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Investing Warren Buffett Watch

  Wednesday, 22 Sep 2010 | 6:00 PM ET

Warren Buffett Remains Second Richest American Despite $5 Billion Gain

Posted ByAlex Crippen
100922_Forbes400_Cover.jpg

Warren Buffett keeps his #2 slot on the new Forbes 400 list of the Richest Americans, released tonight \(Wednesday\).

The magazine estimates Buffett's fortune at $45 billion.

That's $5 billion more than last year's $40 billion .

Despite the gain, however, Buffett remains behind his friend, Microsoft Chairman Bill Gates, who keeps his top spot on the list with $54 billion. That's an increase of $4 billion from last year's estimated $50 billion for Gates.

Oracle's Lawrence Ellison is in third place with an estimated $27 billion, unchanged from last year.

Buffett is featured in a Forbes cover story and video clip that accompanies the new list. "The Summit" features a recent conversation among Buffett, musician and businessman Jay-Z , and Steve Forbes on "wealth, success, and giving back."

Overall, it was a good year for Buffett's fellow billionaires. Forbes calculates the total combined wealth of its 400 Richest Americans increased 8 percent to $1.37 trillion from $1.27 trillion last year. That's still below 2007 and 2008 when the Forbes 400 total wealth topped $1.5 trillion.

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  Wednesday, 15 Sep 2010 | 11:52 AM ET

Warren Buffett Resumes Sales of Moody's After Stock Price Rebounds

Posted ByAlex Crippen
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Warren Buffett's Berkshire Hathaway has resumed sales of Moody's shares as the credit rating agency's stock price tops $25.

That's a rebound from June lows that took the stock under $19.

Berkshire has been unloading slices of its Moody's position since last summer, but hasn't revealed any sales since March, when the stock was above $30.

According to an SEC filing , a total of 1,350,550 shares were sold for $33.98 million over three trading days ending yesterday (Tuesday). Average selling price: $25.16.

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  Tuesday, 14 Sep 2010 | 6:02 PM ET

Charlie Munger on US Economy: Pain Not Over

Posted ByBecky Quick

A day after Berkshire Hathaway's Warren Buffett made headlines about his views on the economy , his long-time business partner Charlie Munger is weighing in.

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  Monday, 13 Sep 2010 | 6:58 PM ET

Warren Buffett Still Doesn't Expect 'Double-Dip' Recession

Posted ByAlex Crippen
Warren Buffett
Getty Images
Warren Buffett

Warren Buffett doesn't appear to be concerned that slowing U.S. economic growth will worsen to become a "double-dip" recession, saying there's no evidence of "sour" sentiment in the latest results from Berkshire Hathaway's numerous operating businesses.

Speaking today by video to the Montana Economic Development Summit, AP quotes him as telling those attending: "I am a huge bull on this country. We are not going to have a double-dip recession at all. I see our businesses coming back across the board."

Bloomberg has almost the same quote, adding the word 'almost' to make it read, "I see our businesses coming back almost across the board."

It also adds this quote from Buffett:

"I’ve seen sentiment turn sour in the last three months or so, generally in the media. I don’t see that in our businesses. I see we’re employing more people than a month ago, two months ago."

Buffett said U.S. banks are now prepared to increase their lending: "It’s night and day from a year, year and a half ago. I know Wells Fargo, they would love to have $50 billion more of loans now. Go in and talk to the banker."

Buffett's Berkshire is Well Fargo's biggest shareholder, with over 320 million shares as of June 30. Today's market value: $8.5 billion.

It's not the first time Buffett has rejected suggestions the U.S. economy could again fall into recession in the near future, but today's comments do appear to reflect a more optimistic outlook with no reported mentions of an anemic recovery.

In March of this year, CNBC's Becky Quick asked him if he was worried about a "double-dip." At that time, he said:

"It's a slow recovery. The only thing--I mean, if you had some big exogenous event, I mean if you had something go wrong in the European Union or--I mean, there--if something--a huge terrorist attack, I mean, you can--you can think of things that would cause another jolt to the economy like that jolt we had in September of 2008. But absent something really big from an exogenous nature to the United States, no, I think we will continue moving upward but not at a very fast rate."

As early as September of 2009, Buffett was saying the worst was over for the economy:

BECKY: But is there a risk of a second downturn? Will unemployment levels climb to a point where it becomes a leading indicator rather than a lagging indicator?

BUFFETT: I-- I think the odds are very much against getting significantly worse. It's sort of plateaued at the-- at the bottom right now, but if you got some horrible exogenous event, some-- some, you know, 9/11-- type event or worse-- you know, you could have something that would be dis-- really disruptive and start things all over again. But in terms of problems that we've identified and are working with, we've got more to come. But we're-- we're-- we're past the-- we're past the critical point.

