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Investing Warren Buffett Watch

  Monday, 24 Jan 2011 | 1:07 PM ET

Buffett's Berkshire Gets Big Barron's Boost

Posted ByAlex Crippen
Barron's January 24, 2011 Cover: Mr. Moneybags
Barron's January 24, 2011 Cover: Mr. Moneybags

Shares of Warren Buffett's Berkshire Hathaway are up almost four percent at mid-day \(Monday\) after Barron's suggested the company could pay its first dividend since Buffett took over in the mid-1960s.

It's also predicting Berkshire's stock price, which "hasn't budged in nearly a year," could top its all-time high this year.

For Class A, that's about $149,000 a share.

Any close above $125,612 would be a new 2-1/4 year closing high.

At 1p ET, they're at $124,982, up 3.7 percent.

Current real-time price:

In the cover story, Mr. Moneybags , Andrew Bary points out that Berkshire is "piling up cash so quickly that it could be sitting on close to $50 billion at its core insurance operation alone by year end."

Bary writes, "The flood of cash could prompt Berkshire to finally start paying a cash dividend in the next 12 to 18 months, particularly if the 80-year-old Buffett is unable to find what he calls an 'elephant,' or a large acquisition."

Late in 2009, Berkshire announced a stock-split for its Class B shares after years of rejecting any suggestion of a split. Just before it was approved by shareholders the following January, CNBC's Becky Quick asked Buffett if there might be more unexpected changes.

BECKY: Some people are asking if you are completely changing your stance on a lot of different issues.

BUFFETT: No.

BECKY: Some people are saying, 'Is this going to mean a dividend's coming soon, too?'

BUFFETT: No, I don't think it means that. It made sense in terms of the Burlington Northern acquisition.

Bary notes that a Buffett-Berkshire dividend would be unprecedented:

Buffett hasn't paid a dividend on Berkshire shares since he took control in 1965, preferring to invest the company's profits. That's been the right move, given the 6,000-fold increase in Berkshire's stock since then. Buffett's aversion to dividends could change if cash continues to build and he can't find a big acquisition. A dividend also could take some pressure off his successors to invest the company's profits.

He adds that "Berkshire's initial dividend, whenever it comes, is expected to be modest, at 2% or less."

Current Berkshire stock prices:

»Read more
  Friday, 21 Jan 2011 | 11:20 AM ET

Lou Simpson Ditches Retirement, But He's Not Going for the Big Bucks

Posted ByAlex Crippen
Lou Simpson
Lou Simpson

Lou Simpson is going back to work, but he's not going back into the game for the money.

Last August, he was planning to retire from Geico at the end of the year, after decades of independently, and very profitably, managing the Berkshire Hathaway subsidiary's multi-billion dollar stock portfolio.

His profitable picks, listed in Berkshire's portfolio disclosures, would sometimes be attributed to Warren Buffett himself.

In his 2004 letter to shareholders, Buffett wrote that Simpson is "a cinch to be inducted into the investment Hall of Fame."

From his new home in Florida, Simpson tells Bloomberg that he "did retire for a day" before realizing that "I would probably drive myself crazy and my wife crazy if I really retired and didn't do anything."

So he's filed plans with the SEC to open an investment-advisory firm that will manage $150 million to $200 million (to start) for family, friends, and some charities.

Simpson's firm, SQ Advisors, will collect a 1 percent management fee, with no additional fees for performance. That contrasts with the standard hedge fund's cut of 2 percent of assets and 20 percent of profits.

He tells Bloomberg, "This business is not being run to maximize income. One of our prime thoughts was to try to help people."

»Read more
  Thursday, 20 Jan 2011 | 1:36 PM ET

Warren Buffett Retiring from Washington Post Board After 'Great 37 Years' .. But Keeping the Stock

Posted ByAlex Crippen

Warren Buffett will retire from the Washington Post board of directors after what he calls a "great 37 years."

But he tells the Wall Street Journal that Berkshire will "keep every share of stock we have" in the company. "I would never sell a share of the Post," he says. It has "all kinds of meaning to me."

