Buffett Watch

  Friday, 19 Jul 2019 | 2:27 PM ET

Elon Musk, Bill Gates and Warren Buffett are optimists: Now is the best time to be alive, they say

Elon Musk is an optimist: There is no better time to be alive, Musk says.

"Humanity can address a lot of the suffering that occurs in the world and make things a lot better. I think a lot of times people are quite sort of negative about the present and about the future, but really if you are a student of history, when else would you really want to be alive?" Musk said Tuesday at a Neuralink event at the California Academy of Sciences.

"Now is the best time, pretty much. Those who think the past is better have not read enough history," Musk said.

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  Friday, 19 Jul 2019 | 8:01 AM ET

BlackRock's Fink: CEOs tell me they're pulling their supply chains out of China

Companies are moving their supply chains out of China instead of waiting for a resolution of the trade war between Washington and Beijing, BlackRock Chairman and CEO Larry Fink told CNBC on Friday.

"We're hearing from CEOs that more and more supply chains are moving out of China right now," Fink said on "Squawk Box." "People are not waiting, companies are not waiting to see what the outcome is."

The trade fight between the world's two largest economies has been going on for about a year, and businesses are starting to feel the repercussions.

President Donald Trump has slapped 25% tariffs on $200 billion worth of Chinese goods and continues to threaten duties on an additional $325 billion of goods as trade negotiations continue.

More than 50 multinational companies are moving production out of China, including Apple, Nintendo and Dell, CNBC previously reported. Companies began announcing in May that they would move from China to Vietnam, as China and the U.S. stepped up tit-for-tat duties.

Brooks Running — which is part of Warren Buffett's Berkshire Hathawaysaid in May it would be "predominantly in Vietnam by the end of the year," adding that about 8,000 jobs will move there from China.

At the same, the Chinese economy is starting to lag, having grown just 6.2% in its second quarter. That's the weakest rate in at least 27 years. Trade data released last weekshowed China's June exports fell 1.3% year over year due to the tariffs.

"I do believe the trend in China continues to be downward," said Fink, co-founder of the world's largest money manager. "I think long term, China knows they need to find ways to stimulate more of their domestic economy."

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  Tuesday, 16 Jul 2019 | 9:01 AM ET

Self-made billionaire and presidential hopeful Tom Steyer's investing rule: Don't be greedy

Presidential hopeful Tom Steyer founded hedge fund Farallon Capital Management, the success of which made him a billionaire. And Steyer, who declared his candidacy for President of the United States on July 9, lead the firm guided by a North Star principle that might seem surprising: Don't be greedy.

"When we thought about investing, our rule was it's really important not to be greedy," Steyer said on the podcast The Forbes Interview in 2017. "So we were always trying to be honest and not take huge risks and to understand the risks we were taking."

Steyer said the the idea was to "compound at a good rate and not be greedy, but just do it consistently. Because if you do the math, but if you think about it in any long-term way, the people who do well are the people who compound over and over again."

As of June 30, Farallon Capitol was managing $28.5 billion in assets.

With Steyer's investment philosophy, it's no surprise that he considers Berkshire Hathaway boss Warren Buffett, who has a similar investing strategy, "the icon of American business." Buffett's philosophy is to get into the stock market early, own a diverse portfolio of stocks and hold them for a long time.

"For the last 53 years, the company has built value by reinvesting its earnings and letting compound interest work its magic. Year by year, we have moved forward," Buffett wrote in his 2017 annual letter to shareholders of Berkshire Hathaway.

Steyer (like Buffett) also believes business relationships should be for the long run: Steyer and Farallon aimed for "long, honest relationships with our partners," he told Forbes. "Both the people we worked with and for the people who were our lawyers, our accountants, our brokers who we did business with. Our idea was long, positive relationships beat short, competitive ones. Which I think is a big point of life."

Steyer's route to investing was by way of Yale, where he earned his bachelors in 1979, and Stanford University Graduate School of Business, where he earned his MBA in 1983. He founded Farallon Capital in 1986 with $9 million in investments and grew the fund to $36 billion in investments at its peak in 2008 before the recession hit. Steyer left the firm at the end of 2012 to focus full-time on "to focus full-time on giving back," he said at the time in a letter to investors, according to Philanthropy News Digest. Shortly after Steyer left, Farallon Capital had $18.6 billion assets under management, according to Institutional Investor.

After leaving Farallon, Steyer founded NextGen America in 2013, a nonprofit group which fights against climate change and promotes social justice and participation in the democracy through voter registration and grassroots organization.

In 2017, Steyer became a vocal and public advocate for impeaching Donald Trump.

