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Quantum hedge fund co-founder and commodity bull says he’s concerned about his long yen position, which he’s held for several years.

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FundWatch: Investor Jim Rogers fretting about yen « In search of 'SELF'

So there’s this guy who’s an investor and he owns a lot of Dell stock and he’d like to see the value of that investment increase greatly so he’s written an open letter to Larry Ellison suggesting that the Oracle CEO should pony up about $50 billion to acquire Dell because it’d be a super-duper bolt-on for Oracle.

This investor has published his open letter on the Motley Fool investment site, whose generic disclaimer says the following: “We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.”

After considering just where this idea would fit in that “diverse range of insights,” I strongly recommend it be filed in a rubber-padded cell in the Absolute Lunacy section. Here’s why:

“But for all your personal and professional success, you have a growing problem,” writes Fool contributor Chris Baines. “That problem is called Hewlett-Packard. HP shipped 17.5 times more servers last year than Sun (which you recently acquired), and is No. 1 to your No. 5. and since when have you settled for being No. 5?”

Baines continues down this dead-end path by adding, “Mr. Ellison, critics are starting to doubt the Sun acquisition because of plummeting market share in servers (now at 6.7%). the company that fired Mark Hurd, unfortunately, also managed to oust IBM as this year’s sales leader. and the trend shows no sign of abating. In the third quarter, HP and IBM grew server revenues by 22.2% and 9% year over year, respectively, versus Sun’s own anemic 0.9% growth.”

Now, I can’t blame this guy for looking for someone—anyone!—to step in and bid up the value of a significant portion of his holdings by 250% (Dell’s market cap is about $19 billion). but pitching Dell to Oracle to boost its commodity-server market share makes about as much sense as asking Warren Buffet to acquire Dell because it would diversify his portfolio.

As Ellison himself said just a few weeks ago in Oracle’s most recent earnings call, “Our goal is to become #1 for both online transaction processing and data warehousing—both of those segments. We are not interested in the low-margins commodity segment of the server business [boldface emphasis added]; we are focused on high-end OLTP, high-end data warehousing, where the margins are good and we can have a highly differentiated product.”

As we reported in Global CIO: Larry Ellison’s 10-Point plan for World Domination, Oracle’s CEO went on to say, “Right now with our Sun servers, our numbers are behind IBM and HP in the high-end server business. We think IBM’s hardware and software technology is quite competitive, while HP’s big servers are slow, expensive and have little or no software value-add. That makes HP extremely vulnerable to market share losses in the coming year.”

And then, as they say on late-night TV ads, “But WAIT—there’s MORE!” Baines then proposes that Oracle shell out the bucks for an even bigger pile of fool’s gold by promising Ellison that the Dell deal will bring him something he dislikes almost as much as he dislikes Microsoft: a big footprint in the PC business!

“And of course with Dell you’re not just getting servers: You’re getting the PC market,” writes Baines. “And who better to help you understand this market than your newest hire, former HP CEO Mark Hurd? do you have any doubt that Mark Hurd, who spruced-up HP, couldn’t work some magic with Dell?”

Well, not to beat a glue-factory-destined horse, but yeah, I think Larry Ellison would have some doubts about that—particularly since he’s got Hurd totally focused on driving sales of high-end optimized systems that sell for hundreds of thousands of margin-rich dollars instead of just hundreds of margin-hungry dollars.

Here’s how Hurd himself described Oracle’s hardware business during last month’s earnings call as he emphasized the point that Oracle-Sun now has a record hardware backlog:

Global CIO: Larry Ellison Should Acquire Dell (And 10 Other Crackpot Ideas)

The world's richest man, Warren Buffet and best investor has endorsed Barack Obama.

Republicans who value of free market economics should have a great deal of respect for Warren Buffet's opinion. he has made his wealth making predictions about good investments. I guess he thinks Barack Obama would be a good investment for our county.

Thanks to iowagner

No he doesn't think Obama would be a good investment, he never said or implied that

Many of us that value a free market and making a living in the free market and even those of us in the securities market do not necessarily have "a great deal of respect for Buffetts opinion".
He shunned the street, and many of those that worked on it, there is not as much respect as you think

Obama is also endorsed by many of the leaders of some terrorist nations, what does this mean.

He's endorsed by many that hate America and Americans, what does this mean

Who knows what lurks in the hearts of evil men. only the shadow knows. he has a plan.

Warren Buffet is no fun but Jimmy Buffet sang "Margaritaville" and he always tickles Elmo. Warren just keeps stacking up his money and sits behind his big desk. Elmo is a Parrothead! Hey, lets go to Key West this summer?