In its most recent SEC portfolio filing, Berkshire says that as of December 31, 2010, it held 1,727,765 shares. At the current stock price of $426.02, they're worth $736 million.

Berkshire is, by a large margin, the biggest institutional holderof Washington Post shares, with a 20.5 percent stake.

In a news release today, distributed by Berkshire-owned Business Wire (of course), the Post says the 80-year-old Buffett won't stand for re-election to the board, but will serve through the expiration of his current term in May.

Buffett tells the Journal, "A few years ago I wanted to get off all boards ... This was the one I hated to get off." He's been on 19 boards at one point or another.

Now, however, Buffett says he needs to focus on his own company. "As we get more complicated, I find more things taking up my time related to Berkshire."

There's no lack of mutual affection in today's news release.

»Read more
  Thursday, 20 Jan 2011 | 12:11 PM ET

Mexican Billionaire Carlos Slim Won't Join Warren Buffett's 'Giving Pledge'

Posted ByAlex Crippen
Mexican tycoon Carlos Slim.
AP
Mexican tycoon Carlos Slim.

Carlos Slim, the world's richest man by the latest Forbes ranking with an estimated $53.5 billion, tells CNBC he won't be signing onto the Giving Pledge , the invitation to philanthropy created by Warren Buffett \(#3 on the Forbes list with $47.0 billion\) and Bill Gates \(#2, $53.0 billion\).

The program asks the "wealthiest individuals and families in America to commit to giving the majority of their wealth to the philanthropic causes and charitable organizations of their choice either during their lifetime or after their death."

In a taped interviewin Mexico with Michelle Caruso-Cabrera , Slim says business people should help to fight poverty, but he doesn't think giving to charity is the best way to do so, and he doesn't appear to like the idea of a specific target.

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  Monday, 3 Jan 2011 | 2:42 PM ET

Buffett's Berkshire Sells $1.5B of Debt

Posted ByAlex Crippen

Warren Buffett's Berkshire Hathaway says in an SEC filing today that it plans to sell $1.5 billion of 3-year and 10-year investment-grade notes guaranteed by the company.

The filing indicates the 10-year notes will be at a fixed rate, while the 3-year notes will be both fixed and floating.

UPDATE AT 4:25P ET: The deal is done. Thomson Reuters IFR says the following notes have been sold:

  • $375M in 3-yr floating rate notes at Libor plus 33 basis points
  • $375M in 1.5% 3-year fixed notes at 58 basis points over comparable Treasuries
  • $750M in 10-year 4.25% fixed-rate notes at 95 basis points over comparable Treasuries

UPDATE at 5:50P ET: Berkshire has filed a pricing term sheet with the SEC.

Dow Jones Newswires calls the decision to issue floating-rate securities "interesting" since interest rates are expected to rise, increasing Berkshire's borrowing costs.

Cabot Money Management's Bill Larkin says Berkshire's deal could change expectations for issuing structure. Buffett is "a very smart man, and others could follow suit."

Proceeds will be used to retire floating-rate notes that mature later this month.

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, 31 Dec 2010 | 4:47 PM ET

Buffett Stomps S&P in 2010

Posted ByAlex Crippen

Shares of Warren Buffett's Berkshire Hathaway (Class A) have finished the year with a gain of 21.4 percent for 2010, far outperforming the benchmark S&P's 12.8 percent gain, excluding dividends.

(We're using Class A to stay consistent with past years, despite the Class B split. The B shares are up 21.9 percent this year.)

»Read more
  Wednesday, 29 Dec 2010 | 3:54 PM ET

Bad Year for Buffett-Backed BYD

Posted ByAlex Crippen
090413_Fortune_Cover_Buffet.jpg

A missed sales target caps a tough year for shares of BYD, the Chinese electric car company backed by Warren Buffett's Berkshire Hathaway.

BYD tells Bloomberg that it will sell between 520,000 and 550,000 cars this year. That's below the already-reduced target of 600,000. In August, BYD cut that goal by 200,000 vehicles.

The Chinese company has started a trial programwith the Los Angeles Housing Authority for an electric car fleet and it still expects to sell its K9 electric bus in the U.S. in 2011. Sales in the U.S., however, of the E6 electric car are now planned for 2012. That's two years behind schedule.

