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Warren Buffett Watch

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  Friday, 29 Feb 2008 | 12:24 PM ET

Warren Buffett's Letter to Shareholders Will Be Sent Later Today

Posted By: Alex Crippen
Investor Warren Buffet participates in the Treasury Conference on U.S. Capital Markets Competitiveness, Tuesday, March 13, 2007, at Georgetown University in Washington.  (AP Photo/Gerald Herbert)
Gerald Herbert
Investor Warren Buffet participates in the Treasury Conference on U.S. Capital Markets Competitiveness, Tuesday, March 13, 2007, at Georgetown University in Washington. (AP Photo/Gerald Herbert)

Warren Buffett's annual letter to the shareholders of Berkshire Hathaway, and the entire financial world, will be released later today \(Friday, March 3\) around 4:30pm ET. We'll also get Berkshire Hathaway's fourth quarter earnings report. Current price:

That's going to be a lot of conversation starters for Buffett's live appearance on CNBC's Squawk Box Monday morning (6am ET) with Becky Quick. (Buffett will also be answering many of the email questions you've been submitting to us.)

Each year, Buffett's letter is eagerly awaited. (CNBC's Patti Domm tells me she's heard from some fans who are planning a party of sorts this afternoon.)

We'll be reporting on the letter as soon as it is released, both on CNBC and here on CNBC.com's Warren Buffett Watch .

A reminder that Buffett has given us something of a pre-test question for his letter . (No, there won't be a quiz afterwards.) He'll discuss the question, and the answers, with Becky Monday morning on Squawk.

In a post today on his Reflections on Value Investing blog , Shai Dardashti speculates that Warren's question may be a hint he'll be revisiting the "Joy of Compounding" in today's letter.

The shareholder letters are one of the best ways to get inside Buffett's head. He writes in a very easy-going, straight-talking, style about what he's been doing, his successes, his failures, and his general observations about investing and the markets. They often contain a pithy line or two or three that become classic "Buffett-isms."

Many of his fans say they got a lot of their financial education by reading Buffett's letters over the years. (They are collected on their own page on the Berkshire Hathaway web site.)

In its comprehensive preview story, Reuters speculates that Buffett "may hint at what's next in his bold foray into bond insurance but is unlikely to give specifics on his search for a successor."

Bloomberg quotes analyst Charles Hamilton of FTN Midwest Securities as predicting a 10 percent decline for Berkshire earnings to $1,667 a share, excluding one-time items. The Reuters estimate is $1,692 a share. Remember, however, that there aren't a lot of analysts who follow Berkshire, so the consensus estimates are fairly rough.

Questions? Comments? Email me at buffettwatch@cnbc.com

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  Thursday, 28 Feb 2008 | 9:30 PM ET

Warren Buffett Wants to Know What YOU Predict

Posted By: Alex Crippen

Warren Buffett will be answering your emailed questions Monday morning during all three hours of Squawk Box, starting at 6a Eastern.

Today, he's asking you a question.

He asked our Becky Quick to poll the CNBC audience to see what you predict:


Warren told Becky: "The answer will be in the Berkshire Hathaway annual report...sort of..." He'll discuss the question, and its answers, with Becky on Monday's Squawk.

Buffett's shareholder letter will be released today (Friday) at 4:30PM ET. Check back here and on CNBC for full coverage.


And watch Squawk Box on CNBC first thing this coming Monday at 6am ET, when Warren Buffett will sit down in Omaha with Becky Quick for a series of exclusive, live interviews appearing throughout Squawk's three hours, focusing on this year's letter and your emails.





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  Wednesday, 27 Feb 2008 | 6:07 AM ET

Your Chance to Ask Warren Buffett a Question

Posted By: Alex Crippen

Warren Buffett will answer some of your email questions this coming Monday morning, March 3, live from Omaha, exclusively on CNBC's Squawk Box .

On Friday afternoon, Buffett will be releasing his annual letter to the shareholders of Berkshire Hathaway , as the company releases its earnings report for the fourth quarter of 2007. Each year, his shareholder letters provide lots of insight into what Buffett is thinking and doing and have been the source for some of his most famous "Buffett-isms."

Then, first thing Monday morning at 6am ET, Buffett will sit down in Omaha with our Becky Quick for a series of exclusive, live interviews appearing throughout Squawk's three hours, focusing on this year's letter.

