Investing Warren Buffett Watch

  Tuesday, 21 Mar 2017 | 3:39 PM ET

Here's what Warren Buffett's hero Jack Bogle is most worried about in the markets right now

Posted ByJohn Melloy

Jack Bogle, founder of the Vanguard group and creator of the first index fund, told CNBC PRO he is worried that just three firms — Vanguard, BlackRock and State Street — dominate the passive investing game. He believes more firms need to embrace the passive philosophy and reduce the influence of these companies, including his own.

He believes more firms need to embrace the passive philosophy and reduce the influence of these companies, including his own.

"I've also been in this business so long that I know that when everything looks sweet and easy, you better be worried 'cause the big guy hidden in the back of the room — you can't see him — huge, strapping guy carrying a sledgehammer and just when you think everything is going fine he takes that sledgehammer back and hits you in the nape of the neck," Bogle told Mike Santoli in the exclusive interview.

Overall, Bogle remains concerned about Wall Street's constant habit of putting itself before its customers and that active management mutual fund firms which are also publicly traded will continue to suffer from this conflict of interest.

"The industry structure I think is going to have to change in a more mutual direction where the client comes first and not the investment manager and particularly not the financial conglomerates that own 30 of the 50 largest mutual fund companies," Bogle said.

Warren Buffett called Bogle a "hero" to him in his annual letter released this year, writing, "If a statue is ever erected to honor the person who has done the most for American investors, the hands down choice should be Jack Bogle."

On this comment from the "Oracle of Omaha," Bogle said, "When a hero like Warren calls me a hero, there may be an element of truth in it, but one takes these things with a grain of salt."

Bogle, 87, also discusses in this nearly 20 minute sit-down:

  • How much bigger passive investing can get (It's 22 percent of the market now).
  • The origin of his index fund idea.
  • Why some ETFs don't belong in 401(k)s.
  • What returns investors can expect over the next decade

To view this interview, you must be a CNBC PRO subscriber.

»Read more
  Tuesday, 21 Mar 2017 | 11:23 AM ET

Because of Warren Buffett, people now realize Apple does have a 'moat,' analyst says

UBS analyst Steven Milunovich shared his views on Apple in an interview Tuesday on CNBC's "Squawk on the Street."

On Apple's run in the market: "The December quarter was pretty solid. The guidance wasn't as poor as people expected. The supply chain is starting to think about ramping up for the new iPhone 8. So I think investor confidence is just increasing. Now, we're going to see a strong iPhone 8 cycle, and then of course, you have Warren Buffett buying in, which suggests that maybe there are more moats around Apple than investors have given it credit for."

On the cyclical nature of Apple's stock: "Increasingly, we're thinking you could have a two-year cycle here, particularly depending upon supply of OLED. And investors want to see more consistency. The company has been emphasizing services, but really we should go up a level to look at the installed base of iPhones, which is still growing close to 20 percent, and the retention rate, which is 90 percent. As long as those things are in place, you've got a fairly consistent story here, and then hopefully, longer-term optionality with some major new products coming."

On Apple in China: "China is critical to Apple. It used to be two-thirds of growth and now it's actually a drag. And how the iPhone 8 does next year depends to a large degree on how China does. We do think the issues that Apple has had in China are more cyclical than secular."

Milunovich is the managing director at UBS, known for his coverage of technology stocks and detailed analysis of Apple.

Apple announced on Tuesday new versions of its 9.7-inch iPad and iPhone 7.

He also discusses:

  • Tim Cook
  • Augmented reality
  • Trade war in China

To watch the broadcast interview in its entirety, you must be a CNBC PRO subscriber.

»Read more
  Tuesday, 21 Mar 2017 | 9:40 AM ET

The 5 richest men in the world have all made this one mental shift

Forbes released its 2017 Billionaires List Monday morning, showcasing the world's richest people. For the fourth year in a row, Bill Gates topped the list, with a net worth of $86 billion.

Joining him in the top five are Warren Buffett, Jeff Bezos, Amancio Ortega, and Mark Zuckerberg. Like Gates, they're all fathers.

Zuckerberg, the 32-year-old co-founder and CEO of Facebook, is the youngest dad of the elite group. He and his wife, pediatrician Priscilla Chan, have a one-year-old daughter and recently announced that they are expecting a second.

"Having kids does change how you think about the world in a pretty dramatic way," Zuckerberg told students at North Carolina Agricultural and Technical State University.

