Munger on Morality, Higher Taxes, and How The Founding Fathers Can Help Us Now

Charles Munger, Warren Buffett’s long-time sidekick at Berkshire Hathaway, offers some tough medicine for the U.S. in an editorial written for today’s Washington Post. Calling the current situation “dire”, Munger says that the current bust goes well beyond the normal boom & bust cycle, and measures should thus be taken to keep it from occurring again. “Should we opt for even more pain now to gain a better future?” he asks. “For instance, should we… Read More

Buffett: Fear Is Winning — But It Won’t Win In The End

In a wide-ranging interview with Dateline NBC’s Tom Brokaw, Warren Buffett says that fear is currently winning out over hope in the U.S. economy — but that he wouldn’t bet against the country’s ability to recover from this crisis and go on to new heights. “Right now fear is [winning],” Buffett said. “It really is an economic Pearl Harbor. … The country is facing something it hasn’t faced since World War II. And [people] are… Read More

Buffett’s ’08 Bargain Binge: $20 billion +

The final tally from Warren Buffett’s 2008 buying spree: $20 billion-plus. “While most investors panicked or were forced to sell, [Buffett] put more than $20 billion to work last year, positioning his insurance-focused conglomerate to profit if the economy and markets recover in coming years,” writes Alistair Barr of MarketWatch. Buffett’s firm had about $44 billion in cash entering ’08, according to Barr, who notes that Buffett had had trouble finding attractively valued investments in… Read More

Looking at Berkshire’s Holdings by ROE, ROA & ROI

We know that following Warren Buffett’s investments, even after they are publicly disclosed, can produce stellar long-term returns for investors. Knowing this, we decided to take 30 of Berkshire’s Q3 holdings and look more closely at each company’s returns on equity, assets and investment (Validea’s Buffett-based model uses ROE in its formula). By looking at ROE, ROA and ROI, we are able to see what firms in Berkshire’s portfolio are generating the highest return to… Read More

Tilson on “Points of Maximum Pessimism”, and Buffett Bashers

In a column for The Financial Times, fund manager Whitney Tilson says that, while he’s no optimist about the U.S. economy’s short-term prospects, he does “believe the level of panic that has overtaken the market has created buying opportunities for investors who can see light at the end of the very dark tunnel.” Tilson indicates that we’re at or near what the great John Templeton called “points of maximum pessimism”; that is, as Tilson puts… Read More

Buffett, Berkshire Snatch Up More Rail Shares

Warren Buffett’s Berkshire Hathaway now owns almost 20% of Burlington Northern after put options it wrote were exercised. Over the past year or so, Buffett has continued to buy up shares in Burlington Northern, the country’s second largest rail company. He has previously said that “railroads have good long-term prospects and are healthier today than in past years,” according to the Associated Press. CNBC’s Warren Buffett’s Watch, written by Alex Crippen, provides additional detail on… Read More

Buffett to Disclose More on Derivatives; Tilson Ups Berkshire Stake

Warren Buffett says he will give more information on Berkshire Hathaway’s much discussed derivative bets in the company’s end-of-year-report, Reuters is reporting. The derivatives contracts call for the firm to pay out billions to purchasers if, by certain dates starting in 2019, four different market indices fall below agreed-upon levels. Rumors that Berkshire’s liabilities for the contracts could be more than previously thought caused the firm’s stock to plunge — and its credit default swap… Read More

Billions in Derivatives Losses Looming for Buffett, Berkshire?

Investment author Jon Markman says in his Nov. 19 “Trader’s Advantage” newsletter that the losses Warren Buffett and Berkshire Hathaway have recently incurred because of the plummeting market may be only the start of their problems. “If you want to talk about problems that are not fully discounted by the market yet, let me just throw one bombshell out there. … What if Berkshire Hathaway, the most respected insurance company in the world, were to… Read More