Buffett Watch

  Wednesday, 15 May 2019 | 1:15 PM ET

Billionaire Mark Cuban: One of the 'most patriotic' things you can do is get 'obnoxiously rich'

Tuesday, Mark Cuban spoke with CNBC's Scott Wapner and left open the possibility that he would run for President.

"It would take the perfect storm for me to do it. There's some things that could open the door, but I'm not projecting or predicting it right now," the billionaire entrepreneur told CNBC.

Yet whether or not he runs, by his own calculation, Cuban has already been of great service to his country — by creating and amassing wealth.

Mark Cuban grew up working class in Pittsburgh, but the tech entrepreneur is now worth $4.1 billion, according to Forbes. He's gotten rich, and that, he says, this is one of the most patriotic things anyone can do.

On Monday, Cuban shared a link to a blog post he wrote in 2011 called, "The Most Patriotic Thing You Can Do."

"Bust your a-- and get rich," reads the first line of the post.

"Make a boatload of money. Pay your taxes. Lots of taxes. Hire people. Train people. Pay people. Spend money on rent, equipment, services. Pay more taxes," Cuban writes.

"When you make a sh--load of money, do something positive with it. If you are smart enough to make it, you will be smart enough to know where to put it to work," he says.

Cuban, who sold his company Broadcast.com to Yahoo in 1999 for $5.7 billion in stock, now owns the Dallas Mavericks NBA team. The billionaire tweeted a link to his 2011 blog post in response to a tweet asking if the billionaire was "scared of paying higher taxes?"

He is not.

"Profits equal tax money. While some people might find it distasteful to pay taxes. I don't. I find it Patriotic," Cuban writes in the 2011 post. "Get out there and make a boatload of money. Enjoy the sh-- out your money. Pay your taxes. It's the most Patriotic thing you can do." (Cuban has since said that "after military service" paying taxes is the most patriotic thing you can do if you're wealthy.)

Cuban urges people to get so "obnoxiously rich that when that tax bill comes, your first thought will be to choke on how big a check you have to write. Your 2nd thought will be 'what a great problem to have,' and your 3rd should be a recognition that in paying your taxes you are helping to support millions of Americans that are not as fortunate as you."

Cuban's tweet comes at a time when wealth inequality is frequent topic of discussion.

The combined fortunes of Amazon'sJeff Bezos, Microsoft's Bill Gates and Berkshire Hathaway chairman Warren Buffett equals more money than the entire poorest half of the population in the United States has, according to an October report from progressive Washington, D.C.-based think tank Institute for Policy Studies.

And other billionaires have weighed in: Bridgewater Associates founder Ray Dalio has said that capitalism is no longer working for most people. Gates and Buffett, on the other hand, see capitalism as the best system but believe the super rich should pay higher tax rates.

As for Cuban, he writes in 2011: "I don't care what anyone says. Being rich is a good thing. Not just in the obvious sense of benefiting you and your family, but in the broader sense. Profits are not a zero sum game. The more you make the more of a financial impact you can have."

See also:

Warren Buffett: This is the best way to put cash in the pockets of people who need it

Billionaire 'Shark Tank' star Mark Cuban: This is how to know if a business will be successful

Mark Cuban, Scott Galloway, Mike Rowe all agree 'following your passion' is totally bogus advice

»Read more
  Friday, 4 May 2018 | 8:22 AM ET

Warren Buffett says Berkshire Hathaway has sold completely out of IBM

Billionaire Warren Buffett's Berkshire Hathaway has ended a difficult chapter in its investment in IBM while ramping up its stake in Apple.

CNBC's Becky Quick, in an interview from Omaha that aired Friday, asked him if Berkshire owns any IBM shares.

He said, "No."

"I think we have zero," he said.

"The answer is almost certain, yes," on Berkshire owning no more IBM shares, he said.

»Read more
  Saturday, 11 May 2019 | 8:50 AM ET

Billionaire Warren Buffett has a 'simple' test for making tough decisions—here's how it works

Achieving success and making tough decisions go hand in hand. So what's the best way to make ethical decisions during tough times?

That's a question one student asked Warren Buffett at a 2005 Q&A session with Microsoft co-founder Bill Gates at the University of Nebraska-Lincoln.

It all comes down to reputation, the billionaire told the audience. Integrity and ethics are essential for building a solid, positive reputation. They also indicate trust and adherence to high moral standards.

"We have all the money we need," Buffett said, referring to himself and Gates. "While we'd like to have more, we can afford to lose money. But we can't afford to lose reputation. Not a shred."

»Read more
  Friday, 10 May 2019 | 10:35 AM ET

The majority of billionaires in the world are self-made

There are 2,604 billionaires in the world, and 55.8% of them are self-made.

That's according to the Billionaire Census published Thursday by market research firm Wealth-X.

Taken together, self-made billionaires have a total of nearly $5 trillion.

