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Posts Tagged ‘warren buffett’

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?

Billionaire investor Warren Buffett plans to distribute more than $30 billion of his stock to the Bill and Melinda Gates Foundation.

Buffett, 75, plans to commit 10 million class B shares of his company, Berkshire Hathaway, to the Gates Foundation. They will be distributed at a rate of 5 percent of the balance annually. Based on the current value of the stock, Buffett’s commitment is more $30 billion, which doubles the size of the funds available to the Gates Foundation.

The Gates Foundation will ultimately receive 85 percent of Buffett’s personal wealth, rather than the investor’s three children or the foundations that they run.

“My kids were elated when I told them (about the Gates Foundation donation). They knew my views on inherited wealth and shared them,” Buffett said during a press conference on Monday. “I believe in equality of opportunity…They should not inherit my position in society, based on the womb that they were born from.”

Buffett, a long-time friend of Gates, said he chose to allocate the bulk of his wealth to the Gates Foundation after becoming familiar with the organization and the results it had achieved, based on dollars invested.

“The results are terrific,” Buffett said.

The Gates Foundation focuses on global health issues, such as the GAVI Alliance to distribute vaccines to children in poor countries, and education, such as the United Negro College Fund Gates Millennium Scholars Program.

“We’ve known Warren since 1991, and it is his view that wealth should go back to society that got us thinking of our own foundation,” Gates said during the press conference.

While Buffett will serve as a director on the Gates Foundation, he said he prefers spending his time as a professional money manager at Berkshire Hathaway and leaving the details of investing his charitable contributions to others.

When investing, Buffett said he seeks companies that are easy to understand. but the billionaire noted that philanthropy is the opposite. he said it requires a willingness to take large risks to fix complex problems that others have likely failed trying to solve.

The Gates Foundation not only faces that challenge but also the challenge of doubling the level of its funding to charities.

“It’ll be a big challenge to make sure we’re using the money in the right way,” Gates said. “We’ll be giving away (a combined) $3 billion a year and will do our best to make sure all the money is well spent.”

The Gates Foundation plans to delve deeper in its existing areas of focus, Melinda Gates said during the press conference. It will also possibly expand into other issues, such as microlending in order to help poor regions become more self-sufficient in agriculture and biotech, she said.

She added that despite Buffett’s financial commitment, the Gates Foundation will continue to partner with other charitable foundations to maximize financial resources and lessons learned. the Gates Foundation, for example, works with the Michael and Susan Dell Foundation to invest in Texas schools, as well as the David and Lucile Packard Foundation to deliver medicines in India.

Buffett’s financial commitment to the Gates Foundation is also contingent upon either Gates or his wife remaining actively involved in the organization. Earlier this month, Gates announced that in two years, he will be stepping down from his daily involvement with Microsoft as its chief software architect, in order to concentrate on the foundation full-time.

Reuters contributed to this report.

Buffett pledges $30 billion to Gates foundation

How does an average Joe find out what stocks Warren Buffett is investing in lately?

In a day of important talking, Warren Buffett trumps President Obama.

The president is traveling to Pittsburgh to give an update on the state of the economy. last year, he promised to work to rebuild the economy on a “solid foundation.” Yet it’s an economy amazingly like George W. Bush’s, except for the lack of a housing bubble and the illusion of growth. oh, and millions of unemployed and underemployed people. To be fair to the president, events are increasingly out of his control. But we might have more confidence if his chief economic advisers were not members of the Wall Street elite.

The more interesting words might come from Buffett as he testifies before the Financial Crisis Inquiry Commission on the rating agencies and the financial crisis. He owns a sizable piece of Moody’s but, according to WSJ Deal Journal, he’s been reducing his stake in recent quarters. In live blogging, Buffett is continuing to say that the ratings agencies were among the many who missed the bubble (hmmm). Still hoping for some of the vinegary honesty of which the Oracle of Omaha is capable. this was the man who called derivatives “financial weapons of mass destruction” in 2003. Apparently the memo didn’t get to Moody’s.

The reality is the credit agencies, to enhance their profitable relationships with investment banks and other playerz, failed in their ostensible role as impartial raters of risk. like the regulators, they were far too cozy with the old order and its swindles. when average financial journalists understood the problems the economy faced in 2005-2006, it didn’t take high-paid geniuses at Moody’s to figure it out, or at least voice it. more than investors paid the price.