He is now running for President on a platform that includes taking "corporate control out of politics," he said in his campaign announcement. "We need the broadest democracy possible," Steyer says on his campaign website, "to take back our government from the corporations that now control it and have stolen the rights of everyday Americans."

Today, Steyer is worth of $1.6 billion, ranking as the 1,425th richest person, according to Forbes. He's committed to giving much of that fortune away as part of The Giving Pledge, an initiative co-founded by Buffett and Bill Gates, whereby billionaires publicly pledge to give away more than half of their wealth.

Steyer told Forbes investing was "relaxing and exciting" for him; he liked the challenge of trying to understand what's going to happen in the future. But he felt compelled to do more with his time and resources.

"What happened to me was I realized, 'Wow, I've been super lucky. I love doing this. I've had a great career. But there are things in our society that I find...there are opportunities that we're missing that are gigantic,'" Steyer told Forbes.

"I felt like as an American citizen, I don't want my grandchildren to say, 'When we were completely screwing it up, grandpa, what were you doing?' And I was going to say, 'Well, I was running my business.' I'm an American too. I take that responsibility really seriously."

See also:

Meet the billionaire businessman obsessed with impeaching Trump

Warren Buffett on the US economy: 'The tsunami of wealth didn't trickle down. It surged upward'

5 of Warren Buffett's best tips for investing in the stock market

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  Monday, 1 Jul 2019 | 10:01 AM ET

5 timeless lessons for success from the early years of Warren Buffett's annual shareholder letters

Warren Buffett took over Berkshire Hathaway in 1965. At the time, the company was a struggling textile mill in New Bedford, Mass. Today, the investing conglomerate has a market cap of more than $500 billion and the 88-year-old CEO and chairman is himself worth $87 billion, according to Bloomberg's Billionaire Index.

Each year, Buffett writes a letter to his shareholders. Here are five pieces of Buffett's best advice about to be successful in business, culled from early annual letters.

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  Monday, 1 Jul 2019 | 7:47 AM ET

Warren Buffett is donating $3.6 billion in Berkshire shares to 5 foundations, including Gates

Posted ByYun Li
Warren Buffett, chairman of Berkshire Hathaway Inc., right, and Bill Gates, chairman and co-founder of Microsoft Corp., participate in a newspaper toss event at the Berkshire Hathaway annual shareholders meeting on Saturday, May 5, 2012.
Daniel Acker | Getty Images
Warren Buffett, chairman of Berkshire Hathaway Inc., right, and Bill Gates, chairman and co-founder of Microsoft Corp., participate in a newspaper toss event at the Berkshire Hathaway annual shareholders meeting on Saturday, May 5, 2012.

Warren Buffett said he will donate $3.6 billion worth of Berkshire Hathaway shares to five foundations, including the Bill & Melinda Gates Foundation.

The Oracle of Omaha will convert 11,250 of his Class A shares into 16.875 million Class B shares. About 16.8 million of these Class B shares will be donated to five foundations: Bill & Melinda Gates Foundation, Susan Thompson Buffett Foundation, Sherwood Foundation, Howard G. Buffett Foundation and NoVo Foundation, the company said in a statement on Monday.

Buffett pledged in a 2006 letter to make annual gifts of Berkshire B shares throughout his lifetime for the benefit of the Bill & Melinda Gates Foundation. He donated $1.5 billion worth of shares that year.

Berkshire said Buffett has never sold any shares of Berkshire, and about 45% of his 2006 holdings have been given to the five foundations, totaling about $34 billion.

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  Thursday, 27 Jun 2019 | 2:55 PM ET

Why everyone is talking about free cash handouts—an explainer on universal basic income

The idea of free cash for all may seem too good to be true, but a growing number of high-profile people — from Democratic presidential hopeful Andrew Yang to tech billionaire Elon Musk — say universal basic income, or UBI, may become a reality.

And the rest of America is becoming more interested, too: Google searches for the term "universal basic income" have multiplied as much as 50 times between 2015 and 2019.

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  Tuesday, 25 Jun 2019 | 10:45 AM ET

Made in Vietnam: US-China tensions spark a manufacturing shift but not without growing pains

Multinational companies are starting to question whether it's time to shift production out of China due to the ongoing trade war between Washington and Beijing.

Many firms are already making the move to other countries, with Vietnam as one of the major beneficiaries of tensions between the world's two largest economies.

President Donald Trump is set to meet with Chinese President Xi Jinping at the G-20 summit in Japan later this week, where the two leaders are expected to restart stalled trade talks.

However, if talks were to prove unsuccessful the White House has threatened to place 25% tariffs on an additional $300 billion worth of Chinese goods, essentially all remaining imports into the U.S. from China.

