WEB:The Oracle of Omaha- Warren Buffett

Top 105. Jan 16, 2001 9:47 AM

» JenL_2 - Warren grades himself "D" Brinker had no comment..

These posts copied from the "BB Discussion" thread:

Author: KLR
Date: January 16, 2001 8:07 AM
Subject: Warren grades himself "D" Brinker had no comment..

In response to message posted by Will_L:

OMAHA, Neb. (CBS.MW) -- Famed value investor Warren Buffett, chairman of Berkshire Hathaway, took his knocks in 1999. So much so that the "Oracle of Omaha" gave himself a grade of "D" in his year-end letter to shareholders.

This year's report card will look far different.

Berkshire Hathaway's Class A (BRKA: news, msgs) shares are now trading near a new 52-week high of $69,800 -- that's a 65 percent jump from the stock's two-year low in early March. The stock had been on a downward slide since mid-1999 before staging its rebound.

The diversified holding company, whose primary businesses are engaged in property and casualty insurance, is making great strides at a terrible time for a sector that billionaire Buffett shuns: technology

The rebound is a marked improvement after Buffett described Nebraska-based Berkshire Hathaway's 1999 stock return as the "worst absolute performance of my tenure, and, compared to the S&P, the worst relative performance as well."

Author: Will_L
Date: January 16, 2001 8:26 AM
Subject: Re: Warren grades himself "D" Brinker had no comment..

In response to message posted by KLR:

Thanks for the news item KLR. Honesty is the bedrock in any profession and I think it would have been very uncharacteristic to hear Buffet blaming elections and earnings compressions and fed moves for underperformance.

His take is a very refreshing one and one that many could learn from.

-- posted by JenL_2

Top 106. Mar 10, 2001 1:09 PM

» Kirk - Released 3/10/01

Author: MichaelJohn64
Date: March 10, 2001 12:52 PM
Subject: Investment wisdom from the Oracle of Omaha

Remember when everyone thought Buffet was yesterday's news and they were laughing at the old fogey for missing out on the Tech revolution? Who's laughing now?
This is from his annual letter to Berkshire shareholders released today:

"Now, speculation - in which the focus is not on what an asset will produce but rather on what the next fellow will pay for it - is neither illegal, immoral nor un-American. But it is not a game in which Charlie and I wish to play. We bring nothing to the party, so why should we expect to take anything home?

The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities - that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future - will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There is a problem, though: They are dancing in a room in which the clocks have no hands.

Last year, we commented on the exuberance — and, yes, it was irrational - that prevailed, noting that investor expectations had grown to be several multiples of probable returns. One piece of evidence came from a Paine Webber-Gallup survey of investors conducted in December 1999, in which the participants were asked their opinion about the annual returns investors could expect to realize over the decade ahead. Their answers averaged 19%. That, for sure, was an irrational expectation.

Far more irrational still were the huge valuations that market participants were then putting on businesses almost certain to end up being of modest or no value. Yet investors, mesmerized by soaring stock prices and ignoring all else, piled into these enterprises. It was as if some virus, racing wildly among investment professionals as well as amateurs, induced hallucinations in which the values of stocks in certain sectors became decoupled from the values of the businesses that underlay them.

This surreal scene was accompanied by much loose talk about "value creation." We readily acknowledge that there has been a huge amount of true value created in the past decade by new or young businesses, and that there is much more to come. But value is destroyed, not created, by any business that loses money over its lifetime, no matter how high its interim valuation may get.

What actually occurs in these cases is wealth transfer, often on a massive scale. By shamelessly merchandising birdless bushes, promoters have in recent years moved billions of dollars from the pockets of the public to their own purses (and to those of their friends and associates). The fact is that a bubble market has allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them. Too often, an IPO, not profits, was the primary goal of a company's promoters. At bottom, the "business model" for these companies has been the old-fashioned chain letter, for which many fee-hungry investment bankers acted as eager postmen.

But a pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learns some very old lessons: First, many in Wall Street - a community in which quality control is not prized - will sell investors anything they will buy. Second, speculation is most dangerous when it looks easiest."