Zipcar wants to driveA demolition derbyAlso called Wall Street

When rating agencies attack: Warren Buffett's cred is on the line

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By Mark Hulbert, MarketWatch

ANNANDALE, Va. (MarketWatch) — the stock market’s extraordinary volatility of late brings to mind Warren Buffett’s classic line that one of the primary purposes of stock market forecasters is to make fortune tellers look good.

/quotes/comstock/10w!i:dji/delayed DJIA 10,137, -122.36, -1.19%

Take Tuesday: the Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (DJIA 10,137, -122.36, -1.19%) at one point early in the session was down nearly 300 points, raising fears of a waterfall decline similar to that seen in the Fall of 2008, following the bankruptcy of Lehman Brothers.

But then Dow the rallied, finishing the day down just 23 points. the S&P 500 index /quotes/comstock/21z!i1:inx (SPX 1,089, -13.65, -1.24%) actually eked out a small gain.

Does that mean the short-term direction of the market has now turned up? Or does it mean that the bear is just taking a break, and will shortly return in full force?

Of course, no one knows for sure.

Given how difficult it is to forecast the stock market’s short-term direction at any time, much less now, you might imagine that it is even more difficult to forecast the market’s direction over longer periods of time.

Ironically, however, that may not be the case. Statisticians tell us that it is less hard (note I didn’t say easy) to predict the market’s return over the next six to 12 months than it is to forecast its return over the next day. and it’s even less difficult still when the forecast horizon extends to longer periods of time.

Consider an econometric model maintained by Sam Eisenstadt, the former research chairman at value Line, inc. /quotes/comstock/15*!valu/quotes/nls/valu (VALU 19.80, 0.00, 0.00%) , the author of the famed value Line stock-ranking system, and a rigorous statistical student of the stock market for over 60 years. he reports that his model sports an impressive track record back to 1952 in forecasting six-month returns. (Its r-squared, for the statisticians among you, is 0.3).

Or consider another econometric model with similar statistical success devised by Norman Fosback, editor of Fosback’s Fund Forecaster and formerly head of the Institute for Econometric Research. His primary trend model focuses on the market’s returns one to five years into the future, but makes no predictions about the market’s shorter-term movements.

What are these two models saying right now?

Interestingly, both are quite bullish. Eisenstadt tells me that his model is currently forecasting a 20% return for the S&P 500 index /quotes/comstock/21z!i1:inx (SPX 1,089, -13.65, -1.24%) over the next six months. Fosback reports in the latest issue of his newsletter that his model is forecasting a 26% total return for the stock market over the next year and a 75% five-year return (equivalent to around 12% annualized).

Note carefully that, just because these models have good track records, there is no guarantee that they will be right. An r-squared of 0.3, for example, even though statistically quite impressive, still means that the bulk of the stock market’s returns over any given six-month period cannot be explained or predicted by the model.

Nevertheless, we should remember their past success when we are tempted to throw up our hands in despair at predicting the stock market’s daily ups and downs. We don’t have to be good at forecasting those gyrations in order to do very well, thank you, in predicting the market’s longer-term trend.

Mark Hulbert is the founder of Hulbert Financial Digest in Annandale, Va. he has been tracking the advice of more than 160 financial newsletters since 1980.

Longer term in focus

Lucas Remmerswaal is a man on a mission – a mission to change the way a whole generation approaches its finances.

But how does a Whangarei investment adviser and father-of-six plan on doing that? By writing children’s books inspired by the ideas and principles of American billionaire investor and philanthropist Warren Buffett – the world’s third wealthiest man.

Remmerswaal is in the process of producing an illustrated book for five-year-olds, another for 12 year-olds and a teaching aid for parents and teachers.

The books, both titled The 13 habits that made me $48 billion, inspired by Warren Buffett, have been illustrated by Australian artist Annette Lodge, who has published a number of her own children’s books.

Remmerswaal says he has invested $64,000 in the project so far.

“All our money outside the family home is invested in this project.”

But before approaching publishers, he wants to get Buffett involved, as he says that will be the key to his plan of launching the books on the Oprah Winfrey Show.

It’s a big dream – Buffett is bombarded by hundreds of unsolicited emails and calls every day, and has a loyal personal assistant whose job mostly involves fending off unwanted inquiries. But Remmerswaal hopes the books will help avoid another global financial crisis.

“Everyone did it wrong,” he says, referring to the greedy business practices that led to the recession. “Two billion dollars worth of retirees’ savings wiped off the face of the earth, just in new Zealand.

“I’m just a poor house husband that’s put his life savings on the line because I want to create a change from that Petricevic and Bryers thinking to Buffett thinking.”

He says financial gain is only a small part of his reason for starting the project, and if it is successful, he plans on donating much of the money to the Success for Students charitable trust that he set up with his neighbour.