Some companies, such as Brooks Running — which is part of Warren Buffett's Berkshire Hathaway — are not waiting to see if the additional China tariffs will go into effect. CEO Jim Weber said back in May that Brooks would be "predominantly in Vietnam by the end of the year." He also said about 8,000 jobs will move there from China.

Such relocation plans raise the question of whether Vietnam can become the new China. CNBC's Carl Quintanilla reports from Hanoi, ahead of the Trump-Xi meeting, with a look at Vietnam's manufacturing boom and whether it can be sustained.

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  Tuesday, 25 Jun 2019 | 6:01 AM ET

Warren Buffett denies tensions with his partner in troubled Kraft Heinz, supports new Kraft CEO

Posted ByBecky Quick

Warren Buffett told CNBC he has no tensions with 3G Capital, Berkshire Hathaway's partner in troubled Kraft Heinz.

The Berkshire chairman and CEO said in response to reports and rumblings on Wall Street that 3G co-founder Jorge Paulo Lemann is "a good friend." He noted that Lemann attended Berkshire Hathaway's annual meeting in Omaha last month with family members. Lemann was spotted at a private party attended by Buffett and hosted by Berkshire board member Walter Scott after the annual meeting.

Buffett also said he plans to see Lemann next month at Allen & Co.'s Sun Valley conference and to attend Lemann's 80th birthday party in August.

Questions about tensions may have been sparked by Kraft Heinz's underperformance and because of accounting problems at the packaged goods company. The stock has lost more than 50% of its value over the last 12 months. In February, Kraft Heinz announced it was writing down the value of its Kraft and Oscar Meyer brands by $15.4 billion, slashed its dividend and revealed an investigation by the Securities & Exchange Commission into its accounting and procurement procedures. In May, the company said it would restate nearly three years of its financial reports after an internal investigation looking into the charges.

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  Sunday, 23 Jun 2019 | 8:30 AM ET

Value investing might be dead — and here's what killed it

Posted ByYun Li
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 30, 2019.
Brendan McDermid | Reuters
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 30, 2019.

Value investing might have lost its value.

The classic factor investing strategy of picking stocks with cheap book valuation, embraced by the legendary Warren Buffett, has become increasingly irrelevant thanks to central banks and technology, according to AB Bernstein.

The long period of low interest rates is the first to blame for the demise of value investing, Bernstein said. The Federal Reserve started its quantitative easing program to salvage the economy from the 2008 recession. But at the same time, an easier monetary policy lifted valuations across the board, leaving a smaller premium on cheap stocks, hence the long stretch of underperformance of value names.

Take iShares S&P 500 Value ETF, an exchange-traded fund that tracks the undervalued stocks in the S&P 500. It has been consistently lagging the market in the last five years.

"Duration has been bid up as rates are so low," Inigo Fraser-Jenkins, Bernstein's head of European quantitative strategy, said in a note on Wednesday. "Thus, the outperformance of value might require higher interest rates, which could be structurally difficult to achieve in the foreseeable future. In this sense one could say that QE could have stopped the mean-reversion process that usually occurs over the economic cycle."

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  Thursday, 20 Jun 2019 | 8:35 AM ET

Bernie Sanders 'doesn't have a clue' — Leon Cooperman says a lurch left in 2020 could hurt stocks

Billionaire investor Leon Cooperman told CNBC on Thursday the stock market could get hurt if a far-left candidate were to win the presidency in 2020.

"One of the risks for the market is if there's a movement to the left," Cooperman said in a "Squawk Box" interview. "Bernie Sanders, in my opinion, doesn't have a clue."

"We have the best economy in the world. Capitalism works," Cooperman said in a knock against Sanders, who describes himself as a democratic socialist. The Vermont senator, a champion of progressives, is one of nearly two dozen candidates seeking the 2020 Democratic president nomination. He ran in 2016, but the party nomination went to Hillary Clinton.

As a platform, Sanders and some other Democratic presidential candidates, including Sen. Elizabeth Warren of Massachusetts, are looking to increase taxes on the wealthy to pay for expanded government social programs.

"All in all, I'm not in favor of raising taxes. Taxes are high enough," Cooperman said. "I think it's counterproductive to look to the wealthy people across the board."

However, Cooperman said he personally could afford to pay higher taxes. "I can live with a 50% tax rate."

Cooperman, whose Omega Advisors is now a family office, said he plans to give all his money away through the Giving Pledge, created by Bill Gates and Melinda Gates, and Warren Buffett. Cooperman said he gave his children their inheritance years ago.

While generally supportive of President Donald Trump's business friendly policies, Cooperman has been critical at times of the president for the way he conducts himself and communicates.

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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.