Investing Warren Buffett Watch

  Thursday, 7 Sep 2017 | 10:47 AM ET

Bitcoin up sevenfold since Warren Buffett warned digital currency was a 'mirage'

Posted ByTae Kim

When a billionaire investment manager and a Nobel-Prize winning economist are sounding the alarm over the speculative fever in digital currencies, it may be prudent to review the sage old wisdom on the topic from the Oracle of Omaha himself.

Warren Buffett was specifically asked for his views on bitcoin several years ago.

"Stay away from it. It's a mirage basically. It's a method of transmitting money. It's a very effective way of transmitting money and you can do it anonymously and all that. A check is a way of transmitting money too. Are checks worth a whole lot of money? Just because they can transmit money?" Buffett said on CNBC in 2014. "I hope bitcoin becomes a better way to do it. But you can replicate it a bunch of different ways. The idea that it [bitcoin] has some huge intrinsic value is just a joke in my view."

Digital currency advocates will point out that the price of bitcoin has risen more than sevenfold since Buffett expressed his negative view. In addition, the cryptocurrency was up nearly 380 percent this year through Thursday morning, according to data from industry website CoinDesk.

But the famed investor never said he can predict exactly when bubbles peak, just that the feverish times will end some day. He specifically warned about the perils of "effortless money" through speculation during the dot-com bubble time period:

"The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money … But a pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learns some very old lessons: First, many in Wall Street - a community in which quality control is not prized - will sell investors anything they will buy. Second, speculation is most dangerous when it looks easiest." - Warren Buffett, Berkshire Hathaway 2000 shareholder letter

In similar fashion, billionaire investor Howard Marks told his clients to avoid high-flying digital currencies in July.

"In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it," Marks wrote in an investor letter.

The manager then compared cryptocurrencies to the tulip mania of 1637, the South Sea bubble of 1720 and the internet bubble of 1999.

To be sure, there is no way to know we are near the top even if digital currencies are similar to previous asset bubbles. However Buffett has proven to be rarely wrong over the long run and investors should be cognizant of his warnings on bitcoin.

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  Thursday, 7 Sep 2017 | 10:22 AM ET

Why Warren Buffett raises money for this church in a rough part of San Francisco

When Warren Buffett's late wife Susie told him about the Glide church in San Francisco and all the good it was doing for the community, the billionaire investor was skeptical.

"I thought, 'This sounds too good to be true,'" says Buffett, speaking with CNBC. "I am a suspicious guy by nature, so she didn't sell me."

But then Buffett's wife took him to visit the congregation and meet its leader.

"It is run by a very special man, Cecil Williams," Buffett says. "She took me there one time to Glide and I got to meet Cecil, I got to see what happened, the kind of people he was helping and how he was helping them."

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  Wednesday, 6 Sep 2017 | 7:50 AM ET

Investing lessons from Warren Buffett's $9 billion Oncor 'stumble'

Posted By John Reese, co-founder of Validea Capital Management

Berkshire Hathaway recently made investment headlines with its agreement to purchase the power-transmission company Oncor for $9 billion in cash, a would-be coup for the legendary billionaire, as it would have chipped away at Berkshire's bloated cash balance (of nearly $100 billion).

Disappointment, however, came in the form of Sempra Energy, which swooped in with an offer of $9.45 billion. This made headlines, some of which characterized the chain of events as a "stumble" by Buffett, even insinuating that the Oracle of Omaha might be losing his deal-making chops.

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  Friday, 1 Sep 2017 | 11:50 AM ET

Mark Zuckerberg added almost $3 billion a month to his net worth this summer

Posted ByJohn Shinal
Priscilla Chan and Mark Zuckerberg
Adam Berry | Getty Images
Priscilla Chan and Mark Zuckerberg

The stock market was kind to Mark Zuckerberg this summer.

So was life in general.

Facebook shares jumped 14 percent in the past three months, as of Thursday's close, the best performance among the five most valuable U.S. technology companies. Apple and Microsoft each rose about 7 percent, While Amazon and Alphabet dropped.

As Labor Day weekend arrives and the kids return to school, Zuckerberg finds himself the world's fifth-richest person, just behind Warren Buffett and ahead of Carlos Slim. Facebook's summertime rally added over $8 billion to the founder's fortune, which now sits at $71.7 billion, according to the Forbes billionaires list.