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  Tuesday, 26 Feb 2008 | 9:18 PM ET

MBIA's CEO Tells CNBC He's "Comfortable" Competing with Warren Buffett

Posted By: Alex Crippen

In a live on-set interview during today's Closing Bell on CNBC, MBIA CEO Jay Brown told us he's "comfortable" going up against Warren Buffett's new bond insurance company, although he acknowledges that Berkshire Hathaway can be "tough" competition.

In response to a question from Michele Caruso-Cabrera about Buffett "going after" his business, Brown suggested Buffett might not be in it for the long haul:

"I have competed with Warren Buffett in the insurance space most of my life. They're tough competitors. They offer a unique product. And they also like to come in and out of markets. The muni market, or the structured market, when you look at it, needs constant players in there. We've seen a huge drop in bond coverage provided by the market.

Warren saw an opportunity. Warren never misses an opportunity to jump in, especially when there's stress. And so I think I'm pretty comfortable we can compete with Warren."

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  Monday, 25 Feb 2008 | 3:53 PM ET

General Re, AIG Former Execs Convicted of Fraud

Posted By: AP

A federal jury has found five former insurance company executives guilty of a scheme to manipulate the financial statements of the world's largest insurance company.

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  Monday, 25 Feb 2008 | 3:51 PM ET

Former Execs at Berkshire Hathaway's Gen Re Convicted in Fraud Trial

Posted By: Alex Crippen
Warren Buffett, right, chairman of Berkshire Hathawy Inc., speaks to the media while Ron Ferguson, chairman and chief executive officer of General Re, listens in New York on Friday, June 19, 1998. Berkshire Hathaway Inc. is buying General Re for $22 billion worth of stock, adding one of the world's leading insurers of insurance companies to its portfolio. Berkshire announced Friday after the stock market closed that it would let General Re operate independently of its other insurance operations,
Adam Nadel
Warren Buffett, right, chairman of Berkshire Hathawy Inc., speaks to the media while Ron Ferguson, chairman and chief executive officer of General Re, listens in New York on Friday, June 19, 1998. Berkshire Hathaway Inc. is buying General Re for $22 billion worth of stock, adding one of the world's leading insurers of insurance companies to its portfolio. Berkshire announced Friday after the stock market closed that it would let General Re operate independently of its other insurance operations,

Four former executives of Berkshire Hathaway's General Re have just been found guilty in a closely watched criminal fraud trial. A former executive of American International Group was also convicted by the jury, following a one-month federal court trial in Hartford, Connecticut.

All five were accused of creating and hiding an illegal deal to make AIG's reserves look better than they actually were in 2000 and 2001.

The defense in the trial had floated the idea of calling Berkshire Chairman Warren Buffett to the stand, in an effort to show that he knew what the defendants were doing, didn't try to stop them and didn't think there was anything wrong with it. The defense has portrayed the deal in question as a perfectly legal transaction.

Despite the talk, the defense never did call Buffett to the stand , vindicating Warren Buffett Watch's semi-bold prediction made as the trial was getting underway.

Berkshire Hathaway's current price:

Questions? Comments? Email me at buffettwatch@cnbc.com

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  Friday, 22 Feb 2008 | 5:31 PM ET

Buffett's Berkshire Backs Over 100 Muni Bonds In Last Two Days

Posted By: Alex Crippen

Warren Buffett's new bond insurance company has backed more than 100 municipal bonds in the past two days, according to Reuters .

The wire service quotes a Moody's Investor Services spokesman as saying, "We have rated approximately 112 Berkshire Hathaway Assurance Corp-insured issues between yesterday and today."

Reuters calls it a "development that shows just how fast the new unit is growing in a field where rivals are struggling."

Ambac and MBIA have been on the brink of losing their own AAA ratings from Moody's, Standard and Poor's and Fitch due to exposure to potentially big losses from risky investments like collaterialized debt obligations (CDOs). In the last few minutes, however, CNBC's Charlie Gasparino reported that banks working on a bailout for Ambac could announce a deal Monday or Tuesday.

Even though BHAC doesn't have its own AAA credit rating yet, the bonds it guarantees are getting the top rating from Moody's Investors Service.

In a news release, Moody's says BHAC's guarantees are backed by Berkshire-owned National Indemnity Co. (NICO), which does have its own AAA credit rating. VP Bruce Ballentine, co-author of a new Moody's report on BHAC says in the release, "Moody's Aaa insurance financial strength rating on NICO reflects its superior capitalization, its unique ability to assume large and unusual risks, its expertise in managing long-tail portfolios, and the implicit support from Berkshire." (I found a link to the report , but it's a bit expensive.)

