> Warren Buffett Blog: 2017

Wednesday, December 27, 2017

Income producing Asset vs Speculative Asset

Bitcoin vs Other Investments

"There are basically two kinds of assets. One, you look to the stream of income it will produce; the other, you hope like hell that someone will pay you more for it."

Warren Buffett thinks people are buying bitcoin because the price is going up. What happens when the price goes down?

“I will say this. It will come to a bad ending.” - Warren Buffett

Wednesday, December 13, 2017

Berkshire to get $3 billion from Burger King

Burger King-owner Restaurant Brands International Inc. is scheduled to redeem $3 billion in preferred shares from Buffett’s Berkshire Hathaway Inc. The money helped the fast-food chain finance its 2014 purchase of Tim Hortons. 

The redemption will add extra cash to Buffett’s arsenal for investments and takeovers. At the end of the third quarter, Buffett’s Omaha, Nebraska-based holding company had a record $109 billion in cash. 

Tuesday, December 12, 2017

Warren Buffett wins on Davita

Shares of Davita, a kidney care service provider, jumped 12.52% to $68.50 on Wednesday after UnitedHealth Group said it would buy the company's medical unit for $4.9 billion. As of December 12, 2017, Davita is up further trading at $70.35.

The biggest shareholder of Davita is Warren Buffett's Berkshire Hathaway according to data from Bloomberg. The company owns about 38 million shares, or about 21% of the total outstanding shares. 

Berkshire raked in about $295 million on Wednesday after DaVita's shares moved higher following the news. The gains are only on paper thus far, and Berkshire Hathaway would have to liquidate its position to realize the gains.

Monday, December 4, 2017

Warren Buffett winning on Home Capital deal

Warren Buffett invested in Canada's lender Home Capital in June 2017. Berkshire Hathaway Inc. provided a financial lifeline and became Home Capital's biggest investor with a sweetheart deal.

Berkshire Hathaway bought more than 16 million shares priced at $9.55 each, or 36-per-cent below the closing price on June 21. Given the gains since then, Mr. Buffett is now up nearly $115-million, or 75 per cent, on his initial investment.

Monday, November 27, 2017

Berkshire bets on Apple

Warren Buffett has been gradually increasing his firm’s position in Apple since 2016. In Q3 2017, Apple represented nearly 11.6% of the firm’s portfolio. Berkshire added 3.9 million shares in Apple in Q3 2017.

Berkshire Hathaway is the fifth largest investor in Apple with 134 million shares. Vanguard Group was the largest investor in Apple with 344.5 million shares. Apple is the third largest holding in Berkshire Hathaway’s portfolio.

Tuesday, November 7, 2017

Bitcoin could implode says Warren Buffett

Warren Buffett is not a fan of Bitcoin. In a recent interview with Marketwatch he sounded bearish on Bitcoin as an investment,
"You can’t value bitcoin because it’s not a value-producing asset."
"It doesn't make sense. This thing is not regulated. It's not under control. It's not under the supervision [of] any...United States Federal Reserve or any other central bank. I don't believe in this whole thing at all. I think it's going to implode."

Monday, October 23, 2017

Tax reform is quite possible and can happen

With Tax Reform being proposed by Donald Trump, many people are skeptical of any changes being made. Warren Buffett thinks there could be progress made on Taxes and he is holding out on selling stocks partly because of it.

"We may or may not have a change in the tax code. Right now we're sitting and watching because within three months, actually less than that, we'll know the answer on it. I would feel kind of silly if I realized $1 billion worth of gains and paid $350 million in tax on it if I just waited a few months and would have paid $250 million. 
If you talk about the three big items, this is the only one left to do this year. I would think the Republicans controlling both houses and the presidency, they would not want to have a shutout in their first year."

Thursday, October 19, 2017

Index Funds make sense for most investors

"The S&P 500 "will absolutely kill every one of the fund of funds. Passive investment in aggregate is going to beat active investment because of fees." 

-via cnbc

Monday, October 16, 2017

Warren Buffett thinks S&P500 will beat most active managers but refuses a bet opportunity

Recently Warren Buffett told CNBC that he was willing to a new bet on Active versus Passive. So now a hedgefund has offered Warren Buffett to do that bet. The hedgefund represented by Mark Yusko believes that Active Management would beat Passive investing over the next 10 years but Buffett declined to take up the bet opportunity. He cites, 
"I think the Protege bet proved the point and has stimulated a re-evaluation of professional management. If I were to do another ten-year bet — and I regard that as the reasonable term for measurement — that would take me to 97 and not at the best point to write and talk about the results. 
There's no doubt in my mind, however, that the S&P 500 will do better than the great majority of professional managers achieve for their clients after fees."

Monday, September 25, 2017

DOW to 1 Million | Dont short America

At a recent party for Forbes magazine's Warren Buffett said the Dow Jones Industrial Average will be over 1 million in 100 years. It is currently around 22,296 currently. He pointed out the Dow Jones was at 81 during the 1980's. 

"Whenever I hear people talk pessimistically about this country, I think they're out of their mind. Being short America has been a loser's game. I predict to you it will continue to be a loser's game. It has been 241 years since Thomas Jefferson wrote the Declaration of Independence. Being short America has been a loser's game. I predict to you it will continue to be a loser's game."

Monday, September 18, 2017

Investing VS Speculating

The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money.

But a pin lies in wait for every bubble. 

And when the two eventually meet, a new wave of investors learns some very old lessons: First, many in Wall Street - a community in which quality control is not prized - will sell investors anything they will buy. Second, speculation is most dangerous when it looks easiest.

Monday, September 11, 2017

Buffett on Trump, Apple and Insurance Business

I'm not in the business of attacking any president, nor do I think I should be.

