Buffett Watch

  Wednesday, 6 Dec 2017 | 12:07 PM ET

Warren Buffett scores a quick $230 million with DaVita deal

Posted ByLiz Moyer

Warren Buffett's Berkshire Hathaway can finally claim a victory in the health-care sector.

UnitedHealth is paying $4.9 billion for a division of DaVita, the kidney dialysis center operator that counts Berkshire as its biggest shareholder, with a 20 percent stake. The one-day paper profit to Berkshire is more than $231 million.

The deal is for DaVita Medical Group, which operates 300 clinics and a handful of outpatient surgical centers in six states. It will be folded into UnitedHealth's Optum group, which includes pharmacy benefits, data analytics, clinics, surgical centers and home care.

The rest of DaVita will be left to focus on the kidney care business. It says it will use the proceeds of the sale to buy back stock and pursue other investments.

Berkshire began investing in DaVita in 2011. The stock has been a favorite of Berkshire portfolio manager Ted Weschler, who has a personal stake in the medical services company of 2.2 million shares, according to FactSet.

But it hasn't always been a slam dunk. At the end of 2011, DaVita shares traded at about $38, rising to $75 by the end of 2014. But they are down 20 percent since then, closing on Tuesday at $60.93.

DaVita shares jumped more than 10 percent after the deal was announced on Wednesday.

Berkshire has dabbled in health care in the past with mixed results. It was once an investor in UnitedHealth and WellPoint but sold off those shares in 2010, around the time the Affordable Care Act was transforming the health insurance landscape. It also once held a big stake in Johnson & Johnson but pared that back over the years.

The health industry is scrambling to respond to the growing threat of Amazon.com, the e-commerce giant that is said to be exploring a move into the pharmacy business. That potential competitive threat is partly the reason behind CVS Health's $69 billion deal to buy Aetna.

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  Tuesday, 5 Dec 2017 | 5:49 PM ET

New York's Sen. Schumer says BofA stock purchases proof tax reform will fail

Posted ByLiz Moyer
A Bank of America branch in New York.
Scott Mlyn | CNBC
A Bank of America branch in New York.

Bank of America announced Tuesday that it plans to buy back another $5 billion of its stock through the middle of next year, and that is proof enough that tax reform is bound to fail, according to New York Democrat Sen. Chuck Schumer.

The bank had already planned to buy back $12 billion of its shares, and word about the extra purchases helped lift its stock price in early morning trading before it fell back.

Bank of America is buying back the stock, after getting approval from the Federal Reserve for the plan, after generating extra money by selling a U.K. cards business and after Berkshire Hathaway converted warrants to shares.

U.S. banks have been required to get Fed approval for share buybacks and dividend payments since the central bank began stress testing them after the financial crisis to make sure they had enough capital on hand to weather a severe downturn.

But Schumer says the buyback plan just underscores how major corporations are likely to use the tax cuts they are due under the tax reform being pushed by Republican members of Congress. That is to say, they won't be using their windfalls to expand business and create jobs.

"Big corporations can smell the huge tax cut they have coming, and rather than raising workers' pay or hiring new workers, they're buying back stock and prepping huge dividend payments," Schumer said in a statement. "CEOs have made no secret of their intention to spend a coming tax windfall on executive bonuses, stock buybacks and dividends."

A Bank of America spokesman didn't want to comment on the senator's view.

The markets normally view dividend payments and buybacks as a good thing. Bank of America's biggest shareholder, billionaire investor Warren Buffett's Berkshire Hathaway, converted crisis-era warrants into common shares of the bank this summer after the bank boosted its dividend.

Assuming it isn't needed to fund the immediate needs of the business or can't be put to better use acquiring something, buybacks are one way for a company to use extra cash, Buffett said in his annual letter to shareholders this year.

"Both American corporations and private investors are today awash in funds looking to be sensibly deployed," Buffett said in the letter. "I'm not aware of any enticing project that in recent years has died for lack of capital."

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  Wednesday, 29 Nov 2017 | 11:00 AM ET

Katy Perry and Warren Buffett apparently gabbed about cryptocurrency

Posted ByLiz Moyer

If bitcoin's soaring price hasn't convinced you a bubble in cryptocurrency is forming, perhaps celebrity Instagram can.

