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Investing Warren Buffett Watch

  Thursday, 21 Sep 2017 | 1:20 PM ET

Warren Buffett is the most charitable billionaire

Posted ByRobert Frank

Warren Buffett and Bill Gates are the most charitable American billionaires, according to a new analysis.

The Chronicle of Philanthropy calculated the giving since 2000 of the 10 richest people in America, and calculated their charity as a share of their total wealth.

Buffett topped the list, giving away more than $46 billion since 2000. That worked out to 71 percent of his $65.5 billion fortune.

The billionaires' wealth levels were from Forbes as of the end of 2016. Many of those fortunes are now higher. The Chronicle's calculations were based on the Philanthropy 50 reports, data from the IRS and information supplied by some of the donors.

Gates has given away $18 billion, or 22 percent of his $81 billion fortune, to charity since 2000. Yet he and Melinda Gates have given away more than twice that since they created their foundation in 1994. And last month, he donated another $4.6 billion in Microsoft stock.

Michael Bloomberg ranked third, with 10 percent of his $45 billion fortune going to charity, That too is understated, since it doesn't count his giving before 2000 or possible anonymous gifts.

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  Thursday, 21 Sep 2017 | 1:07 PM ET

Warren Buffett predicts the Dow will hit 1 million and that may actually be pessimistic

Posted ByLiz Moyer

Warren Buffett is famously optimistic, but his view of the U.S. stock market long term is more conservative than it might suggest.

At a party for Forbes magazine's centennial earlier this week, Buffett said the Dow Jones industrial average will be over 1 million in 100 years, up from 22,397 currently (which is near a record, by the way).

The 87-year-old acknowledged there's a strong likelihood he won't be around to take a victory lap on his prediction, but he also said it isn't unreasonable.

"Whenever I hear people talk pessimistically about this country, I think they're out of their mind," Buffett, the chairman of Berkshire Hathaway, said Tuesday, as reported by Reuters.

He pointed out the Dow was at 81 a century ago. It was first created in the late 1890s to represent a basket of 30 big American companies.

But Buffett's value-investing fellow billionaire, Mario Gabelli, joked on Twitter about whether Buffett's normally sunny outlook had darkened given the numbers. "one million in one hundred years ...has Buffett turned bearish?" Gabelli said in a tweet Thursday.

Contacted for further comment, Gabelli left a voicemail for CNBC saying he was "just having some fun" with numbers, but added the roughly 3.9 percent compound annual growth rate needed to get from where the Dow is today to where Buffett predicts it will be in 2117 would be lower than the 5.5 percent CAGR from the beginning of the 20th century until now.

"Warren is always looking out long term," Gabelli said. "I'm assuming Warren was just having some fun."

Buffett spoke and performed on Tuesday at the Forbes party, noting that about 1,500 people had made the magazine's list of richest Americans (including himself).

"Being short America has been a loser's game. I predict to you it will continue to be a loser's game," he said. None of them, he said, had bet against U.S. growth. "It has been 241 years since Thomas Jefferson wrote the Declaration of Independence," Buffett said. "Being short America has been a loser's game. I predict to you it will continue to be a loser's game."

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  Wednesday, 20 Sep 2017 | 3:45 PM ET

Warren Buffett is a full-time investor, but part-time lounge act

Posted ByLiz Moyer
Stevie Wonder and Warren Buffett perform a duet at the Forbes Media Centennial Celebration at Pier 60 on September 19, 2017 in New York City.
Source: YouTube
Stevie Wonder and Warren Buffett perform a duet at the Forbes Media Centennial Celebration at Pier 60 on September 19, 2017 in New York City.

Warren Buffett may be famous for his investing skill, but his lounge act isn't bad, either.

He took to the stage as recently as Tuesday night, at the centennial party for Forbes magazine in New York, where he teamed up with Stevie Wonder to sing Billy Hill's 1936 classic "The Glory of Love."

Buffett likes the song, or at least knows all the words to it, because he also sang it and accompanied on the ukulele at another Forbes party a few years ago. That duet was with Jon Bon Jovi, who played along on the guitar. "Groupies!" Buffett yelled to a laughing audience, "I've been waiting all my life."

Three years ago the Oracle of Omaha teamed up with Paul Anka to serenade Fortune magazine reporter Carol Loomis in a reworded rendition of Frank Sinatra's "My Way." And he played the ukulele and sang along with the Quebe Sisters at his annual meeting in 2008, with a version of "Red River Valley."

Buffett sang for CNN host Piers Morgan in 2013, admitting he never met Sinatra but he likes "My Way." He did forget some of the words that time.