Forty-five presidents of the United States and I lived under a third of them. I bought stocks under 14 of the 15. The first one was Hoover. I was only 2 when he left so I hadn't gotten active at that point. But Roosevelt was next. And I bought stocks under him, even though my dad thought it was the end of the world when he got elected.

Thursday, September 7, 2017

Warren Buffett not optimistic on Bitcoin

Stay away from it [Bitcoin]. It's a mirage basically. It's a method of transmitting money. It's a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money too. Are checks worth a whole lot of money? Just because they can transmit money?

I hope bitcoin becomes a better way to do it. But you can replicate it a bunch of different ways. The idea that it [bitcoin] has some huge intrinsic value is just a joke in my view.

Monday, August 28, 2017

BYD to construct monorail in Philippines

BYD the electric car, battery company and is partially owned by Berkshire Hathaway Inc. won its first overseas contract to build a monorail as BYD pushes further into municipal public transportation.

The Shenzhen, China based company will construct a monorail in Iloilo, the Philippines, and expects the first phase of the 20kms (12-mile) system to start operations in 2019, it said in a statement on Wednesday. The company didn’t provide an investment amount.

BYD—already China’s biggest electric-car manufacturer—has supplied battery-powered buses for cities overseas, in markets including the US and Europe. Monorail will represent the next major growth area for BYD given the prospects for light-rail systems as a solution to urban gridlock in China’s smaller cities, which can’t afford to build and maintain expensive underground subways, Chairman Wang Chuanfu said in June last year.

Wednesday, August 23, 2017

Berkshire sells all its GE holdings

According to recent SEC filings, Berkshire Hathaway, has sold off its remaining 10.6 million shares of General Electric in the second quarter of 2017. As of June, Buffett's investment had been worth $315 million.

The timing of the sale was good as those 10.6 million shares would have been worth $46 million less today than three months ago.

2017 has been particularly rough on GE. The stock has cratered 20% since January. In June, CEO Jeff Immelt resigned after 16 years on the job. And the company continues to offload struggling legacy businesses as it tries to stay relevant in the digital age.

Still, Buffett made hay off the investment. He poured $3 billion into GE in 2008 when the company was hit hard by the financial crisis. GE's stock grew about 40% during the time Berkshire held stock in the company. Even better: GE pays a huge dividend, helping pad Buffett's profit.

Monday, August 21, 2017

Berkshire may have lost Oncor acquisition to Sempra

Warren Buffett had made a bid for Oncor last month. rarely gets knocked off by competing bidders. But this time Oncor Electric Delivery Co., the takeover target that Berkshire was pursuing, got away. 

Sempra, a San Diego-based utility owner, made a $9.45 billion bid for the bankrupt parent of the Texas power distributor, topping Berkshire's $9 billion offer that had been agreed to just six weeks ago. It's a win for another billionaire, Paul Singer, whose Elliott Management Corp. had been fighting the Berkshire deal. 

Energy Future’s board decided to make the switch on Sunday after Sempra also offered assurances it could get its acquisition of Oncor approved by Public Utility Commission of Texas, as well as a US bankruptcy judge, the sources told Reuters.

Berkshire offered to allow Energy Future to keep an Oncor dividend, but that proposal was not enough to bridge the gap in price, the sources added.

Monday, August 14, 2017

Global warming is a major problem to Earth

Warren Buffett called global warming a “major problem” and has invested Berkshire's money in renewable energy industry, spending billions to develop solar and wind power. 

But renewable energy proponents claim the utility arm of Berkshire Hathaway has been trying to undermine an almost 40-year-old law intended in part to promote the growth of cleaner energy. Berkshire, they say, is effectively stifling solar projects to protect utilities it owns, such as PacifiCorp, based in Portland, Ore.

Thursday, August 10, 2017

Berkshire Hathaway holding almost $100 Billion in Cash and Cash like investments

Berkshire Hathaway Inc. just reported that it was holding close to $100 billion in cash at the end of the second quarter.

While that figure highlights the staggering money-making ability of the businesses he’s collected over the years, it’s also a burden. Because Berkshire doesn’t pay a dividend and rarely buys back its own stock, Buffett is on the hook to find ways to invest those funds.

Buffett, said at Berkshire’s annual meeting in May 2017, saying he hadn’t put his “foot to the floor” on an acquisition for a while and shouldn’t keep so much money earning next to nothing for long periods. The war chest includes some cash-like securities, such as Treasuries.
“The question is, ‘Are we going to be able to deploy it?’” 
“I would say that history is on our side, but it’d be more fun if the phone would ring.”

Tuesday, August 8, 2017

Apple earnings bonanza for Warren Buffett

Warren Buffett’s ownership of Apple has yielded unrealized gains to the tune of $1 billion in a single day for Berkshire Hathaway.  

Apple Inc, the American multinational technology company had released it’s quarterly earnings report for the third quarter last week. Buffett’s company, Berkshire holds 135 Million shares in Apple Inc. On the back of strong quarterly earnings posted by Apple Inc, its shares rose by 5.11% to $157.72 on Wednesday. In absolute terms the shares rose by $7.67. The math amounts to a gain of $1,035,319,579.

Buffett will have to sell sell his company’s shares at the current stock price in order to realize the gains. 

Thursday, August 3, 2017

Home Capital pays back Warren Buffett

Home Capital Group Inc. said it repaid the balance on a US $1.6 billion credit line from Warren Buffett’s Berkshire Hathaway Inc. after the Canadian mortgage lender sold assets.

Home Capital received C$662 million from its previously announced agreement to sell some commercial mortgages, the Toronto-based firm said. The company has received about C$1.13 billion in total on the sale and discharges of commercial mortgages tied to its initiatives to increase liquidity.

Home Capital said it will continue to pay a 1 percent standby fee on undrawn funds until the Berkshire facility matures one year from the initial funding date. Buffett last month agreed to buy C$400 million in shares and provide the credit line after the alternative mortgage lender faced a run on deposits.

