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Investing Warren Buffett Watch

  Sunday, 20 Mar 2011 | 9:44 AM ET

Warren Buffett Still on the Lookout for Deals

Posted ByBecky Quick

Berkshire Hathaway's $9 billion purchase of Lubrizol last week doesn't mean that the Oracle of Omaha is out of the game when it comes to business acquisitions.

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  Sunday, 20 Mar 2011 | 1:40 AM ET

Berkshire Will Not Exercise Goldman Sachs Warrants Immediately

Posted ByBecky Quick

Berkshire Hathaway will not exercise its $5 billion of warrants in Goldman Sachs immediately, even though doing so would result in a profit of nearly $2 billion, billionaire investor Warren Buffett told CNBC.

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  Friday, 18 Mar 2011 | 1:57 PM ET

Warren Buffett Gets an Unwanted Call from Goldman Sachs

Posted ByAlex Crippen

Warren Buffett's Berkshire Hathaway has been getting $1,369,863 a day from Goldman Sachs, so it's no surprise Warren Buffett isn't happy that flow of money is getting cut off.

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  Tuesday, 15 Mar 2011 | 7:19 PM ET

Warren Buffett Tells CNBC He Won't Go to Japan Next Week for Plant Opening

Posted ByAlex Crippen
Koriyama fire department staff check radiation levels of rescue personnel in Koriyama city in Fukushima prefecture on March 13, 2011.
JIJI Press | AFP | Getty Images
Koriyama fire department staff check radiation levels of rescue personnel in Koriyama city in Fukushima prefecture on March 13, 2011.

Warren Buffett tells CNBC's Becky Quick tonight that he won't be going to Japan next week, as had been originally planned.

Buffett had been scheduled to attend a Tungaloy Corp. plant opening in Fukushima prefecture on Tuesday, March 22. Tungaloy is owned by Berkshire subsidiary Iscar , a toolmaker headquartered in Israel.

He had hoped to make the trip, but canceled after authorities in Japan suggested it would not be the best time to visit.

The earthquake and tsunami-damaged nuclear reactors that threaten to release large amounts of radiationare also located in Fukushima.

Buffett will be going to the other two countries on the original Asia itinerary: India and South Korea .

Current Berkshire stock prices:

Class B:

Class A:

For more Buffett Watch updates follow alexcrippen on Twitter .

Email comments to buffettwatch@cnbc.com

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  Tuesday, 15 Mar 2011 | 9:40 AM ET

Is a Japanese Banking Crisis Next?

Bank of Japan governor Masaaki Shirakawa
JIJI PRESS/AFP/Getty Images
Bank of Japan governor Masaaki Shirakawa

The exposures of various insurance companies to the economic devastation of the Tsunami may be dominating the financial discussions in the tragedy's wake – but Japanese banks may be at the most risk.

And that risk may become a tragic test case for an economic conundrum described by Warren Buffett .

Here's the background.

An Australian hedge fund manager named John Hempton has done analysis on a Japanese financial institution called 77 Bank.

The bank is located in Sendai, which is the Japanese city most affected by the tsunami.

Not only is the bank located in the city that sustained the most damage, it also has a near 50 percent market share in that metropolitan area.

Here's the rub. Hempton writes:

"Warren Buffett once said that Fannie Mae had more supercatastrophe risk in it than Berkshire Hathaway. He figured the really really big hurricane or earthquake could do more damage to Fannie than Berkshire even though Berkshire is the largest supercat insurer in the world.

Buffett was – I suspect – right.

We now unfortunately have a gruesome test of Buffett statement on finance and supercatastrophe. There is probably more uninsured damage in the destruction of North East Japan than in any other event in history – and uninsured damage falls sharply on banks.

77 Bank – deeply concentrated in the disaster zone – is the test. It is not a test I would want to repeat. But I think we will – at the end of this – be able to confirm Buffett’s observation that banks don’t like supercats."

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  Monday, 14 Mar 2011 | 7:33 AM ET

Warren Buffett Hits His Mark with $9 Billion Deal for Lubrizol

Posted ByAlex Crippen

Warren Buffett may have let a 'zebra' get away in recent weeks, but today he hit his target.

While it may not be an 'elephant' on the scale of $26 billion for Burlington Northern Santa Fe, it is still one of Berkshire Hathaway's "largest acquisitions in years."

Berkshire says in a news release this morning that it is buying Lubrizol for about $9 billion in cash, plus the assumption of another $700 million in debt.

That's $135 a share for the chemicals company, a 28 percent premium over Friday's closing price of $105.44 and an 18 percent boost from its all-time high.

