Investment News Briefs
Berkshire Hathaway Holdings Show Buffett Hunting a Big Elephant
Warren Buffett's Berkshire Hathaway holdings have undergone some major changes in the third quarter, according to the company's latest 13F filing.
Not only did Buffett and Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) sell more than $750 million in two American giants, they initiated four new holdings and eliminated three positions entirely. Overall, Berkshire's reported portfolio, which only includes long positions, increased to $75.3 billion for the quarter ended Sept. 30, up from $74.3 billion the previous quarter.
While some think Buffett is taking profits where he can, others think he is building up a stockpile of cash for a major move.
"Buffett may be selling the consumer stocks to provide more funds to his deputies while reserving money for a large acquisition," David Kass, a professor at the University of Maryland's Robert H. Smith School of Business, told Bloomberg News.
"He may be really wanting to keep that aside for his big elephant," said Kass, who is referring to Buffett's quote in a letter to shareholders last year where the 82-year-old investing legend stated, "Our elephant gun has been reloaded, and my trigger finger is itchy."
Only Buffett and Berkshire's new portfolio managers, Todd Combs and Ted Weschler, truly know why they made their latest moves, and so without further speculation, here they are.
Stock Market Today: Markets See-Saw on Bernanke Speech
Investing in Smart Grid Technology: Two Stocks to Power Up Your Portfolio
There's a saying that goes, when you lose the Internet it's like 1979 but when you lose power it's like 1879.
For a while, we actually lived through it when a big swath of the mid-Atlantic lost power in July. Let me tell you, it was ugly.
I've lived in Northern Virginia for most of my life. I remember dill pickles in a barrel at the grocery store, Quisp and Quake cereal, and Frank Howard was my hero on the Washington Senators, if that gives you an idea of old I am. In all of those years I have never seen anything like it.
The power went out on Friday night and by mid-morning Saturday, there wasn't a hotel room with air conditioning to be found in a 50 mile radius.
So many street lights were out that it was up to the drivers to figure who went next, and you're talking a metropolitan area of about 12 million people cycling through. That doesn't even account for the fact that I-95 cuts through the whole area with trucks, tourists, etc.
It was completely nuts.
Now imagine what it was like in India where nearly 700 million lost power. Yes, that's 700 million suddenly without power.
That's like the entire U.S. going down and then adding another 200+ million on top of that.
The lesson in both instances though is the same: It's necessary to build a "smart" grid.
Why Jim Rogers is Investing in Farmland
Legendary Wall Street trader and best-selling author Jim Rogers recently offered this unconventional advice: If you want to get rich, you should be investing in farmland.
Don't laugh. Rogers is good at what he does. Really good.
Together with George Soros, he founded the Quantum Fund in the 1970s and posted returns of 4,200% over 10 years. Rogers retired in 1980 at the age of 37, but is still active as a private investor.
Back in 1999, Jim Rogers recommended gold when it was trading at $252 and silver at $4. You know what happened after that.
Now Rogers thinks investing in farmland will pay off in a big way.
"It's the farmers, the producers, who are going to be in the captain's seat when the prices go through the roof," he told The Australian Financial Review.
The Tragic Investing Tale of "Big Al" Clifton
One of our core messages here at Money Morning - and one that we tend to repeat over and over – is that it is crucial for you to take control of your own financial destiny.
To underscore just how important this is, allow me to share a personal story I guarantee will drive this point home.
I've massaged the biographical details on this one a bit to protect the folks who are involved. But the rest of the facts are true.
This is the story of Alvin "Big Al" Clifton, the much-loved stepfather of a boyhood friend of mine. Big Al (who I always addressed as "sir") was the longtime manager of a highly successful paint-and-body shop in my hometown.
He knew everybody, and everybody knew "Big Al."
He was boisterous and colorful – an acquired taste for some, I guess. But he also had a heart of gold – as I well knew.
In the mid-1980s, just after I started my newspaper career at a small weekly (and was very poor), I stopped in to see Mr. Clifton after I'd banged up my Chevette – my daily transportation, and the only vehicle I had.
Although Mr. Clifton was in business to make money from precisely this kind of situation, I watched as he picked up his phone, dialed a buddy and within five minutes had arranged for me to get the hood, radiator-core support, grill and bumper that I needed – all for free.
Some years later, when the body shop was sold to a new owner from out of town, Mr. Clifton was unceremoniously dumped from the only place he'd ever worked.