At 33, Zuckerberg is 54 years younger than Buffett, who amassed his fortune through many decades of value-based investing. Zuckerberg earned his wealth by creating an online business that's grown rapidly around the globe and now has 2 billion users.

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  Thursday, 31 Aug 2017 | 9:37 AM ET

Cramer calls Wells Fargo a 'rogue bank' after revelations of over a million more fake accounts

CNBC's Jim Cramer called Wells Fargo a "rogue bank" on Thursday after the bank said it uncovered much more potentially unauthorized consumer and small-business accounts than originally thought.

On Thursday, Wells Fargo said its review of 165 million retail accounts opened from January 2009 to September 2016 identified 3.5 million as potentially unauthorized, up from 2.1 million accounts identified in a narrower review.

"A million extra? I mean that's not a rounding error," Cramer said on "Squawk on the Street." "It's not embarrassing, it's rogue. This is a rogue bank."

Perhaps Sen. Elizabeth Warren, who has been tough on Wells Fargo, had a point, added Cramer. In June, the Massachusetts Democrat called for the ouster of 12 board members at Wells Fargo due to the fake accounts scandal.

"They thought they got to the bottom of it but they left out a million accounts," Cramer said. "That does not seem like the bottom of this. This is so outrageous."

"I'd like to call all those board members to Congress," he added. "This was a bank that ran amok in order to meet cross-selling obligations. ... We should not let up on this Wells Fargo situation."

On Wednesday, billionaire investor Warren Buffett told CNBC that when one puts a spotlight on a large financial institution like Wells Fargo, they're likely to find something.

"What you find is there's never just one cockroach in the kitchen when you start looking around," the chairman and CEO of Berkshire Hathaway said on "Squawk Alley." Berkshire is Wells Fargo's largest shareholder.

In response to Buffett's comment, a Wells Fargo spokesperson said in part: "Our top priority is rebuilding the trust of our customers, team members, community partners, and shareholders."

CNBC has reached to Wells Fargo for further comment but the company did not immediately respond.

— CNBC's Liz Moyer contributed to this report.

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  Thursday, 31 Aug 2017 | 9:58 AM ET

Wells Fargo: There were nearly 70 percent more potentially fake accounts opened than originally thought

Posted ByLiz Moyer

Wells Fargo & Co. said it uncovered nearly 70 percent more potentially unauthorized consumer and small-business accounts than originally thought after an independent investigation into a sales scandal that erupted last year.

The disclosure on Thursday marks the conclusion of that investigation, the bank said. Earlier this month, Wells Fargo CEO Timothy Sloan warned his employees to brace for more negative headlines, saying the review by an outside firm could reveal a "significant increase" in the number of accounts involved.

On Thursday, the bank said the review of 165 million retail accounts opened from January 2009 to September 2016 identified 3.5 million as potentially unauthorized. That is up from the 2.1 million accounts originally identified in a narrower review that only covered 93.5 million accounts opened from May 2011 to mid-2015.

Sloan said on a conference call early Thursday morning that the bank was now focused on remediation for customers, adding that it cast a wide net in the review and that some of the accounts identified may have been opened legitimately.

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  Wednesday, 30 Aug 2017 | 1:10 PM ET

It's Warren Buffett's 87th birthday: Here's what he and 5 other billionaires were like as kids

Warren Buffett turned 87 years old Wednesday. He's haled as one of the best investors of all time and has earned the affectionate nickname, the "Oracle of Omaha," in a nod to his prescience in business and his hometown. He wasn't born the "Oracle of Omaha," though. He was just a kiddo once, too.

Similarly, Steve Jobs wasn't born on a stage in a black turtleneck and jeans presenting the next innovation from Apple. And little Jeff Bezos didn't hope to run an e-commerce company one day.

So where did they start? Here's what Warren Buffett, Elon Musk, Steve Jobs, Jeff Bezos, Bill Gates and Mark Zuckerberg were doing and dreaming of being when they were kids.

Warren Buffett
CEO of Berkshire Hathaway
Net worth: $77.3 billion, according to Forbes

Buffett has been finding ways to make a nickel since he was very young — literally. In his first money-making venture a six years old, Buffett sold packs of Juicy Fruit, Spearmint and Doublemint for five cents a piece, according to Alice Schroeder's 2008 biography, "The Snowball: Warren Buffett and the Business of Life."