Another 30.9% of billionaires made at least some of their wealth themselves, according to the report, while 13.3% inherited their wealth entirely.

The data showed a "continuation of the long-term trend in the gradual increase in the proportion of self-made billionaires," says the report, which is based on Wealth-X's own proprietary data and intelligence from Jan. 1 through Dec. 31, 2018. This was "despite a broad weakening of asset markets and more subdued global growth prospects," which the report says "highlights the growing importance of entrepreneurship in creating and preserving substantial wealth."

Source: Wealth-X

In fact, almost all of the current richest billionaires are self-made, from Amazon founder Jeff Bezos, the richest man in the world with a current net worth of more than $155 billion, according to Forbes, to Google co-founders Larry Page (more than $53 billion) and Sergey Brin (more than $52 billion), the 10th and 11th richest respectively, according to Forbes.

However, overall, the number of billionaires in the world and their collective wealth declined in 2018 compared to the year prior, according to Wealth-X.

The number of billionaires fell 150 from 2,754 in last year's report, and their total wealth fell from $9.2 trillion to $8.6 trillion. The draw down was due to "heightened market volatility, global trade tensions and a slowdown in economic growth," Wealth-X says.

Of course, even "self-made" billionaires did not succeed alone.

Bezos has said his own rocket-out-of-the-cannon success with Amazon would not have been possible without the technological advancements that set him up for success.

"I've witnessed this incredible thing happen on the internet over the last two decades. I started Amazon in my garage 24 years ago — drove packages to the post office myself. Today we have 600,000-plus people, millions and millions of customers, a very large company," Bezos said at the Yale Club in New York City in Feb., according to Business Insider.

Bezos continued: "How did that happen in such a short period of time? It happened because we didn't have to do any of the heavy lifting. All of the heavy-lifting infrastructure was already in place for it. There was already a telecommunication network, which became the backbone of the internet. There was already a payment system — it was called the credit card. There was already a transportation network called the US Postal Service, and Royal Mail, and Deutsche Post, all over the world, that could deliver our packages."

At the same event, Bezos said the success of Facebook CEO Mark Zuckerberg was also a direct function of the technological innovation that came before him: "An even more stark example is Facebook. Here's a guy who literally, in his dorm room, started a company — Mark Zuckerberg started a company in his dorm room, which is now worth half a trillion dollars — less than two decades ago," Bezos said.

Zuckerberg quite famously, started Facebook at Harvard in 2004.

Zuckerberg, the fifth richest person in the world with a more than $69 billion fortune, said himself in his 2017 Harvard commencement speech that some amount of his success is due to the freedoms afforded him by his affluent upbringing.

"We all know we don't succeed just by having a good idea or working hard. We succeed by being lucky, too. If I had to support my family growing up instead of having time to code, if I didn't know I'd be fine if Facebook didn't work out, I wouldn't be standing here today," Zuckerberg said in his speech. "If we're honest, we all know how much luck we've had."

Warren Buffett, who founded Berkshire Hathaway and is the fourth richest person in the world with a more than $85 billion net worth, has also spoken about the role luck has played in his success.

"My wealth has come from a combination of living in America, some lucky genes, and compound interest. [Both] my children and I won what I call 'the ovarian lottery,'" Buffett told Christiane Amanpour in 2010. "I was born in the right country at the right time."

See also:

Sam Adams founder: Unless you're a sociopath, being happy is better than being rich

Instagram co-founder on selling to Facebook for $1 billion: 'Money itself is no end. It doesn't make you happy'

Pinterest's employee No. 2 left before his equity vested—here's what he says of the decision that cost him millions

»Read more
  Thursday, 9 May 2019 | 2:53 PM ET

Chevron, the loser in the Anadarko buyout battle, is actually a winner on Wall Street

Michael Wirth, CEO of Chevron, speaking at the 2019 WEF in Davos, Switzerland on Jan. 23rd, 2019.
Adam Galica | CNBC
Michael Wirth, CEO of Chevron, speaking at the 2019 WEF in Davos, Switzerland on Jan. 23rd, 2019.

Occidental Petroleum may have spoiled Chevron's plans to acquire oil and gas driller Anadarko Petroleum, but Wall Street is not pronouncing the oil company the loser in the buyout battle.

Several analysts are commending Chevron for declining to counter Occidental's $38 billion bid for Anadarko. Chevron not only walks away with a $1 billion breakup fee, but showed investors it won't sacrifice its budget sheet in a bidding war, the analysts say.

The San Ramon, California-based energy giant was under pressure to hike its original $65 per share offer into the $70s after the underdog Occidental sweetened its offer this week. For Occidental, funding a $76 per share bid relied in part on agreeing to a steep 8% annual payout to Warren Buffett in order to secure a $10 billion investment from the Oracle of Omaha.

»Read more
  Thursday, 9 May 2019 | 8:28 AM ET

Chevron walks away from Anadarko Petroleum deal, will collect $1 billion breakup fee

Chevron said Thursday it will not submit a new offer to acquire Anadarko Petroleum, walking away from the deal after Occidental Petroleum pulled ahead in a battle to take control of the driller with prized assets in the top U.S. shale oil field.