Warren Buffet has been successful in business, but he has always had socialist views. I resepect his good decisions, but I disagree with him politically in every way, and always have. Wealthy does not always mean republican idol any more than ignorant always means democrat.

Didn't he found Family Home Town Buffet?

All you can eat for $9.95, I love that place.

I'll bet he's a great cook.

Does Warren Buffet know which army liberated Auschwitz concentration camp?

As blue blood as any Republican. good to see Dems realizing that being successful without government assistance is an admirable thing.

Yes. we have come a LONG way since the early days of Ronald Reagan.

Even Dems sound Republican!

I feel the same way as when Obama receives any endorsement; I'm elated and he continues to win.

Thanks for the great post.

Obama 2008!

I think it means that he believes that Obama will be very good for not levying taxes on the wealthy- just like an olde skool republican

OR he thinks Obama would be easy to manipulate and control. ALOT of powerful ppl will support the man who can be their puppet you know.

The world's richest man gave away his fortune to those in need so I'd say he's a great judge of character.

Obama/Clinton '08

Again some famous dude trying to influence the elections! I really wish celebs would keep who they support private. Too many make up there minds on who supports who and not the issues!

Well since Warren Buffett has no political credibility then it means nothing. Sure he's famous but so is Paris Hilton and I wounldn't take her advice.

Just goes to show ya! Oh the company he keeps. who cares what Warren Buffet thinks. I just mean I will still vote for Hillary, regardless of who the nominee is.

You can pick your nose, but you cant pick your endorsers. He's got so much money, maybe he feels bad about the rest of the republicans shafting us for the last 8 years

Buffett's just jealous that Betsy Ross dumped him for John McCain.

I wish Mr.buffet could endorse me.

Midin stole the words right out of my mouth…er, fingers.

What do you think about Warren Buffet endorsing Obama?

It is possible to find the stock holdings of investors like Warren Buffet, but is it possible to find any listings of the stock holdings of common investors? Rather than picking stocks to invest in, it seems a good idea to simply pick good investors and invest in the stocks that they do. Alternatively, is there a listing of all stock transactions (buys/sells) which take place every day, including the buyer and the seller?

it is private……………
watch cnn and cnbc..or read the little book that beats the market……..

stock holdings of common investors… no, people have a right to privacy. I have no desire to know your net worth, social security number and bank account numbers, but many bad guys do.
Plus, how can you tell in the "common investor" you pick is a "good investor?" you would have to follow their picks for 10 years or more.
But there is a way to find "good investors" and see how they have done over the years and what they almost currently hold (holdings can be up to 7 months old). Check morningstar, or investment magazines, msn money or yahoo finance or many other sites for actively managed mutual funds that have beaten the total returns of a index fund of that same benchmark. It doesn't have to beat the index every year, just enough to have a better 10 year return. The investment sites also give the top 10 to 25 holdings of the fund. If you want to see all the holdings, ask the fund company to send you the latest annual or semi-annual report.

Only for investors who own more than 5 percent of a company. you can see those in 13-D filings on the sec.gov website. or institutional investors like mutual funds. Yahoo usually lists the top holders for each stock.

Hey Matthew,

I can understand your approach about wanting to follow the best investors.

However, I think that you can do better (yes, better) than these big investors by learning what they do, and applying the strategies yourself as opposed to following other investors.

I'm a big advocate of value investing (the same as Warren Buffett's approach to investing — find great companies to invest in, buy them at the right price, and then sell only when they become overvalued…)

However, one of the most important part of value investing (and why it works) is that it goes COUNTER to the "follow the herd" mentality of what other people do when investing in stocks.

When many investors (especially the big Wall Street firms) are buying and selling to move the market one way or another, sometimes great companies get beaten down unjustly — giving you the opportunity to buy this company at a great discount. The reason you can is because while many people are selling (which is why the stock price is down…), you'll have the opportunity to buy — going counter to the market trend.

Now, many of the best value investors do what I've just described, so it might sound good to just follow their lead. however, there are a LOT of great smaller companies that can yield huge returns through a value investing approach that these big investors will never buy…

Why? because they are small to mid-cap stocks (their total worth is less than $1 billion, some even as low as $100 million…), and if any one of these huge investors came in to buy any portion of the stock, they'd be forced to file a 13-D to disclose that they've acquired 5% or more of the company, and price would shoot to the moon before they'd be able to take advantage of these values…

Even Warren Buffett thinks that the individual investor has a better chance of making huge returns through value investing for just this reason — the independent investor can get into lower valued companies without being noticed and ride the wave when the market corrects itself.

The big name investors can't do this (because they're too big!), and following them would only reduce your ability to really take advantage of what value investing can offer.

