Portfolio diversification is one of the most widely advocated concepts in investing. Almost all financial planners recommend it.
But it's also one of the most misunderstood concepts.
Traditional diversification isn't a real-world way to create big wealth.
Warren Buffett certainly understands this, as you'll see.So does Lynn...
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.
To continue reading, please click here...
Warren Buffett's Berkshire Hathaway Holdings Show Major Selling
For those who want to model their investments after the famed Berkshire Hathaway holdings, this is your week.
Berkshire CEO Warren Buffett along with other iconic investors such as George Soros this week revealed their second-quarter stock moves - and you may be a little more than surprised to see what they've been up to.
The two billionaire investors disclosed their most recent investments in 13F filings, which are released by the U.S. Securities and Exchange Commission 45 days after the close of a quarter.
While Buffett has stepped back a bit from the business as he anticipates retirement, the Berkshire Hathaway holdings show he's still the driving force behind the firm's investing success.
"Buffett continues to hold sway over a meaningful amount of the equity portfolio--something we don't anticipate changing too significantly in the near to medium term," wrote Morningstar analyst Greggory Warren.
To continue reading please, please click here...
U.S. Job Market Continue Upward Swing, Fueling Confidence in Employment Recovery
The U.S. job market exceeded estimates by adding 290,000 jobs in April, the Labor Department reported Friday. The biggest upswing in four years indicates a strong upward trend in private sector hiring and a positive outlook for the recovery.
Experts say the job data shows that the recovery is making progress and should erase fears of a double dip recession - even if that progress is slow.
"The jobs report underscores this is a resilience of the recovery," said Lakshman Achuthan, managing director of Economic Cycle Research Institute. "When the business cycle is in an upswing, it starts to feed on itself, and the economy can withstand a pretty big shock without being tipped into a new downturn."
Goldman Director Linked to Insider Trading on Buffett Investment
Galleon Group founder Raj Rajaratnam Rajat may have engaged in insider trading on Goldman Sachs Group Inc. (NYSE: GS) stock by profiting from a tip from Rajat Gupta, a director at Goldman, The Wall Street Journal reported, citing a person it didn't identify.
The new disclosure stems from a government examination into whether Gupta gave inside information to Mr. Rajaratnam about a $5 billion investment Warren Buffett's Berkshire Hathaway (NYSE: BRK.A, BRK.B) made in the Wall Street bank before it became public knowledge.
In a March 22 court filing, the government revealed more details about the information it alleges Rajaratnam received, alleging that he or "co-conspirators" traded on non-public information, including advance notice about the Buffett investment in Goldman.
Playing 'Follow the Guru' Can Be Fun – and Profitable – for Investors
If you wanted to distill all the world's best investment advice into a single sentence, it would probably come down to this: Follow the leader.
We've whittled the investing wisdom of these three stalwarts - and others - into 15 rules to live by. We offered the first five rules in Part I of this story, which appeared yesterday (Wednesday). Here in today's second installment, we offer the final 10 rules.
Playing 'Follow the Guru' Can Be Fun – and Profitable
If you wanted to distill all the world's best investment advice down into a single sentence, the result would actually be fairly simple:
The Investing Secrets of Warren Buffett
Investing icon Warren Buffett is known for the market-beating returns that his company, Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B), has returned over the past few decades. His success is due to some very simple investing strategies that he adheres to religiously. Here are 10 of his best:
MetLife Closing in on AIG's Alico Unit
MetLife is reportedly negotiating to buy the American Life Insurance Co. from its parent American International Group Inc. (NYSE: AIG). The deal would give MetLife more exposure to Japan and assist AIG in paying back the billions of dollars it owes to the government.
Under the terms now being discussed, MetLife would pay $14 billion to $15 billion for American Life, commonly known as Alico, The New York Times reported. At least $9 billion of that sum would immediately go to the Federal Reserve Bank of New York to redeem preferred stock now being held in a special-purpose vehicle. Additional proceeds would go toward paying down part of a separate, $35 billion credit facility from the New York Fed.
Acquiring Alico would give MetLife a strong presence in Japan where an aging population offers fresh growth opportunities. Alico had about 200 offices, 4,600 consultants or employees, and 10,000 agencies in Japan as of March of last year, according to The Wall Street Journal. The company generates about 70% of its revenue from the Pacific island.