The decision means Chevron will collect a $1 billion breakup fee, a windfall that it could use to purchase another driller in the Permian Basin, the engine of the American oil drilling boom.

Shares of the San Ramon, California-based oil major were up about 3% on Thursday.

Anadarko announced on Monday that its board had unanimously decided that Occidental's revised $38 billion bid was superior to a $33 billion Chevron buyout. Anadarko said it intended to break its agreement with Chevron and strike a deal with Occidental if Chevron did not submit a better offer.

Occidental, with backing from Warren Buffett's Berkshire Hathaway, offered to pay 78% cash and 22% stock for Anadarko, while the Chevron transaction was structured as a 75% stock and 25% cash deal.

»Read more
  Wednesday, 8 May 2019 | 4:55 PM ET

Occidental's jet just made another trip, setting off fresh speculation about a deal for Andarko

querbeet | iStock | Getty Images

Occidental Petroleum's recent jaunt to Omaha aboard a corporate jet presaged a $10 billion investment from Warren Buffett, and now the plane has traveled to the hometown of oil major Royal Dutch Shell.

This comes as Occidental is trying to finalize a deal to buy Anadarko Petroleum, which has a joint venture with Shell in the Permian Basin, the engine of the U.S. shale oil boom. On Monday, Anadarko said it intends to cancel a $33 billion deal to sell its business to Chevron and instead sell its business to Occidental for $38 billion.

Occidental's Gulfstream V has traveled to Rotterdam The Hague Airport in the Netherlands and was on the tarmac on Wednesday, a source told CNBC.

»Read more
  Tuesday, 7 May 2019 | 2:48 PM ET

Misconduct at Kraft Heinz puts spotlight on employee pressure to meet bonus targets

Posted ByLauren Hirsch
Kraft and Heinz products
Scott Olson | Getty Images
Kraft and Heinz products

It has been a brutal year for Kraft Heinz, mostly tied to its deteriorating financial performance and stock price declines that have lopped roughly $13 billion off its market value since the year began.

Now comes news that it will have to restate its financial statements for 2016 and 2017, which raises a new set of questions. These are about the company's internal controls and the culture of a high-profile Fortune 500 company. In a filing Monday, Kraft Heinz said that following a subpoena from the Securities and Exchange Commission, it discovered employee misconduct in procurement.

»Read more
  Monday, 6 May 2019 | 7:00 PM ET

Anadarko to cancel Chevron buyout deal after board deems Occidental's bid superior

Anadarko Petroleum's board of directors said on Monday that Occidental Petroleum's buyout offer is superior to its agreement to sell its business to Chevron, putting the deal with the oil giant in jeopardy.

The reversal marks the latest twist in a rare bidding war in the oil and gas sector. Chevron now has four days to counter Occidental's latest bid for Anadarko, an oil and gas driller with prized assets in the U.S. Permian Basin, the Gulf of Mexico and Africa.

Shares of Occidental Petroleum were down slightly in after hours trading, while Chevron's stock price ticked higher. Anadarko's shares were roughly flat after jumping 3.8% on Monday.

Chevron reached an agreement last month to buy Anadarko for $33 billion, or $65 a share. Shortly after, Occidental offered $38 billion, or $76 a share. Occidental on Sunday sweetened its bid by offering to pay mostly cash for Anadarko, after earlier structuring the transaction as a 50-50 cash-and-stock deal.

»Read more
  Monday, 6 May 2019 | 3:36 PM ET

What Chevron stands to lose if Occidental wins bidding war for Anadarko

Michael Wirth, CEO of Chevron.
Adam Jeffery | CNBC
Michael Wirth, CEO of Chevron.

Chevron's leaders insist the company's fortunes don't rely on dealmaking, but the oil major nevertheless has much to lose if it does not prevail in an ongoing battle with Occidental Petroleum to take control of Anadarko Petroleum.

Since Occidental first revealed its challenge to Chevron's $33 billion agreement to buy Anadarko, analysts have largely seen Chevron as the likely victor. The prize includes acreage in the hottest U.S. shale oil field, new offshore opportunities and a major natural gas export project in Africa.

While Occidental put in a higher bid, Anadarko's global operations better dovetail with Chevron's international portfolio. And with a far larger balance sheet than Occidental boasts, Chevron can more easily digest an acquisition of this size.

But despite those advantages, the momentum appears to have swung in Occidental's favor following series of unexpected developments.

First, Warren Buffett's Berkshire Hathaway committed to invest $10 billion in Occidental to fund the Anadarko purchase. Then Occidental reached a deal to sell Anadarko's operations in Africa to French oil major Total for $8.8 billion. Bolstered by those two deals, Occidental sweetened its bid by offering to pay mostly in cash.

»Read more

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  • 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.