Buffett revealed the creation of his new bond insurer just about two months ago. It's in the process of getting a "streamlined" nationwide application for licenses to sell in all 50 states.

Earlier this month, during a live appearance on CNBC's Squawk Box, Buffett offered to reinsure $800 billion dollars worth of municipal bonds now backed by Ambac, MBIA and FGIC.

That offer was not well received, with Ambac's CEO telling CNBC's Erin Burnett it's "laughable." The insurers don't like the deal partly because it would, in effect, skim the "good" stuff while leaving them stuck with the "bad" CDOs.

Berkshire Hathaway does own 48 million shares, now worth about $1.8 billion, in Moody's. (See our new Berkshire Hathaway Portfolio Tracker.) That's about 19 percent of its outstanding stock, making Berkshire the biggest Moody's shareholder. Current price for Moody's:

This week, the New York Post said that "allegations of conflicts came from insurance industry sources" because Moody's "began pulling the rug out from under (Buffett's) rival insurers to force them into 'egregious' deals with Buffett." That is, the argument goes, by threatening their AAA credit ratings, Moody's is trying to force Ambac and MBIA to accept Buffett's reinsurance offer. The Post did not identify the source of what it called the "cries of foul."

Berkshire Hathaway's current price:

Questions? Comments? Email me at buffettwatch@cnbc.com

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  Tuesday, 19 Feb 2008 | 9:57 AM ET

Warren Buffett: Playing Bridge Theoretically More Interesting Than Naked Woman

Posted By: Alex Crippen

Warren Buffett says he's addicted to Bridge. To emphasize just how much, he told CBS News, "You know, if I'm playing bridge and a naked woman walks by, I don't ever see her."

While he makes it sounds like this is a commonplace occurence at his local bridge club, he did add with a laugh, "Don't test me on that!" (I'm relieved that Omaha is not actually a hot-bed of debauched bridge parties. Dealbreaker isn't so sure.)

Over the weekend, CBS News Sunday Morning featured a piece by John Blackstoneon how Warren Buffett and Microsoft's Bill Gates love to play bridge, and what they're doing to get more young people interested in a game that mostly attracts older players. Buffett and Gates often play together online, and sometimes in person.

Along with putting a lot of money into a program to teach bridge to junior-high school kids, Buffett also lends his name to the Warren Buffett Challenge Match, pitting the USA against Europe in the "Ryder Cup of bridge." The USA won the first match in 2006.

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  Friday, 15 Feb 2008 | 7:13 PM ET

Kraft Foods Rallies 7% on Revelation Warren Buffett Is Now Its Largest Shareholder

Posted By: Alex Crippen
** EMBARGOED FOR USE UNTIL 12:01 A.M. WEDNESDAY ** Cookies and crackers are seen at a Hannaford Supermarkets location Sunday, Sept. 3, 2006, in Latham, N.Y. The items were not awarded any stars under the Guiding Stars system. The rankings are based on federal guidelines, with points earned for meeting recommended levels of nutrients like fiber and taken away for having too much of the bad stuff--like saturated fats and sugar. "You don't have to have a nutrition degree to understand it," said Car
Candace Choi
** EMBARGOED FOR USE UNTIL 12:01 A.M. WEDNESDAY ** Cookies and crackers are seen at a Hannaford Supermarkets location Sunday, Sept. 3, 2006, in Latham, N.Y. The items were not awarded any stars under the Guiding Stars system. The rankings are based on federal guidelines, with points earned for meeting recommended levels of nutrients like fiber and taken away for having too much of the bad stuff--like saturated fats and sugar. "You don't have to have a nutrition degree to understand it," said Car

Kraft Foods rallied by 6.9 percent to close at $31.33, the day after Warren Buffett's Berkshire Hathaway revealed it has accumulated an 8.6 percent stake in the company , becoming Kraft's largest shareholder. That's the biggest one-day percentage gain ever for Kraft, which began trading on the NYSE in 2001.

Kraft Foods Current Price:

Buffett's Kraft Foods stake also helped push other food stocks higher in what one portfolio manager calls a "bit of a halo effect " for the sector that often accompanies news of a Berkshire buy. Bullish forecasts and earnings from H.J. Heinz , Hormel Foods and Campbell Soup also point to better pricing power for the industry, which has been hit by rising agricultural commodity costs.

