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Investing Warren Buffett Watch

  Sunday, 1 May 2011 | 4:53 PM ET

Five Things to Watch: Squawking with Warren and Metals Mania

Posted By CNBC.com|Edited by Matthew Levine and Nikhil Deogun

Record-breaking gold tries to keep pace with silver in a busy week that begins with Buffett's burden and drumrolls towards Jobs Friday. Here's what we're watching...

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  Saturday, 30 Apr 2011 | 6:28 PM ET

Warren Buffett to CNBC: I Should Have Been Tougher in Sokol News Release

Posted ByAlex Crippen
Berkshire Shareholders Meeting 2011: The Interview
Berkshire Shareholders Meeting 2011: The Interview

Warren Buffett tells CNBC that he should have been more critical of David Sokol in the news release he wrote a month ago announcing the Berkshire executive's surprise resignation .

In a taped interview with our Becky Quick after facing hours of questioning from Berkshire Hathaway shareholders today in Omaha, Buffett says, "I wouldn't have written the press release that way."

The release started out with several paragraphs praising Sokol's "extraordinary" contributions to Berkshire, prompting critics to question why he wasn't more "ruthless" with someone who would be hurting the company's reputation.

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  Saturday, 30 Apr 2011 | 5:24 PM ET

Warren Buffett: We're Looking at Two Deals But Won't Stretch for a 'Really Big Elephant'

Posted ByAlex Crippen
Buffett Shareholders Meeting 2011: No Elephants Now
Buffett Shareholders Meeting 2011: No Elephants Now

Warren Buffett tells shareholders that Berkshire Hathaway is currently looking at two potential acquisitions that would be roughly as large as its $9 billion deal , composed entirely of cash, for Lubrizol earlier this month.

But underlining his extreme aversion to financing purchases with stock or selling an existing business to raise cash, Buffett says, "We can't do a really big elephant now and we won't stretch."

That's a reference to his February letter to shareholders in which he talked about the need for more "major" acquisitions. "Our elephant gun has been reloaded, and my trigger finger is itchy."

On the same theme, Buffett says he would have liked Johnson & Johnson's acquisition of Synthes "a whole lot more" if it had been all cash.

J&J's $21.6 billion purchase price of the Swiss medical devices maker consisted of two-thirds stock and one-third cash.

Our Berkshire Hathaway Portfolio Tracker shows that Buffett's company reported owning 42.6 million J&J shares at the end of December. At Friday's closing price of $65.72, that stake would be worth $2.8 billion. Current price:

Just over a year ago, Buffett told CNBC he would have voted against Kraft's use of stock to purchase Cadbury. He's also criticized Nestle's sale of its pizza business.

In late 2009, Berkshire did use some stock to help pay for its $26 billion acquisition of Burlington Northern Santa Fe. In an interview on CNBC , Buffett said, "I don't like to use stock, but on this one, because of the size and because they wanted a tax-free option for shareholders, we're doing it 40 percent stock and 60 percent cash."

Current Berkshire stock prices:

Class B:

Class A:

For more Buffett Watch updates follow alexcrippen on Twitter .

Email comments to buffettwatch@cnbc.com

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  Saturday, 30 Apr 2011 | 3:45 PM ET

Warren Buffett: Failure to Raise Debt Limit Would Be 'Most Asinine Act' Ever By Congress

Posted ByAlex Crippen
Shareholders Meeting 2011: Debt Limit
Shareholders Meeting 2011: Debt Limit

Warren Buffett says if Congress fails to raise the U.S. debt limit, it would be its "most asinine act" ever.

But he told shareholders today there's "no chance" lawmakers will fail to do so, despite "waste of time" debates on Capitol Hill.

While Buffett doesn't want the nation to keep increasing its debt relative to GDP, he says there's shouldn't be a legislated debt limit to begin with, because circumstances change.

Buffett says the U.S. will not "have a debt crisis of any kind as long as we keep issuing our notes in our own currency." Inflation resulting from a "printing press" approach, however, is a serious threat.

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  Saturday, 30 Apr 2011 | 1:10 PM ET

Warren Buffett Isn't Joining Gold Rush or Betting Against U.S. Dollar

Posted ByAlex Crippen
110430_2011_Gold_Dollar.jpg

Warren Buffett is not joining the recent gold rush that has sent the commodity to all-time highs above $1500 an ounce.

He tells shareholders that he understands why rising prices can create excitement and draw in buyers, but it's not the way to create lasting wealth.

Buffett says he'd rather bet on strong businesses instead of something "that doesn't do anything."

He points out that for all the gold in the world, he could buy all of the farmland in the U.S. and 10 Exxon Mobils, with $1 trillion left over.

As far as he's concerned, the only thing you can do with gold is admire and "fondle" it.

Charlie Munger agrees: "There's something peculiar to buy an asset that will only really go up if the world goes to hell." He'd rather own Berkshire shares.

Buffett also says it's unlikely that Berkshire will "make another big currency bet." He still believes the U.S. dollar, and most other foreign currencies, will lose value over time. But he doesn't have a strong enough conviction on the rates of decline to justify putting a lot of money on the line.