He also accompanied himself on ukulele while singing the Coca-Cola song for a 100th birthday tribute to his favorite soft drink.

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  Wednesday, 20 Sep 2017 | 5:55 AM ET

Buffett calls pessimists about United States 'out of their mind'

Uncertainty about how the United States will cope with growing tumult in the world has not dampened Warren Buffett's optimism for the country's prospects over the long term—even 100 years into the future.

"Whenever I hear people talk pessimistically about this country, I think they're out of their mind," Buffett, the chairman of Berkshire Hathaway, said on Tuesday night.

Buffett spoke in New York at an event celebrating the 100th anniversary of Forbes magazine, and is on the cover of an issue featuring 100 of the world's greatest living "business minds."

The billionaire has transformed Berkshire since 1965 from a failing textile company into a conglomerate with more than 90 businesses in such sectors as insurance, railroads, energy and retail, and well over $100 billion of stocks.

Buffett said he expects the Dow Jones Industrial Average to be "over 1 million" in 100 years, up from Tuesday's close of 22,370.80. He said that's not unreasonable, given how the index was roughly 81 a century ago.

But he knows he won't be around to see it happen.

"When I hear talking about making it to 100, I get excited," he said. "I'm 87."

Buffett said he recently determined that of the 53,364 people in the United States who were at least 100 years old, the ratio of women to men was nearly 5-to-1.

"We should start thinking about a sex change," Buffett said, prompting laughter.

Nonetheless, he said long-term investing remains the way to go.

He noted that since Forbes created its first list of the 400 richest Americans in 1982—Buffett was worth just $250 million then—some 1,500 different people have been included.

All with one thing in common.

"You don't see any short sellers," he said, referring to people who bet stock prices will fall.

"It has been 241 years since Thomas Jefferson wrote the Declaration of Independence," he said. "Being short America has been a loser's game. I predict to you it will continue to be a loser's game."

Forbes' list of top business minds included people with a variety of backgrounds.

Among them were Microsoft co-founder Bill Gates, Amazon.com founder Jeff Bezos, Facebook's Mark Zuckerberg and Sheryl Sandberg, Nobel Peace Prize winner Muhammad Yunus, architect Frank Gehry, media mogul Oprah Winfrey, and singers Bono and Paul McCartney.

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  Tuesday, 19 Sep 2017 | 3:51 PM ET

Billionaire Warren Buffett could win $2 million thanks to a bet he made 10 years ago

Posted ByRuth Umoh

Warren Buffett has made billions thanks to his ability to bet successfully on investments over the years. Now, it looks like he's about to win $2 million more.

In 2007, Buffett made a bet that the S&P 500 stock index would outperform hedge funds, which he describes in a 2016 letter to Berkshire Hathaway shareholders. He argues that over a period of time, active investment management by professionals would underperform the returns by amateurs who were passively investing.

Buffett publicly wagered $500,000 and suggested a 10-year bet. "I then sat back and waited expectantly for a parade of fund managers ... to come forth and defend their occupation," Buffett writes in the letter. "After all, these managers urged others to bet billions on their abilities. Why should they fear putting a little of their own money on the line?"

Only one person, however, took the bet, according to the 2016 letter: Ted Seides, a former co-manager of Protégé Partners, a specialized asset management and advisory firm. In a Bloomberg post, Seides says that the two agreed to the wager, which pitted low-cost S&P 500 index fund returns against a group of Protégé's handpicked hedge funds.

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  Monday, 18 Sep 2017 | 1:50 PM ET

Small companies are struggling, marking the biggest economic divide since the financial crisis

Posted ByEvelyn Cheng
  Thursday, 14 Sep 2017 | 10:05 AM ET

JPMorgan becomes just seventh bank to cover Buffett's Berkshire Hathaway, calling it a screaming buy

Posted ByTae Kim

If there is anyone out there who doesn't need affirmation from Wall Street analysts, it's the 87-year-old investing icon Warren Buffett.

But JPMorgan gave it to the "Oracle of Omaha" anyway Thursday, initiating coverage on Berkshire Hathaway, the conglomerate he's run for five decades, with an overweight rating.

Despite Berkshire being the sixth-largest company in the S&P 500 by market cap, there are just seven analysts covering the company, according to FactSet. This compares to the No. 5 most valuable company in the index, Amazon, which has 41 analyst ratings. Wall Street doesn't really bother to cover Buffett because of Berkshire's low relative trading volumes as Street research often gets paid from trading commissions.

"Berkshire is a collection of best-in-class businesses that range from insurance to railroads, utilities and manufacturing. The businesses benefit from best-in-class managements, unmatched balance sheet strength, and many of the companies have strong brands, scale or low-cost competitive advantages," analyst Sarah DeWitt wrote in a note to clients.