-- posted by Kirk

Top 107. Mar 10, 2001 9:17 PM

» Roger_Babson - Re: Interesting how Value has come back

In response to message posted by Kirk:

BRK.A is indeed a value stock and one of many similar stocks that peaked in 1998 and 1999 with the secular bull market peak of the overall market of common stocks.

The stock is losing momentum here, and I expect it to resume another downtrend in the secular bear market to a lower low this year, along with the decline in the NYSE, DJIA, and SPX, which will be a confirmation of the onset of the secular bear market.

Buffet will likely go on a distressed asset shopping spree over the next 3-4 years. Even with a decline in the price of BRK.A and BRK.B, Buffet is overflowing with cash (as he was smart enough to sell when it was correct to sell and not get caught up in the bubble mentality) to purchase the assets of failing companies either to securitize them, manage them directly, or to sell them at a profit at some later date when the cycle turns.

BRK.A and .B may eventually fall as much as two-thirds to three-quarters from the all-time high but Buffet is in cash and prepared to weather the storm, unlike most of his peers (Are there any?) and most people on this list.

-- posted by Roger_Babson

Top 108. Mar 10, 2001 9:31 PM

» Roger_Babson - Re: Released 3/10/01

In response to message posted by Kirk:

When Mr. Buffet utters such gems of wisdom, using sterilized language so as not to appear superior of offensive, we all nod our heads in agreement and deference.

When the "Roger Babsons" sound a similar refrain with rather more provocative language well ahead of the obvious outcome of such exhuberance, they are labeled naysayers, gloom-and-doomers, and worse.

When the carnage is upon us, we will view the Babsons as having contributed to the cause of the debacle and worthy of the utmost derision.

However, Mr. Buffet will retain his crown as genius, even though his company's stock price may be a quarter to 40% of its all-time high value in the worst of the crash.

No, life is not fair, and most people are sheep and not very smart ones at that, but I like it that way, and no doubt so does Mr. Buffet. Were it not for the blind and herd-prone sheep, how could Mr. Buffet and I make so much money as contrarians? ;-)

Thank goodness for sheep and the calm rationalism of the Buffets of the world.

-- posted by Roger_Babson

http://berkshirehathaway.com/2000ar/2000...

Top 109. Mar 11, 2001 10:08 AM

» Kirk - Berkshire's vs. the S&P 500

Pretty impressive!

-- posted by Kirk

Top 110. Mar 11, 2001 10:19 AM

» Rande - Re: Re: Released 3/10/01

In response to message posted by Roger_Babson:

So Warren Buffet joins Harry Dent, along with the rest of humanity. It seems that so far as Roger Babson is concerned, anyone who is not Roger Babson is a schmuck. Evidently, that includes humanity at large, bubbleheaded fools one and all, deserving of all the ills that will inevitably befall them.

-- posted by Rande

Top 111. Mar 11, 2001 1:22 PM

» KLR - Bubblehead Buffet Clowning Around

In response to message posted by Rande:

Berkshire Hathaway doubles profit
The Sage of Omaha recovers
By Steve Gelsi, CBS.MarketWatch.com
Last Update: 12:03 PM ET Mar 10, 2001

OMAHA, Neb. (CBS.MW) -- Warren Buffett's holding company Berkshire Hathaway saw its profit grow 114 percent in 2000 during a time of withering tech shares and surging old economy stocks, the firm reported on Saturday.

The investment company (BRK.A: news, msgs, alerts) , which also owns Geico insurance and General Re, grew its book value 6.5 percent vs. a 9.1 percent drop in the S&P 500 ($SPX: news, msgs, alerts) last year.

Berkshire rang up net profit of $3.3 billion, up from $1.6 billion in the year-ago period. That amounts to $2,185 per share, up from $1,025 per share in 1999. Revenue came in at $34 billion, up from $24 billion in the year-ago period.

"Overall, we had a decent year," Warren Buffett said in a shareholder letter that displayed his usual homespun humor about his aversion to tech and Internet firms.

"I will tell you now that we have embraced the 21st century by entering such cutting-edge industries as brick, carpet, insulation and paint," he said. "Try to control your excitement."

