Buffett Bonanza: Government vs. Fear, Bank Prognosis, and Why You Should Still ‘Buy American’

Warren Buffett spent three hours on CNBC’s Squawk Box this morning discussing the economy and stock market from all angles. Buffett says the economy will turn around, but that it won’t happen quickly — and he says government actions will be crucial in how quickly it gets back on track. “I’ve never seen the consumer, or the Americans just generally, more fearful than this,” Buffett said. “And they’re also confused. And you can get fearful… Read More

Even Buffett Makes Mistakes — and You Can Learn from Them

In his latest Wall Street Journal column, James B. Stewart examines some of the mistakes Warren Buffett acknowledged making in Berkshire Hathaway’s 2009 letter to shareholders, and explains what average investors can learn from “The Oracle of Omaha’s” mistakes. Most interesting is Stewart’s discussion of Buffett’s decision to buy $7 billion in ConocoPhillips shares last summer, around the time that oil was hitting its peak. Since then, Conoco shares — and those of most oil… Read More

Buffett, the Long-Term Optimist: “America’s Best Days Lie Ahead”

Berkshire Hathaway published its long awaited annual report on Saturday. Warren Buffett, CEO of Berkshire, penned the first 20 pages or so. For those who haven’t read the letter yet, we encourage you to take a look as it provides Buffett’s thoughts on a host of issues, including the performance of Berkshire, the mistakes Buffett made last year, his outlook for the economy and other things. Link: Berkshire’s 2008 Annual Report & Letter

Buffett Cut J&J Stake, Other Holdings in Fourth Quarter

Berkshire Hathaway has released the list of its holdings for the fourth quarter of 2008 — and it looks like Warren Buffett has made some substantial changes to his company’s portfolio. While Buffett has recently said he is “buying American” with his personal portfolio, the biggest news from Berkshire’s filing doesn’t involve new purchases, notes Alex Crippen of CNBC’s Warren Buffett Watch, “Instead of asking what Buffett has been buying,” Crippen says, “we should have… Read More

Buffett “Weighing Machine Metric”: Time to Buy Stocks

A metric that Warren Buffett uses to assess the market’s valuation is now showing that it is a good time to buy stocks, Carol Loomis and Doris Burke write for Fortune. According to Loomis and Burke, Buffett believes that over the long term, there should be a “rational relationship between the total market value of U.S. stocks and the output of the U.S. economy (gross national product).” If the total stock market value as a… Read More

What Does It Mean to be a Value Investor?

In a piece written for Forbes.com’s “Gurus’ Guide to 2009“, John Heins and Whitney Tilson do a great job in examining just what makes an investor a value investor. While value investors come in all shapes and sizes — large-cap, small-cap, activist, non-activist, U.S.-focused, foreign-focused — Heins and Tilson list 12 similarities they share. A sampling: They focus on intrinsic company value and buy only when there is a substantial margin of safety, rather than… 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

Buffett’s “Timeless” Predictions

CNBC.com outlines eight timeless predictions by Warren Buffett on its Warren Buffett Watch blog. While CNBC labels these as predictions, we tend to think of these more like lessons that Buffett offers up to long-term stock market investors. After a year like 2008, Buffett’s lessons provide some perspective on dealing with recessions, bear markets and investor psychology. 1. Recessions can’t be avoided forever. 2. We’ll survive current and future recessions just as we’ve survived past… 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