On Wednesday the pop music superstar Katy Perry posted a photo for her 68 million Instagram followers of her face to face meeting with Warren Buffett, during which she says she asked for the Oracle of Omaha's thoughts on cryptocurrency. The post has more than 111,000 likes so far.

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  Tuesday, 28 Nov 2017 | 11:49 AM ET

Here's who really runs Amazon — and only 2 of the top 38 execs are women

Posted ByEugene Kim
Getty Images | Alex Wong

It's a big week for Amazon.

Cyber Monday and the mass of online shoppers brought another record high in Amazon's stock price, while in Las Vegas, the company's cloud computing business kicked off its annual re:Invent conference.

Amazon's 2017 rally lifted Jeff Bezos' net worth past $100 billion on Friday, and he now towers over Bill Gates and Warren Buffett on the list of the world's richest people.

With so much going on inside Amazon, including the hunt for a second headquarters location, CNBC decided it was a good time to find out who are the power players at this sprawling company.

We tracked down an organization chart, which is available internally but not to the public.

One immediately noticeable fact is that Amazon, like so much of the tech universe, is a company run by men. Specifically white men.

In marketplace, Prime and AWS, or what Bezos likes to call the three pillars of the business, there are 37 people under the CEO who report directly to him — or are one layer removed — with at least the title of vice president. Only two of them are women.

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  Monday, 27 Nov 2017 | 9:05 AM ET

Retail stocks climb on the heels of Black Friday, record Cyber Monday expected

Posted ByLauren Thomas

In the wake of Thanksgiving weekend, what marks the start of the holiday shopping season, retail stocks are rallying on upbeat sentiment around preliminary sales results.

Shares of Macy's, J.C. Penney, Wal-Mart and Target, among others, were all climbing Monday morning.

Macy's stock was up about 1 percent, and Penney's shares were climbing nearly 2 percent. Big-box retailers Wal-Mart and Target's shares increased by less than 1 percent.

"We walked away from the start to the holiday shopping season more bullish than we had anticipated as it appears that roughly 65% of consumers made a purchase (online/store) this year with 15% incremental versus last year with a weighted average spend of $420," Gordon Haskett analyst Chuck Grom wrote in a note to clients.

Apparel retailer Gap, which has already been called out by multiple analysts over the weekend for the strength of its Old Navy and Banana Republic Black Friday deals, saw its stock climb more than 3 percent Monday morning.

"GPS was a traffic winner this weekend, with strength at both Gap and Old Navy," Jefferies analyst Randal Konik wrote in a note to clients. Konik added that Gap remains one of his "top picks for the holiday."

Cyber Monday is now expected to mark the biggest online shopping day in U.S. history, according to Adobe Insights, which measures 80 percent of digital transactions from 100 major retailers.

Online sales are expected to surpass $6.5 billion Monday, an increase of more than 16 percent when compared with last year, Adobe said.

Meantime, Amazon's sales continue to balloon, and GBH Insights has predicted the e-commerce giant rung up as much as 50 percent of all online purchases on Black Friday. Analyst Daniel Ives said Amazon had an "eye-popping" performance, even prior to Cyber Monday.

Amazon shares were climbing around 2 percent Monday morning.

Following a successful Black Friday, Amazon CEO Jeff Bezos' net worth has now surpassed $100 billion. Bezos, the world's richest man, is followed on the list of wealthiest people by Bill Gates and Warren Buffett.

To be sure, many analysts still say there's one retailer neck and neck with Amazon, and it's based in Bentonville, Arkansas.

"Our survey results showed Wal-Mart (when combined with Jet.com) is not only a powerhouse among discount retailers, but in close competition with Amazon when measuring online traffic only," Grom said.

With Monday's gains, the S&P 500 Retail ETF (XRT) has lost roughly 6 percent in 2017.