"Berkshire's largest businesses have meaningful structural advantages that we think will allow it to grow earnings and book value faster than overall equity markets over time," she added.

The analyst established a year-end 2018 price target of $210 for Berkshire Hathaway B shares, representing 17 percent upside from Wednesday's close. DeWitt has covered insurance companies for JPMorgan for nearly three years. It's unclear why the bank decided to put her on Berkshire this week.

But we know it's not to curry favor with Buffett, who is already a big fan of the bank and its CEO Jamie Dimon.

DeWitt predicts the company will report 17 percent earnings-per-share growth in 2018 and 9 percent earnings-per-share growth in 2019. She cited how Berkshire has $86 billion in cash, which can be used for future acquisitions.

"Berkshire's balance sheet strength is a significant competitive advantage, and its liquidity position is the highest ever," she wrote. "Our estimates could have upside if Berkshire can deploy record levels of cash for acquisitions."

The analyst also mentioned Berkshire utility executive Greg Abel is currently the "most likely" successor to replace Warren Buffett as CEO of the company.

"We think Greg Abel would be a strong allocator of capital and the earning power of the underlying businesses would remain strong," she wrote.

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  Thursday, 14 Sep 2017 | 8:30 AM ET

Why starting a book club with your co-workers can help you be more successful

Posted ByNatalie Daher

We keep tabs on what top leaders are reading or recommending, so why not start a book club with your colleagues? A book club can help both an organization and its staff grow, according to career and leadership experts.

For business professionals, book clubs are an opportunity to develop emotional intelligence, foster relationships and improve as communicators, according to John Coleman in the Harvard Business Review. And several business scholars have even praised reading fiction (here's a list of popular titles for office book clubs). Moreover, book clubs can boost employee performance.

"The act of reading in a community can help you read more deeply and better understand diverse perspectives," Coleman writes. "Engaging with diverse content — fiction, history, biography, social science — can pull you out of your day-to-day routine and help you make connections between ideas from other fields that might be relevant to your work or life."

Even if you never would have picked the selection, a book club challenges you to think differently. Studying another workplace's culture broadens your perspective. Discussing a narrative tests your views and opinions, and how you express them. Observing a colleague's reaction to a text is valuable insight for future encounters (looking at you, introverts).

For what it's worth, billionaire Warren Buffett is a voracious reader. But reading in public, as Mark Zuckerberg has said on Facebook, can hold you accountable to actually finishing a book.

The benefits of reading at any age are innumerable, yet about 26 percent of Americans haven't read a single book in a year.

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  Friday, 8 Sep 2017 | 5:45 PM ET

Here's why Warren Buffett might not be interested in buying Mondelez

Warren Buffett shocked the food world last month when he said Kraft Heinz isn't interested in buying Mondelez.

Buffett is a co-investor in Kraft with its owner Brazilian private equity firm 3G Capital. 3G has made a name for itself acquiring well-known consumer companies and squeezing out costs. The food industry's favorite parlor game over the past year has been guessing what Kraft's next acquisition will be, and many had placed their bets on Mondelez, which owns such brands as Oreo cookies. Mondelez was part of Kraft until it was spun off into a separate company in 2012.

Buffett was asked in an interview with CNBC's "Squawk Alley" whether Kraft would be interested in buying Mondelez.

"I think the answer is no on that," he said.

Buffett's answer left analysts at RBC Capital Markets "pretty confused," the firm's David Palmer wrote in a research note. However, Palmer identified five reasons that could be influencing Buffett.

3G's cost-cutting prowess would have limited impact on some of Mondelez's biggest challenges: powerful retailers that can squeeze brands on price and slowing sales that require investment in sales and marketing.

Kraft's failed bid for dial soap owner Unilever meanwhile, shows the company is interested in the home and personal care sector, which could offer Kraft more room to grow.

Plus, activist investors own significant shares of Mondelez, and the company has minority stakes in Keurig Green Mountain and Jacobs Douwe Egberts. Both present unknown issues for 3G Capital and Buffett, Palmer wrote.

Buffett said "the answer is no," but he really means "not now" because food companies are getting cheaper thanks to Amazon, Palmer wrote.

"In other words, Mr. Buffett and 3G are not going to get in the way of a good discount that will impact Mondelez's stock more than the direct Amazon effect is impacting Mondelez's business," Palmer wrote.

Berkshire Hathaway did not immediately respond to CNBC's request for comment.

Disclaimer

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  Friday, 8 Sep 2017 | 2:05 PM ET

Kraft Heinz names 29-year-old 3G Capital partner as CFO

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.