Corporation (XOM). 

In all three cases, the short-sellers are currently ahead. In addition, Berkshire has suffered losses on its position in Tesco, which prominent hedge funds successfully shorted earlier this year though not in an "activist" fashion. 

However that does not mean Berkshire Hathaway stock is performing poorly. On the contrary Berkshire is having an excellent 2014, with its stock up 18% compared to the S&P 500's 8%. Berkshire and Warren Buffett can stumble just like any of us but they are mere stumbles in the journey, longer term Buffett has proved there is no one better than him in this game.

Tuesday, October 21, 2014

IBM stock plunge causes Warren Buffett $1 Billion paper loss

Warren Buffett could lose $1billion due to plummeting IBM stocks this week.

Warren Buffett's company Berkshire Hathaway, of which he is CEO, has 70,173,978 IBM shares. 

Buffett risked losing $1,056,118,369 when IBM saw its stock price fall 8.3% before the market opened, CNBC reported Monday morning.

Monday, October 20, 2014

Warren Buffett admits Tesco mistake, reduces holdings

Billionaire investor Warren Buffett has dealt Tesco a double blow after dumping more than 245 million of the crisis-hit grocer’s shares just days after branding his holding a ‘huge mistake’.

In a TV interview he had said: ‘I made a mistake on Tesco. That was a huge mistake by me.’

The investment guru, known as the Sage of Omaha, is thought to have lost close to $800million since investing in the troubled supermarket back in 2006.

Buffett’s investment vehicle Berkshire Hathaway was the third-largest shareholder, with a 3.97 per cent stake, but it has reduced this.

Monday, October 13, 2014

Buffett rebranding Auto and Home businesses

Revenues in the Berkshire division that includes the real estate business jumped 26 per cent to $1.2 billion in the first six months of this year, according to a company filing.

Berkshire Hathaway has this year dramatically expanded the use of its own name, rebadging its family of utility companies, U.S. estate agents and a newly acquired car dealership. The Van Tuyl car dealership chain that Berkshire acquired earlier this month - the fifth largest in the U.S., with over $8 billion in annual sales - plans to continue making acquisitions after being rebranded Berkshire Hathaway Automotive, it said at the time of the deal. 

Warren Buffett latest holdings 2014

Company Owned 
Symbol          Percentage    Owned
American Express Company AXP 14.49%
Bank of New York Mellon  BK 2.18%
Chicago Bridge & Iron Company CBI 9.89%
Charter Communications, Inc. CHTR 2.13%
Conoco Phillips COP 0.11%
Costco Wholesale Corporation COST 0.99%
Deere & Company DE 1.11%
NOW Inc DNOW 1.71%
DaVita HealthCare Partners Inc DVA 17.51%
General Electric Company GE 0.11%
Graham Holdings Co GHC 1.86%
General Motors Company GM 2.05%
Goldman Sachs Group Inc GS 2.87%
International Business Machines Corp. IBM 7.03%
Johnson & Johnson JNJ 0.01%
The Coca-Cola Company KO 9.12%
Kraft Foods Group Inc KRFT 0.03%
Liberty Global plc  LBTY 5.90%

Lee Enterprises, Incorporated LEE 0.17%
Liberty Media Corp LMCA 1.17%
Mastercard Inc MA 0.35%
Moody's Corporation MCO 11.68%
Mondelez International Inc MDLZ 0.03%
Media General, Inc. MEG 5.24%
M&T Bank Corporation MTB 4.08%
National-Oilwell Varco, Inc. NOV 1.70%
Precision Castparts Corp. PCP 1.31%
The Procter & Gamble Company PG 1.95%
Phillips 66 PSX 1.16%
Sanofi SA (ADR) SNY 0.15%
Suncor Energy Inc. (USA) SU 1.12%
Torchmark Corporation TMK 3.24%
United Parcel Service, Inc. UPS 0.01%
U.S. Bancorp USB 4.44%
USG Corporation USG 26.98%
Visa Inc V 0.29%
Viacom, Inc. VIAB 1.80%
Verisk Analytics, Inc. VRSK 0.94%
Verisign, Inc. VRSN 10.39%
Verizon Communications Inc. VZ 0.36%
WABCO Holdings Inc. WBC 6.82%
Wells Fargo & Co WFC 8.88%
Wal-Mart Stores, Inc. WMT 1.82%
Exxon Mobil Corporation XOM 0.96%

Holdings are as of June 30, 2014 as reported in Berkshire Hathaway's 13-F filing on August 14, 2014, 

Thursday, October 9, 2014

Hillary Clinton to be next president of USA

Hillary is going to run. Hillary's going to win. I will bet money on it. I don't do that easily.

She's going to announce it as late as possible.

Tuesday, October 7, 2014

Warren Buffett surprised by slow home construction numbers

You would think that people would be lining up now to get mortgages to buy a home. It’s a good way to go short the dollar, short interest rates. It is a no-brainer. But so far home construction pickup has been slower than I had anticipated.

Household formation falls off dramatically in a recession, at least initially, but that doesn’t last long. Hormones kick in and in-laws get tiresome, too.

Thursday, October 2, 2014

Oncor may get a buyer in Warren Buffett

Warren Buffett’s Berkshire Hathaway Inc. is among other companies that signed confidentiality agreements to explore bids for Energy Future Holdings Corp.’s Oncor electricity distributor.

Oncor, which operates the largest distribution and transmission business in Texas, delivers electricity to more than 3 million homes and businesses and serves Dallas-Fort Worth. The company is prized because it’s poised to take advantage of population growth in the state and it has said it plans to invest $1 billion annually in power lines through 2018.

Wednesday, October 1, 2014

How Warren Buffett picks investments

We first have to decide whether we can sensibly estimate an earnings range for five years out, or more. If the answer is yes, we will buy the stock [or business] if it sells at a reasonable price in relation to the bottom boundary of our estimate. 

If however, we lack the ability to estimate future earnings - which is usually the case - we simply move on to other prospects.