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  Wednesday, 22 Nov 2017 | 6:14 PM ET

Uber and Infosys co-founders are latest billionaires to join The Giving Pledge

Posted ByLora Kolodny
Nandan Nilekani, current chairman and former CEO of Infosys.
Ramesh Pathania | Mint | Getty Images
Nandan Nilekani, current chairman and former CEO of Infosys.

Uber co-founder Garrett Camp has joined The Giving Pledge, a commitment to give away half of their wealth to charity. So has Infosys co-founder Nandan Nilekani, who signed on along with his wife Rohini.

Camp's net worth is estimated at $5.1 billion while Nilekani's is estimated at $1.7 billion.

The Giving Pledge was created in 2010 by Warren Buffett and Bill and Melinda Gates to encourage the world's richest people to "publicly dedicate the majority of their wealth to philanthropy" while they're still alive.

In a personal blog post announcing his plans, Camp spoke of recent travels to Kenya, where he connected with people living without access to basic services like clean water, food and electricity.

"Beyond just making charitable donations, I [will] also begin spending part of my time on projects where hands-on systems design can create more efficient solutions, and help people who need it most," he wrote.

Camp will be conducting philanthropic research and projects via a new foundation, Camp.org. He told CNBC in an email that the foundation's research is just beginning and its initiatives will ramp up over the next few years.

The Nilekanis announced their commitment in a letter posted to The Giving Pledge website.

"Inequality is increasing sharply in most countries," the wrote. "We see the young and the restless in this interconnected unsure of their future, wanting more but anticipating less...What must the super wealthy do?"

Through the EkStep foundation, the Nilekanis have thus far focused on education. In their statement, they promised to be supportive of "societal platforms," including software that can be used to make a positive impact on those most in need.

According to reports from the Nonprofit Research Collaborative, more than half of the non-profits in the U.S. raise between 50 percent and 100 percent of their money from individuals rather than from foundations and corporations. Most of their largest gifts, however, come after a wealthy donor dies.

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  Monday, 20 Nov 2017 | 10:07 AM ET

Warren Buffett says this quick mental exercise will make you a happier person

Posted ByAli Montag

Warren Buffett is one of the richest men in the world, worth over $75 billion. If money could buy happiness, he could certainly afford it.

But when MBA students at the Ivey Business School at Western University asked Buffett "Are you happy?" his response had nothing to do with money.

"I get to do what I like to do with people that I love," Buffett answered during the 2008 talk. "That is happiness. I am happy day after day after day. How could I be any happier?"

If you're feeling less excited about life than he is, here's a quick exercise that Buffett suggested to the students — that you also can use — as a way to remedy the situation. (Appropriately for Buffett, the exercise uses the stock market as an analogy.)

Here's how it works: First, imagine the people in your life as publicly traded companies — some will succeed and their value will rise, some will flounder and watch their value fall.

"Imagine that I am going to give you an hour, and in that hour, you have to pick one of your classmates to own 10 percent of for the rest of your life," Buffett said.

"Then, when you write that person's name down, I will ask you to list the reasons or qualities that caused you to pick that person." Look for someone you predict will keep gaining value, who you would "buy long," according to Buffett.

Next, Buffett says think about someone who you would "sell short," which means you expect their value to decrease.

Consider the behaviors of the two people you picked and make a list.

"On the one side, you list the qualities of the person who you want to own 10 percent of, and on the other side you list the qualities of the person who you want to short 10 percent of," Buffett said.

When it comes to the person you expect to succeed, "You will find that these are not things you are born with, like the ability to kick a football or sing a high C; they are qualities that you actually generate for yourself," he says. "These are things like generosity, humor, forgiveness — all of the qualities that you admire in other people."

On the other side of the list, "Look at the qualities which turn you off in other people," Buffett said. "If they turn you off of other people — if you have them — you will turn people off of you. Those qualities, you don't have to have. You can get rid of them.

"The thing to do is look at that list and say, 'I want to be like the one I want to own 10 percent of,'" he says. Work on developing the personality of people you admire, while ridding yourself of the qualities you dislike in others.

For Buffett, it works: "The person that does that will be someone that is happy, I guarantee you."

Don't miss: Warren Buffett and Mark Cuban agree this one habit is key to success—and anyone can do it

Like this story? Like CNBC Make It on Facebook!

