September 2014

by admin on September 27, 2014, no comments

HFs are Inappropriate Investments for Providing Retirement and Other Benefits (NYTimes.com)

September 2014

by admin on September 27, 2014, no comments

Millennials are Finally Leaving Their Parents (Fortune)

September 2014

by admin on September 27, 2014, no comments

Employee Group Wants North Carolina Out of Hedge Funds (Pensions & Investments)

September 2014

by admin on September 27, 2014, no comments

Tiger's Julian Robertson: The bubble Is About to Bite (Fortune)

September 2014

by admin on September 23, 2014, no comments

Bubble in Everything, Everywhere Marc Faber (Yahoo Finance)

August 2014

by admin on September 18, 2014, no comments

Sharpe Ratio Strategy Beats Risk Parity Approach Returns (Value Walk)

September 2014

by admin on September 18, 2014, no comments

Chinese Vases Soar 120 Times Past Target to $1.2 Million (Bloomberg)

Sep 8, 2014

by admin on September 11, 2014, no comments

Alibaba: Jack Ma’s Original Sales Pitch in 1999 (YouTube)

Berkshire Stock Hits $200,000

by admin on September 10, 2014, no comments

Berkshire Hathaway’s class A shares hit the price of $200,000 a share for the first time, and the market-cap rises to $328 billion. While Buffett donated much of his shares to charities, he still owns 321,000 shares which are worth around $65 billion.

Scandal: Sokol and Lubrizol

by admin on September 10, 2014, no comments

Announces that David Sokol, a Berkshire Hathaway executive, bought thousands of shares of Lubrizol two months before Berkshire announced a $9 billion deal for the company.

Buffett’s Defense of Credit Agencies

by admin on September 10, 2014, no comments

Claiming, “Very, very few people could appreciate the bubble. That’s the nature of bubbles–they’re mass delusions,” Buffett defends the credit-rating agencies for their role in the US financial crisis.

Best of Warren: Burlington Northern Santa Fe

by admin on September 10, 2014, no comments

Invests $34 billion cash and stock in Burlington Northern Santa Fe expecting the American economy to rebound after the financial crisis of 2007. Despite the slow recovery of the economy, BNSF’s financials surpass its peers’ and the general market’s.

Best of Warren: Dow Chemical Company

by admin on September 10, 2014, no comments

Assists the Dow Chemical Company with the acquisition of Rohm & Haas with $3 billion in 2009. Through this transaction and through his acquisition of Series A cumulative convertible perpetual preferred DOW stock, Buffett becomes the single largest shareholder of the company. The preferred stock has a 8.5% annualized yield, and Buffett has not yet […]

Buffett’s Worst: COP

by admin on September 10, 2014, no comments

Starts buying a large stake in the stock of Conoco Philips (COP) as part of a speculation on future energy prices. The investment, however, turned sour as soon as oil price dropped from its peak. Crude oil price was well over $100/barrel before the crisis, and the price still hasn’t recovered to its prior peak. […]

Berkshire’s Acquisition

by admin on September 10, 2014, no comments

Berkshire Hathaway acquires 10% perpetual preferred stock of Goldman Sachs. Some of Buffett’s index put options (European exercise at expiry only) that he wrote (sold) were at around $6.73 billion mark-to-market losses as of late 2008.

Berkshire’s Acquisition

by admin on September 10, 2014, no comments

Agrees to buy General Electric preferred stock. The terms of the preferred were an option to buy $3 billion of GE stock at $22.25 over the five years following the agreement and 10% dividend (callable within three years).

Buffet’s Best: buys BYD

by admin on September 10, 2014, no comments

Although Buffett is famous for refraining from investing in tech companies, he buys 225 million shares (or 9.9% stake) of BYD, a Chinese battery company that produces environment-friendly cars. The unrealized gain on this investment is reported to be as much as $1.8 billion.

“Buy American. I am”

by admin on September 10, 2014, no comments

Writes an opinion piece published in the New York Times saying, “Buy American. I am.” Berkshire suffered a 77% drop in earnings during Q3 ’08, and several of his later deals suffered large mark-to-market losses.

