Buffett is Giant Trader of U.S. Treasury Bills

After several years of struggling to find acquisition targets, Berkshire Hathaway has used its growing pile of cash to become one of the world’s largest owners of U.S. Treasury bills. This according to a recent article in The Wall Street Journal. As of last September 30, the article points out, Berkshire held $109 billion in cash and, according to CEO Warren Buffett, “nearly all of that was invested in short term bills,” a bigger holding… Read More

Hidden Secrets in Warren’s Buffett’s Annual Letter to Shareholders

By Justin J. Carbonneau (@jjcarbonneau) —  Ok, just to be clear there are no real hidden secrets in Warren Buffett’s Annual Berkshire Hathaway shareholder letter (download the full letter here). You won’t find a map, like the in the movie “The Goonies”, leading you to Berkshire’s $116 billion cash hoard aboard some pirate ship. You won’t even find any hint on who Buffett is going to pick as a successor. Sorry to disappoint you. But… Read More

U.S. Government Just Gave Investors Part of their “Super Stock” for Free (Sort Of)

By Justin J. Carbonneau (@jjcarbonneau) —  Sometimes someone says something that hits you like a ton of bricks. Well, in early January Warren Buffett was on CNBC and one of the topics he was discussing was tax reform and its impact on the value of stocks (see full video here, pick it up at the 17 min mark). In classic Buffett fashion, he makes a few very salient points that are worth digging into. Buffett… Read More

Buffett Says Tax Cut is Bullish for Stocks

The new tax legislation, which lowered the corporate tax rate from 35 percent to 21 percent, is “significantly altering how investors value equities and the market,” according to a recent CNBC article. On CNBC’s Squawk Box earlier this month, Warren Buffett said, “The tax act is a huge factor in valuation.” Simple math, said Buffett, says that the tax bill will result in a stock owner’s share of corporate profits increasing from 65 percent to… Read More

The Value of Cash and the Gurus

By Justin J. Carbonneau (@jjcarbonneau) — Cash may be one of the most boring things to talk about when discussing a company and its investment prospects. Things like a company’s business model, its stock price, its future growth forecast, its yield, and its valuation are far more exciting. But cash is an asset that gives companies many options both in terms of pursuing growth opportunities and other forms of capital allocation like buying back shares,… Read More

Zweig on Buffett and Bitcoin

Author and columnist Jason Zweig says that successful investors–such as Warren Buffett and Charlie Munger–can set aside emotions, according to a recent CNBC article. At the recent Evidence-Based Investing conference in New York, Zweig mentioned Berkshire Hathaway’s Buffett and Munger as among the top tier, adding that they are “inversely emotional and are able to turn emotions inside out,” and “acutely sensitive to the fear inside other people” which they then take advantage of. With… Read More

For Hedge Funds, Being Like Buffett Isn’t Easy

While Warren Buffett’s track record is appealing to large private equity firms, his buy-and-hold strategy (averaging 10-20 years rather than the hedge fund industry norm of 3-5 years) can be hard for many to adopt, according to a recent Bloomberg article. “To play,” the article says, “they would need to give themselves lots of time—decades, in fact—and as near-to-permanent capital as they could muster. Ambitious buyout firms bet that by raising long-duration funds, they would finally… Read More

Buffett Speaks at Forbes’ Centennial on the Dow, Geico and U.S. Prospects

The Dow At the one hundred year anniversary of Forbes magazine, the billionaire CEO of Berkshire Hathaway predicted that the Dow Jones Industrial Average will breach 1 million in the next century, according to a recent article in The Wall Street Journal. That would require the index to grow by 3.9% annually (over the last 100 years, it has grown by 5.8% annually over the last 100 years). “The continued climb,” the article says, “is… Read More

Buffett Bets on Trucking

Last week, Berkshire Hathaway announced an agreement to purchase a 38.6% stake in Pilot Travel Centers LLC for an undisclosed amount, according to a Wall Street Journal article that calls it “Berkshire’s latest wager on traditional forms of transportation and U.S. economic growth.” According to the article, the Tennessee-based company, better known as Pilot Flying J., is the largest operator of truck stops in the U.S. as well as one of the country’s largest private… Read More

A “Flywheel” Approach to Investing

By John Reese — Teacher and leadership coach Jim Collins has authored and co-authored six books that delve into the inner workings of corporations and what makes them succeed or fail. One of the many concepts he features in his books, articles and lectures is that of the flywheel: “No matter how dramatic the end result, good-to-great transformations never happen in one fell swoop. In building a great company or social sector enterprise, there is… Read More