Tuesday, August 1, 2017

Clayton Homes acquiring home builders

Berkshire Hathaway’s Clayton Homes division, known for its factory-built houses, is expanding into the site-built, $250,000-and-under housing market.

Since October 2015 Clayton has acquired homebuilders in Atlanta; Nashville, Tennessee; Kansas City; Denver; and, earlier this month, Birmingham, Alabama, and is building homes on-site at a rate of 2,500 to 3,000 a year.

Clayton isn’t choosing cities and then looking for homebuilders to buy, said Mike Rutherford, president of Clayton’s properties group, and Tom Walsh, vice president of Clayton’s properties group.

Rather, they said in an interview, the idea is to identify builders with the right management and culture, and then check out their growth potential. The acquired builders keep their managements and names.

Walsh said Berkshire’s financial strength and Clayton’s buying power — imagine the lumber needed for 45,000 factory-built homes each year — are advantages that can give the acquired companies an edge over the competition.

Monday, July 24, 2017

Berkshire and Sprint wireless deal rumours

Last week, at the gathering of CEOs held in Sun Valley, Idaho, Sprint Chairman Masayoshi Son met with Warren Buffett about a potential investment, according to reporting by CNBC. 

According to the report, while discussions are still in the preliminary stages, Berkshire Hathaway may be considering putting forward as much as $10 billion or more into a possible deal. CNBC cited a separate report suggesting that Buffett was considering an investment in Sprint of somewhere between $10 billion and $20 billion. 

Monday, July 17, 2017

Rumours flying about Warren Buffett and US telecom company Sprint

Sprint's chairman, Masayoshi Son, has engaged in talks with Berkshire Hathaway's Warren Buffett and media mogul John Malone to discuss a potential investment in the U.S. wireless company, according to a report from the WSJ. 

Son met Buffett and Malone, the chairman of Liberty Interactive, separately this week at an annual gathering of CEOs in Sun Valley, Idaho, the Journal reported, citing people familiar with the situation.

Wednesday, July 12, 2017

Warren Buffett donates $3 Billion Dollars of Berkshire Stock

Warren Buffett this week donated around $3.17 billion worth of Berkshire Hathaway stock to the Bill & Melinda Gates Foundation and four family charities. 

Buffett's donation to the five charities comprised 18.63 million Class “B” shares of Berkshire, valued at $170.25 each as of Monday’s market close.

Berkshire said Buffett, 86, has made $27.54 billion in donations since 2006 to the five charities, including roughly $21.9 billion to the Gates Foundation.

Buffett still owns about 17 percent of Berkshire, the Omaha, Nebraska-based conglomerate he has run since 1965, despite having donated more than 40 percent of his holdings.

Tuesday, July 11, 2017

Berkshire acquisition of Oncor

Berkshire Hathaway Energy, agreed to acquire Oncor for $18.1 billion, including debt. In recent years, two other sales of the state’s largest regulated utility were proposed, only to be derailed by the Texas Public Utility Commission. This case is different, in part because Berkshire and Oncor had the foresight to win over stakeholders in advance. Groups representing cities, industries and consumers support the deal. Even the PUC staff director endorsed the takeover.

For decades, Buffett has invested in strong companies with strong managers, and let them continue doing what they do best. His deals aren’t driven by synergies or financial engineering, which are common in other acquisitions. Buffett explained his philosophy in an owner’s manual for investors, which was first written in 1996 and later updated.

“We subcontract all of the heavy lifting in this business to the managers of our subsidiaries,” Buffett wrote, referring to himself and partner Charlie Munger. 

Wednesday, June 28, 2017

Berkshire subsidiary invests in Home Capital of Toronto, Canada

A subsidiary of Berkshire Hathaway, Buffett's main company, will also also provide a new $2-billion line of credit on better terms than an expensive cash infusion provided to Home Capital by one of Ontario's large pension funds.

"We believe this represents a turning point for Home Capital as we look to restore investor and depositor confidence in the company," said Home Capital interim chief executive Bonita Then.

While the investment from Berkshire Hathaway can be seen as a vote of confidence, it is acquiring its shares in Home Capital at a significant discount from where they are trading today and with certain approvals required.

Under the agreement, it will make an initial investment of $153.2 million for 16 million Home Capital shares at a price of $9.55, representing a 19.99 per cent stake in the company, subject to approval by the TSX.

Berkshire Hathaway has also agreed to make a second investment of $246.7 million for nearly 24 million shares at a price of $10.30, which would take its stake in Home Capital to 38.4 per cent, subject to shareholder approval.

The Berkshire credit facility will charge a slightly lower interest rate than charged by the Healthcare of Ontario Pension Plan.

Monday, June 26, 2017

Warren Buffett buys more REITs

Warren Buffett's firm acquired a nearly 10% stake in a real estate investment trust that controls single-tenant properties.

Berkshire Hathaway invested $377 million in shares of Store Capital, equaling a stake of about 9.8%, the REIT disclosed Monday. Berkshire paid $20.25 a share for 18.6 million shares of the internally managed net-lease real estate investment trust, Store Capital said in a statement. Store Capital shares are down 16% in 2017.

Store Capital owns a stake in more than 1,750 properties in 48 states.

Store Capital CEO Christopher Volk said in a statement.
“An investment in our company from one of history’s most admired investors represents a vote of confidence in our experienced leadership team and an affirmation of our profit-center real estate investment and management approach.”

Tuesday, June 20, 2017

Someone just paid $2.6 million to lunch with Warren Buffett

An anonymous person just bid $2,679,001 in a charity auction to have lunch with billionaire investor Warren Buffett. This years winning bid is down from last year’s winning bid of $3,456,789. 

