Buffett Watch

  Tuesday, 15 Jan 2019 | 3:43 PM ET

If you invested $1,000 in Netflix in 2007, here's how much you'd have now

Video-streaming giant Netflix announced Tuesday that it is raising prices between 13 and 18 percent for new and existing customers. That's the most substantial increase in its history. Following the announcement, the company's stock shot up more than 6 percent.

If you had invested in Netflix in 2007, when it first began its streaming service, that investment could have paid off big time: A $1,000 investment would be worth more than $90,000 as of Jan. 15, according to CNBC calculations.

While the company's stock has performed well over the years, any individual stock can over- or under-perform and past returns do not predict future results.

The platform faces competition from Amazon, Apple, Disney and, most recently, NBCUniversal, which either offer similar services or plan to launch streaming platforms and which could pull content, and potentially viewers, from Netflix.

"I think Netflix is in trouble when the big guys start coming after them," Laura Martin, an analyst at investment-banking and asset-management firm Needham & Company, said in a previous interview with CNBC.

Still, investors remain generally optimistic about Netflix.

CNBC: Netflix stock as of January 2019

"The company's investment in content, technology and distribution will drive subscriber growth well above consensus expectations, both in the U.S. and internationally," says Goldman Sachs internet analyst Heath Terry.

And Justin Patterson of investment banking-company Raymond James upgraded Netflix's stock to "strong buy" from "outperform."

"We believe the combination of positive revisions and emerging signs of long-term profit potential will yield share price outperformance," says Patterson, noting high viewer numbers for the popular original film "Bird Box," as well as "Netflix's advantages in film; convenience, cost, and global distribution."

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  Monday, 14 Jan 2019 | 9:15 AM ET

5 money mistakes that keep you from getting rich

Posted ByMichelle Fox

The rich — they're just like us, right?

Well, not exactly.

If you analyze the habits of wealthy people, some trends begin to emerge. First, they don't follow the pack — whether it's a fad investment or panicking during a market sell-off, according to Tom Corley, an author who has studied self-made millionaires.

Secondly, they work at becoming successful every day. And it doesn't have to take hours of their time.

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  Wednesday, 9 Jan 2019 | 10:09 AM ET

Cramer: The Buffett-Bezos-Dimon health venture needs to 'embrace the Apple ecosystem'

L-R: Apple CEO Tim Cook, JP Morgan Chase CEO Jamie Dimon, Amazon CEO Jeff Bezos and Berkshire Hathaway CEO Warren Buffett.
Getty Images
L-R: Apple CEO Tim Cook, JP Morgan Chase CEO Jamie Dimon, Amazon CEO Jeff Bezos and Berkshire Hathaway CEO Warren Buffett.

If Apple wants to reshape health care, it should get involved with the joint venture created by Jamie Dimon, Jeff Bezos, and Warren Buffett, CNBC's Jim Cramer contended Wednesday.

Dimon, chairman and CEO of J.P. Morgan, would need to be the one to bring Apple in since Buffett's Berkshire Hathaway owns a huge stake in the tech stock that could appear "self serving," said Cramer, whose charitable trust also owns shares of Apple. "It is really time for, I think, that ecosystem to embrace the Apple ecosystem."

Through their venture, Amazon's Bezos, Buffett, and Dimon are working on ways to cut health costs and improve services for their U.S. employees. The three titans hope that the sheer sizes of their companies will help bring the necessary scale and resources to tackle the health-care system's most pertinent issues.

Dr. Atul Gawande, a surgeon and professor at Harvard Medical School, is taking the lead on the new health-care company.

In an interview with Cramer that aired Tuesday night, Apple CEO Tim Cook teased that the company will announce new services this year, especially in the realm of health care. Apple has been investing in health and wellness in recent years as it capitalized on the success of its Apple Watch and hired dozens of doctors to bolster its health technology segment.

"I believe, if you zoom out into the future, and you look back, and you ask the question, 'What was Apple's greatest contribution to mankind?' It will be about health," Cook told Cramer.

Apple shares have been under pressure since the company lowered its first-quarter guidance last week, citing weakness in China's economy. However, Wall Street analysts had already been peppering Apple's stock with downgrades due to concerns that the company would suffer declines in iPhone unit sales over the next couple of years.

