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Archive for June, 2010

ONE of the unlikeliest books of last year was “Only the Super-Rich can Save us!”, a fictional account by Ralph Nader, a veteran left-wing campaigner, of a movement of billionaires led by Warren Buffett and featuring, among others, Ted Turner, George Soros and Barry Diller, who use their fortunes to clean up America. This was not, as you might suppose, a satire but what Mr Nader called “an exercise in practical Utopianism”. he even met Mr Buffett to urge him to take up the challenge.

Perhaps the Sage of Omaha, as Mr Buffett is known, was listening. on June 16th, with Bill Gates and his wife, Melinda, he launched a campaign to persuade America’s billionaires to give away much of their fortunes. they are invited to take the “giving pledge” by writing a public letter promising to donate 50% or more of their wealth. Mr Buffett himself has written the first, which is published on a website, givingpledge.org. he says he will ultimately give away 99% of his wealth, most of which he has already pledged to the Bill & Melinda Gates Foundation. Although the letters will not be legally binding, they are intended to create a moral obligation which will be reinforced by peer pressure from others who take the pledge—a bit like members of Alcoholics Anonymous who promise to stay off the booze.

The idea took shape at a secret meeting in new York in may 2009, where Mr and mrs Gates and Mr Buffett were joined by David Rockefeller, at 95 the elder statesman of philanthropy; Michael Bloomberg, the city’s billionaire mayor; Mr Turner; Mr Soros; and Oprah Winfrey, among others. It was refined over subsequent dinners in new York and San Francisco.

Since giving up his day job running Microsoft to work full-time at his foundation, Mr Gates has turned into an evangelist for giving, both by the wealthy and the broader public. just as he sought out Mr Rockefeller for advice when he began giving on a large scale a decade ago, would-be philanthropists are now turning to Mr Gates. they include the new rich from the developing world. Mr Gates has hosted dinners in China and India, and predicts that India will become second only to America in its high-end philanthropy.

One carrot for those who take the pledge will be an invitation to what is expected to be an annual “Great Givers” summit. Although Mr and mrs Gates and Mr Buffett say they have no agenda other than encouraging giving, it would be surprising if the summit did not look at how to be an effective giver. The Gates Foundation has an obsession with achieving demonstrable change with its money.

The new campaign comes at an interesting time for the rich in America. thanks to Wall Street’s leading role in causing the economic downturn, bashing wealthy businesspeople is back in fashion. even Mr Buffett has been given a tough time over his investment in Moody’s, a credit-rating firm that approved lots of dodgy mortgage securities. There is every chance of higher taxes, though due to the oddities of George Bush’s tax reforms, for 2010 only America has no inheritance tax (making this, in the words of Mr Gates’s father, an advocate of inheritance tax, “throw momma from the train year”).

The financial crisis also caused many wealthy people to slow down their giving, though their financial health has bounced back far more than that of the average American family. so far, four other tycoons (all well-known philanthropists) have publicly agreed to take the pledge: Eli Broad, a Los Angeles billionaire; John Doerr, a Silicon Valley venture capitalist; John Morgridge, a former boss of Cisco Systems; and Gerry Lenfest, a media entrepreneur. more are promised.

Mr Gates reckons that only about 15% of the wealthy currently give away large amounts of their fortunes. Half of the total net worth of the American billionaires on the 2009 Forbes 400 list is over $600 billion. so there is plenty to play for.

Keeping up with the Gateses

Are the prices of Philippine stocks dependent on Wall Street or the Dow Jones Index? because I read in news that prices in Philippine stock rises or falls because prices in Wall Street or the Dow Jones index rose or fell.

What is the relationship of the Philippine Stock Market to Wall Street and the Dow Jones Index?

A couple I know say the Wall Street mess is a result of “Greenspan raising interest rates 16 times in 2 years” and not sub prime preadtory lending. Her brother is a realator, which is my suspicion of this slant. Greenspan was the Fed chairman for a long time and very respected, so there has to be 2 sides to this story……why did he raise interest rates so many times? Aren’t these problems intertwined?

Are my friend’s right about the Wall Street mess being Greenspan’s fault?

I mean he uses Berkshire Hathaway’s money to purchase the stocks, so who technically owns the stock, Buffett or Berkshire since a corporation is a seperate legal person?

Does Warren Buffett own all the stock of all those companies he buys?

http://www.moneyweek.com/file/49505/why-now-might-be-the-time-to-invest-in-taiwan.html

he and Geoge Soros used to run a fund.

Jim retired at 37 after making 100 x is money

in commodities .

Who is JIM ROGERS and where is he investing today ?

Wait for it. Jim Rogers is… *gasp* bullish on commodities still! Now, who would have ever guessed that?! On a serious note, he still is adamant that 1999 was the start of the commodity bull market and he is bullish on the prospects. What’s interesting is that he fully admits it will be a bubble at some point, but he’s not worried about that right now as that’s a ‘way’s off.’ this interview comes after we saw Rogers recently start some short positions as he wagers the market is overdue for a correction.