»Read more
  Friday, 17 Mar 2017 | 9:37 AM ET

Billionaire investor Marc Lasry shares how he's playing markets right now

Posted ByLeslie Picker

Buy on the prospect of deregulation. Sell on the enactment of deregulation.

That's the strategy that billionaire investor Marc Lasry is implementing, according to an interview with CNBC in Las Vegas on Thursday. He said that the market has priced in deregulation, and by the time actual legislation is executed, it will not be as much as "everyone thinks it is."

Still, because of the excitement in the market over things like tax cuts and loosening banking regulation, he has very little cash on the sidelines.

"We're probably today, more invested than we've ever been," said Lasry, who spoke on the sidelines of the Forbes Shook Top Advisors Summit. "Short term, we think it's all going to be positive."

Lasry, who supported Hillary Clinton in her bid to become president, said some of the deregulation being discussed could be "good for business; it may not be good for people."

»Read more
  Friday, 17 Mar 2017 | 8:32 AM ET

Wells Fargo CEO: We will 'reassure' our investors — including Warren Buffett

Since its massive fake accounts scandal broke last year, Wells Fargo has been looking to assure customers that it's back on the right track. One very big shareholder factors significantly into that effort: Warren Buffett.

The billionaire Oracle of Omaha is the bank's biggest shareholder through his firm Berkshire Hathaway, which has a 9.6 percent stake in Wells Fargo worth nearly $28.5 billion.

In the past, Buffett publicly has stated that the bank made "a huge mistake" that led to the scandal. Wells had to pay a $190 million fine related to employees creating accounts for customers who never requested them.

On Friday, Wells Fargo CEO Timothy Sloan said Buffett was absolutely correct.

"He's been very direct in terms of some of the mistakes that we made," Sloan told CNBC in an exclusive interview. "I agree with him. We had an incentive program that drove the wrong behavior."

Though he has expressed his displeasure not only with the sales scandal but also the way the bank handled it from a public relations standpoint, Buffett has stood firm in supporting Wells Fargo. He has not sold any of his company's shares.

However, that doesn't mean Wells executives aren't conscious of keeping Buffett and other stakeholders happy going forward. Sloan said he's spoken to Buffett three times since becoming CEO.

"I don't know if I'm going to be able to do anything to assure him," Sloan said. "I think our performance is going to reassure him as to whether or not he should continue as our largest shareholder."

»Read more
  Wednesday, 15 Mar 2017 | 12:31 PM ET

Apple’s growing service business could make stock less of a bumpy ride, analyst says

Apple App Store
Scott Mlyn | CNBC

Investors should buy Apple on the potential in the tech company's expanding services business, said an RBC analyst, who kept the shares at outperform and raised his price target.

The growing services business, which Apple intends to double in four years, could reduce the laser focus of investors on the phone replacement cycle each year, wrote Amit Daryanani in a note on Tuesday.

"It's the ecosystem, not just hardware," he wrote.

Daryanani estimates that the largest components of Apple's services business are currently:

  1. The App store (3.9 percent of total revenue)
  2. iTunes/Apple Music (2.5 percent)
  3. AppleCare (1.9 percent)
  4. Licensing and other services like iCloud (2.7 percent)

Shares of Apple were up 20 percent year to date as of Tuesday's close after first-quarter earnings reflected higher-than-expected iPhone sales. The stock's movement still largely depends on iPhone sales.

Warren Buffett's Berkshire Hathaway, which tends to favor businesses with steady revenue streams, more than doubled its stake in the company in January.

Apple shares year-to-date performance

»Read more
  Monday, 13 Mar 2017 | 11:20 AM ET

Barack Obama meets with Warren Buffett in Omaha

Posted ByMack Hogan
President Barack Obama awards the Medal of Freedom to recipient Warren Buffett during a ceremony to present the awards at the White House in Washington February 15, 2011.
Larry Downing | Reuters
President Barack Obama awards the Medal of Freedom to recipient Warren Buffett during a ceremony to present the awards at the White House in Washington February 15, 2011.

Former President Barack Obama stopped off in Omaha, Nebraska, Sunday to meet with billionaire investor Warren Buffett, the Omaha World-Herald reports.

Obama had lunch with Warren and Susie Buffett, an unannounced visit that involved no press corps. There's no official word on what the former president discussed with the Buffetts.

"I'm not going to talk about the meeting," Susie Buffett told the Omaha World-Herald. "The three of us ate lunch."

