Buffett: Negative Rates Are More Puzzling Than Scary

The prospect of negative interest rates confounds Warren Buffett but doesn’t frighten him, according to a recent Bloomberg article. “U.S. policy makers have been seeking to grapple with the economic fallout of the coronavirus pandemic, “ the article notes, citing the Fed’s cutting of its benchmark rate to zero earlier this month. In his annual shareholder letter (released in February), Buffett contended that equities would outperform long-term, fixed-rate instruments in the long run if current… Read More

Learning from Buffett and Others During Market Crises

By Justin J. Carbonneau As of this writing, the S&P 500 will have dropped close to 30% in less than 20 trading days. The decline is the fastest drop into bear market territory ever. The degree of health related and economic damage for businesses, profits and employment, a result from fallout of the coronavirus, remains so unknown that stocks in general are getting significantly hit and some industries, like airlines, cruise liners and entertainment concerns,… Read More

How to Be Like Warren Buffett in Times Like These

“When fear defines financial markets, remember Warren Buffett,” says a recent Barron’s article. Buffett once asserted that the secret to beating the market was to “be fearful when others are greedy and greedy when others are fearful,” a simple idea that the article notes can be difficult to follow, “especially now, when no one knows what the coronavirus might do.” The negative market reaction to the recent health threat, the article points out, raises a… Read More

Highlights: Buffett’s Annual Letter to Shareholders

Berkshire Hathaway’s annual report included Warren Buffett’s much anticipated letter to shareholders. Here are highlights from the letter: Retained earnings. Buffett dedicated the first several pages of the letter to defending his position on reinvestment of earnings: “At Berkshire, Charlie and I have long focused on using retained earnings advantageously. Sometimes this job has been easy—at other times, more than difficult, particularly when we began working with huge and ever-growing sums of money.” When investing… Read More

Berkshire Hathaway and a Buffett-less Future

As Warren Buffett approaches his ninetieth birthday, Berkshire Hathaway shareholders might be worrying about the company’s future, according to a recent article in Barron’s. But the article outlines several issues that could be “resolved in a post-Buffett era.” Here are some highlights: New leadership could “break up the conglomerate to unlock value—or at least be more amenable to an idea that Buffett opposes:” Although Buffett has long argued that Berkshire is better as a conglomerate,… Read More

Buffett Sells Newspaper Business

Warren Buffett and Berkshire Hathaway have agreed to sell BH Media and the Buffalo News to Lee Enterprises, Inc., for $140 million in cash, marking a “rare divestiture after he spent years snapping up local newspapers.” This according to an article in Bloomberg. Buffett, who reportedly first invested in the industry to capitalize on strong local advertising revenues, said last year that most newspapers are “toast” because of changing economics. The article notes that BH… Read More

Buffett’s Resolutions for 2020

This past year was “unremarkable” for Warren Buffett’s Berkshire Hathaway as the conglomerate’s cash hoards continued to grow and any “elephant” acquisitions remained elusive. This according to a recent article in Bloomberg. The article notes that although the past year was “boring” for Berkshire, it marked the end of a “transformative” decade that included the following events: Berkshire’s purchase of BNSF, “America’s most expansive railroad systems” as well as recognizable brands such as Duracell and… Read More

When Warren Buffett Thanks You for “Client Alpha”

By Justin Carbonneau (@jjcarbonneau) Imagine for a moment you were one of the very first investors in Berkshire Hathaway in 1965 and you’ve stayed committed to Buffett all these years (54 years and counting be exact). You’re meeting him today to profusely thank him for producing the results he has. You say, “Warren, I want to thank you for producing the long-term outperformance over the market you have delivered on my investment. You’ve more than… Read More

Buffett’s Bid for Tech Data Thwarted

Berkshire Hathaway’s $5 billion offer ($140 per-share) for technology distributor Tech Data Corp. was beat by private equity firm Apollo Global Management last month with an offer of $145 per share in cash. This according to an article in The Wall Street Journal. Tech Data is a wholesale distributor of products including computer hardware, software, consumer electronics and cellphones that reported net income of $91 million for the quarter ended October 31st. The article quotes… Read More

Buffett’s Berkshire Hathaway See Record Profits and Cash

Berkshire Hathaway’s operating profit peaked in the third quarter, pushing the conglomerate’s 2019 net income to “a staggering $52 billion, making Berkshire the most profitable public company in the world.” This according to an article in Bloomberg. The article notes that Buffett also “has more cash than ever to play with: $128 billion. That’s the record which has Berkshire’s stock languishing as investors grapple with a question amid all the superlatives: what comes next?” CFRA… Read More