The Buffett project has received high praise from education royalty – national standards specialist Professor John Hattie from the University of Auckland, who met Remmerswaal last week, and viewed the drafts of the books.

“I think he’s onto a winner and I think it’s a stunning project,” says Hattie. “The artwork alone is incredibly impressive, and that alone will engage young kids.”

Remmerswaal could be described as a Buffett obsessive. He has researched the Omaha, Nebraska-based businessman intensely since the late 1990s. He recently spent a week in Omaha trying to get a meeting with Buffett, to introduce him to the project, but to no avail.

Apparently, Buffett doesn’t answer his door to strangers.

There’s nothing particularly strange about Buffett fanaticism. There are thousands of “disciples” of the so-called “Oracle of Omaha” around the world. The annual shareholder’s meeting for his company, Berkshire Hathaway, fills an arena.

Despite being one of the richest companies on earth, the offices of Berkshire Hathaway occupy just a single floor of a modest office block in Omaha. Buffett, renowned for his frugality, employs only a handful of staff.

He reportedly gives 85 per cent of his net wealth to the bill and Melinda Gates Foundation and family charities, and lives in a humble home – not even the biggest in the street – in a suburb of Omaha.

Remmerswaal says he has read every chairman’s letter Buffett has released since 1977, as well as countless biographies on the billionaire.

There is much to be gained from the information contained in those letters and books, he says, but people are put off reading them because they think they are complicated. “All I’ve done is translated [the letters and books] for 5-year-olds, for 12-year-olds and for parents and teachers,” he says. “I’m just a foreign language translator, that’s what I’m doing here.”

Next month Remmerswaal heads back to Nebraska to join the hordes at the Berkshire-Hathaway annual shareholders meeting. He will again attempt to make contact with Buffett.

The clock ticks mercilessly for Remmerswaal – he wants the book to be launched on August 30 to coincide with Buffett’s 80th birthday. He has four-and-a-half months to get Buffett, and then Oprah, on board.

Hattie says there is much Kiwi kids can learn from the ideas in the Buffett books. “The message isn’t so much about Warren Buffett, it’s about key behaviours and key attitudes and Lucas is using [the books] as a medium,” he says.

By Christopher Adams

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The fight against HFT, and intraday speculation just got serious. According to the WSJ, Warren Buffett, together with John Bogle and 25 others, have endorsed a petition that focusing on speculative stock gains “hurts the economy and may require regulation.” from the statement:

“We believe that short-term objectives have eroded faith in corporations continuing to be the foundation of the American free enterprise system, which has been, in turn, the foundation of our economy.”

Some proposals endorsed by Buffett et al:

To encourage investors to take the long view, the statement suggests that the government could change the tax-code to reward long-term holders over short-term holders – by, for example, setting capital gains tax rates that get gradually lower the longer an investor hangs on to a companies shares. Additionally, fund managers should act in the long-term interests of the investors whose money they manage – something that, the statement argues, fiduciary duty stipulates they do. Finally, activist investors who take large stakes in a company should be required to disclose when they have entered into derivative contracts to hedge away risk.

Of course, proponents of all things angelic brought to you compliments of some 1,000,000 shares a second HFT algo, will, as always, scream against this proposal, and retort with the usual defense that no matter how many million dollars one stock of Citigroup may cost, the precious, precious liquidity would simply go away if anyone dared to tax away even one microcent of HFT’s winnings.

Yet, for the good of this country, the opinions of investment luminaries such as Buffett may hold a little more sway in the grand scheme of things.
Well, it’s a tax and disclosure policy proposal.

What do you think of this Warren Buffet tax proposal?

Warren Buffett bashes gold every change he gets and says he will never invest in it, despite gold’s incredible performance. You would think “the world’s greatest investor” would have picked up just a little bit of it over the years, or at least bought a gold stock. Buffett did invest in silver briefly, buying at $5 and selling at $8, using it as a commodity play. Damon Vickers has an incredible track record, is connected to the “elite” and freely talks about the truth on shows like Alex Jones. However, Damon’s philosphy is opposite of Alex, Damon seems to welcome the “NWO” that Alex despises. Search “Damon Vickers” on youtube.

Why does Warren Buffett always bash gold? | Warren Buffett News

The cult of personality that surrounds Warren Buffett (all the “Oracle of Omaha” talk, etc.) has expanded and diversified over the years to such a degree that it rivals the performance of his company, Berkshire Hathaway. and while he’s been the subject of scores of books—including Alice Schroeder’s 2008 authorized biography “The Snowball”—the latest book news out of New Zealand caught our eye.

