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Investing Warren Buffett Watch

  Monday, 29 Nov 2010 | 1:02 PM ET

Warren Buffett Talks Charity and Taxes on ABC's This Week

Posted ByAlex Crippen
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ABC News

For those of you who slept in or otherwise missed Warren Buffett on ABC's This Week with Christiane Amanpour Sunday morning, here are some links to the interview. (Amanpour also spoke with Bill and Melinda Gates, Ted Turner, and hedge fund manager Tom Steyer.)

The conversation focuses on Buffett's "Giving Pledge" but also touched on his long-standing argument that the super-rich should be paying more in taxes. It's been getting some extra attention lately as Congress debateswhether and how to extend the Bush tax cuts.

ABC has posted a video of the complete 47-minute program .

Shorter clips are included in a text story headlined "Billionaires Giving Back " on the ABC News site.

There is also a "web extra" video clip in which Buffett walks and talks with Amanpour, explaining why he thinks it is important, and profitable, to be able to communicate clearly and effectively.

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  Monday, 22 Nov 2010 | 11:31 AM ET

Yoshikami: Buffett Bashers Unite!

After Warren Buffett wrote an op-ed piece in the New York Times restating his belief that the intervention of the government was a success, and in published reports reiterated his view that taxes should be raised on the affluent, critics howled. Many commentators labeled Buffett out of touch and conflicted in his perspective.

I suspect the criticism will continue.

It is my view that anti-Buffett rhetoric is really a smokescreen for critics protesting the interventionist activities of the Bush and Obama administrations when financial markets froze in 2008.

True, Buffett had much to lose if the United States economy had collapsed. But seriously, isn't this the the case for all of us?

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  Thursday, 18 Nov 2010 | 1:24 PM ET

Ritholtz: Dear Uncle Sucker

Posted By Barry Ritholtz is CEO, Director of Equity Research for Fusion IQ

For many years, I’ve been a fan of Warren Buffett’s long term approach to value investing. Understanding the value of a company, regardless of its momentary stock price, is a great long term investing strategy.

But it pains me whenever I read commentary from Buffett that glosses over reality or is somehow self-serving. His OpEd in the NYT – Pretty Good for Government Work – paints an artificially rosy picture of the Bailout, ignores the negatives, and omits his own financial interest in government actions.

What might he have written if Sir Warren was dosed with some sodium pentothal before he sat down to pen that “Thank you” letter? It might have gone something like this:

I was about to send you a thank you note for bailing out the economy . . . but then some nice men dressed in Ninja outfits came in and shot me full of truth serum. That led me to make one more set of edits to my letter thanking you for saving the economy.

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  Wednesday, 17 Nov 2010 | 5:43 PM ET

Warren Buffett to Receive Nation's Highest Civilian Honor

Posted ByAlex Crippen
Presidential Medal of Freedom
Presidential Medal of Freedom

Warren Buffett will receive the nation's highest civilian honor at a White House ceremony early next year. President Obama named Buffett today as one of 15 recipients of the 2010 Presidential Medal of Freedom.

According to a White House news release this afternoon, the Medal of Freedom is "presented to individuals who have made especially meritorious contributions to the security or national interests of the United States, to world peace, or to cultural or other significant public or private endeavors."

The release calls Buffett an "American investor, industrialist, and philanthropist" who is often referred to as "legendary."

It notes that Buffett has pledged to give 99 percent of his net worth to philanthropic endeavors and cites his co-founding (with Bill Gates) of The Giving Pledge, "an organization that encourages wealthy Americans to devote at least 50 percent of their net worth to philanthropy."

Among the other recipients: President George H.W. Bush, German Chancellor Angela Merkel, Congressman John Lewis, and Baseball Hall of Famer Stan "The Man" Musial.

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  Wednesday, 17 Nov 2010 | 12:11 PM ET

Warren Buffett's Warning on CNBC: Fed Easing Creates 'Dangers' for Confidence in Dollar

Posted ByAlex Crippen
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Warren Buffett has written a 'Thank You' note to 'Uncle Sam' for preventing a catastrophic economic meltdown in September of 2008, but he's not as enthusiastic about what the Federal Reserve is doing right now to boost the economy.