 Now in its 18th year, the annual auction for lunch with the Berkshire Hathaway Inc. chairman has raised more than $25 million in total for San Francisco charity Glide.

Wednesday, June 14, 2017

US Farming has improved dramatically

I don't really know anything about robots. But I'll put it this way. If you eventually got the world so that one guy could push one button and everything that's being produced now would be produced from him pushing that button, it'd be a better world. Now, you'd have to make sure that guy didn't keep all the output, but the idea of getting more productive, it benefits everybody. And I shouldn't say it benefits everybody. It benefits society. It can hurt individuals in their given industries. But we should long for more productivity. That'll give a fewer hours worked, it'll give more output per capita, it'll give better living for people. And that's what we've done, actually, in this country. 

We saw it dramatically in farming. I mean, it's unbelievable what has happened in farming. And we now have 2 percent of the population working on farms, doing way better than when we had 80 percent. But if we didn't have tools and fertilizer and all those things, we'd be an agrarian economy and we'd be living like we did in 1776.

Monday, June 12, 2017

I dont know what the stock markets will do tomorrow or next year says Warren Buffett

I don't have the faintest idea what the stock market's going to do tomorrow or next week or next month or even next year. I do know that over time – and we'll talk ten years of something of the sort – that equities will do better than bonds, which is the main alternative or bank deposits or whatever it may be. Fixed dollar investments for people. And they're not going to be able to pick the time to come in. I don't know how to pick the time to come in. I bought a lot of stocks in the last couple months. They turned out – the stock market goes down 20 percent or 30 percent. But that won't bother me if I like the businesses I bought.

Wednesday, June 7, 2017

Your kids will live better than you do

The economy is – everything I see has been the same since 2009 – the fall of 2009. It keeps moving ahead at a couple percent a year, which is terrific, incidentally. Not as terrific as 3 percent or 4 percent would be, but if it just stays at 2 percent, you'll add in one generation 19,000 of GDP per capita to our present economy. 

We'll have so much more stuff then than we have now, it'll be fabulous, one generation away. So your kids are going to live better than you do. But people – would rather have 3 percent or 4 percent, and maybe we'll get it. But 2, we're moving forward.

Monday, June 5, 2017

Dont borrow money to buy stocks

You shouldn't borrow money against stocks. And you shouldn't – if you're going to need some money for college or something in a year, you don't want to be in stocks because you don't have any idea what stocks are going to sell for in a year. It's inappropriate. But stocks are safe for the long run and they're very unsafe for tomorrow. 

Berkshire, three times since I took over, has gone down roughly 50 percent. Did I feel poor then? No, not at all. I mean, you know, but I didn't owe it on borrowed money. I knew it was going to be worth more over time. American business is going to be worth more over time. You know, that's what you're buying, is a business. You're not buying a stock, you're buying a piece of a whole bunch of businesses. Are those businesses going to be worth more ten or 20 or 30 years from now? Of course, they are. But if you think you can jump in and out or that you know the time to come in, then I think you're making a mistake.

Thursday, June 1, 2017

Buffett likes Stocks instead of Bonds

I would bet my life that stocks over 30 years outperformed the 30 year bond. I would come close to doing it, betting that over ten years, they'll do better than the ten year bond, versus the one year bond or two year bond. I have, you know, no idea whatsoever. But stock if you look at American equity, basic business of America, American equity earns a tremendous return on tangible net assets. That's what the business is about. That's what the farm is producing. Now, a bond is limited in what it can produce. But when you say reversion to the mean, I'm not sure what the mean is. I mean, the mean is going to be based upon returns on equity, the amount of equity reinvested and reemployed. And I would say there the prospects are so much better than in fixed dollar investments, that, you know, admittedly, I liked stocks a lot better a few years ago. And I've said that on this program. But the stocks versus bonds right now, it's not close. Now, bond yields can change a lot. If bonds go to 15 percent, I may be recommending bonds.

Tuesday, May 30, 2017

Its not easy to beat the market

If you take half the people in the country and they don't do anything, they just own the average, they are going to get average results, right? If they don't have expenses they will get growth from that. The other by definition average, the other part average left for them, they are going to incur all kinds of fees and they are going to do way better – way worse than the people in the -- who do nothing. And I made this bet in order to just illustrate. The difference is incredible. The amount of money people wasted getting investment advice is just ridiculous in this country.

Only a handful of active investors beat the market
I've known 10 or so people with modest amounts of money, I would bet a lot of money that they would do better than average. And I say that there are hundreds, maybe even thousands. But there's thousands, and thousands, and thousands and thousands of hedge fund managers charging two and twenty is just ridiculous. And you don't get better because you charge a lot. I mean, that does not make you a better judge of securities or anything like that. And so the good salespeople, overwhelmingly, are the ones that attract the money, rather than the very few who are extraordinary at managing money. Phil Fisher, who wrote that book Common Stocks and he was going to do better than average. Charlie was going to do better than average in life in investments. Bill Ruane, a friend of mine, was going to do better. There have been a few. But there are very, very few. And then only if they work with fairly modest sum of money.

Monday, May 22, 2017

Index Funds vs Active Management

Costs really matter in investments. If returns are going to be seven or eight percent and you're paying one percent for fees that makes an enormous difference in how much money you're going to have in retirement.

Just remember, the person you're talking to, your fees are their income.

And it leaves your pocket and goes to them and you'd better get something for it. And you really don't get it in investment management. The record shows that the unmanaged index fund is going to do quite well over time and active investment as a group can't beat it.

Wednesday, May 17, 2017

Buy Index Funds specially when markets are down

The trick is not to pick the right company, the trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low cost way.

Consistently buy an S&P 500 low-cost index fund. I think it's the thing that makes the most sense practically all of the time.