According to the World-Herald, the meeting was not a fundraiser. Obama is currently raising money for his presidential library, but this meeting wasn't focused on that.

Read more at the Omaha World-Herald.

»Read more
  Thursday, 9 Mar 2017 | 12:34 PM ET

The world's billionaires are now worth $8 trillion

Posted ByRobert Frank
Wang Jianlin (L), chairman of the Dalian Wanda Group, shakes hands with Jack Ma, executive chairman of Alibaba Group last April.
ChinaFotoPress | Getty Images
Wang Jianlin (L), chairman of the Dalian Wanda Group, shakes hands with Jack Ma, executive chairman of Alibaba Group last April.

The world's billionaires are now worth $8 trillion, greater than the GDPs of Germany and France combined.

According to the latest Hurun Global Rich List, published by the China-based Hurun Report research unit, there are now 2,257 billionaires in the world — up 3 percent from last year.

Their combined fortunes jumped 16 percent over 2016, to the equivalent of 11 percent of the world's annual GDP. Their wealth was also larger than every country's individual GDP, other than the U.S. and China.

"Billionaires are concentrating wealth at a supercharged rate," Rupert Hoogewerf, Hurun Report's chairman and chief researcher, said in a statement.

Indeed, the number of billionaires has exploded over the past five years, rocketing 55 percent higher. Because much of the world's wealth is hidden or difficult to find, the actual number of billionaires may be closer to 5,000, Hoogewerf said.

"While some billionaires go to extraordinary lengths to conceal their wealth, for the most part it is that they are discreet and prefer operating under the radar," he said.

China once again led the U.S. in the sheer number of billionaires, 609 to 552. China added 41 net new billionaires last year, while the U.S. netted an additional 17. (Forbes says the U.S. still has more billionaires, due to different methodologies and information). Combined, the two countries account for half the billionaires on the planet, according to Hurun.

While Bill Gates and Warren Buffett still hold the top spots with $81 billion and $78 billion respectively, Amazon's Jeff Bezos is closing in fast. Hurun said his net worth jumped 37 percent last year to $72 billion.

The richest man in China is businessman Wang Jianlin and his family, worth $30 billion, followed by Alibaba's Jack Ma and family at $29 billion, Hurun said.

Two-thirds of the world's billionaires are self-made rather than inherited, according to the report.

»Read more
  Wednesday, 8 Mar 2017 | 10:29 AM ET

David Tepper on Apple: Warren Buffett 'made a better trade' than I did

Billionaire investor David Tepper told CNBC on Wednesday that Warren Buffett turned out to be right to buy Apple since late last year.

Tepper's Appaloosa Management trimmed its Apple stake late last year, according to the hedge fund's fourth quarter 13F filing with regulators.

Meanwhile, Buffett's Berkshire Hathaway was buying Apple at the end of last year through Jan. 31, when the tech giant reported earnings, Buffett revealed on CNBC last month.

Berkshire has amassed about $18 billion of Apple stock.

On Wednesday's "Squawk Box," Tepper said Buffett "made a better trade than me" on Apple, acknowledging the stock has been "up since we trimmed it."

Tepper said he decided to sell some Apple shares during 2016's final quarter because of worries about China exposure.

"We were a little concerned about what China policy might be in the beginning of the year," said the founder of Appaloosa, which has $17 billion in assets under management.

"We were waiting for that shoe to drop with China," he continued, "and it never did."

Asked whether he's looking to add back shares of Apple, Tepper said not at $139 each, where the stock was trading mid-morning Wednesday.

»Read more
  Wednesday, 8 Mar 2017 | 8:57 AM ET

Warren Buffett's favorite CEO annual letter is not his own. It's from this guy.

Posted By Tim Mullaney, special to CNBC.com

Everyone reads Berkshire Hathaway chairman and CEO Warren Buffett's shareholder letters for guidance on management, but to whom does Buffett turn for business wisdom? JPMorgan Chase chairman and CEO Jamie Dimon.

The 60-year-old Dimon is, perhaps, less cuddly than the 86-year-old Oracle of Omaha, and Dimon's shareholder meetings aren't a weekend-long extravaganza highlighted by Dairy Queen. But, like Buffett, Dimon uses his often quite long annual shareholder letters to muse about the best way to manage companies and, of course, to manage banks specifically.

Here are some of Dimon's best lessons from over the years for business leaders:

»Read more

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.