Buffett’s Worst: Energy Future Holdings

by admin on September 10, 2014, no comments

Invests $2 billion in Energy Future Holdings, a Texas power company, expecting a rise in energy prices, but the national shale gas boom in 2011 and 2012 causes an enormous drop in natural gas prices. The power company files for bankruptcy, and Berkshire Hathaway incurs $873 million pre-tax losses from this investment.

Buffett Announces that he is Looking for a Younger Successor

by admin on September 10, 2014, no comments

In a letter to shareholders, Buffett announces that he is looking for a younger successor or successors to run his investment business. Buffett had previously selected Lou Simpson, who ran investments for GEICO before leaving in 2011. But Simpson is only six years younger than Buffett and now runs a Hedge Fund based in Florida.

Warren Donates to Charities

by admin on September 10, 2014, no comments

Announces that he will give away 85% of his Berkshire Hathaway holdings to five foundations in a form of annual gifts, starting in July 2006. The largest contribution will be to the Bill and Melinda Gates Foundation.

Buys McLane

by admin on September 10, 2014, no comments

Buys McLane, a wholesale distribution business of WalMart, for $1.45 billion. McLane outperforms the market throughout the financial crisis of 2007, as Buffett proudly notes in his 2009 annual report. McLane eventually doubles its earnings by 2012 and continuously expands profit margins.

Berkshire’s Acquisition

by admin on September 10, 2014, no comments

Enters in $11 billion worth of forward contracts to deliver U.S. dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion.

Gen Re

by admin on September 10, 2014, no comments

Became involved with Maurice R. Greenberg at AIG in 2002 and Gen Re provided reinsurance.

Buffett’s Best: PetroChina

by admin on September 10, 2014, no comments

Buys 1.3% of PetroChina as Charlie Munger and Buffett think the company is significantly undervalued. In 2007, due to rising oil prices and PetroChina’s expanding its oil and gas reserves, the market value of the company skyrockets. Buffett decides to sell the stock in 2008, and realizes $3.6 Billion in profit.

Berkshire’s Acquisition

by admin on September 10, 2014, no comments

Berkshire Hathaway acquires CORT Business Services, Justin Industries, Shaw Industries, Benjamin Moore & Company, Johns Manville, MiTek in conjunction with MiTek management, and XTRA.

Speaks at Sun Valley Gathering

by admin on September 10, 2014, no comments

Speaks at the famous summer gathering in Sun Vallley, Idaho at the Allen & Co conference delivering a message that there is no “new paradigm,” referring to the high flying Technology, Media and Telecom stocks. The paradigm soon proves to be a bubble in less than a year.

Warren’s Worst: Dexter Shoes

by admin on September 10, 2014, no comments

Invests in Dexter Shoe Co. as he sees a “durable competitive advantage,” but the advantage vanishes within a few years. Dexter eventually closes its shoe production in the U.S. and Puerto Rico in 2001 and the investment turns sour, causing Berkshire Hathaway a total loss of $3.5 billion.

Buffett: Salomon Brothers Scandal

by admin on September 10, 2014, no comments

Had acquired a 12% stake in Salomon Brothers in 1987. In 1990, a rogue trader gets accused of submitting bids in excess of Treasury rules and the U.S. government puts pressure on Salomon. Buffett quickly steps in and lifts a ban on Salomon’s bidding in government bond auctions. He also steps in to run the […]

Warren’s Worst: U.S. Air

by admin on September 10, 2014, no comments

Buys preferred stock in U.S. Air attracted to high revenue growth. The investment, however, turns sour as U.S. Air cash flow dries up and stops paying its dividends. Even though Berkshire Hathaway eventually made money on the investment, U.S Air almost went bankrupt. Buffett later notes in his 2007 letter that some businesses look appealing […]

Becomes Gillette’s Largest Shareholder

by admin on September 10, 2014, no comments

Becomes Gillette’s largest shareholder with $600 million investment in Gillette preferred: 8.75% dividend, mandatory redemption in 10 years, and the rights to convert into common at $50 a share. In 1995, with the announcement of P&G’s $57 billion deal to buy Gillette, Buffett profits about $645 million in one day and gains roughly $4.4 billion […]

