Investing Warren Buffett Watch

  Monday, 24 May 2010 | 11:31 AM ET

Bidding for Charity Lunch with Warren Buffett Begins June 6

Posted ByAlex Crippen

Online bidding on EBay for the annual "Power Lunch" with Warren Buffett begins Sunday evening, June 6 and ends Friday, June 11 at 10:30p ET.

The minimum opening bid will be $25,000. All bidders must pre-qualify .

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  Friday, 21 May 2010 | 1:34 PM ET

Kraft CEO Confident Warren Buffett Will Be Sending Congratulations on Cadbury

Posted ByAlex Crippen

Kraft Foods CEO Irene Rosenfeld doesn't appear to be concerned after Warren Buffett's Berkshire Hathaway slashed its stake in the food giant by almost 23 center during the first quarter of the year.

Buffett has been very critical of Kraft's pursuit and acquisition of Cadbury, but no one at Berkshire has said if the sales are related to Buffett's opposition to the January deal. (Berkshire sold shares of several companies during the first three months of the year, presumably to help pay for its $26 billion acquisition of Burlington Northern Santa Fe.)

Referring to Buffett's line about waiting five years before sending either a congratulatory or condolence greeting card to a company making an acquisition, Rosenfeld tells Reuters :

"What I have said to him is that I am quite confident he will be sending me a congratulatory card and it will be in far less than five years."

Rosenfeld says the integration of the two companies is going extremely well. "I will say that for Mr. Buffett as well as for all our shareholders, in the coming months we will continue to deliver against the targets we have laid for ourselves. These results will speak for themselves."

She adds that Kraft is "well on the way" to delivering on its goal of at least $675 million in annual cost savings from the deal by the end of its third year.

Even after selling 31.5 million Kraft shares between December 31 and March 31, Berkshire remains the company's biggest shareholder with a stake of just over 6 percent.

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  Tuesday, 18 May 2010 | 11:19 AM ET

Yoshikami: Learn From Warren Buffett

Warren Buffett latest SEC filings to the SEC show that those that say he's an investment dinosaur simply don't understand how the mind of the Omaha Oracle works.

Truth is, he is so much more of a tactical investor than many people realize and there are lessons to be learned from his latest investment decisions.

Who says that buy and hold means you cannot adjust as you go along? Buffett is showing clearly that even long-term investors should adjust when business conditions change.

Taking a look at some of his major investment adjustments are telling.

It is obvious that he still feels Kraft Food’s management decision to buy Cadbury was not wise. In the filings, he did not sell the entire position but it appears that he is dollar cost averaging out of an asset that he feels less confident about.

Lesson? Management matters.

And when you have doubts about the decisions leaders of companies are making, adjust your exposure to the assets. But don't panic; re-size if you still like the business but want to be less exposed.

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  Monday, 17 May 2010 | 5:32 PM ET

Warren Buffett's Berkshire Hathaway Sells Lots of Kraft (And Other Stocks) in First Quarter

Posted ByAlex Crippen

Warren Buffett's Berkshire Hathaway sold a lot of stock during the first three months of the year, including more than 31 million shares of Kraft Foods . The Kraft shares sold would be worth almost a billion dollars at today's closing price of $30.55.

That 22.8 percent reduction in Berkshire's stake comes amid Buffett's outspoken criticism in January of Kraft and CEO Irene Rosenfeld for using stock he saw as undervalued to acquire Cadbury's.

After the Q1 sales, Berkshire owned 106,734,745 Kraft shares as of March 31, remaining Kraft's largest shareholder, with 6.3 percent of the company's shares outstanding.

In a January 20 interview with CNBC , he told us he would have voted against the Cadbury deal given the opportunity, but passed up opportunities to say he might sell some stock in protest:

JOE KERNEN: There's another way to vote, Warren, and that's with your feet. Is that what you're telling us you're going to do.

BUFFETT: That gets expensive. (Laughs.) Well, if I don't like what's going on in the government, that doesn't mean I have to leave the country either, Joe.

Kraft's stock rallied by about 10 percent during the first quarter

Berkshire has also been raising money to pay for its now-completed $26 billion acquisition of the freight railroad Berkshire Hathaway Santa Fe.

It continued to sell shares of many companies that had also seen their stakes reduced in the fourth quarter, although the Q1 cuts are generally smaller than the Q4 drops.