Cramer, whose has long warned his followers against selling Apple's stock, said last week the company could eventually bottom out at $120 per share. At the time, the stock was trading around $144. Apple shares jumped 2 percent to nearly $151 each on Tuesday.

— CNBC's Elizabeth Gurdus and Christina Farr contributed to this report.

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  Tuesday, 8 Jan 2019 | 8:13 AM ET

Court allows Chairman Eddie Lampert another chance to buy Sears, pushing off decision to shut stores

Posted ByLauren Hirsch

A bankruptcy judge decided Tuesday to give Sears Chairman Eddie Lampert another chance to buy the retailer out of bankruptcy and save roughly 50,000 jobs.

Sears Holdings had planned to reject Lampert's bid to save the 126-year-old company, which would have put it on a course to liquidation.

Lampert had put forward a $4.4 billion bid to save Sears through his hedge fund ESL Investments. One of the biggest unresolved issues had that it fell short of covering the fees and vendor payment it owes, making it "administratively insolvent."

ESL protested Sears' decision. ESL, which worked over the weekend to improve its offer, pointed to the advisory fees that Sears has racked up during bankruptcy, a person familiar told CNBC. Such fees are part of Sears' administrative expenses.

Ultimately, the bankruptcy judge gave Lampert more time — but at a cost. ESL will now be required to pay a $120 million deposit by 4:00 p.m. Wednesday. Sears will allow Lampert to participate in a previously scheduled auction Monday, when it will compare ESL's offer to others by liquidators. But it's unclear where he will get the funds to back his offer. A person familiar with the situation told CNBC Lampert has been working to get the financing.

The people requested anonymity because the information is confidential.

A liquidation remains a possibility, and even if it comes to that pieces of the storied retailer could still be salvaged, like its home services business.

Lampert's grand plan was to fortify two struggling retailers, Sears and Kmart, by combining them in 2005. But the combined companies became victim of savvier competition, changing shopping habits and, many have argued, poor management.

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  Monday, 7 Jan 2019 | 5:33 PM ET

Ocasio-Cortez's 70% tax plan gets fierce response, but even Warren Buffett says rich should pay more

Alexandria Ocasio-Cortez has had no shortage of attention since she became, at 29, the youngest woman ever elected to Congress, one who is unafraid to push controversial progressive policies.

Sunday, she got a new surge of attention calling for a tax rate as high as 70 percent for the rich on the CBS's "60 Minutes" in an interview with Anderson Cooper.

While some see Ocasio-Cortez's plan as outrageous, or "a terrible idea," as former Federal Reserve chairman Alan Greenspan called it,she is not alone in calling for the wealthy to pay higher taxes. There is one very notable and wealthy financier who is an unabashed advocate of raising taxes on the wealthy: billionaire Warren Buffett.

In a 2011 piece Buffett penned in the New York Times titled "Stop Coddling the Super-Rich," he called for a raise on taxes for everyone making more than $1 million. He called for an even more severe tax hike on those making more than $10 million or more. (Buffett did not provide specific tax rates.)

"I know well many of the mega-rich and, by and large, they are very decent people. They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn't mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering," Buffett wrote in the Times. "My friends and I have been coddled long enough by a billionaire-friendly Congress. It's time for our government to get serious about shared sacrifice."

Also, Buffett says he has not seen higher tax rates discourage investment. "People invest to make money, and potential taxes have never scared them off," Buffett writes in the Times.

The Oracle of Omaha, so named for his Midas Touch with investing and his hometown in Nebraska, is currently worth more than $81 billion, according to Forbes, is famous for his critique of the United States tax code by saying he pays a lower tax rate than does his own secretary.

Buffett does not begrudge the wealthy their success, nor does he blame the rich for others' struggles. "The poor are most definitely not poor because the rich are rich," he said in a 2015 op-ed he wrote for the Wall Street Journal. "Nor are the rich undeserving. Most of them have contributed brilliant innovations or managerial expertise to America's well-being. We all live far better because of Henry Ford, Steve Jobs, Sam Walton and the like."

But he does advocate for the well off to support the retraining of those left behind by the ever-modernizing economy.

And he does not have a problem with his inheritance being taxed.