Keep buying it through thick and thin, and especially through thin. The temptation when you see bad headlines in newspapers is to say, well, maybe I should skip a year or something. Just keep buying. American business is going to do fine over time, so you know the investment universe is going to do very well.

Warren Buffett buys more Apple, Airlines and sells IBM

Buffett recently disclosed that Berkshire sold off one-third of its 81 million IBM shares and bought about 133 million Apple shares.

The filing showed Berkshire added to its investments in American Airlines Group Inc. and Southwest Airlines Co. in the quarter. Its United Continental Holdings Inc. stake was unchanged, and its Delta Air Lines Inc. stake was reduced to 55 million from 60 million shares.

Berkshire held 49.3 million American shares at the end of March, up from 45.5 million. Its Southwest stake grew to 47.7 million from 43.2 million.

Buffett first disclosed his airline investments last fall, surprising many because he had long been critical of the industry. He has invested in all the major airlines now because he believes the industry is much healthier now and flying with planes at least 80 percent full most of the time.

Berkshire sold off nearly 9 million shares in Twenty-First Century Fox, the parent company of the 20th Century Fox movie studio and Fox News Channel, which has been hit by allegations of discrimination and harassment.

Tuesday, May 9, 2017

Berkshire Hathaway Shareholder Meeting 2017

Watch above the full 2017 Berkshire Hathaway Annual Shareholder meeting - Full Q&A

The video is just over 5 hours long.

Click here if the above video does not play.

Tuesday, May 2, 2017

Trump and Buffett both like Coca Cola

Coke has a fan in Trump, but it also has a loyal friend in Warren Buffett. The renowned investor is often caught with a bottle to his lips and has claimed to drink five cans a day.

In an interview Buffett said, 
"I'm one quarter Coca-Cola. If I eat 2,700 calories a day, a quarter of that is Coca-Cola. I drink at least five 12-ounce servings. I do it everyday.”

The breakdown is something like this: one at breakfast, two during the day and two at night, with regular Coke at the office and Cherry Coke at home.

Not only is the 86-year-old’s body powered by the soda, but so is his net worth.

Buffett has been a major shareholder for the last few decades and now owns a 9.3 percent, $17 billion stake in the company. His association is so firmly established that Coca-Cola actually capitalized on it when introducing Cherry Coke in China March 10. Buffett’s face graced a limited edition can to appeal to the nation’s emulating investors.

Monday, May 1, 2017

Society needs to do more to help people left out by Globalization

We need an educator in chief, logically the president, not specifically this president but any president, has to be able to explain to the American public the overall benefits of free trade. And then beyond that we have to have policies to take care of the people that become the roadkill in the process.

Investors can diversify their investments so that overall trade benefits them and they don’t get killed by a specific industry condition, but workers can’t do that. If they get destroyed by something that is good for society, they get destroyed.

We should try to hit both objectives, to make sure there is not roadkill and 320m people get the benefits of free trade.

Monday, April 24, 2017

Warren Buffett's son launches charity to support Women

A new philanthropic organization set up by Warren Buffett's son called the NoVo foundation will devote $90 million over seven years to support young women and girls of color in the United States. Most of Warren Buffett's philanthropy typically goes towards helping the Bill & Melinda Gates Foundation eliminate diseases and supporting the developing world.

Peter Buffett and his wife Jennifer will distribute the $90 million through their foundation. The foundation works to advance adolescent girls' rights, ending violence against them, helping local economies, supporting Indigenous communities, and researching social and emotional learning. They first announced their $90 million commitment last year.

Wednesday, April 19, 2017

Berkshire trims Wells Fargo stock for non-investment reasons

Berkshire has sold some of its stake — one-sixth of one per cent of the bank’s outstanding shares — only in order to end negotiations with the Federal Reserve over how to deal with the fact that Berkshire had become such a large shareholder of the bank.

As Wells bought back its own stock last year, Berkshire’s stake increased to more than 10 per cent, triggering scrutiny under the US Change in Bank Control Act.

“These sales are not being made because of investment or valuation considerations,” Berkshire said in a statement.

Those results will show how well Wells is coping with the fallout from the scandal in which its employees opened thousands of fake bank accounts. The bank’s net income is forecast to decline for a sixth straight quarter, down 4 per cent, in part because of mounting legal expenses and a revamp of its sales practices.

Berkshire has netted $500m from selling the sliver of its Wells stake, which has been one of the longest-held pieces of Mr Buffett’s $122bn stock portfolio. It will still hold just below 10 per cent and still be its largest shareholder.

Tuesday, April 11, 2017

Your best asset is yourself - Invest in you

Investing in yourself is the most important investment you'll ever make in your life. There's no financial investment that'll ever match it, because if you develop more skill more ability, more insight, more capacity, that's what's going to really provide economic freedom. … It's those skill sets that really make that happen.

Monday, April 10, 2017

Warren Buffett hiring tips for companies

Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.

If each of us hires people who are smaller than we are, we shall become a company of dwarfs. But, if each of us hires people who are bigger than we are, we shall become a company of giants.

Thursday, April 6, 2017

What the wise do in the beginning, fools do in the end

A pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learns some very old lessons: First, many in Wall Street — a community in which quality control is not prized — will sell investors anything they will buy. Second, speculation is most dangerous when it looks easiest.

Wednesday, April 5, 2017

Recovering from investing mistakes

The best thing is to learn from other guy’s mistakes. [General George] Patton used to say, “It’s an honor to die for your country; make sure the other guy gets the honor.” 

There are a lot of mistakes that I’ve repeated. The biggest one, the biggest category over time, is being reluctant to pay up a little for a business that I knew was really outstanding.”

Monday, April 3, 2017

Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future

We’ve long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.

Thursday, March 30, 2017

Investing VS Romance - Warren Buffett Quote

Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant.

Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.