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  Wednesday, 15 Nov 2017 | 8:22 AM ET

Billionaire investor George Soros dumps large stake in Snap, adds to Amazon

Posted ByArjun Kharpal
George Soros speaking at the 2015 CGI Annual Meeting in New York.
Adam Jeffery | CNBC
George Soros speaking at the 2015 CGI Annual Meeting in New York.

George Soros' investment fund dumped its stock holdings in Apple and Snap in the last quarter while reducing stakes in other major tech giants including Facebook and Twitter, regulatory filings show.

The billionaire investor's hedge fund, Soros Fund Management, sold 1,700 shares of Apple, and 1.55 million of Snap stock in the September quarter. This wiped out the hedge fund's stake in both companies, U.S. Securities and Exchange Commission (SEC) filings released Tuesday revealed.

It's important to note that the fund's holdings in Apple were relatively small, worth just $291,278 at Tuesday's market close.

However the Snap holding is significant. The 1.55 million shares were worth $19.48 million at Tuesday's close.

There is a lot of bearishness around Snap, which has continued to miss earnings expectations and failed to grow its user base significantly. Snap shares are down over 48 percent since it went public in March. Wall Street analysts are also not sold on Snap. The stock has 19 "hold" ratings, nine "sell," and one "strong sell," according to Reuters data.

Soros Fund Management also reduced its stake in Twitter by 5,700 shares. It still holds 18,400 shares of the social media site.

Facebook also fell out of favor with Soros. The investor dumped 367,262 shares of the social networking giant in the last quarter. Soros Fund Management still owns 109,451 Facebook shares.

But not all names in the technology sector were sold off. Soros upped his stake in Microsoft by 99,000 shares and Amazon by 2,500 shares.

The SEC filings only show the change in share ownership of Soros' fund, but no commentary as to his fund's thinking behind the trades.

Major technology stocks have been on a tear this year, although some of the newly-listed names such as Snap have struggled.

Apple, which Soros' hedge fund also sold all its shares in, is up nearly 48 percent year-to-date. Analysts are excited at the potential of the new iPhone X, released earlier this month. Apple shares hit a record high last week.

Soros' position contrasts to Warren Buffett's Berkshire Hathaway, which topped up on Apple shares in the last quarter. Buffett's conglomerate increased its holdings of the iPhone maker's stock by 3.9 million to 134.1 million, a SEC filing released Tuesday showed.

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  Tuesday, 14 Nov 2017 | 4:37 PM ET

Buffett adds to Apple stake, bails further on IBM

Posted ByEvelyn Cheng

Warren Buffett's Berkshire Hathaway bought more Apple shares before their latest jump to all-time highs.

Berkshire also cut its stake in IBM by 32 percent, or 17.06 million shares, in the third quarter, according to a required quarterly filing with the U.S. Securities and Exchange Commission released Tuesday. The stock is the third-worst performer in the Dow Jones industrial average this year, down 10.3 percent.

Buffett's conglomerate increased its holdings of the iPhone maker's stock by 3.9 million to 134.1 million, the filing showed.

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  Friday, 10 Nov 2017 | 11:42 AM ET

Any patient investor can turn $5,000 a year into nearly $1 million, says billionaire Ron Baron

It's wrong for people to think that they have to be wealthy to get rich investing in the stock market, famed buy-and-hold investor Ron Baron told CNBC in a Friday interview.

"You have to have a small amount of money and invest it regularly for a long time, and live to get to be old. That's how you get rich," said the billionaire founder of Baron Capital, which has nearly $26 billion in assets under management. He appeared on "Squawk Box" from the sidelines of his annual investor conference in New York City.

"It's all about compounding," he said, referring to the power of making regular investments and reinvesting the returns over decades.

Baron has made billions of dollars by doing extensive research, buying the stocks of what he feels are undervalued companies, and keeping them for an average of about 14 years. But individual investors don't need to pick stocks, he said. "The simplest thing for people to do is buy an index fund."

"If you invest $5,000 a year for 30 years ... it's worth $890,000" based on historical stock market returns, he calculated.

»Read more

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.