"I don't think I need a tax cut. For example, the current proposal eliminates the estate tax," Buffett said to Becky Quick on "Squawk Box" in October 2017, in discussing reforms then under debate. "The truth is: if they passed the bill that they're talking about, I could leave $75 billion to a bunch of children and grandchildren and great grandchildren and if I left it to 35 of them, they would each have a couple of billion dollars. They could put it out at 5 percent and have $100 million. Is that a great way to allocate resources in the United States?"

Under that plan, Buffet's family would be set financially for life.

"If they were lucky enough to come out of the right room and have the right name, Buffett, they could build tombs for themselves like Egyptian pharaohs never dreamt of. They could do anything and capitalism was all about intelligent allocation of resources," Buffett told Quick, according to a transcript of the interview. "But if they blow it all, that means that they've done some dumb things with some important resources. That's not good for capitalism I don't think it's good for the children. I sure don't think it's good for a society where there's a ton of inequality to start with."

Buffett has also taken issue with, more broadly, accelerating wealth inequality in the United States.

"The real problem, in my view, is — this has been — the prosperity has been unbelievable for the extremely rich people," said Buffett on PBS Newshour in June. "If you go to 1982, when Forbes put on their first 400 list, those people had [a total of] $93 billion. They now have $2.4 trillion, [a multiple of] 25 for one," he says. "This has been a prosperity that's been disproportionately rewarding to the people on top."

Ocasio-Cortez's tax comment was made during a conversation policy: She has championed an ambitious environmental program, dubbed the "Green New Deal," which calls for the United States to operate entirely on renewable sources of energy in 12 years. She has also promised that all Americans will have a job with a "fair" wage, CBS "60 Minutes" says. To accomplish this would require higher taxes, Cooper says, according to a transcript of the segment.

Ocasio-Cortez didn't disagree. "There's an element where — yeah. [P]eople are going to have to start paying their fair share in taxes."

She continued: "You know, it— you look at our tax rates back in the '60s and when you have a progressive tax rate system. Your tax rate, you know, let's say, from zero to $75,000 may be ten percent or 15 percent, et cetera. But once you get to, like, the tippy tops— on your 10 millionth dollar— sometimes you see tax rates as high as 60 or 70 percent. That doesn't mean all $10 million are taxed at an extremely high rate, but it means that as you climb up this ladder you should be contributing more."

Cooper, on "60 Minutes," points out the ambition of her idea: "What you are talking about, just big picture, is a radical agenda — compared to the way politics is done right now."

The cohort of Americans earning more than $10 million a year currently pays the top marginal tax rate of 37 percent, CNBC.com says.

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  Monday, 7 Jan 2019 | 2:45 PM ET

It's lights out for Sears on Tuesday unless Eddie Lampert can sweeten his bid

Posted ByLauren Hirsch
Edward Lampert speaks during a news conference to announce the merger of Kmart and Sears in New York Wednesday, Nov. 17, 2004.
Gregory Bull | AP
Edward Lampert speaks during a news conference to announce the merger of Kmart and Sears in New York Wednesday, Nov. 17, 2004.

Sears and its chairman, Eddie Lampert, have been so far unable to resolve disagreements over his $4.4 billion bid to save Sears and 50,000 jobs by buying it out of bankruptcy through his hedge fund ESL Investments, people familiar with the situation tell CNBC.

Sears continues to inch toward liquidation, even while leaving Lampert room to have a last-minute about-face. Sears advisors this past Friday had told the bankruptcy judge it planned to announce a liquidation on Monday, one of the people said. By Sunday afternoon, Sears had decided it would give ESL until Tuesday morning before coming to and announcing a conclusion.

ESL's advisors worked through the weekend and into Monday. So far, Lampert's bid is insufficient. If he doesn't agree to concessions, the company will liquidate.

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  Saturday, 5 Jan 2019 | 3:00 PM ET

Tony Robbins: 5 money mistakes investors need to avoid in today's choppy market

Posted ByLori Ioannou
Tony Robbins: Business strategist and life coach to the stars 
Tony Robbins: Business strategist and life coach to the stars 

Tony Robbins, renown life and business strategist who has coached more than 50 million people, has dedicated himself to spreading personal finance literacy across America. And his mantra is timely: Don't sit on the sidelines in fear or make rash decisions because of stock market volatility. As he points out: "The single biggest threat to your financial well-being is your own brain."