Wednesday, March 29, 2017

Time is the friend of the wonderful company, the enemy of the mediocre

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.

Monday, March 27, 2017

What we look for in companies

We select such investments on a long-term basis, weighing the same factors as would be involved in the purchase of 100% of an operating business:

    (1) favorable long-term economic characteristics;
    (2) competent and honest management;
    (3) purchase price attractive when measured against the yardstick of value to a private owner; and
    (4) an industry with which we are familiar and whose long-term business characteristics we feel competent to judge.

Thursday, March 16, 2017

Free trade is great but can hurt certain segments of the population

Free trade is wonderful for the world and for the United States, but its benefits are diffused among 320 million people. You buy your bananas cheaper because we don't try and produce them in the United States. But the penalties from free trade are terrible to specific industries. And as an investor, I can own – make a dumb decision on owning a shoe company. But if I own a good insurance company, I can diversify away the problems. 

If you're a 55-year-old steelworker, you can't diversify away your talents. I mean, you had it if steel or textiles or shoes become subject to total, it all moves offshore. So you want to have free trade, but you also have to take care of the people who, through no fault of their own, have spent their life learning one profession. And you can talk about retraining and all that, but it just isn't practical. And just take Berkshire Hathaway. We started with 2,000 employees in New Bedford, Mass, turning out textiles. And that business was doomed. And we had workers there who really they didn't have alternatives at age 50. Fair number of them just spoke Portuguese. They didn't have a chance. And a rich country that's prospering because of free trade, and as the world is prospering, should keep the free trade as much as possible. But they also should take care of the people that become the roadkill, you know, when an industry moves.

You've got to take care of those people. And if I were somebody that had spent 25 years in shoes or textiles or you name it, and somebody came around to me and said, "This is great for the world and it's great for those guys on the Forbes 400, but it's just too bad because you lose your job and it makes – we can buy our shoes a little cheaper, our underwear a little cheaper, our steel a little cheaper abroad," I would say that a rich society should figure out a way to take care of those people.

Wednesday, March 15, 2017

Border adjustment tax is essentially a Sales Tax

Border adjustment tax, I mean, it's an import tax, and an import tax is a sales tax. You're looking – we're here at the Nebraska Furniture Mart. This store is in several buildings, does over $400 million a year; 75 percent of what you see is imported. I mean, if we pay an import tax on it, our customers are going to pay for it. It's a sales tax, and it's a sales tax, in this case, on items that are not yachts or anything like that. They're things that the ordinary person buys. So it would be a big sales tax. I think the president said initially that it was – it'd be too confusing or too complicated or something of the sort. 

Tuesday, March 14, 2017

US secretary of state Rex Tillerson is an outstanding individual

 I certainly think Rex Tillerson makes a lot of sense. I mean, you've got an absolutely outstanding person. And incidentally, I would say this too, because you get a lot of this in politics: Rex Tillerson is going to be working for the United States in that job. I mean, people that get all upset because he was with ExxonMobil or something, or because he's got a fair amount of money, I have seen a lot of people enter high levels of public service. And I think the great majority of them take it very seriously, that their employer is the United States. And so I don't worry at all about the fact that somebody comes from the oil industry or that they've got a lot of money or anything of the sort. I do think most people rise to the occasion to quite a degree. Not always, but quite a degree. So, I don't know Tillerson. I've sat next to him one time at dinner. But, you know, he'd be the kind of person I would choose.

Monday, March 13, 2017

There are a lot of regulations that I think have gone too far

I will judge President Trump after four years based, number one, on how safe the country has been kept. I mean, that is the number one job of the chief executive of the United States. And that's not an easy job. And I'm not thinking of random killings or anything like that, I'm thinking of weapons of mass destruction. I mean, that's my number one worry. And that's the number one test I have. 

Secondly, I'll judge him, to a degree, although, they have less control over this – well, they need a little luck on weapons of mass destruction too, but how the economy does overall. And then third, I'll judge him on how if the economy does well, which I expect it to do, how wide the participation in that in a better economy extends. And those are the three primary tests I would have applied to Hillary Clinton or to Donald Trump.

Friday, March 10, 2017

Dont mix politics with business

Last year at our annual meeting, you know, it was clear I was for Hillary, but I got asked a question about the market based on who got elected. And that does not – and I said, America's going to do fine under – in terms of economically under – under either candidate as president. 

People who mix their politics up with their investment activities I don't think that makes sense. I've watched it all my life and obviously probably half the time, my adult life, I've had a president other than the one I voted for. But that has never taken me out of stocks. I mean, the American economy, you know, we're up to number 45 or so and we've done awfully well. If you mix your politics with your investment decisions, you're making a big mistake.

In 1951, I proposed to my wife. And my father-in-law was the most conservative guy in Nebraska except maybe for my dad. My father-in-law said, "I want to have a talk with you." So I went over to his house to have a talk. And he sat there and he said, "Warren," he says, "I just want to absolve you from any worries. You're going to fail. And the reason you're going to fail – my daughter may starve to death and you're going to fail, but I'm not going to blame you because it's because the Democrats are in and they're all Communists." And I listened to this thing for three hours. And I almost withdrew my proposal at the end. But I have seen people make economic decisions based on their political feelings and it is not the way to do it.

Thursday, March 9, 2017

We made a good profit on Dow Chemical stock

We've never owned chemical shares. We own a specialty chemical company Ebersol a chemical common stock we own we bought the preferred stock of Dow because we wanted a preferred position and we held it. It was kind of interesting we bought that stock in July of 2008, the preferred and they were going to acquire, Dow was going to acquire Rohm & Haas and they needed money for it and then the world fell apart in the fall and Dow wanted to get out of the contract, they sued Rohm & Haas to get out of the contract but it was held that they had to stick with it. 