Berkshire's 13-F filing with the SEC shows that as of March 31, 2010, stakes were completely eliminated for:

  • Sun Trust Banks
    Berkshire held 2,398,206 shares as of December 31 after selling 681,572 shares, 22 percent of its Q3 stake, during the fourth quarter.

  • Travelers
    Berkshire held 27,336 shares as of December 31.

  • United Health
    Berkshire held 1,175,000 shares as of December 31 after selling 2,225,000 shares, 65 percent of its Q3 stake, during the fourth quarter.

  • Wellpoint
    Berkshire held 1,343,820 shares as of December 31 after selling 2,050,393 shares, 60 percent of its Q3 stake, during the fourth quarter.

Holdings were reduced for:

  • Carmax
    Sold 274,100 shares during first quarter, reducing stake by 3.4 percent. Berkshire had cut its holdings by 1 million shares (-11.1%) during the fourth quarter.

  • ConocoPhillips
    Sold 3,532,081 shares during first quarter, reducing stake by 9.4 percent. Berkshire had cut its holdings by 19.7 million shares (-34.3%) during the fourth quarter.

  • Costco
    Sold 920,637 shares during first quarter, reducing stake by 17.5 percent. No sales during fourth quarter.

  • Gannett
    Sold 461,969 shares during first quarter, reducing stake by 21.0 percent. Berkshire had cut its holdings by 1,245,400 shares (-36.1%) during the fourth quarter.

  • Johnson & Johnson
    Sold 3,241,019 shares during first quarter, reducing stake by 11.9 percent. Berkshire had cut its holdings by 9,782,166 shares (-26.5%) during the fourth quarter.

  • M&T Bank
    Sold 1,151,779 shares during first quarter, reducing stake by 17.2 percent. No sales during fourth quarter.

  • Moody's
    Sold 1,030,734 shares during first quarter, reducing stake by 3.2 percent, as previously reported . Berkshire had cut its stake by 7,404,702 shares (-18.9%) during the fourth quarter.

  • Procter and Gamble (as foreshadowed in BRK's quarterly earnings report a few days ago)
    Sold 8,406,627 shares during first quarter, reducing stake by 9.6 percent. Berkshire had sold 8,812,599 shares (-9.1%) during the fourth quarter.

Berkshire increased its stakes in:

  • Becton Dickinson
    Bought 244,128 shares during first quarter, increasing stake by 16.3 percent. Berkshire had bought 300,000 shares (+25.0%) during the fourth quarter.

  • Iron Mountain
    Bought 794,800 shares during first quarter, increasing stake by 11.4 percent. Berkshire had bought 3,627,800 shares (+107.6%) during the fourth quarter.

  • Republic Services
    Bought 2,537,200 shares during first quarter, increasing stake by 30.6 percent. Berkshire had bought 4,665,500 shares (+128.7%) during the fourth quarter.

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  Monday, 17 May 2010 | 12:35 PM ET

Expect Some Sales When Warren Buffett's Stock Holdings Are Revealed Later Today

Posted ByAlex Crippen

We'll get some fresh data on what Warren Buffett has been buying and selling later today \(Monday\), when Berkshire Hathaway releases details of its stock portfolio.

Expect more selling than buying, as Berkshire continues to raise money for its $26 billion acquisition of Burlington Northern Santa Fe.

Today's 13-F filing with the SEC will list Berkshire's U.S. equity holdings as of March 31, 2010, the end of the first quarter.

We already know to look for another reduction in Berkshire's stake in Procter & Gamble , on top of the 8.8 million shares sold during last year's fourth quarter . Berkshire's quarterly earnings filing shows the company's total P&G cost basis , the amount of money it initially paid for the stock, fell $502 million between December 31 and March 31. (Reducing the number of shares held would also reduce the total cost basis. In this instance, we're not talking about per-share cost basis, which could also be reduced by acquiring more shares at a lower price.)

We also may see another drop for Johnson & Johnson . Berkshire's stake in that company fell by almost 10 million shares in the fourth quarter.

Buffett told us in a March 1 interview that he sold shares in P&G and J&J because he wanted to raise money to buy BNSF, and not because he thinks they will be long-term losers.

Berkshire also sold shares of ConocoPhillips and ExxonMobil in last year's fourth quarter.