Translated, that means we all have biases and fears that we need to shake — from the aversion to losing money to investing overseas. As he notes in his book "Unshakeable: Your Financial Freedom Playbook," you need to have "a state of mind that will help you have unwavering confidence even amidst the storm."

That is especially true in today's volatile stock market environment. To be sure, 2018 was the most volatile year since 2015, measured by intraday moves of 1 percent or more. That year, the S&P 500 recorded 72 intraday such moves. This year has seen 64 through Friday. That compares with 48 in 2016 and just eight in 2017. The month of December was the worst final month of the year since the Great Depression, with a loss of nearly 10 percent.

According to Robbins, during big swings in the market, it's wise not to make emotional decisions. To be successful, the best bet is to follow Warren Buffett's golden rule and have a long-term horizon to capture a compounding effect that others who quit lose out on. This strategy means your asset allocation, cash flow and mindset are designed to deal with short-term risks.

"There will always be booms and busts. You cannot really time the market. It doesn't work 99 percent of the time," Robbins says. To prove his point, he notes that the average return in the S&P over the last 20 years was 8.6 percent. But if you were out of the market for just 10 of the best trading days during the period, your returns would have been only 2.5 percent.

Robbins' advice has been gleaned from his interviews and work with some of the greatest financial minds of our generation — from Jack Bogle, founder of Vanguard Group, and Ray Dalio, founder and co-CIO of Bridgewater Associates, to Warren Buffett, founder, CEO and chairman of Berkshire Hathaway.

As he explains, these money mistakes can derail individual investors' wealth strategies.

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  Friday, 4 Jan 2019 | 11:19 AM ET

39-year-old retired millionaire: The best investment I ever made cost 'little to nothing'

Chris Reining, 39, managed to build a seven-figure portfolio by age 35 and quit his corporate job shortly after. He did it by saving more than half his income and investing it in his employer sponsored 401(k) plan and a taxable account.

Needless to say, Reining, who has been retired for nearly three years and is "not really worried about ever running out of money," made some smart investments over his short career.

The very best investment he ever made, though, has nothing to do with the stock market or real estate or money in general: He invested in himself, he tells CNBC Make It, and that cost "little to nothing."

Investing in yourself can mean different things. For Reining, it meant getting mentors to guide him; surrounding himself with smart, driven people; reading self-help books; and practicing new skills like public speaking by joining Toastmasters.

"One of the best shortcuts to wealth is making yourself more valuable," the self-made millionaire writes on his blog. And, "when you invest in yourself you become more valuable."

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  Thursday, 3 Jan 2019 | 8:45 AM ET

5 simple ways to be smarter about money in 2019

Posted ByEmmie Martin

You don't have to be an expert to handle your money well. Even a few easy tweaks to how you save, spend and invest can help you build wealth.

To get you started, CNBC Make It rounded up five simple facts about money, all of which have been vetted and endorsed by experts, that can help you manage your finances like a pro in 2019.

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  Wednesday, 2 Jan 2019 | 6:24 PM ET

Apple's drop costs Warren Buffett $3.8 billion, adding to struggles for Berkshire portfolio

Posted ByKate Rooney
Billionaire investor Warren Buffett, chairman of Berkshire Hathaway, speaks on a mobile phone during an interview in New York, U.S., on Wednesday, June 25, 2008. 
Bloomberg | Getty Images
Billionaire investor Warren Buffett, chairman of Berkshire Hathaway, speaks on a mobile phone during an interview in New York, U.S., on Wednesday, June 25, 2008. 

Warren Buffett lost some serious money on Thursday ... at least on paper.

With Apple's 9 percent drop in early trading Thursday, Buffett's Berkshire Hathaway is looking to lose more than $3.8 billion on its position in the tech company.

Berkshire owns 252.5 million shares of Apple, which at the market close on Wednesday were trading at $157.92 per share, according to FactSet. When the market closed, Buffett's position was worth $39.87 billion.

Futures prices tanked soon after CEO Tim Cook announced Wednesday afternoon that Apple is lowering its fiscal first-quarter guidance, blaming a range of variety of factors including a weakening economy in China and lower-than-expected iPhone revenue.

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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.