In pre-market trading this morning, Lubrizol shares are up 27 percent to $134, just below the deal price.

Current price:

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  Monday, 14 Mar 2011 | 6:16 AM ET

Berkshire Hathaway to Purchase Lubrizol for $9 Billion

Posted ByDavid Faber

Berkshire Hathaway has agreed to purchase chemical company Lubrizol in a $9 billion cash deal worth $135 per LZ share, the two companies said Monday. The price, a roughly 28 percent premium to Lubrizol's close on Friday is also about 18 percent above the stock's all time high.

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  Wednesday, 9 Mar 2011 | 2:04 PM ET

Warning that Warren Buffett's Bet on Chinese Copycat BYD Could 'Backfire'

Posted ByAlex Crippen
090413_Fortune_Cover_Buffet.jpg

A lengthy "special report" by Reuterstoday warns that Berkshire Hathaway's high-profile investment in BYD, a Chinese electric car maker, could "backfire" on Warren Buffett and his company.

BYD is criticized for "stealing designs from rivals, using those savings to undercut competitors on price and scrimping on safety."

Among other sources, the article quotes from a diplomatic cable "revealed by WikiLeaks and provided to Reuters by a third party." In October of 2009, Guangzhou Consul-General wrote:

"While BYD has certainly achieved a measure of success based on a business approach of copying and then modifying car designs just enough to convince Chinese courts that the company has not infringed on patents, it is far less certain that foreign courts will be as sympathetic."

Reuters notes that while analysts say BYD may be "broadly typical" of Chinese automakers, "even in that context, BYD stands out, and there are questions about whether the company's much-ballyhooed — and oft-delayed — e6 all-electric car will ever make it to the U.S. market."

A BYD America executive tells Reuters that no one can match BYD's "genius" battery technology.

Berkshire's 2008 investment in BYD is now worth around $1 billion, five times what it spent for the stake. That's down, however, from just under $2 billion at the end of 2009.

Reuters suggests that if the deal goes "ultimately sour" it will be a "black mark" for David Sokol, the Berkshire exec who "spearheaded it."

Sokol is widely seen as the lead candidate to eventually take over from Buffett as Berkshire's CEO.

Current Berkshire stock prices:

Class B:

Class A:

For more Buffett Watch updates follow alexcrippen on Twitter .

Email comments to buffettwatch@cnbc.com

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  Thursday, 3 Mar 2011 | 3:30 PM ET

Three Investing Gurus See Dark Days Ahead for the Dollar

money_torn_200.jpg
Gaetan Charbonneau | Getty Imags

The dollar’s dominance among global currencies is coming to an end, according to separate interviews with three of the world’s most successful investors.

The shift will affect everything from Americans’ standard of living to growth rates in emerging economies, and the main uncertainty in these gurus’ forecasts is the speed at which these changes will take place.

“I think it’s inevitable that the dollar’s role as a world currency will diminish from the dominant currency to one of a few,” said Ray Dalio, president of the hedge fund behemoth Bridgewater Associates, in a rare interview this morning on CNBC's Squawk Box . “We’ve been very lucky borrowing at cheaper rates. It will fade probably pretty quickly.”

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  Thursday, 3 Mar 2011 | 1:19 PM ET

Halftime: Will Warren Buffett Buy Colgate?

Posted ByDrew Sandholm

After Warren Buffett told investors he is "hungry" to make acquisitions with Berkshire Hathaway's $38 billion in cash, famed strategist Douglas Kass predicts the stock sage will target a large consumer products company, like Colgate-Palmolive.

Being as Kass views the market as fragile, he thinks only a few sectors are going to hold on, including “staples and necessities.” That, he said, is something Buffett will factor into his next move.

“With Buffett looking for another target, I suspect a large consumer products company is on his menu,” Kass said on Wednesday's "Fast Money ." "I wouldn't be surprised if he (buys) a company as large as Colgate-Palmolive ."

A Berkshire Hathaway shareholder, renown investor Whitney Tilson sees the situation a little differently. Buffett, he said, isn't likely to get the bargain price he desires.

"The stock market has doubled in the past two years," said Tilson, founder and managing partner of T2 Partners. "Blue chips are probably 20 percent undervalued, but they’re no longer 50 percent undervalued as they were."

In addition, Tilson said it's very rare in Buffett's history that he's taken a publicly-traded company private. There aren't that many examples, he said, aside from Clayton Homes, GEICO and Burlington Northern. In each case, Buffett saw extreme value.

"In the case of GEICO or Burlington Northern, he already owned a big slug of the stock and the whole company or the industry was depressed," Tilson explained. "So he was able to come in and buy it at a cheap price."

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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.