They gave him a lump-sum distribution – a pension and severance – that amounted to about $140,000.
That wasn't even close to being enough for a guy who was only 59, and had enough health problems to keep him from starting a second "career."
And Mr. Clifton knew it.
Yahoo (Nasdaq: YHOO) Needs More Than Just a New CEO
The black cloud following Yahoo! Inc. (Nasdaq: YHOO) seems bigger than ever.
Just one day after he was forced to leave the forlorn Internet company for padding his resume, reports surfaced that ex-Yahoo CEO Scott Thompson revealed he has cancer.
According to a report in The Wall Street Journal, citing unnamed sources, Thompson told Yahoo's board and several colleagues of his thyroid cancer before resigning Sunday.
A source told The Journal that Thompson's decision to leave his position at Yahoo was in part influenced by his cancer diagnosis.
News broke last week that Thompson embellished his resume with a degree in computer science, when he actually earned a degree in accounting from a small Massachusetts college.
Thompson was hired in January to replace Carol Bartz, who was fired by phone last September.
In the revolving position at Yahoo, former head of global media Ross Levinsohn has been named interim CEO.
New CEO Boosts YHOO
Levinsohn had a triumphant stretch running Internet services within Rupert Murdoch's media empire at News Corp. before Bartz lured him to Yahoo in 2010. Levinsohn previously ran ad sales for Yahoo's Americas unit.
Yahoo investors applauded the media veteran's appointment. Yahoo shares tacked on 2.2% in premarket trading Monday ahead of a nasty open for U.S. markets.
Levinsohn has significant credentials as a negotiator. Before coming aboard at Yahoo, he had a history of recognizing and acquiring an assortment of digital media companies around the globe. That is a striking comparison to Yahoo's last two CEOs, who had stronger backgrounds in technology than media.
"We view Mr. Levinsohn as well-equipped to lead the organization and to build off the company's core strengths – advertising products and digital media," said Spencer Wang, an analyst with Credit Suisse.
But Yahoo still faces a rocky road ahead.
Popular Investment Decisions Designed to Avoid Financial Crisis Effects
Almost all U.S. households make strategic investment decisions to best protect their hard-earned money.
Yet, as anyone who makes a financial game plan knows, even the most detailed, thorough outlines can fail when real life intervenes.
Just ask the thousands of Americans suffering while tornadoes and flooding continue hammering the U.S. South and Midwest regions, leaving whole towns of people homeless and jobless.
The rising Mississippi River has swept through an area that Missouri Gov. Jay Nixon described as "literally the most productive part of our continent," meaning farmers have watched their only sources of income wash away in floodwaters.
Fed Press Conference: What Do You Think of the Outcome?
The U.S. Federal Reserve today (Wednesday) will hold its first-ever press conference – an extraordinary development that has generated more buzz than typically surrounds a Federal Open Market Committee (FOMC) meeting.
But many wonder, will U.S. Federal Reserve Chairman Ben S. Bernanke deliver clear-cut explanations, or a script of "Fedspeak"?
Bernanke will start the Fed press conference at 2:15 p.m. EDT after the two-day meeting of the Federal Open Market Committee (FOMC). The agenda includes a review of the Fed's economic projections and the FOMC's policy decisions, which will be released in a policy announcement at 12:15 p.m.
Then – the part everyone is really waiting for – Bernanke will field press questions for about 45 minutes.
Even on the Brink of a Government Shutdown, Congress Still Doesn't Get it
At the risk of sounding trite, let me just say that "here we go again."
Overnight budget talks failed to lead to a federal budget agreement, and now we're just a few hours from the first U.S. government shutdown in 15 years. The shutdown could put 800,000 federal employees out of work, while creating a nightmare for U.S. taxpayers who are regular users of government services.
As bad as that all sounds, the shutdown threat isn't the worst thing I see here – not by a longshot.
The worst thing is that – with a $14.2 trillion national debt – the part of the budget the two sides are squabbling over is miniscule. Democrats have agreed to $34.5 billion in spending cuts, while the Republicans have agreed to $39 billion for the fiscal year that ends Sept. 30.
It's a rounding error.
Long-Term Investing Strategies: The Final Four Ways to Invest in Global Demographic Trends
Stock-market icon Warren Buffett once said that "our favorite holding period is forever."
Clearly, if you want to be a stock-market winner, you need to find profit opportunities that offer a predictable, long-term payoff.
And one of the best ways to do that is to capitalize on global demographic trends.