Lucas Remmerswaal, an investment adviser from the city of Whangarei, recently traveled to Nebraska to in an attempt to get Buffett’s blessing for a pair of illustrated children’s books he’s been writing—one aimed at five-year-olds, the other at twelve-year-olds—based on the billionaire’s no-nonsense investing principles and expansive generosity. though he failed to meet the man he calls his hero, Remmerswaal remains undeterred; he’ll be headed back to Omaha for the Berkshire shareholder meeting in may, hoping to convince Buffett to partner with him and Oprah Winfrey (also not yet attached) to teach sound financial skills to the youth of the world. it may sound a little hokey (hell, it may be a little hokey), but Remmerswaal insists that Buffett’s core values transcend economics and are simple enough for kids to understand.

Perhaps Buffett should cut out the middleman here, though, and take to writing his own children’s books. After all, his yearly letter to shareholders is rightly seen as a modern iteration of the folksy almanac, full of clear, charming prose and general good sense. see, for example, how he describes a business failure, in this year’s letter:

And now a painful confession: Last year your chairman closed the book on a very expensive business fiasco entirely of his own making.

For many years I had struggled to think of side products that we could offer our millions of loyal GEICO customers. Unfortunately, I finally succeeded, coming up with a brilliant insight that we should market our own credit card. I reasoned that GEICO policyholders were likely to be good credit risks and, assuming we offered an attractive card, would likely favor us with their business. we got business all right—but of the wrong type.

Our pre-tax losses from credit-card operations came to about $6.3 million before I finally woke up. we then sold our $98 million portfolio of troubled receivables for 55¢ on the dollar, losing an additional $44 million.

GEICO’s managers, it should be emphasized, were never enthusiastic about my idea. they warned me that instead of getting the cream of GEICO’s customers we would get the – - – - -well, let’s call it the non-cream. I subtly indicated that I was older and wiser.

This passage shows how honesty, wit, and charm can put some shine on a piece of bad news, and has the soothing tone of a good bedtime story. Still, “credit risks,” “pre-tax losses,” and “troubled receivables” might be a bit over the heads of little Janey and Jimmy.

We haven’t gotten a look at Remmerswaal’s books, but if he were to partner with Buffett, he’d have access to some of Berkshire’s kid-friendly brands to spread the gospel. and if children respond to anything these days, it’s branding. take these examples:

• Berkshire has controlled Geico since 1996. for years, the company’s ubiquitous gecko has been filling children’s heads with the mantra: “Fifteen minutes can save you fifteen per cent or more on car insurance.” why not get them repeating something about the genius of compound interest?
• From Buffett’s old-thyme favorite, the Dilly Bar, to the more crass and caloric Blizzard, a treat from Berkshire-owned Dairy Queen might get children singing the praises of sound, independent management.
• Berkshire owns significant shares of Coca-Cola. If Coke can convince kids that polar bears drink soda, then surely it can sell the idea that predictable business models outweigh flashy trends.
• When all else fails, children can be plied with chocolates from See’s Candies, another Berkshire company.
• As for these oddball mascots from Fruit of the Loom (controlled by Berkshire since 2002), they might not appeal to anybody, of any age.

Via the New Zealand Herald.

Warren Buffett for Five-Year-Olds

Warren Buffett receives thousands of letters from people who ask for money for a range of reasons, such as getting a new glass eye or paying legal fees from custody suits, and each one gets forwarded to his sister, Doris, reports The Wall Street Journal.

Ms. Buffett runs the Sunshine Lady Foundation, which has given more than $1.4-million to more than 300 letter writers. the average gift is $4,800. So far, she has received more than 3,000 letters from her brother, who transferred $5-million in Berkshire Hathaway stock to his sister’s foundation.

The foundation is unusual because it supports individuals, unlike most grant makers. the Internal Revenue Service has strict rules on grants to individuals to make sure that the money is used for legitimate charitable purposes.

Ms. Buffett personally calls letter writers she is interested in helping and even doles out stern bits of advice on financial responsibility.

Mr. Buffett says his sister is more charitable than he is, adding, “She identifies with the underdog. I do it in a wholesale way, but not on a one-on-one basis. she really wants to know their stories.”

Ms. Buffett’s foundation also makes grants to encourage college students to learn about philanthropy, the Chronicle of Philanthropy reported in a recent article.

(A paid subscription or short-term pass is required to view the Chronicle article.)

How Warren Buffett Handles Donation Pleas From Individuals …