Current Berkshire stock prices:

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  Monday, 6 Sep 2010 | 9:31 PM ET

Warren Buffett & Bill Gates Seek to Soothe Suspicions Over China Philanthropy Visit

Posted ByAlex Crippen
Bill Gates, Warren B_33889550
David Goldman

Warren Buffett and Bill Gates will reportedly travel to China later this month to "learn how to do philanthropy" in that nation.

China's Economic Observer newspaper says Gates and Buffett have invited a "select group" of 50 to 60 members of the nation's "business elite" to a "private party" in Beijing.

Some of those invited, however, have declined to attend, apparently over concerns they'd be asked, or even pressured, to make a donation pledge at the event.

In June, Buffett and Gates used Fortune Magazine to publicly challenge America's richest billionaires to pledge they will donate 50 percent of their wealth to charity, and just over three-dozen have already accepted that challenge.

Bloomberg quotes a Gates Foundation spokesman in Beijing as saying Buffett and Gates may soon release a letter to ease some of the concerns the Chinese guests will also be put on the spot to make a big pledge. "Our biggest intention for this month’s China trip is to learn how to do philanthropy in China. We would like to learn how to propel the charity business in such a big developing nation."

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  Thursday, 26 Aug 2010 | 1:41 PM ET

Charlie Munger's Wesco Soars on Buyout Offer by Warren Buffett's Berkshire Hathaway

Posted ByAlex Crippen
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Shares of Charlie Munger's Wesco Financial spiked as much as 19 percent higher today (Thursday) to $387/share after Warren Buffett's Berkshire Hathaway revealed plans to buy the almost 20 percent of Wesco it doesn't already own.

Munger, Buffett's long-time friend and business partner, is Wesco's Chairman of the Board.

Wesco's independent directors and non-Berkshire shareholders still need to approve the transaction.

Wesco shares have settled back a bit from today's high, but is still up almost 13 percent at $366 as of 1:30p ET today.

Current price:

Berkshire is proposing to pay Wesco's book value per share at the time the deal closes. Dow Jones notes that at the end of the second quarter, book value was around $353 per share, but has probably changed since then. Even so, it appears Wesco's market price was well below its book value at the time of the offer, resulting in today's surge.

The stock is still well below its 52-week high of $416 on March, 10, 2010.

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  Sunday, 22 Aug 2010 | 3:30 PM ET

Warren Buffett's Semi-Secret Stock Picker Lou Simpson Set to Retire

Posted ByAlex Crippen
Lou Simpson
Lou Simpson

The low-profile 73-year-old man whose stellar stock picks are often attributed to Warren Buffett is calling it quits.

In her Chicago Tribune column, Melissa Harris breaks the big news that media-shy Lou Simpson will retire at the end of the year.

For decades, he's been quietly, independently, and profitably managing the now $4 billion investment portfolio at Geico, the Berkshire Hathaway insurance subsidiary.

Buffett will take over those responsibilities, but there's some speculation Simpson's departure could create an opportunity for Li Lu, the Chinese investor who Charlie Munger says is a "foregone conclusion" to become one of Berkshire's top decision makers on investments.

Buffett says Simpson never sought approval for his buying and selling decisions. Last year, five million Bank of America shares in Berkshire's portfolio slipped Buffett's mind as he described its bank holdings because it was Simpson who had bought them.

The two men, however, do have very similar investment styles and successes.

In his 2004 letter to shareholders, Buffett said Simpson is "a cinch to be inducted into the investment Hall of Fame," even though sometimes he will "silently disagree" with his decisions. But, Buffett acknowledges in tiny print, "Usually he's right."

In that letter, a table headlined "Portrait of a Disciplined Investor" details how Geico's portfolio suffered annual losses only three times from 1980 to 2004 and beat the benchmark S&P 500 stock index 18 times. Simpson's average annual gain over that period: 20.3 percent vs the S&P's 13.5 percent.

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  Tuesday, 17 Aug 2010 | 5:00 PM ET

Stocks End Higher; Dow Snaps Losing Streak

Posted ByAbby Schultz

Stocks ended higher Tuesday with the Dow gaining more than 100 points to snap a five-day losing streak. The rally followed a series of government data releases and earnings reports that showed hints of strength returning to the economy.

The Dow Jones Industrial Average ended up 103.8 points, or 1 percent, to 10,405.85 amid light volume, and after losing about 40 points in the last half hour of trading.

Most Dow components were in positive territory with Home Depot, Alcoa and DuPont in the lead. Kraft and JP Morgan fell.

The S&P 500 ended up 13.2 points, or 1.22 percent, to 1,092.54 and the Nasdaq ended up 27.6 points, or 1.3 percent, to 2,209.44. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell more than 7 percent, below 24.

The key S&P sectors were all higher Tuesday, led by materials, industrials and consumerdiscretionary.