So we closed the deal to buy the preferred stock in April of 2009 by which time the market had totally disintegrated the time we closed that we bought $3 billion worth it probably wasn't worth tops more than 60 cents on the dollar so we showed up with $3 billion for something that was worth $1.8 billion at the time which is one reason why people offer us deals they know we will be around at the closing. We showed up for the Wrigley closing too that was on October 4 or something but during that whole period we had commitments and that kept me from doing some other things we might have done at that time. The fact that we had this $3 billion going out the door.

We ended up making about a billion dollars and plus we had an 8.5 percent coupon those years.

Wednesday, March 8, 2017

Why I bought more Apple shares

Well, I would say Apple's — I mean, obviously it's very, very, very tech-involved, but it's a consumer product to a great extent too. And I mean, it has consumer aspects to it. And one of the great books on investing, which I've touted before, is one that Phil Fisher wrote back around 1960 or thereabouts, called "Common Stocks and Uncommon Profits." It had an effect on me. I went out to meet Phil Fisher after reading the book, I found him in this little office in San Francisco. And I recommend any investor read that book. And it's still in print. And he talks about something called the scuttlebutt method, which made a big impression on me at the time. But I used it a lot, which is essentially going out and finding out as much as you can about how people feel about the products that they ... it's just asking questions, basically. And Apple strikes me as having quite a sticky product and enormously useful product that people would use, and not that I do. Tim Cook's always kidding me about that. 

So I ask people about products all the time. When I take my great-grandchildren to Dairy Queen they bring along friends sometimes. They've all got a iPhone and, you know, I ask 'em what they do with it and how ... whether they could live without it, and when they trade it in what they're gonna do with it. And of course, I see when they come to the furniture mart that people have this incredible stickiness of — with the product. I mean, if they bring in an iPhone, they buy a new iPhone. I mean, they're ... it just has that quality. It gets built into their lives. Now, that doesn't mean something can't come along that will disrupt it. But the continuity of the product is huge, and the degree to which their lives center around it is huge. And it's a pretty nice, it's a pretty nice franchise to have with a consumer product.

But it's a decision-based ... but again, it gets down to the future earning power of Apple when you get right down to it. And I think Tim has done a terrific job, I think he's been very intelligent about capital deployment. And I don't know what goes on inside their research labs or anything of the sort. I do know what goes on in their customers' minds because I spend a lot of time talking to 'em.

Monday, March 6, 2017

Stock markets can be volatile but you should not be afraid

In the spring of 1942 I was 11 years old, and the Dow was at about 100. And we were losing the war in the Pacific at that point, that was early ... was shortly after Pearl Harbor. And there was no doubt in this country we were going to win over time. I mean, and people said, "Well, this is let's wait till things are clear, let's wait till we start winning the war." 

There's always a reason to wait and I've listened to that all my life. You know, when I got out of school the Dow had never been above 200. There'd never been a year when the Dow had not been below 200 during the year. 

Even in 1929, when it got to 381, the low was below 200. Never been a year. Well, so what, you know? But that was a big subject at that time. And then you know, we ran into price controls, we ran into the oil shocks, you name it, just all kinds of things. And those are diversions. So all my life I've been hearing, "You know, maybe there's a better time to invest, you know?" Or, "Things are more unpredictable now." They're always unpredictable. I can't predict what's gonna happen tomorrow. I mean, you could have anything happen tomorrow. We've had October 19th, 1987, 22 percent down in one day. 

So I can predict what'll happen ten or 20 years in a general way, but I have no idea what'll happen tomorrow. And the important thing is if you got these wonderful assets out there, to own 'em, and which ones do you own? I mean, if you ... if you save money you can buy bonds, you can buy a farm, you can buy an apartment, house, or even buy a part of American business. 

And if you buy a 10-year bond now you're paying over 40 times earnings for something whose earnings can't grow. And you know, you compare that to buying equities, good businesses, I don't think there's any comparison. 

But that doesn't mean the stock market can't go down 20 percent tomorrow. I mean, you never know what it's going to do tomorrow, but you do know what it's going to do over ten or 20 years. And people talk about 20,000 being high. Well, I remember when it hit 200 and that was supposedly high. The Dow, I mean, the Dow, in your lifetime. You know, you're going to see a Dow that certainly approaches 100,000 and that doesn't require any miracles, that just requires the American system continuing to function pretty much as it has.

Thursday, March 2, 2017

Why stocks make sense in this low rate environment

I've been talking this way for quite a while, ever since the fall of 2008. I was a little early on that actually. But I don't think you could time it. And we are not in a bubble territory or anything of the sort. 

Now, if interest rates were 7 or 8 percent then these prices would look exceptionally high. But you have to measure, you know, you measure everything against: interest rates, basically, and interest rates act like gravity on valuation. So when interest rates were 15 percent in 1982 they'd pull down the value of any asset. 

So, what's the sense of buying a farm on a 4 percent yield basis if you can get 15 percent in government's? But measured against interest rates, stocks actually are on the cheap side compared to historic valuations. But the risk always is, is that — that interest rates go up a lot, and that brings stocks down. 

But I would say this, if the ten-year stays at 230, and they would stay there for ten years, you would regret very much not having bought stocks now.

Wednesday, March 1, 2017

Stay in the game and stay invested

I don't know anybody that can time markets over the years. A lot of people thought they can. But, if you were buying a farm and you decided that farms were gonna be worth more money ten, or 20, or 30 years from now and that would be a productive asset, go out and buy it unless it was just ... some absurd price. 

And the best thing with stocks actually is to buy 'em consistently over time. You wanna spread the risk as far as the specific companies you're in by owning a diversified group, and you diversify over time by buying this month, next month, the year after, the year after, the year after. I ... but you ... making a terrible mistake if you stay out of a game that you think is going to be very good over time because you think you can pick a better time to enter it.