Again, following the big dogs isn't a bad idea, but I think a better idea is to learn their approaches and become a truly independent investor (making your own decisions and not following the decisions of other investors).

Hope this helps, and good luck!!

Investors such as Buffet have to disclose most of their holdings due to the huge positions he takes, but the information will usually do you little good as it is not published until well after the fact.

How to find other investors stock holdings?

Jim Rogers is a legendary commodities investor and the chairman of Rogers Holdings. in late 2009, he predicted that the price of gold would increase to $2,300 per ounce within the near future. Though mr. Rogers may love gold, he is not taking any steps to invest in it.

The reason for his lack of action is that gold prices are peaking and anyone making investments at this time will be taking on a big risk. most of the larger investors are taking the opportunity to sell gold now, in order to generate a huge profit. the price of gold is sitting on a market bubble, which can burst at any time, so these investors are getting out while the getting is good.

Most recently, mr. Rogers advised investors to steer clear of the bond market and invest in commodities. He believes that commodities are a safe haven from the volatility in the world economy. He recommended investing in silver rather than gold, based on his mindset of last year that anything rising straight up does not represent an ideal investment. the fact that silver is trading 60 to 70 percent below its peak prices makes it a better investment than gold, which is trading at record highs.

Investors would be wise to adhere to the advice of mr. Rogers because is he well-known for being ahead of the crowd when it comes to investment thinking. He co-founded the Quantum Fund with the iconic George Soros and saw the fund gain over 4,000 percent during a time that the S&P rose not even 50 percent. this Fund is perhaps most well known for earning $1 billion dollars when it bet against the British pound during the early 1990s.

Just because one holds gold already and recognizes its strong potential to increase in price does not mean this precious metal is the favored investment. this is the thinking of commodities investor Jim Rogers and it seems to have served him well so far. Following this line of thought, now is not the time to buy gold coins or make other purchases of the precious metal. Those who have gold holdings may want to start thinking about selling them before the bubble bursts.

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Millions of people have invested money in stock and bond mutual funds over the past few years. Now money is flowing into commodity mutual funds. New funds are constantly being released. Why is this? there are several big trends that people say will drive a boom in the commodities market in the years to come. any investor interested in improving their returns should understand what is involved and serious look into investing in the sector.

For one, remember that famous investors such as George Soros and Jim Rogers have made their fortunes in commodities. This is because the markets are very volatile, and with volatility comes opportunity. And despite the markets being gigantic, there are relatively few players involved meaning there is more chance for pricing discrepancies.

So what are the big trends that are predicted to drive a long bull market in commodities? the developing world. the world has already seen the price of agricultural goods and commodities such as iron ore skyrocket because of China’s growth. but this story has only begun. China is still relatively undeveloped. And there are many countries that are growing very quickly – India’s population is expected to exceed China’s in a few decades. India is growing slower, but this unprecedented growth is expected to greatly increase the demand for basic commodities. the emerging use of ethanol as an energy source will also increase the demand for agricultural goods.

The investment fundamentals are clear: commodities are headed for a big demand. An excellent way to profit off of this are mutual funds.

Why Many People Predict a Boom in Commodities

By SCOTT PATTERSON

The man considered by many to be the greatest investor of all time just had his worst year ever.

But the results released Saturday for Warren Buffett’s company, Berkshire Hathaway Inc., also demonstrate how recently, and over time, the investor has positioned his far-flung empire to weather the financial storm.

Associated Press

Mr. Buffett, in his annual letter, read closely by shareholders and nonshareholders alike, reported Berkshire in 2008 lost 9.6% in book value per share, a common metric Berkshire uses to track performance. that marks the biggest decline since mr. Buffett took over in 1965, when it was a family-run East Coast textile maker.

Mr. Buffett conceded he “did some dumb things.” among them: scooping up shares of oil giant ConocoPhillips when oil prices were near a high and investing $244 million in a pair of Irish banks that hit trouble, resulting in an 89% loss.

Berkshire shares fell nearly as much as the rest of the market last year, indicating that investors are worried about the company’s ability to keep growing. in 2008, Berkshire’s Class A stock fell 32%. This year, the shares are down nearly 19%, slightly better than the Dow Jones Industrial Average.

Yet many analysts were pleased that the decline in book value per share wasn’t steeper. and mr. Buffett’s results also show he has made moves that have paid off and should continue to do so even if economic woes persist, as he predicts.

He limited his exposure to complex and potentially costly derivatives in his reinsurance unit, General Re Corp. he has $24.3 billion in cash that can be used to find bargains in a distressed market. and he’s made several investments in preferred stock of firms such as Goldman Sachs Group Inc. that pay out steady income of 10% or more.