Berkshire Begins Buying Coca Cola

by admin on September 10, 2014, no comments

Begins purchasing Coca Cola. Amid concerns of many Wall Street analysts, who believe that Coca Cola’s market share will stagnate or drop due to competition, declined earnings (-2% from the previous year), and relatively high valuation (P/E ratio of between 14 and 19), Buffett continues to acquire shares of Coca Cola. By 1995, Buffett owns […]

Buffet Pitches to Shareholders to come to Annual Meeting

by admin on September 10, 2014, no comments

Pitches to shareholders to come to Berkshire Hathaway’s annual shareholder meeting. After noting that many of other companies’ annual meetings are useless, he mentions that their annual meeting will prove to be worthwhile, for qualified participants will ask “a wide variety of thoughtful questions.”

Berkshire helps financing Capital Cities’ Deal

by admin on September 10, 2014, no comments

Helps finance Capital Cities’ deal with ABC in return for a 25% stake in the combined company. On March 18, Capital Cities announces $3.5 billion purchase of ABC and surprises the media industry, as ABC was four times larger than Capital Cities at the time.

Berkshire Purchases Capital Cities

by admin on September 10, 2014, no comments

Purchases 20 million shares of Capital Cities at a cost basis of $345 million. As reported in Berkshire Hathaway Annual report in 1996, “On January 4, 1996, shareholders of Capital Cities/ABC, Inc. … and The Walt Disney Company … approved an agreement and plan of merger by and between Disney and Capital Cities. In March […]

Buffett is Nominated on the Forbes 400

by admin on September 10, 2014, no comments

Buffett is nominated for the Forbes 400 for the first time and reaches net worth of $620 million as Berkshire Hathaway ends the year trading at $1,310, rising from $775 at the beginning of the year.

Berkshire’s Acquisition

by admin on September 10, 2014, no comments

Berkshire merges with Diversified Retailing Company and acquires Associated Retail Stores, Columbia Insurance Company, and Southern Casualty Insurance Company.

Antitrus Charges

by admin on September 10, 2014, no comments

Finds himself the target of antitrust charges from the acquisition of Buffalo Evening News. Buffet and the Evening News eventually prevail, but it was a strenuous time and accusations were made that Buffett ignored “gentleman’s agreements” between other parties.

Starts Acquiring Wesco

by admin on September 10, 2014, no comments

Started acquiring Wesco Financial shares since 1972 via Blue Chip with Charlie Munger. In 1973, the two break up a proposed acquisition of Wesco by Financial Corp and then acquire a majority stake in Wesco by 1975. The SEC investigates this deal (and Buffett’s investment practices in general), and extracts a $115,000 payout from Blue […]

Begins Purchasing Shares of Washington Post

by admin on September 10, 2014, no comments

Begins purchasing shares of Washington Post Company (now Graham Holdings). By the end of the year, Buffett owns 1.7 million shares at a cost basis of $11 million. Buffett serves as a board member of the company for 37 years until 2011. In 2013, the investment paid out $17 million in dividends. Berkshire Hathaway reportedly […]

Begins Buying Shares of GEICO

by admin on September 10, 2014, no comments

Begins buying shares of GEICO and continues through 1970s and until 1981 to acquire a 30% stake of the firm with a cost basis of $45.7 million. GEICO buys back their shares and Berkshire Hathaway’s stake grows to 51% by 1990s. During the dawn of 1996, Buffett strikes a deal to acquire the rest of […]

Berkshire, Worst Trade

by admin on September 10, 2014, no comments

The purchasing of Berkshire Hathaway (textile mill) may be one of the worst investments Buffett made during his time. Buffett began buying Berkshire Hathaway shares since 1962 and tried to sell the shares back to Seabury Stanton, the company president, at $13.5 each. However, when the written offer read $13.375, $.125 less than what they […]

Buffett Plans to Retire

by admin on September 10, 2014, no comments

Notifies his partners in a letter that he will be retiring from the investment partnership endeavor. He offers his partners options to maintain their proportional interests in three companies, one of them being Berkshire Hathaway.

