Run by the iconic Warren Buffett since 1965, Berkshire has grown from a textile manufacturing company to now include 80-plus businesses that run the gamut from insurance to railroads to utilities to ice cream. The Omaha, Neb.-based conglomerate consists of some $117.5 billion of a variety of stocks.
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- The "Painful" Truth About Diversification 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.
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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.
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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.
With His Rebuke of Kraft, Buffett Reminds Wall Street That Shareholders Come First
A decade ago, investing guru Warren Buffett helped torpedo a $15.3 billion Coca-Cola Co. (NYSE: KO) bid for Quaker Oats Cos., arguing that the terms were lousy and the proposed price way too high.
Now Buffet is causing similar complications with a Kraft Foods Inc. (NYSE: KFT) plan to buy Britain's Cadbury PLC (NYSE ADR: CBY), announcing that he's wholly opposed to a plan to issue as many as 370 million Kraft shares to get the deal done. As Kraft's largest shareholder - Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) owns 9.4% of Kraft's common stock - his opinion is likely to carry the day.
Wall Street is furious: Deal fees are not as easy to come by as they used to be, and this transaction promised to be especially juicy - thanks to the spin-offs and share issues Kraft is doing to get the buyout done. Some of those maneuvers won't now be necessary, and if the transaction does get done it will be finalized at a lower price.
From the outset it was clear to me that the Kraft/Cadbury deal represented "managerial capitalism" more than it did shareholder capitalism. And in that battle, I know which side I am on.
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Investment News Briefs
With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Kraft Raises Cash Bid for Cadbury; Google Phone Sales Begin; Automakers See Strong U.S. Sales Gains; Whitney Slashes Goldman Forecast; Gulf Infrastructure Gets a Boost; Construction Collapse; IT Obstacle
- Kraft Foods Inc. (NYSE: KFT) has agreed to sell its DiGiorno and Tombstone pizza brands to Nestle SA (OTC ADR: NSRGY) for $3.7 billion, using all the net proceeds from the sale to boost the cash portion of its offer for Cadbury PLC (NYSE ADR: CBY) . In related news, Warren Buffet's Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) voted against Kraft's offer to issue up to 370 million shares for the Cadbury acquisition, saying it would change its vote if the transaction doesn't "destroy value for Kraft shareholders." Berkshire's stake of more than 9% in Kraft makes it the food maker's largest shareholder. Nestle, meanwhile, formally took its name out of the running of any possible bidders for Cadbury in a terse statement. Read More...
Hot Stocks: Is Markel Corp. a Berkshire Hathaway in the Making?
Ask any 10 U.S. investors to name the most-admired American financial figure and it’s a pretty good bet at least nine of them will answer Warren Buffett.
Thus, it should come as no surprise that other firms would want to emulate the business strategies of Buffett’s company, Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) – which is exactly how Markel Corp. (NYSE: MKL) is making its name on Wall Street.
Like Berkshire, Markel Corp. lists its primary business as insurance – but it’s no State Farm Insurance or Allstate Corp. (NYSE: ALL). Rather than selling auto or homeowners policies directly to consumers, Markel and its subsidiaries (listed below) sell specialty insurance products and programs in an assortment of niche markets.
SEC Filing Shows Buffett Played It Safe Ahead of His Burlington Northern Buyout
Having gone “all in” on a U.S. economic recovery with his $44 billion acquisition of Burlington Northern Santa Fe Corp. (NYSE: BNI), Warren Buffett showed a less aggressive stance in Berkshire Hathaway Inc.'s (NYSE: BRK.A, BRK.B) Nov. 16 filing with the Securities and Exchange Commission (SEC).
Buffett trimmed Berkshire's holdings in riskier businesses that have uncertain futures, such as newspapers, healthcare companies, and credit ratings agencies in favor of more stable long-term picks such as Wal-Mart Stores Inc. (NYSE: WMT) and ExxonMobil Corp. (NYSE: XOM).
The 13-F filing showed that as of Sept. 30 Berkshire had increased its Wal-Mart holdings by almost 90% over the summer, adding 18 million shares worth nearly $1 billion. Read More...