“He’s done a great job to prepare for this,” said Paul Howard, an analyst at Langen McAlenney, a Hartford, Conn., research group, who rates Berkshire a “buy.” “He’s got good businesses that are generating a lot of cash, and he’s going to continue to put that money to work.”

Berkshire’s substantial insurance holdings haven’t needed to take the massive write-downs on toxic subprime securities that have plagued much of the financial industry in the past two years. One reason is mr. Buffett’s longstanding dislike of complex derivatives, which he famously called “financial weapons of mass destruction” in his 2002 shareholder letter and which he railed on again in his latest letter. he pushed General Re, the large reinsurance company Berkshire acquired in 1998, to disentangle itself from a vast web of derivatives — financial instruments tied to the value of other securities, such as stocks or bonds — over the course of five years, winding down its book of 23,218 derivatives contracts at a loss of about $400 million, he said in the letter. the losses may have been far more substantial if General Re had held onto to the contracts, mr. Howard said.

“Upon leaving, our feelings about the business mirrored a line in a country song: ‘I liked you better before I got to know you so well,’” mr. Buffett wrote, referring to General Re’s derivatives book.

Separately, Berkshire took a loss of $5.1 billion in the fourth quarter on several derivatives contracts entered into in recent years. the contracts, essentially insurance policies against long-term declines in U.S. and foreign stocks, expire in 15 or 20 years. Berkshire will have to pay out if the indexes are below where they stood when the deals were struck. the derivatives, whose current estimated value has to be reflected on Berkshire’s books, are one reason the company reported a grim fourth quarter on Saturday — its fifth year-over-year quarterly decline.

The $117 million quarterly gain it eked out in the quarter marked a 96% drop from last year’s $2.95 billion in fourth-quarter net income.

Beyond commenting on Berkshire, mr. Buffett shared his views on the broader economy and financial systems. he doesn’t expect the economy to improve soon but did expect better times, eventually.

“Our country has faced far worse travails in the past,” he said. “Without fail, however, we’ve overcome them.” he declined to draw a correlation between stocks and economics, saying that while he was certain the economy would be “in shambles for 2009,” that “does not tell us whether the stock market will rise or fall.” he credited the government for stepping in with massive assistance last year, saying the intervention was “essential” to avoiding a total breakdown. But he cautioned there could be “unwelcome aftereffects,” such as inflation.

He contended the “investment world has gone from underpricing risk to overpricing it,” which he said is reflected by investor appetite for Treasury bonds. Future historians will comment on the Internet bubble of the 1990s and the housing bubble of the early 2000s, he said, but “the U.S. Treasury-bond bubble of late 2008 may be regarded as almost equally extraordinary.”

Write to Scott Patterson at scott.patterson@wsj.com

Printed in the Wall Street Journal, page C3

Warren Buffett's Berkshire Reports Worst Year Ever

The Snowball: Warren Buffett and the Business of Life
There are many books out on Warren Buffett but this is the first authorized biography. as someone who has read most of what is publicly available on the Oracle of Omaha, I pre-ordered the book on Amazon as soon as I found out about it and started reading it as soon as I received it. The focus of the other books is mostly on Buffett’s stock picking skill; this book delves deeper into the formative experiences and his drive, focus and competitiveness that earned him the largest fortune of the modern era not tied to a particular industry. Other books have chronicled his transition from a pure Graham type investor to incorporating more Phil Fisher growth type approach to investing. as this book makes clear, there is more, a lot more to the Buffett magic than just stock picking. a lot of his value add is from working through difficult situations post-acquisition; and from “Carnegizing” management that is making good choices; you don’t get this influence over the operations of companies without ownership control. Buffet prides himself on being able to make quick decisions on acquisitions but as the book makes clear, he has no crystal ball to avoid nasty surprises like the rest of us. This is well documented in the history of his acquisitions – Blue Chip Stamp (drop in consumer interest), Buffalo News (labor unrest), Berkshire Hathaway (foreign competition in textiles), Coca Cola
(management succession), Salomon Bros. (culture/compensation), General re (off balance sheet derivatives). Buffett makes it through decades of challenges with his reputation for basic honesty and fair dealing intact. Particularly exceptional is his willingness, when Salomon was under fire for fixing Treasury auctions, was to step in as chairman and appear before prosecutors without attorneys present and to forgo accepted legal defenses in resolving the matter.
The book details Buffett’s “elephant bumping” (consorting with celebrities of various types) at great length; too much for my preference but probably will contribute to the commercial appeal of the book. it is also a cautionary tale of the corrosive effect of great wealth on family relationships.

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