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  Friday, 14 May 2010 | 4:19 PM ET

The 'Next' Warren Buffett on What He's Learned From the 'Current' Warren Buffett

Posted ByAlex Crippen

MidAmerican Energy Holdings Chairman David Sokol, widely seen as a frontrunner to follow Warren Buffett at Berkshire Hathaway, talks about the key lesson he's learned from Buffett, in this excerpt from the new book Behind the Berkshire Hathaway Curtain: Lessons from Warren Buffett's Top Business Leaders by Ronald W. Chan.

During the late 1990s, a stock market bubble was in the making. In addition to Internet stocks, energy stocks also soared to sky-high levels. Hindsight has revealed that many of these companies were cooking the books and telling elaborate stories to investors. David, in contrast, had the self-discipline to remain calm and not make foolish investment decisions.

Being out of step with the times, however, has consequences. "We were by any measure a large company at that point," David explained. "We were generating solid profits every quarter, and we looked at our business in a risk-weighted way. Our stock was rising, but our peers were doubling and tripling theirs. Analysts became critical of us because our stock was lagging behind."

Stock analysts recommended that David adopt a more short-term perspective, complaining that the company's projects were too long-term oriented: "One analyst said to me that we needed more 'deal velocity.' He explained that our peers, including Enron, were making two to three deals a month, but we were only making one or two a year. In the end, I was just fed up."

By 1999, David could no longer bear the shortsighted nature of the investment community. His mounting frustration, and a family tragedy (his son, David Jr., had just succumbed to cancer), prompted David to consider ceasing to play the analysts' game by taking the company private. He set up a special board meeting to discuss the possible privatization of MidAmerican and carefully laid out his reasons for doing so.

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  Thursday, 13 May 2010 | 3:59 PM ET

The 10 Best Graduation Speeches Ever: From Will Ferrell to Steve Jobs

Posted ByCindy Perman

Ahhhhh, graduation season! That time of year when we take our youngest and brightest and kick them out of the academic nest and into the real world.

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  Wednesday, 12 May 2010 | 9:48 AM ET

Yoshikami: Is Buy & Hold Dead?

Posted By Michael A. Yoshikami, Founder, Pres., HKSCKPVIamp; Chief Investment Strategist of YCMNET Advisors, Inc

Is the notion of "buy-and-hold" or "set it and forget it" approach to investing dead? Is it time to question the wisdom of this approach?

This apparent tried and tested method of investing may have worked in the past, but many investors are starting to question the success of this philosophy moving forward. With a paradigm shift in global economies, the increasing inter-connectivity of companies and markets, as well as the fundamental shift in trade and labor, perhaps now is time to reassess this approach. After all companies like Citigroup and Fannie Mae are a much different investments than they were in the past. Buy and hold did not work out well for these two once might giants.

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  Monday, 10 May 2010 | 6:43 PM ET

Warren Buffett's Berkshire Hathaway Jumps 5.1% for Best One-Day Gain in a Year

Posted ByAlex Crippen
Warren Buffett
Getty Images
Warren Buffett

Shares of Warren Buffett's Berkshire Hathaway scored their biggest one-day gain in a year, with a lot of help from today's powerful overall stock market rally .

Berkshire Class B shares, now in the benchmark S&P 500 stock index, closed 5.1 percent higher at $78.23. That's their best day since April 29, 2009.

The six-figure Class A shares jumped by 5.2 percent to finish at $117,290 each, for their biggest one-day gain since March 26, 2009.

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  Monday, 10 May 2010 | 2:28 PM ET

Warren Buffett 'Keen' on Indian Insurer Majority Stake Despite Obstacles

Posted ByAlex Crippen

India's largest business newspaper reports today that Warren Buffett is "keen on acquiring a majority stake in a state-owned general insurance company," but current rules limit foreign ownership.

The Business Standard , quoting sources involved in the planning of Buffett's visit to India next March, says he will "take up the issue" with the government during the trip.

According to the newspaper, foreign investors can't own more than 26 percent of an Indian insurance company. The government has proposed raising the limit to 49 percent, but that would still be short of majority control.

The sources tell the paper that Buffett's "fallback option" is to set up his own general insurance company or "acquire a significant stake in an existing company."

Another potential obstacle is that right now "the rules do not allow the government to shed stake in the four public sector general insurance companies - New India Assurance, United India Insurance, National Insurance and Oriental Insurance."

In addition, with all four of the state-owned companies generating profits, the government may not want to reduce its ownership.

Buffett told shareholders earlier this month that "we've looked a lot at being in the insurance business in India" and "people there will be living a lot better 20 years from now."

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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.