Berkshire Acquires Insurance Company

by admin on September 10, 2014, no comments

Berkshire Hathaway acquires an insurance company for the first time: National Indemnity Company and National Fire & Marien Insurance Company. Buffett’s interest in insurance businesses was due to their ability to generate a large amount of cash at near-zero cost of capital, the insurance float, which allowed Berkshire Hathaway to access cheap leverage when investment […]

Buffett Buys AXP

by admin on September 10, 2014, no comments

Observes people using credit cards in their daily transactions and takes a close look at American Express’ “salad oil scandal.” The scandal costed the company approximately $58 million and drove the share price to fall to $35. Buffett recognizes this as an opportunity and changes his investment rules inside the partnership, raising the concentration limit […]

Buffett Becomes Millionaire

by admin on September 10, 2014, no comments

Becomes a millionaire because of his partnerships, which in January 1962 had an excess of $7,178,500, of which over $1,025,000 belonged to Buffett. Buffett merges all partnerships into one entity, Buffett Partnerships, Ltd. Buffett would take 25% of any profits over 6% from this partnership.

Buffett Invests in Sanborn Map

by admin on September 10, 2014, no comments

Reveals that Sanborn Map Company accounted for 35% of his partnerships’ assets, explaining that in 1958, Sanborn stocks sold at $45 per share, $20 dollars cheaper than the company’s investment portfolio of $65 per share. Buffett wins a board seat at the company.

Buffett Buys Home

by admin on September 10, 2014, no comments

Purchases his current house for $31,500. A comparable home sold in his neighborhood today would be worth about $400,000.

Buffet’s Partnership Begins

by admin on September 10, 2014, no comments

On May 1, Buffett forms Buffett Associates, the first investment partnership under his own name with $105,100 from seven family members and friends. Terms of the partnership were as follows: investors received 4% interest on their money, and after the 4% hurdle, Buffet and limited partners shared the profit 50/50. In case of losses, Buffett […]

Ben Graham Closes Partnership

by admin on September 10, 2014, no comments

Benjamin Graham retires and closes his partnership, and Buffett returns to Omaha. Buffett’s personal saving at the time amount to $174,000 ($1.47 million inflation adjusted to 2012 USD).

Ben Graham and GEICO

by admin on September 10, 2014, no comments

Discovers that Benjamin Graham sits on the board of GEICO and takes a train to GEICO’s headquarters in Washington, D.C. During this trip, he meets Lorimer Davidson, GEICO’s Vice President, who becomes Buffett’s life-long friend. After graduation, Buffett offers Graham to work for him for free, but his offer is turned down. He then goes […]

Warren MBA

by admin on September 10, 2014, no comments

Receives a Master of Science degree in Economics from Columbia University where two well-known security analysts, Benjamin Graham and David Dodd, were teaching at the time.

Warren Transfers to Nebraska Lincoln

by admin on September 10, 2014, no comments

Transfers to the University of Nebraska-Lincoln and graduates with a Bachelor of Science degree in Business Administration. His savings reach $9,800 by the time of graduation (over $96,000 inflation adjusted for the 2014 USD).

Warren’s First Business

by admin on September 10, 2014, no comments

Purchases with a friend a used pinball machine for $25 and puts it in a barber shop for profit. Within months, he owns three machines in three locations. He later sells the business for $1,200 to a War Veteran.

Warren’s First Purchase of Shares

by admin on September 10, 2014, no comments

Makes his first purchase of shares by buying shares of Cities Service Preferred. Shares fall to $27 but shortly climb back to $40. Warren and Doris (his sister) sell their stocks, and shortly after, the price hikes to over $200 per share.

Warren Buffett Borns

by admin on September 10, 2014, no comments

Born in Omaha, Nebraska as the second child and only son in the three children household of U.S. congressman, Howard Buffett.

August 27, 2014

by admin on September 3, 2014, no comments

Housing Proof of Shrinking Wealth in America (Bloomberg)