In a live telephone interview on CNBC's Squawk Box this morning following up on his New York Times op-ed , Buffett essentially warned that the Fed's $600 billion quantitative easing program probably won't help the economy very much, but could undermine confidence in the U.S. dollar.

In any case, he says, the government is already doing a lot to stimulate the economy simply by spending more than it takes in as revenue.

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  Wednesday, 17 Nov 2010 | 8:26 AM ET

Buffett Praises 'Dear Uncle Sam' Despite Slow Recovery

Posted ByJeff Cox

The US economy is in for an extended period of slow growth, but it would be worse if policy makers had not acted aggressively in September 2008, investor Warren Buffett told CNBC.

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  Monday, 15 Nov 2010 | 4:28 PM ET

Big Changes for Berkshire Hathaway Portfolio in Third Quarter

Posted ByAlex Crippen
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Warren Buffett's Berkshire Hathaway was busy in the third quarter.

The company's quarterly stock portfolio filing with the SEC shows that during the three months ending September 30, Berkshire added a new stake in Bank of New York Mellon.

Berkshire reports holding almost two million shares of the company, worth about $55 million at today's closing price of just under $28/share. Current price:

ELIMINATED HOLDINGS

Berkshire's filing shows no holdings for five companies that had been listed in the Q2 filing. They are:

  • Home Depot: 2.76 million shares, now worth $86.6 million, sold.


  • Republic Services: 10.8 million shares, now worth $306.9 million, sold.


  • Carmax: 7.73 million shares, now worth $254.0 million, sold.
  • Iron Mountain: 8 million shares, now worth $182.5 million, sold.


  • NRG Energy: 6 million shares, now worth $118.8 million, sold.

Many, or all, of the eliminated holdings may have been purchased by Lou Simpson, the GEICO investment manager who is retiring at the end of the year .

Proceeds may be used to provide incoming Todd Combs with the $2 to $3 billion he'll be managing, at least to start.

REDUCED HOLDINGS

The filing also shows reductions in holdings for:

  • Comcast: stake cut by 98% to 186,897 shares from 12,000,000 shares.
    11,813,103 shares, now worth $228.3 million, sold. (General Electric and Comcast have an agreement to create a joint venture that will include CNBC. It awaits government approval.)


  • Ingersoll Rand: stake cut by 89% to 636,600 shares from 5,636,600 shares.
    5,000,000 shares, now worth $211 million, sold.


  • Nike: stake cut by 52% to 3,642,929 shares from 7,641,000 shares.
    3,998,071 shares, now worth $327 million, sold.


  • Nalco Holding: stake cut by 33% to 6,142,300 shares from 9,150,000 shares.
    3,007,700 shares, now worth $89.7 million, sold.


  • Fiserv: stake cut by 11% to 3,910,800 shares from 4,400,000 shares.
    489,200 shares, now worth $27.1 million, sold.


  • Moody's: stake cut by 6% to 28,873,756 shares from 30,783,876 shares.
    1,910,120 shares, now worth $53.3 million, sold.


  • Procter & Gamble: stake cut by 2% to 76,766,036 shares from 78,071,036 shares.
    1,305,000 shares, now worth $83.9 million, sold.


INCREASED HOLDINGS

There was small increases for:

  • Wells Fargo: stake increased by 5% to 336,408,845 shares from 320,088,385 shares.
    16,320,460 shares, now worth $451.4 million, bought.


  • Johnson and Johnson: stake increased by 3% to 42,624,563 shares from 41,319,563 shares.
    1,305,000 shares, now worth $83.8 million, bought.

Our Berkshire Hathaway Portfolio Tracker has been updated to include the latest numbers.

Current Berkshire stock prices:

»Read more
  Monday, 15 Nov 2010 | 12:26 PM ET

Todd Combs to Manage Just $2-3 Billion of Berkshire Hathaway's $113B Portfolio

Posted ByAlex Crippen
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Fortune.com

Newly hired investment manager Todd Combs will be initially handling $2 billion to $3 billion of Berkshire Hathaway's $113 billion portfolio in what amounts to an "extended trial." That's according to longtime Warren Buffett friend Carol Loomis, writing today for Fortune Magazine under the headline "Welcome to Omaha, Todd Combs."

Loomis notes that Berkshire's October news release announcing the hiring of Combs had said he would be running a "significant portion" of Berkshire's money, leading some to believe Combs "was going to be handling megabillions of Berkshire's huge portfolio."