Investment gains more than made up for underwriting losses in its main insurance businesses.

Buffett bounced back from last year, which he called the worst ever for the firm.
Berkshire's stock closed at $71,100 per share.

Steve Gelsi is a reporter for CBS.MarketWatch.com.

-- posted by KLR

http://www2.marketwatch.com/news/yhoo/st...

Top 112. Apr 2, 2001 7:26 PM

» Kirk - Buffett takes a stake in Gap

Buffett takes a stake in Gap
By The Associated Press
Last Update: 6:23 PM ET Apr 2, 2001

OMAHA, Neb. (AP) -- Billionaire investor Warren Buffett jokes that he can make a tailored suit look bad, but he apparently likes the looks of trendy clothing company Gap Inc.

A filing with the Securities and Exchange Commission released Monday showed Buffett's Berkshire Hathaway Inc. has spent $204 million on 8 million shares of the San Francisco-based clothing retailer (GPS: news, msgs, alerts) .

Gap also markets clothes under the Banana Republic and Old Navy brand names.

The filing was made public after the SEC refused to allow Buffett to use a procedure he routinely employed in the past to delay disclosure of Berkshire holdings.

Two other Berkshire investments also were made public in the new filing. Berkshire invested $3.45 billion in the year ended Dec. 31 in San Francisco-based bank giant Wells Fargo (WFC: news, msgs, alerts) and $181 million in electricity company GPU Inc. (GPU: news, msgs, alerts) of Morristown, N.J.

Marc Hamburg, a vice president at Berkshire, did not immediately return telephone calls seeking comment on the filings.

Buffett's 4.9 million shares in GPU equals about 4 percent of that company, GPU spokesman Ned Raynolds said.

"He's a smart investor and we're glad he sees value in GPU stock," Raynolds said.

GPU plans to merge with Ohio-based First Energy.

Buffett also has invested heavily in MidAmerican Energy of Des Moines, Iowa.

Berkshire Hathaway (BRKA: news, msgs, alerts) owns or has holdings in such varied companies as Coca-Cola, The Washington Post, See's Candies, and car insurer GEICO.

Shares of Gap, Inc. added 70 cents Monday to close at $24.42. Wells Fargo shares gained 22 cents to $49.69 and GPU stock slipped 29 cents to end at $32.20

Shares of Berkshire Hathaway fell $1,460, or 2.23 percent, to $63,990.

-- posted by Kirk

http://biz.yahoo.com/rf/010402/n02333263...

Top 113. Apr 2, 2001 7:27 PM

» Kirk - Berkshire discloses holdings in GPU

Berkshire Hathaway discloses holdings in Gap, GPU
NEW YORK, April 2 (Reuters) - Warren Buffett's Berkshire Hathaway Inc.(NYSE:BRKa - news) disclosed holdings in clothes retailer Gap Inc.(NYSE:GPS - news) and utility holding company GPU Inc.(NYSE:GPU - news) on Monday in a document filed with the Securities and Exchange Commission (SEC).

Berkshire held 8 million shares in Gap at Feb. 14, the document shows, representing a 0.9 percent share of the San Francisco-based company, worth about $204 million in February. Gap shares rose 3 percent to $24.42 on Monday on the New York Stock Exchange.

Berkshire also owns 4.9 million shares in Pennsylvania-based utility holding company GPU, a 4 percent stake worth about $181 million in February, the same filing said. GPU shares fell 0.89 percent to $32.20, also on the

NYSE.

Berkshire has been providing details on some of its smaller holdings this year after it lost a recent struggle with the SEC to keep certain investments private.

Berkshire, which is primarily an insurance and reinsurance company but also acts as a vehicle for Warren Buffett's investments, held about $38 billion worth of stocks at the end of last year, according to the firm's annual report last month.

Berkshire's major stock holdings include 11 percent of charge card giant American Express Co.(NYSE:AXP - news), 8 percent of soft-drink maker Coca-Cola Co.(NYSE:KO - news), 9 percent of consumer goods firm Gillette Co.(NYSE:G - news) and 18 percent of newspaper publisher The Washington Post Co.(NYSE:WPO - news)

-- posted by Kirk