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  Saturday, 30 Apr 2011 | 11:20 AM ET

Buffett: I Made 'Big Mistake' By Not Questioning Sokol on 'Inexplicable and Inexcusable' Trades

Posted ByAlex Crippen
110430_Buffett_Sokol.jpg

Warren Buffett tells shareholders that like the Salomon Brothers scandal 20 years ago, the David Sokol situation is "inexplicable and inexcusable."

Buffett says the unquestionably "inexcusable" part is that Sokol violated Berkshire Hathaway's Code of Ethics and insider trading rules.

A report three days ago from the company's Audit Committee accuses Sokol of misleading Buffett with "incomplete disclosures"about his purchases of Lubrizol shares. Just weeks after buying the stock, Sokol recommended to Buffett that Berkshire acquire the company.

Sokol's Lubrizol holdings increased by $3 million when Berkshire did buy Lubrizol at a 28 percent premium in mid-March.

As for "inexplicable," Buffett says he'll never understand why Sokol did what he did. He can't explain why Sokol didn't disguise his Lubrizol trades if he thought he was doing something wrong. "He was leaving a total record as to his purchases."

He also can't reconcile the fact that Sokol's reputation has been ruined by a scandal involving a $3 million stock profit, when Sokol once volunteered to give up $12.5 million in compensation. At Sokol's suggestion, the money went to his MidAmerican colleague Greg Abel .

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  Saturday, 30 Apr 2011 | 10:43 AM ET

Global Disasters Generate Insurance Underwriting Loss for Berkshire Hathaway

Posted ByAlex Crippen
110430_2011_Earnings.jpg

Warren Buffett tells shareholders for the first time in nine years, Berkshire Hathaway will "likely have an insurance underwriting loss this year."

He expects "this may be a year that the reinsurers will remember" but not because they want to.

Global catastrophes, including the earthquakes in Japan and New Zealand, along with floods in Australia, combined to generate estimated first quarter catastrophe losses of $1.67 billion, pretax.

Buffett says Berkshire estimates an underwriting loss of $821 million in the first quarter, compared to a gain of $226 million in last year's first quarter.

Overall, Berkshire is now estimating that first quarter operating profit will be $1.593 billion, down 28 percent from $2.222 billion in the year-ago quarter.

The company has issued a news release detailing the preliminary numbers Buffett is giving shareholders.

The full earnings report for the quarter is expected to be released next Friday, May 6.

Current Berkshire stock prices:

Class B:

Class A:

For more Buffett Watch updates follow alexcrippen on Twitter .

Email comments to buffettwatch@cnbc.com

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  Friday, 29 Apr 2011 | 8:32 PM ET

Week Ahead: Jobs Report Looms as Dollar Keeps Sliding

Posted ByPatti Domm

Robust earnings reports and new money from fund managers may put a bounce into stocks at the start of the week, but the focus will quickly turn to economic news, especially Friday's April jobs report.

About 20 percent of the S&P 500 reports in the last big week of earnings season, including energy, media and consumer products companies. Warren Buffett meets Berkshire Hathaway shareholders Saturday, and his comments would be followed closely, as he discusses the company, investments and also former executive David Sokol's Lubrizol trades.

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  Friday, 29 Apr 2011 | 1:28 PM ET

Buffett Still Builds Wealth For Shareholders: Gabelli

Warren Buffett doesn't have to worry about Mario Gabelli when he hears from shareholders during Berkshire Hathaway's annual meeting Saturday.

"If I look at a 45-year career for Warren Buffett, I have to, as a shareholder, say, wow, terrific. Warren Buffett has built terrific wealth for his shareholders," the chairman of GAMCO Investors told CNBC Friday.

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  Friday, 29 Apr 2011 | 11:59 AM ET

Sokol Questions Loom, But Buffett Doesn't Expect 'Different' Tone as Shareholders Gather

Posted ByAlex Crippen
David Sokol on Squawk Box
CNBC
David Sokol on Squawk Box

Warren Buffett promises to answer all questions about the David Sokol scandal, and there will certainly be plenty of them tomorrow as roughly 40-thousand Berkshire Hathaway shareholders gather in Omaha.

But Buffett tells us he doesn't expect a "different" tone at the meeting and predicts a lot of shareholders will concentrate on "Berkshire and its prospects."

Buffett concedes that most reporters will be more interested in Sokol. That's demonstrated in the headlines of today's meeting preview stories.

Reuters warns that Buffett May Not Feel Much Love at His 'Woodstock'and quotes a business professor, and Buffett fan, as saying, "He's the best and I expect the best from him, and I think that's why everyone is so disappointed."

The AP writes that Questions About Top Berkshire Exec's Exit Lingerand has some shareholders saying the Sokol incident "demonstrates a weakness of Berkshire's highly decentralized business model."

Fortune's Street Sweep says even though it may seem unfair, Buffett won't be able to avoid "the judgment question. "

Last night, outside Buffett's annual pre-meeting bridge game, Becky Quick asked about Berkshire's report accusing Sokol of misleading Buffett:

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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.