The rally may be attributed to a report of stronger-than-expected industrial production, which provided evidence the manufacturing sector is strong, and a better-than-anticipated capacity utilization rate, said Paul Zemsky, head of asset allocation at ING Investment Management.

Capacity utilization rose to 74.8 percent, 5.7 percentage points above a year earlier, indicating that industry is increasing its output. That news helped quell deflation fears, said Zemsky. Housing starts and producer price data released Tuesday was also largely positive, giving investors reason to cheer a bit, he added.

"There's plenty of room for the market to rally on good news," Zemsky said.

Despite the strong showing Tuesday, the market is still trading within a range that Brian Gendreau, market strategist at Financial Network, doesn't expect will be broken until after the mid-term elections and the uncertainty over the direction in Washington is resolved.

Once the mid-terms are over, Gendreau expects stocks to rise and end the year higher. One reason: in the 17 mid-term elections held since 1942, the market has gone up decisively 16 times, Gendreau said.

In earnings news, Home Depot shares jumped more than 3 percent after the home improvement retailer reported a slightly higher-than-forecast profit. However, the retailer's quarterly revenue was lower than expected.

Wal-Mart also rose after the retail giant posted a higher-than-expected quarterly profitand raised its full-year forecast, thanks to cost cuts and international growth. The company, however, said the slow economic recovery will continue to affect consumers.

As a sign of weaker consumer interest, Wal-Mart reported its fifth consecutive drop in same store sales, and the outlook isn't much better, Patrick McKeever, a senior equity analyst at MKM Partners, said on CNBC.

"We could see another negative quarter," McKeever said.

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  Tuesday, 17 Aug 2010 | 3:49 PM ET

Stocks Advance Ahead of Close; RIM Slips

Posted ByAbby Schultz

Stocks advanced decisively Tuesday, with the Dow on track to snap a five-day losing streak. The rally followed a series of government data releases and earnings reports that showed hints of strength returning to the economy.

The Dow Jones Industrial Average was up more than 120 points amid light volume, after a slight dip Monday that nonetheless marked five straight days of losses for the blue-chip index.

Most Dow components were in positive territory with Home Depot, Alcoa and DuPont in the lead. Kraft was down slighltly.

The S&P 500and Nasdaq were also higher, now for the third straight day. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell more than 8 percent, below 24.

The key S&P sectors were all higher Tuesday, led by materials, industrials and consumerdiscretionary.

Investors were reacting to a report of stronger-than-expected industrial production, which provided evidence the manufacturing sector remains strong, and a better-than-anticipated capacity utilization rate, said Paul Zemsky, head of asset allocation at ING Investment Management.

Capacity utilization rose to 74.8 percent, 5.7 percentage points above a year earlier, indicating that industry is increasing its output. That news helped quell deflation fears, said Zemsky. Housing starts and producer price data released Tuesday was also largely positive, giving investors reason to cheer a bit, he added.

"There's plenty of room for the market to rally on good news," Zemsky said.

Despite the strong showing Tuesday, the market is still trading within a range that Brian Gendreau, market strategist at Financial Network, doesn't expect will be broken until after the mid-term elections and the uncertainty over the direction in Washington is resolved.

Once the mid-terms are over, Gendreau expects stocks to rise and end the year higher. One reason: in the 17 mid-term elections held since 1942, the market has gone up decisively 16 times, Gendreau said.

In earnings news, Home Depot shares jumped more than 4 percent after the home improvement retailer reported a slightly higher-than-forecast profit. However, the retailer's quarterly revenue was lower than expected.

Wal-Mart also rose after the retail giant posted a higher-than-expected quarterly profitand raised its full-year forecast, thanks to cost cuts and international growth. The company, however, said the slow economic recovery will continue to affect consumers.

As a sign of weaker buying interest, Wal-Mart reported its fifth consecutive drop in same store sales, and the outlook isn't much better, Patrick McKeever, a senior equity analyst at MKM Partners, said on CNBC.

"We could see another negative quarter," McKeever said.

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  Tuesday, 17 Aug 2010 | 11:58 AM ET

Stocks Gain More than 1%; Home Depot Rises

Posted By CNBC.com

Stocks rose significantly Tuesday after days of losses, following a series of government data releases and earnings reports that showed hints of strength returning to the economy.

The Dow Jones Industrial Average was up more than 100 points, after a slight dip Monday on very thin volume that nonetheless marked five straight days of losses for the blue-chip index.

Alcoa, Home Depot and DuPont led advancers. Kraft was the only Dow component to fall.

The S&P 500and Nasdaq were also higher. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 25.

The key S&P sectors were all higher Tuesday, led by materials, industrials and consumer discretionary.