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  Wednesday, 30 Aug 2017 | 12:53 PM ET

Mondelez shares tumble after Buffett says Kraft Heinz isn't interested in buying it

Shares of Mondelez erased earlier gains Wednesday after investing legend Warren Buffett suggested Kraft Heinz isn't interested in buying the snack company.

Mondelez's stock was trading about 0.7 percent higher in the morning. It fell 3.1 percent after Buffett's remarks and was down 1.81 percent midday.

Buffett's Berkshire Hathaway is Kraft Heinz's largest shareholder, owning 26.7 percent of outstanding shares, according to FactSet.

Buffett was asked if Kraft Heinz would be interested in buying Mondelez on CNBC's "Squawk Alley."

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

Analysts have been expecting Kraft Heinz to pursue another merger or acquisition after the company's failed hostile $143 billion takeover bid for Unilever earlier this year. Wall Street has speculated Mondelez could be a possible target. The company was once part of Kraft until it was spun off into a separate snack food company.

A Kraft Heinz takeover of Mondelez is one of the "most logical and likely" large-scale mergers and acquisitions in the food industry, RBC Capital's David Palmer wrote in a May research note. "We believe that Mondelez represents the best chance for Kraft Heinz to achieve global scale after the failed Unilever acquisition."

But Buffett suggested that buying Mondelez wouldn't help Kraft Heinz negotiate with retailers as they fend off the threat from Amazon and Whole Foods.

"That doesn't really help you that much in the fight," he said.

The size of the company selling a brand isn't as important to retailers as the strength of the specific brand, Buffett said. What grocers care about is whether products will sell.

Buffett quashed rumors that Kraft Heinz would go after a Unilever takeover again. He said the first attempt was a "misunderstanding."

"We will not make hostile takeover offers, and we did not intend that to be hostile," Buffett said. "But it turned out it was, and we immediately — the next day when I learned about it — we called it off. It was a misunderstanding."

— CNBC's Fred Imbert contributed to this report.

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  Wednesday, 30 Aug 2017 | 12:35 PM ET

Billionaire Warren Buffett: I've never sold a share of Apple

Billionaire investor Warren Buffett told CNBC on Wednesday that he hasn't ever sold a share of Apple.

"I've never sold a share," the chairman and CEO of Berkshire Hathaway said on "Squawk Alley."

Buffett declined to answer whether he's buying even more, but said, "I certainly was buying last quarter and I don't pay attention to the calendar when I'm buying."

When Berkshire first made an investment in Apple in 2016 a fellow at Berkshire bought about 10 million shares, Buffett said. "And then, I looked at it, and I bought considerably more," he said.

The fellow he was referring to was likely either Todd Combs or Ted Weschler, money managers at Berkshire. But Buffett refused to say which one.

After Jan. 1, 2016, and before Apple reported earnings on Jan. 31, Buffett's Berkshire added almost 76 million Apple shares to its holdings. Asked at the time why, he said, "Because I liked it."

As of June 30, 2017, regulatory filings show Berkshire has amassed 130.2 million shares of Apple.

On Wednesday, the tech giant's stock was around $162 per share and hit a record high shortly after the open.

Based on a $162 share price, Berkshire's Apple stake was worth about $21.1 billion.

Buffett told CNBC he's more certain about Apple's future than IBM.

Berkshire had owned about 81 million shares of IBM at the end of 2016, but sold off about a third of that stake in the first and second quarters of 2017.

"I don't value IBM the same way that I did six years ago when I started buying," Buffett told CNBC in May. "I've revalued it somewhat downward.

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  Wednesday, 30 Aug 2017 | 11:53 AM ET

Warren Buffett: Here's why I haven't been criticizing Donald Trump

At a time when corporate leaders have been highly critical of President Donald Trump over his response to deadly violence at a white nationalist rally in Charlottesville, Virginia, Berkshire Hathaway Chairman and CEO Warren Buffett has remained quiet, telling CNBC on Wednesday he tries not to mix business and politics.

"I'm not in the business of attacking any president, nor do I think I should be," Buffett said in a "Squawk Alley" interview.

Earlier this month, a deluge of CEOs distanced themselves from Trump in the wake of Charlottesville by leaving White House business advisory councils, which were later dissolved.

The tipping point for corporate America seemed to come Aug. 15 when the president angrily doubled down on his original comments about the deadly rally, and again blamed both the white nationalists and the counterprotesters for the mayhem.

Trump's critics felt he put neo-Nazis on the same moral footing as the demonstrators who gathered to denounce their racist views.

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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.