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  Friday, 15 Feb 2008 | 11:00 AM ET

Buffett's Berkshire Hathaway Reveals 8.6% Stake in Kraft Foods

Posted By: Alex Crippen
Boxes of Kraft Macaroni and Cheese are seen Wednesday, April 19, 2006, in Milwaukee. Kraft Foods Inc. releases first-quarter earnings after the bell.  (AP Photo/Morry Gash)
Morry Gash
Boxes of Kraft Macaroni and Cheese are seen Wednesday, April 19, 2006, in Milwaukee. Kraft Foods Inc. releases first-quarter earnings after the bell. (AP Photo/Morry Gash)

Warren Buffett's Berkshire Hathaway has accumulated an 8.6% stake in Kraft Foods , totaling over 132 million shares as of the end of the fourth quarter on December 31. The stake was worth $4.3 billion on that date.

At today's closing price of $29.31, it's worth about $3.9 billion. Kraft shares have been under pressure from rising agricultural commodity prices. They're down 9.8% in the last month, 11,7% year-to-date, and 14.2% over the last 12 months.

Kraft's current price:

We got a hint of Buffett's interest in Kraft last July when the Wall Street Journal reported Berkshire had acquired a "small stake" in the company. It was seen at the time as a possible vote of confidence in Kraft's turnaround strategy. Activist investor Nelson Peltz had been pushing Kraft to sell some businesses to pay for a stock buyback.

Berkshire revealed in SEC filings today that it was buying Kraft as early as the second quarter. It held69,583,800 shares worth $2.5 billion as of June 30. Berkshire then increased its stake to107,200,900 shares worth $3.7 billion as of September 30.

Berkshire's reported Kraft stake is its sixth largest by market value, following Coca-Cola ($11.7 billion), Wells Fargo ($8.6 billion), Procter and Gamble ($7.0 billion), American Express ($6.9 billion), and Burlington Northern Santa Fe ($5.7 billion.)

EXPLORE WARREN BUFFETT'S INVESTMENTS WITH OUR NEW BERKSHIRE HATHAWAY PORTFOLIO TRACKER

The snapshot of Berkshire Hathaway's portfolio holdings comes from an SEC filing late this afternoon . Berkshire, like other large holders, reports its portfolio holdings to the government four times each year. It reflects what Berkshire had on the last day of the fourth quarter, which was December 31, 2007. It may not be a complete list, as the SEC sometimes gives Berkshire and others permission to temporarily withhold some information to deter copy-cats.

BUFFETT'S OTHER MOVES

Berkshire also says it had 1.5 million shares of the British drug company GlaxoSmithKline, worth about $76 million as of the end of the fourth quarter. That's a new position for Berkshire.

Glaxo's current price:

Berkshire's CarMax stake jumped to 21 million shares from 14 million at the end of the third quarter. Shares of the used-car retailer rallied over 6 percent back in November when Berkshire first revealed it had bought a stake. (Carmax's new Omaha location is now open!)

CarMax's current price:

Berkshire also slightly increased its holdings of:

  • Johnson & Johnson: 61,754,448 shares (Dec 31), up 0.2% from 61,607,348 (Sept. 30)


  • Sanofi-Aventis: 3,569,905 shares (Dec 31), up 1.1% from 3,530,685 (Sept. 30)


  • U.S. Bancorp: 67,581,926 shares (Dec 31), up 3.2% from 65,490,326 (Sept 30)


  • Wells Fargo: 289,259,868 shares (Dec 31), up 3.4% from 279,669,568 (Sept 30)

Berkshire cut its stakes in:

  • Ameriprise: 661,742 shares (Dec. 31), down 54% from 1,448,662 shares (Sept. 30)

  • Iron Mountain: 4,663,900 shares (Dec 31), down 49% from 9,047,850 (Sept. 30)

Questions? Comments? Email me at buffettwatch@cnbc.com

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About Buffett Watch

  • Warren Buffett is arguably America’s most-admired and most-followed investor. Buffett is the largest shareholder and CEO of Berkshire Hathaway and one of the world’s most famous and most generous philanthropists. Legions of investors - from all walks of life - follow Buffett's homespun investment philosophy: invest in what you know, invest in value. Here on CNBC.com's Warren Buffett Watch, we’ll keep you up to date on what the “Oracle of Omaha” is doing by following Buffett's trades, words and deeds.

 

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