Despite the strong positive moves, the market is still trading within a range that Brian Gendreau, market strategist at Financial Network, doesn't expect will be broken until after the mid-term elections and the uncertainty over the direction in Washington is resolved.

Once the mid-terms are over, Gendreau expects stocks will rise and will end the year higher. One reason: in the 17 mid-term elections held since 1942, the market has gone up decisively by 90 days after the election 16 times, Gendreau said.

The Federal Reserve reported Industrial Production rose 1.0 percentin July on strong factory output from auto manufacturing. The results were better than the 0.7 percent expected. June's results were revised to a loss of 0.1 percent. Factory output grew by 1.1 percent in July.

Capacity utilization was reported at 74.8, better than the expected increase of 74.6 percent.

The Commerce Department said housing starts rose 1.7 percentto a seasonally adjusted annual rate of 546,000 units in July, weaker than expected. Forecasts called for an annual rate of 550,000 units. June's housing starts were revised to show an 8.7 percent fall, which was previously reported as a 5 percent drop.

Also, the Labor Department reportedU.S. producer prices rose by 0.2 percentin July, the first rise in four months, pulled by higher prices for food and consumer goods. The figure was in line with expectations, and follows a dip of 0.5 percent in June.

Big retailers delivered earnings today, including Home Depot, which reported a slightly higher-than-forecast profit of 72 cents a share, better than the anticipated 71 cents a share. The retailer's second-quarter revenue was lower than expected, however.

Also Wal-Mart was slightly higher after it posted a higher-than-expected quarterly profitand raised its full-year forecast on Tuesday, thanks to cost cuts and international growth. The big-box retailer, however, said the slow economic recovery will continue to affect consumers.

As a sign of weaker buying interest, WalMart reported its fifth consecutive drop in same store sales, and the outlook isn't much better, Patrick McKeever, a senior equity analyst at MKM Partners, said on CNBC Tuesday.

"We could see another negative quarter," McKeever said.

Shares of TJX , were higher after the owner of deep-discount clothing and houseware chains T.J. Maxx, Marshalls and HomeGoods reported a jump in earnings of nearly 17 percent, as sales climbed. The retailer also raised its full-year outlook.

In merger news, the board of Potash of Saskatchewan, Canada, which focuses on fertilizer and industrial and feeds products, has rejected an unsolicited takeover bid from BHP Billiton , a diversified natural resources company, saying the deal undervalued the company. Potash's shares jumped more than 25 points, while BHP slipped.

General Motors is expected to file to go public Tuesday. The offering is expected to raise between $15 billion and $20 billion, making it one of the largest IPOs.

GM also announced Tuesday that it is recalling more than 243,000 model year 2009/2010 crossover sport utility vehicles to inspect safety belts for possible damage.

Tech stocks are largely higher Tuesday with the exception of Research in Motion . Wedbush downgraded the maker of the Blackberry to "outperform" from "neutral" and cut the stock's price target to $57 from $65.

Also, RIM reportedly has assured the Indian government it can have limited access to Blackberry Messenger email and instant messaging services by Sept. 1.

In other housing news, the Treasury Department is hosting a forum on what the government should do to reform Fannie Mae and Freddie Mac. Treasury Secretary Timothy Geithner made clear the government-sponsored enterprsies won't be able to return to business as usual. The housing finance companies have received nearly $150 billion in taxpayer bailout money since they were placed into conservatorship by the government in 2008.

Barclays Bank Plc

has agreed to pay nearly $300 million to settle criminal

charges that it violated U.S. sanctions in dealings with Cuba,

Iran, Libya, Sudan and Myanmar, according to U.S. court

documents filed Monday.

The London-based bank was charged with violating the

International Emergency Economic Powers Act and the Trading

with the Enemy Act in its dealings that involved $500 million

from 1995 until September 2006, according to the documents.

The Barclays case marked the latest in a series brought by

U.S. prosecutors in recent months against major banks. According to a quarterly filing with the U.S. Securities and Exchange Commission, George Soros trimmed his holdings in Pfizer, JPMorgan Chase, AT&T, and Wal-Mart, while Warren Buffett's Berkshire Hathaway cut stakes in ConocoPhillips (COP), Kraft Foods (KFT) and Procter & Gamble. Berkshire also bought shares of Fiserv and boost its stake in Johnson and Johnson.

In other news, Spain's Santander renewed talks to merge its U.S. operations with those of M&T Bank, the Financial Times reported. And Hefty bag maker Pactiv is reportedly in talks to be acquired by New Zealand's Rank Group.

Later This Week:

WEDNESDAY: MBA mortgage applications, weekly oil inventories; earnings before the bell from Deere and Target
THURSDAY: Jobless claims, leading indicators, Philadelphia Fed survey; earnings after the bell from HP, Dell, Gap and Intuit
FRIDAY: No major events scheduled

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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.