Monday, February 27, 2017

One word sums up our country's achievements: miraculous

One word sums up our country's achievements: miraculous.

From a standing start 240 years ago — a span of time less than triple my days on earth — Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers.

I mean, we have hiccups in the economy and we even had a panic in 2008. And we had a war during that period that when they started we were losing the war, actually, in the spring of 1942. But this country always comes back and wins. And it's astounding when you think about it, what's happened in 240 years. That is less than three of my lifetimes. And let's look at this place, I mean, there wasn't anything here 240 years ago. And civilization is gone on, you know, for centuries, and centuries, and centuries with people making very little progress in their lives. And then America showed the way and it ... and we have not lost the secret sauce.

Wednesday, February 22, 2017

Selling all Walmart shares

Warren Buffett's Berkshire Hathaway has sold off $900 million of Walmart stock, choosing instead to invest billions in airlines.

The sale, which leaves Buffett with nearly no shares in Walmart, comes as the US's largest traditional retailer has been rushing to catch up to Amazon and other online competitors.

Monday, February 20, 2017

Warren Buffett selling his Laguna Beach home for a cool $11 million profit

Warren Buffett is ready to sell his home in Laguna Beach, California for at $11 million. He bought the house originally in 1971 for $150,000. 

The home, built in 1936 has three levels and has 3600 square feet space. It was remodeled during Buffett’s ownership, sits on a corner lot and has a view of Emerald Bay. 

Buffett mainly resides in Nebraska and said he had previously spent summers and Christmases at the beach house. Buffett also bought a neighboring property. “That became kind of the annex,” he said. He sold the second property in 2005.

Tuesday, February 14, 2017

Warren Buffett believes in Wearable tech and Richline Group

"Jewelry is a centuries-old business that isn't going anywhere, so it's a safe bet. With the addition of technology, we're simply updating something everyone knows and loves to better fit our modern age." - Warren Buffett

Warren Buffett is embracing wearable technology. The billionaire investor, who has been cautious about investing in the tech sector in the past, is diving into wearables with a new smart jewelry line produced by his company Berkshire Hathaway's jewelry subsidiary Richline Group.

The line, dubbed Ela, will debut this spring, starting with smart wristwear—but don't expect to see a smartwatch from the get-go. Ela has been working on elegantly designed smart bracelets and plans to extend into other product categories, including rings and earrings, in the future. 

Ela devices will connect to both Android and iOS devices and share activity data with Apple's HealthKit and Google Fit, although the specific activity sensors that each device will have are unknown. Ela devices will also receive smartphone notifications, and the user can set gems on the device to glow in different colors and vibrate depending on the alert they're receiving.

Cliff Ulrich, product innovation manager for the Richline Group, told ZDNet that a goal was to create devices that are more than just "prettier step trackers." Ela devices will also have their own mobile app with which users can create "memories" that can be shared with a specific device. Content like photos, voice recordings, and songs can be preloaded to Ela devices so that users who are given the device as a gift can open up the content on their smartphones and relive "special memories" they have with the gifter.

Monday, January 23, 2017

President Trump deserves our respect

America works... I've said this before. It'll work wonderfully under Hillary Clinton, and I think it'll work fine under Donald Trump.

It doesn't work all the time perfectly... but you just look at where we go, milestone after milestone. Never bet against America.

I support any president of the United States. It's very important that the American people coalesce behind the president.

That doesn't mean they can't criticize him or they can't disagree with what he's doing maybe. But we need a country unified... He deserves everybody's respect."

Monday, January 9, 2017

Buffett's airline stocks soaring sky high

Buffett's Berkshire Hathaway disclosed in mid-November 2016 that it bought stakes in American, United Continental and Delta at some point during the third quarter.

On the same day as that filing, Buffett told CNBC that Berkshire also bought shares of Southwest in the fourth quarter. The Oracle of Omaha cited his friendship with Southwest co-founder, former CEO and chairman emeritus Herb Kelleher as a reason.

Since Berkshire's airline bets became public knowledge, shares of all four companies have been gaining in altitude. Delta (DAL) has risen 6%. American (AAL) is up 7%. Southwest (LUV) has soared nearly 13%. And United (UAL) has skyrocketed 14%.

Stocks often get a Buffett bump after Berkshire buys new stakes in them. Buffett is known as a consummate value investor, sifting through the rubble for bargains.

He's only recently begun to dip his toe into higher growth tech stocks -- and even there, Berkshire has limited itself to more mature (i.e. slower growth, gigantic and relatively cheap) tech companies like Apple, IBM and Verizon.

It's also worth noting that airline stocks took a breather last year after a couple of strong years, buffeted by terrorism fears, several high-profile technical glitches that led to major cancellations, rising jet fuel prices and a new round of fare wars sparked by discount carriers like Spirit (SAVE) and JetBlue (JBLU).

The airlines might be slowly getting back on track though. Delta reported on Wednesday that its passenger unit revenue -- a key measure of financial health for airlines -- was flat in December. 

Warren Buffett documentary on HBO preview

Wednesday, January 4, 2017

Owning Berkshire similar to diversification ?

In line with Berkshire's owner-orientation, most of our directors have a major portion of their net worth invested in the company. We eat our own cooking.

Charlie's family has 90% or more of its net worth in Berkshire shares [that's Charlie Munger, Berkshire's vice chairman]; my wife, Susie, and I have more than 99%. In addition, many of my relatives -- my sisters and cousins, for example -- keep a huge portion of their net worth in Berkshire stock."

Charlie and I feel totally comfortable with this eggs-in-one-basket situation because Berkshire itself owns a wide variety of truly extraordinary businesses. Indeed, we believe that Berkshire is close to being unique in the quality and diversity of the businesses in which it owns either a controlling interest or a minority interest of significance.