> Warren Buffett Blog: June 2016

Wednesday, June 29, 2016

Berkshire is poised for success whether its Trump or Clinton for president of USA

In my lifetime, GDP per capita in real terms has gone up six for one … I’m confident that 20 years from now there will be far more output per capita than there is now. No presidential candidate or president is going to end that. They can shape it in ways that are good or bad, but they can’t end it.

If either Donald Trump or Hillary Clinton becomes president, I think Berkshire will continue to do fine.

Buffett endorses Hillary Clinton

Monday, June 27, 2016

Warren Buffett making money in Canadian electric market

Two years ago, Buffett’s Berkshire Hathaway Inc. bought more than half of all the electric transmission lines crisscrossing Albertan farmland in a $3.2-billion acquisition of Calgary-based AltaLink LP from troubled SNC-Lavalin Group Inc., making Berkshire Hathaway the electricity transmission provider to 85 per cent of Albertans.

Electricity analysts in the province say that purchase, like many of Buffett’s deals, now looks brilliant. Electricity prices in the province have collapsed — from $49 per megawatt hour in 2014 to around $16 so far this year — but transmission prices have risen, and will continue to rise for at least the next five years.

“It’s got to be the sweetest deal around,” said Calgary-based electricity consultant Sheldon Fulton of Buffett’s business in Alberta, where controversial government regulations force consumers to pay 100 per cent of the cost to build new transmission lines while AltaLink — or its smaller competitors such as Atco Ltd., Enmax Corp. and Epcor Utilities Inc. — have a provincially set 8.75-per-cent after-tax return on their equity in the power lines.

Monday, June 20, 2016

Apple stake purchase done by Todd Combs or Ted Weschler

Berkshire Hathaway's purchase price of Apple Stock has now been revelaed as $99.49. That’s what Warren Buffett’s company paid, on average, to accumulate its stake in Apple, according to a recent regulatory filing.

The company purchased 9.81 million shares of Apple in the days through March 14 for about $976 million, The holding was initiated by one of Buffett’s investment managers, Todd Combs or Ted Weschler. Though the billionaire’s deputies may deviate from his well-known avoidance of technology stocks, they tend to follow his deeper ideas about investing, including buying stocks at prices where they believe there’s a “margin of safety” — or a buffer against losses.

Monday, June 13, 2016

Someone just agreed to par $3.4 million to have lunch with Warren Buffett

Billionaire Warren Buffett has again auctioned off a private lunch to raise money for a San Francisco homeless charity, and this time the meal goes to the highest bidder for $3.4 million.

The bid of $3,456,789 from the winner, who wishes to remain anonymous, ties for the record highest. In 2012, the winner also paid $3,456,789 to become the most expensive individual charity item ever sold on eBay.

“The one thing I will tell you, because we’re in this crowd: It’s a woman,” Buffett, the billionaire chairman of Berkshire Hathaway Inc, said at a United State of Women conference in Washington.

The winner and up to seven friends can dine with Buffett at the Smith & Wollensky steakhouse in midtown Manhattan.

The weeklong eBay auction began June 5 and wrapped up Friday night. By midmorning Friday, the bidding reached more than $2.6 million, nearly $300,000 higher than last year’s winning bid by Beijing-based Dalian Zeus Entertainment Co.

Six of the past eight winners paid more than $2 million to dine with Buffett, the investor who leads the Berkshire Hathaway conglomerate.

Buffett has raised more than $20 million for the Glide Foundation. The lunch auctions began after Buffett’s first wife, Susie, showed him Glide, where she had been volunteering. Susie Buffett died in 2004, but the connection between Warren Buffett and Glide’s founders has endured. Buffett has praised the foundation’s approach in providing meals, health care, job training, rehabilitation and housing support to the poor and homeless.

updated: June 20, 2016 to include the gender of the winner

Wednesday, June 8, 2016

Buy when everyone is selling and sell when everyone is buying

During the Depression, the Dow hit its low of 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980's, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

Monday, June 6, 2016

Saving money for future

I have pledged – to you, the rating agencies and myself – to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits.

Wednesday, June 1, 2016

Berkshire company buys precious metal company John Nordt

Richline Group, a jewelry company owned by Warren Buffett’s Berkshire Hathaway, made a second acquisition in less than a month with the purchase of a precious-metals company, John C. Nordt.

Nordt, a manufacturer for and supplier to the jewelry industry, was founded in 1872 in New York and has operated in Roanoke, Virginia, since 1984.

The deal, effective June 1, comes hot on the heels of Richline’s purchase of online jewelry seller Gemvara.

“Nordt is another important and strategic addition to our brands. The synergies between Nordt and our LeachGarner and Nobilis business units will accelerate our growth into the platinum-group metals industrial markets,” said Joe Esposito, Richline’s executive vice-president of manufacturing.