That $2-3 billion is still much more than the $400 million under management at Combs' Castle Point hedge fund, but "roughly comparable" to Lou Simpson's investment portfolio at GEICO. Simpson will be retiring at the end of the year.

Loomis reports that Combs' pay structure will be similar to Simpson's: "by salary and an incentive compensation plan that gives him a proportion of the amount by which his performance beats the S&P 500 over a three-year period."

That's because, says Buffett, "You want to get away from the short-term ups and downs of the market when you're paying someone for running money, and a plan like this does the job."

Buffett also tells Loomis that Combs "can range wherever he wants to" and won't be restricted to any specific area for his investment choices.

Loomis reports today that Combs attended a four-day Berkshire board meeting earlier this month that included a train trip (via Burlington Northern Santa Fe, of course) to the nation's biggest coal mine in Wyoming.

Combs officially starts his Berkshire job in January.

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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  Thursday, 11 Nov 2010 | 7:56 PM ET

5 Questions With BYD Chairman

Posted By CNBC.com

Wang Chuan Fu, Founder and Chairman of Chinese car and battery maker BYD, tells CNBC how he is charging up the Buffett-backed company for the future.

Q: What made you start BYD, which is China's largest battery maker today?

A: It was around 1995 after China had liberalized its economy, and it was vibrant. Many people wanted to be entrepreneurs and venture into business in China. That was the trend at the time, and that's why we joined this entrepreneurial wave.

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  Friday, 5 Nov 2010 | 5:45 PM ET

Burlington Northern Acquisition Boosts Berkshire Hathaway's Operating Profits .. Again

Posted ByAlex Crippen
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Warren Buffett's Berkshire Hathaway reports a 35.6 percent surge in after-tax operating profits for its third quarter, with "major contributor" Burlington Northern getting a lot of the credit.

That's similar to the company's second quarter , when Burlington was also cited as a "major contributor" to that period's 73 percent earnings jump.

In a news release late today (Friday), Berkshire says Burlington was responsible for $706 million of its $2.79 billion in operating earnings for the period. (More extensive information on the quarter is included in Berkshire's 10-Q filing with the SEC.)

Berkshire says another "major reason" for the improvement is a swing from losses to profits at its NetJets subsidiary.

Those gains helped offset a 42.4 percent decline in Berkshire's insurance underwriting businesses to $199 million from the year-ago's $346 million. Investment income for the insurance businesses fell 14.2 percent to $873 million from $1.02 billion.

Earnings per Class A share increased 27.7 percent to $1,692. The release notes that Berkshires shares outstanding were increased by 6.1 percent as a result of the Burlington buy, which was finalized in February.

The consensus forecast from the handful of analysts who follow the stock called for a per share operating profit of $1,677.

With $307 million in gains from investment sales, and $95 million in recorded losses from derivatives, Berkshire's net earnings fell 7.7 percent to $2.99 billion from $3.24 billion in last year's third quarter. Berkshire reported $1.13 billion in gains from derivatives in that quarter, but the release repeats Buffett's assertion that gains and losses from investments and derivatives in any given quarter or year are "often meaningless."

Berkshire is required to report gains or losses on the derivatives contracts it has sold, including what amounts to large insurance policies for buyers seeking protection from a long-term catastrophic loss for global stock markets. Those 'paper' gains and losses, however, can't be realized for at least eight years, because the contracts can not be exercised before expiration.

In its 10-Q, Berkshire reports a $700 million dollar pre-tax loss on these equity index put options, despite generally higher stock prices around the world. That was partially offset by a $519 million gain for credit default obligations that insure buyers against certain bond defaults. With another $35 million in gains on other derivatives, the total loss for the quarter is $146 million, compared to a $1.73 billion gain in 2009's Q3.

Berkshire reports that its book value, a metric that Buffett has called a good indicator of changes in the company's intrinsic value, increased 7.5 percent to $90,823 per Class A share as of September 30.

Its insurance float was $66 billion on that date.

An $462 million increase in the total cost basis for Wells Fargo during the quarter indicates we'll see an increase in Berkshire's holdings of the stock when it files its Q3 portfolio snapshot just over a week from now.

A decrease of $78 million for Procter and Gamble's total cost basis points to a smaller position in that stock.

»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.