BYD expects a "sizable profit " from electric vehicles in about five years, but its third quarter profits fell 99 percent after weak sales this summer.

At today's close of HK$40.50, the Hong Kong listed stock has lost half its value since early April, when it hit its 2010 high just above HK$80.

»Read more
  Wednesday, 15 Dec 2010 | 7:40 AM ET

What's Obama Trying to Bolster?

Barack Obama
Barack Obama

President Barack Obama invited two of the world's richest men to the White House Tuesday to discuss ways to boost the U.S. economy.

The White House says Obama's meeting with Bill Gates and Warren Buffett focused on ideas for spurring economic growth and making the U.S. more competitive. But we want to know what you think? Was this meeting more about bolstering the economy, or Obama's 2012 re-election campaign? Share your opinion:

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  Tuesday, 14 Dec 2010 | 12:51 PM ET

Mr. Buffett Goes to the White House ... Again

Posted ByAlex Crippen

For the second time this year, Warren Buffett has met with President Obama in the White House's Oval Office.

The session this morning (Tuesday) also included Bill and Melinda Gates.

According to a brief White House statement, Mr. Obama invited the trio to the White House discuss the Giving Pledge , "the initiative they launched earlier this year that invites the wealthiest individuals and families in America to commit to giving the majority of their wealth to philanthropy."

The statement goes on to say the conversation also covered "ideas for growing the economy and making America more competitive including investment in education to better prepare the next generation and investing in innovative areas with opportunity for growth."

In July, Buffett met with President Obama in the Oval Office to "discuss the economy and our ongoing efforts to work with the private sector to stimulate growth and create jobs."

During that visit, the president noticed that Buffett's tie was frayed, and gave him a new, gift-wrapped, red tie.

No word on whether Buffett wore that gift today, or if he put on another disreputable tie in hopes of getting a second free piece of neckwear.

Current Berkshire stock prices:

Class B:

Class A:

For more Buffett Watch updates follow alexcrippen on Twitter .

Email comments to buffettwatch@cnbc.com

»Read more
  Thursday, 9 Dec 2010 | 4:36 PM ET

Stocks End Mixed; Nasdaq Hits 3-Year High

Posted ByAbby Schultz

Stocks trimmed losses to end narrowly mixed Thursday as Treasury prices firmed and the dollar stabilized.

The Dow Jones Industrial Average fell 2.42 points, or 0.02 percent, to close at 11,370.06 a day after ending slightly higher in a session dominated by moves in Treasurys and metals.

McDonald's, DuPont, and Boeing declined, while Bank of America and Cisco rose.

The S&P 500 rose 4.72 points, or 0.4 percent, to close at 1,233.00, its highest close since September 19, 2008.

The Nasdaq marked its highest close since December 31, 2007, rising 7.51 points, or 0.3 percent, to close at 2,616.67.

The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell to nearly 17.

Among key S&P 500 sectors, financials, telecom and materials rose, while consumer discretionary and technology fell.

The dollar rose slightly against a basket of currenciesas the euro fell after Fitch cut ratings for Ireland's sovereign debt, and a political party in Ireland said it would vote against a European Union bailout for the country. Gold and silverpricesrecovered some of their gains.

Investors flocked to an auction of $13 billion in 30-year bonds that had a yield of 4.410 percent and a bid-to-cover ratio of 2.74. The bid-to-cover is a measure of how much is bid for each dollar auctioned.

The auction result surprised the market as it was on the heels of the worst two-day selloff in Treasurys in two years. After the auction, the 10-year Treasury note rose 20/32 higher to yield 3.19 percent, down from 3.27 percent late Wednesday.

Bond investors have been concerned that an agreement between President Obama and Republicans to extend the Bush-era tax cuts for a further two years would threaten financial stability and spark inflation.

On Thursday, the markets were awaiting direction from Washington about the tax cut plan as Congress continued to wrestle over the details. Aversion of the compromise is expected to be put before the Senate later today, according to Senate Majority Leader Harry Reid.

Most investors seem to expect a compromise will be reached, and if it's not, "it could be a market moving event," said Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland.

»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.