Buffett Bullish on Bank Stocks

In a recent interview with Yahoo Finance, Berkshire Hathaway CEO Warren Buffett explained why he is bullish on bank stocks: “They’re businesses I understand, and I like the price at which they’re selling relative to their future prospects;” “I think ten years from now they’ll be worth more money and I feel there’s a very high probability that I’m right;” “I don’t think that it will turn out to be the best investment at all, of the… Read More

Warren Buffett’s Next Deal Looms Large

In this year’s letter to Berkshire Hathaway shareholders, billionaire CEO Warren Buffett wrote that the mere thought of completing another big acquisition “is what causes my heart and Charlie’s to beat faster.”  This according to a recent Bloomberg article. Since its last big deal—the 2016 purchase of Precision Castparts for $37 billion– the company has not been able to find another “elephant-sized” channel for its over $100 billion in cash. “Lately,” the article says, “investor… Read More

Buffett Annual Letter Offers Advice to Pensions and Endowments

In his annual letter to Berkshire Hathaway shareholders, CEO Warren Buffett tells pension funds and endowments to eliminate high-cost “helpers” that eat into returns, according to an article in Chief Investment Officer. Buffett illustrates his point with the example of his first stock purchase 77 years ago– three shares of Cities Service which he bought for $114.75: “If my $114.75 had been invested in a no-fee S&P 500 index fund, and all dividends had been… Read More

Replicating Buffett’s Wide Moat Investing Method

By Justin J. Carbonneau (@jjcarbonneau) —  Warren Buffett and others have long advocated buying companies with moats around their businesses. Strong brand loyalty (Disney), economies of scale (Walmart), innovation (Google), location (Starbucks) and other sources of competitive advantage play an important role in in the success of companies over time. The reason companies with moats appeal as attractive investments is that a moat, which is a function of a firm’s competitive advantage, protects the business… Read More

Buffett on Tax Cuts, China and Women in Business

In a recent interview with Yahoo Finance, Berkshire Hathaway CEO Warren Buffett fielded questions on a variety of subjects. Here are some highlights: Tax cuts: “I don’t agree with the philosophy,” Buffett said, “but it helps Berkshire shareholders.” In economics, he added, “you can never just do one thing. You always have to ask yourself, and then what?” Buying cryptocurrency, argues Buffett, is more speculation than investing. When investing, he explained, you’re looking to the… Read More

Buffett’s Letter: Shorter and Less Upbeat

An article in Institutional Investor published after the release of Berkshire’s annual letter to shareholders said, “It isn’t what Warren Buffett wrote in his shareholder letter—it’s what he didn’t.” Noting the brevity of the letter compared to years past, the article notes that the “low word count should be unsettling to Buffett-watchers,” underscoring, for example, the “scant attention” paid to Kraft Heinz, “which lost more than a quarter of its stock market capitalization” only one… Read More

High Hopes for Buffett’s Annual Letter

A Bloomberg article published prior to the release of this year’s letter to Berkshire Hathaway shareholders notes that Warren Buffett “has provided himself with plenty of fodder—if only he’ll use it to answer two nagging questions for investors:” Does the company’s recently “relatively new, and recently erratic, interest in technology investments” signal anything to its investors? “If Buffett didn’t find a “significant acquisition in December’s market swoon, then when will he?” The article notes that… Read More

Takeaways from Berkshire’s Annual Letter to Shareholders

Here are some highlights of Warren Buffett’s widely-anticipated annual letter to Berkshire Hathaway shareholders: Format Change While for thirty years the billionaire investing legend has opened with a paragraph concerning the change in the firm’s per-share book value, this year he wrote, “It’s now time to abandon that practice,” citing three reasons for the change: Berkshire has “gradually morphed from a company whose assets are concentrated in marketable stocks into one whose major value resides… Read More

Learning from Buffett’s Performance

In my last article, I looked at the stocks owned by Warren Buffett and Berkshire Hathaway and asked the question, “How Active is Buffett’s Portfolio?”. As we found out, the answer is very active in terms of how different the equity portfolio looks vs. the broader market index. The combination of Buffett’s portfolio and investing acumen has translated into one of the best investment track records in history. There are some interesting observations we can… Read More

How Active is Buffett’s Portfolio?

By Justin J. Carbonneau (@jjcarbonneau) —  With a $500 billion market capitalization, Berkshire Hathaway is the fifth largest company by market cap in the U.S. stock market and the majority of the company’s value comes from three sources. The first is the 60 or so operating companies Berkshire owns and the future earnings power of those companies. The second is the cash on the balance sheet and the optionality to invest that in in the… Read More