Of course he also thinks gold is going up and he expects it to be at $2,000 at least by the end of this decade, if not higher. In the past we’ve posted up plenty of hedge fund research on gold, all of which we recommend checking out. he recently sat down with Bloomberg to discuss his most recent thoughts on April 7th. If you come to the site, below you’ll find an embedded video of his quick interview:

So, he’ll continue to ride the longer term trend that he feels is in-tact here. Rogers isn’t a big believer in market timing and he’ll gladly wait out the trend over the long-term. we check in on Rogers from time to time just to see what he’s saying, but he appears in the media quite often, re-iterating a lot of his views anyways. Keep in mind that Rogers and George Soros previously managed the highly successful Quantum Fund and have since gone their separate ways. Head over to see Rogers’ recent rationale for starting short positions as well as our coverage of George Soros’ hedge fund portfolio.

Jim Rogers Still Bullish on Commodities ~ market folly

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Short-sellers and hedge funds may be shadowy, but sometimes they are the smartest ones in the room. They’ve done their homework, and they’re willing to bet their capital against the crowd — an investing strategy that can be as lucrative as it is contrarian.

On Motley Fool CAPS, we also have investors who find the chinks in a company’s armor and correctly call its fall. our “Underdogs” have earned 100 or more CAPS points by correctly predicting that one or more stocks would underperform the market. However, we’re going to focus on the stocks these members expect will outperform the market. If these CAPS investors have scored big by correctly predicting which stocks will fall, it may be worth our while to see what they think will succeed.

Underdog

Member Rating

Company

CAPS Rating
(out of 5)

anthrobabble

Boeing (NYSE: BA)

wstimson

InterOil (NYSE: IOC)

GoodOleRebel

Wal-Mart (NYSE: WMT)

Not every short sale goes as planned, making shorting a risky proposition. Stock prices can be irrational longer than you have money to stay in the game. so don’t use this as a list of stocks to sell or buy — just the launching pad for further research.

Underdogs still wag their tails
We might be on the brink of a double-dip recession, under the weight of government debt, and dealing with high unemployment, high oil prices, and consumers afraid to spend. Who’d have thought the one industry expected to be profitable this year is airlines? Yes, the industry Warren Buffett has advised us to avoid like the plague.

According to the International Air Transportation Association, the airline industry is looking at a $2.5 billion profit in 2010 — a 180-degree turn from the $2.8 billion loss the trade group predicted just two months ago.

Obviously, this is a very fluid situation, but American Airlines parent AMR (NYSE: AMR), Delta (NYSE: DAL), and Southwest all reported surprising revenue gains in their latest quarter. the anticipation level is high enough that Boeing saw fit to boost its production calendar above and beyond the orders from its list of international clients.

CAPS member surfnskate isn’t so sure the buildup is worthwhile because there are just too many factors, domestic and international, that could change the situation dramatically.

So I know I’m going against the crowd…but hear me out. Dollar is getting stronger and this has a negative effect on their exports. Increased competition from Europe and weaker euro will also take away from their sales. Reduced defense spending. the outsourcing problems for the dreamliner aren’t done…perhaps they are done in the development stage but not production stage…meaning more M&a they didn’t really want or need in order to control the supply line. Management keeps changing timelines…and they aren’t done.

A dose of reality
They say the best revenge is living well, and InterOil and its investors have been doing just that. even though shares are down 34% year to date, they’re up more than 95% over the past year. the company reported hitting the top of its Papua New Guinea reservoir at a level higher than anticipated, causing it to increase its estimates of just how large the pocket is. It’s also planning to build a major liquefied natural gas (LNG) export facility in Papua New Guinea, fortuitous because ExxonMobil (NYSE: XOM) is also building a LNG plant there. And Japanese conglomerate Mitsui has agreed to fund and operate InterOil’s Elk and Antelope fields.

Yet some maintain that things still aren’t going as well as they say: the Mitsui partnership is really one more akin to banker and borrower, and drilling beyond the initial objectives, as recently announced, suggests they didn’t really find what they were after.

CAPS member maestro43 hasn’t been swayed by the critics, believing InterOil’s assets will ultimately pay off.

Regardless of what the detractors and shortsellers say, [InterOil] has tremendous assets and strategic positioning to market them. Within 4 years market cap should be in the neighborhood of 25 Billion.

A golden opportunity
Continuing its quest to be where America shops for all of its needs, Wal-Mart reached an agreement with Eli Lilly to sell its insulin brand Humulin, with free rein to set pricing on it. It’s yet another shot at pharmacy chains like CVS Caremark (NYSE: CVS) as Wal-Mart tries to draw consumers who may otherwise shop at CVS.

