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warren buffett news

Article Index

Warren Buffett Stocks: How to Invest Like the Oracle of Omaha

By , Money Morning -

For months, the Obama administration has been using Berkshire Hathaway Inc. (BRK.A, BRK.B) Chairman and CEO Warren Buffett's considerable name recognition to try to change how America's top earners are taxed.

The fate of the so-called "Buffett Rule," which would apply a minimum tax of 30% to individuals making more than $1 million a year, still has yet to be determined. Chalk it up to politics as usual.

There is, however, a list of other Buffett Rules that are far more useful to investors.

They're the tricks of the trade that have made Warren Buffett the most successful living investor, and one of the richest men in the world.

After all, the Oracle of Omaha hasn't earned his nickname by mistake. To many, it seems the billionaire has a sixth sense when it comes to investing, a supernatural ability to divine the good investments from bad.

But while his ability may be uncanny, there's really no magic at work. What Buffett has above all else is discipline. His philosophy is based on patience.

As a value investor, Buffett's goal is to identify companies the market has undervalued or companies that are trading cheaply compared to their intrinsic value.

Once he finds them, he buys them and holds on to them for the long term while their value steadily increases over decades.

Warren Buffett's Rules for Successful Investments

Beyond those simple tenets, there are a few rules - those other Buffett Rules - that guide Buffett's conscience as he makes investment decisions.

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Congress Wastes Time on Buffett Rule, Keystone Pipeline to Beef Up Attack Ads

By , Associate Editor, Money Morning • @DavidGZeiler -

They are at it again...

With a cynical eye cast toward the November election, members of Congress forced votes on the "Buffett Rule" and the Keystone pipeline knowing both would ultimately fail.

The real purpose for voting on the Buffett Rule and the Keystone pipeline was to embarrass the opposition and produce material for campaign attack ads.

What Would Warren Buffett Do? The Hottest Trend for Savvy Investors

By , Managing Editor, Money Morning -

If Warren Buffett was going to invest in anything right now, where would he put his money?

At first, that question may be difficult to answer. But if you think about Buffett's classic investment approach - focusing on real assets with a reliable return and prizing valuation - it gets a little easier.

Stumped?

Try the housing market - single-family rental homes to be precise.

"If I had a way of buying a couple of hundred thousand single family homes and I had a way of managing them... I would load up on them and take mortgages out at very very low rates," Buffett said in an interview with CNBC. "It's a very attractive asset class right now."

It's a classic buy low, sell high opportunity - and one that more and more investors are taking advantage of.

In fact, sales of investment and vacation homes surged 65.4% last year to 1.2 million units, the highest level since 2005, according to the National Association of Realtors (NAR).

Naturally, low home prices were a major catalyst for that surge.

Last year, U.S. home prices were down 33.8% from their 2006 peak. But another factor was increased interest from investors - many of which boast six-figure salaries and desire a more consistent return than the stock market offers right now.

"I have doctors, lawyers, an engineer from Apple who told some of his buddies," Brian Hardie, who manages rental properties, told Forbes about his clients.

And with foreclosures on the rise this year, there will be an even greater opportunity for entrepreneurial investors, which means Hardie's client list at Regency Property Management will likely continue to grow.

Indeed, foreclosures that had previously been held up by litigation relating to robo-signing and other malfeasance on the part of banks are once again moving back through the system following a $26 billion settlement five major banks reached in January.

A February report from RealtyTrac showed new default notices - the first step in the foreclosure process - were up 1% from January. Furthermore, default notices increased dramatically in some states, such as Pennsylvania (35%), Florida (33%) and Indiana (37%).

As the NAR recently pointed out, 20% of February home sales were foreclosures. And if RealtyTrac's forecast for a 25% increase in foreclosures this year comes to fruition, the number of distressed sales will rise even further.

Meanwhile, the heightened rental property interest, dually helped by inflation, has given landlords more power - which means rents across the country are increasing.

This has created an optimal situation for investors that have the wherewithal to make it work for them.