Highly rated CAPS All-Star nibs61 says Wal-Mart’s commitment to rolling back prices makes the business undervalued.

The CEO is going after business with pricing and this will be just what they need as to get their loyal customers coming back again and again in these tough economic times. they also said they will be hiring over 500,000 people in the coming few years and this sounds like a growing company to me.

There’s no need to fear …
Underdogs often shine brightest with their backs against the wall. Still, it takes more than a few All-Star picks and a quick paragraph to make buy or sell decisions. start your own research on these stocks on Motley Fool CAPS, where your opinion can still save the day. while there, you can read a company’s financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock’s CAPS page.

These Underdogs Are No Dogs

Sites other than Rediff, Moneycontrol etc. they are updating after some hours.

Could you pl. suggest sites for indian stock market which update corporate information quickly?

We are pleased to present the following exclusive interview with legendary international investor, best selling author, adventurer and family man Jim Rogers, Chairman of Rogers Holdings and founder of the Rogers International Commodity Index (RICI). Hera Research Newsletter (HRN): thank you for speaking with us today. Let’s start with the world reserve currency. what do you think about the International Monetary Fund (IMF) replacing the US dollar as the world reserve currency with Special Drawing Rights (SDRs)?

Complete story »

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Interview: Jim Rogers on Currencies and Inflation

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Watch for the sparks to fly Wednesday as the Fiscal Crisis Inquiry Commission turns its focus on the credit rating agencies, which many believe played a key role in the near collapse of the U.S. economy.

Financier Warren E. Buffett, chairman and chief executive officer of Berkshire Hathaway, and Raymond W. McDaniel, chairman and chief executive officer of Moody’s Corp., will be among those called to testify during the FCIC hearing.

According to Fortune magazine’s Carol Loomis, who is Buffett’s long-time friend, the editor of his newsletter and a shareholder, the financial giant refused invitations to voluntarily testify before the commission. Gary Cohen, the FCIC’s general counsel, confirmed Buffett was issued a subpoena to testify.

Still one of Moody’s biggest shareholders, Buffett began selling off his interest in the rating company last summer.

While most of the commission’s hearings have been held in Washington, D.C., Wednesday’s will be held at The new School in new York City.

The bipartisan commission, which was created by Congress, is headed by Democrat Phil Angelides, California’s former state treasurer, and former Republican Congressman Bill Thomas of Bakersfield, Calif.

In an interview with Dianne Hardisty, which appeared in The Bakersfield Californian in December, on the eve of the commission’s first major hearing, Thomas was highly critical of credit rating agencies in providing a false sense of security around risky investment schemes.

“What really happened was that all these large banks were carrying these strange instruments of consolidated mortgages. And all of a sudden they weren’t worth that much,” Thomas told Hardisty. “Well, how much were they worth? We didn’t know for sure. Moody’s gave them a triple-A rating so they could sell them to other people. But if you look at the rating game, you pay for the rating. so you end up hiring one of the firms that gave you a triple-A.

“It’s a lot like what happened to the accounting firms that recommended how and where you invested your money, and then went over the books and, guess what, they concluded that was a great place to invest your money. except it blew up. you can’t have people on both sides of a ledger when they are carrying out a function,” Thomas said.

“People were buying triple-A ratings. maybe they weren’t triple-A. maybe they were junk. Banks had these on their books and they didn’t know if they were worth anything. it wasn’t that they didn’t have enough money. They just didn’t know what they had.”

This week, New York Times columnist Ross Sorkin likened the system to restaurant reviews.

“Restaurant reviews might seem suspect if they were paid for by the restaurants being reviewed,” Sorkin wrote. “But that is essentially how things work in the credit rating business. Even now, after all we have learned, Moody’s, S.&P. and Fitch are still paid by the banks and companies whose securities they evaluate.”

During his December interview, Thomas noted that commissioners “are not out to embarrass people. We are out to find the facts. as the facts come out, a number of people will have to be embarrassed because they were in positions of responsibility and didn’t do what people in these positions should do.”

Commission Chairman Angelides told Fox Business’ Charlie Gasparino last week that so far, the vast majority of information the FCIC and its staff of about 40 investigators have found doesn’t fall into the “illegal” category.

“Most of what we see is not illegal activity,” he said. “What we are seeing is something that is actually more profound. These guys didn’t think they were doing anything wrong because of the use of risk to make money was universally celebrated on Wall Street.”

When the commission reaches its Dec. 15, 2010, deadline, the goal is to leave Americans with a book to explain what happened and a yard stick to measure the efforts of this Congress and future Congresses to fix the problems, said Thomas.

About the author: Dianne Hardisty retired as The Bakersfield Californian’s editorial page editor in 2009. She now is a freelance writer in Bakersfield specializing in business and government issues.

Moody's, Warren Buffett on FCIC hot seat Wednesday