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Warren Buffett's Takeover Targets: Grab Shares Now…Get Rich When Berkshire Buys

By , Money Morning -

Iconic investor and Chairman and Chief Executive Officer of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) Warren Buffett announced that his company was eyeing acquisition targets, sending many "follow the guru" investors on a search for the next big takeover.

Berkshire's cash rose to a three-year high of $38.2 billion and Buffett said the firm was on the prowl for new buyouts.

"We will need more good performance from our current businesses and more major acquisitions," wrote Buffett. "We're prepared. Our elephant gun has been reloaded, and my trigger finger is itchy."

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Who is Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) Replacement?

By , Associate Editor, Money Morning -

Warren Buffett fans are buzzing with one burning question after the legendary investor released his annual shareholder letter on Saturday: Who is Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) replacement?

The Board is "enthusiastic about my successor as CEO, an individual to whom they have had a great deal of exposure and whose managerial and human qualities they admire," Buffett said in the letter, without identifying the person. "When a transfer of responsibility is required, it will be seamless, and Berkshire's prospects will remain bright."

Buffett noted there were two "superb" back-up candidates in place as well.

Even though Buffett didn't share the details with investors, this is the clearest signal he's given that a specific strategy has been outlined for a post-Buffett Berkshire.

"It's more of a commitment, clearly," Alice Schroeder, author of "The Snowball, Warren Buffett and the Business of Life," told The New York Times. "This is not the if-I-get-hit-by-a-bus plan. This is the succession plan."

Some of Buffett's big-name employees are already slated for other positions, leaving just a handful of big wigs left to take the CEO spot.



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The Stocks Warren Buffett is Buying

By , Managing Editor, Money Morning -

Warren Buffett has gotten a lot of headlines recently for his critical assessment of the U.S. tax code.

But don't forget that Buffett became one of the world's wealthiest men through his career as an investor - not a political pundit.

For that reason, Buffett's Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) is one of the most successful and widely followed companies in the world.

In fact, a 2007 study by two university professors entitled "Imitation is the Sincerest Form of Flattery" showed that buying what Buffett buys - even a month after his purchases - is a pathway to superior returns.

"The market ... appears to under-react to the news of a Berkshire stock investment since a hypothetical portfolio that mimics Berkshire's investments created the month after they are publicly disclosed earns positive abnormal returns of 14.26% per year," the study said.

And right now Berkshire is making big moves.



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Warren Buffett is Taking Berkshire Hathaway Inc. (NYSE: BRK.A , BRK.B ) on the Hunt for Takeover Targets

By , Associate Editor, Money Morning -

Iconic investor and Chairman and Chief Executive Officer of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) Warren Buffett announced on Feb. 26 in his annual shareholder letter that his company was eyeing acquisition targets in 2011, sending many "follow the guru" investors on a search for the next big takeover.

Berkshire's cash rose to a three-year high of $38.2 billion and Buffett said the firm was on the prowl for new buyouts.

"We will need more good performance from our current businesses and more major acquisitions," wrote Buffett. "We're prepared. Our elephant gun has been reloaded, and my trigger finger is itchy."

Berkshire Hathaway generated almost $1 billion a month in free cashflow last year. It also completed its biggest purchase, spending $26.5 billion for rail company Burlington Northern Santa Fe Corp.

Many analysts view the defense industry and agriculture sectors as the most appealing sectors.

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Warren Buffett Emphasizes Investment Risk Management With Successor Pick Todd Combs

By , Associate Editor, Money Morning -

Warren Buffett's announcement Monday that a little-known hedge fund manager, Todd Combs, will help oversee his $100 billion investment portfolio at Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) surprised investors and highlighted Buffett's emphasis on risk management for investment success.

Adding 39-year-old Combs to the Berkshire team makes him a top contender to take over Buffett's investment management duties whenever the Oracle of Omaha leaves his company.

"He is a 100% fit for our culture," said Buffett. "I can define the culture while I am here, but we want a culture that is so embedded that it doesn't get tested when the founder of it isn't around. Todd is perfect in that respect."

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