WEB:The Oracle of Omaha- Warren Buffett

Top 182. Oct 27, 2003 10:07 AM

» Kirk - Re: Re: Price for a cherry consensus

In response to message posted by Normxxx:

I too look to buy on pullbacks. I took some (5%)profits in CACS at $9.90 and used SOME of those to buy into a small fiberoptics company this AM I've had my eye on. Like CACS, it had a pullback so I bought it rather than buying my CACS shares back at $9.30 this AM to get a bit more diversity. So far, I'd have made a bit more to have bought the CACS back (up more right now) but that is often the price to diversify. (These were NOT newsletter buys and sells.)

-- posted by Kirk

Top 183. Oct 27, 2003 10:14 AM

» Normxxx - Re: Re: Re: Price for a cherry consensus

In response to message posted by Kirk:

And in the long run, you can usually quantify the advantage of diversity (assuming all else is equal-- which it hardly ever is).

-- posted by Normxxx

Top 184. Oct 27, 2003 1:22 PM

» Jen_ - Re: Buffett Sees Little to Invest In

.
In response to message posted by Kirk:

the article from 10/26 Barron's...

The Waiting Game

Unable to find bargains, Warren Buffett is making a pitch for patience

By ANDREW BARY

THE WORLD'S MOST SUCCESSFUL INVESTOR doesn't see a lot that appeals to him right now. A patient Warren Buffett, the chairman and chief executive of Berkshire Hathaway, is sitting on an enormous cash hoard -- more than $24 billion -- awaiting investment opportunities in the stock and bond markets. In a wide-ranging interview last week at Berkshire's Omaha, Neb., headquarters, Buffett said that he's "not finding anything" in the stock market and isn't enamored of Treasury bonds or junk debt.

However, the 73-year-old CEO sounded upbeat on the outlook for his own company, whose stock has appreciated little this year despite stronger earnings and a rising book value. Berkshire's Class A shares finished Friday at $76,000, up 4% this year and not much higher than they were in late 1998. The Class B shares, equal to 1/30th of a Class A share, stand at $2,530. (For ways to buy Berkshire in little chunks, see The Electronic Investor.) Berkshire now trades for 22 times projected 2003 profits of $3,500 per Class A share and for 1.7 times its book value of $46,000 a share.

"I'm happy with the acquisitions that we've made in the past five years," Buffett said. Through a series of deals totaling more than $15 billion, he's transformed Berkshire into a giant conglomerate with significant noninsurance businesses. These complement Berkshire's two other main operations: property and casualty insurance and investments, including a famed equity portfolio currently worth about $32 billion.

Buffett said that Berkshire has paid, on average, about seven times pretax earnings for its acquisitions, an attractive price given current stock-market valuations. The Standard & Poor's 500 index trades for nearly 20 times projected 2003 operating profits and for 13 to 14 times pretax earnings. The company's notable acquisitions have included Shaw Industries, the leading U.S. carpet manufacturer; Benjamin Moore, the paint producer; Johns Manville, which makes insulation, roofing and other materials; and 80% of Mid-American Energy, an Iowa-based utility with large interests in the U.K.

Buffett also is bullish on Berkshire's most important business: insurance, which includes Geico, one of the country's leading auto insurers. The unit also houses General Re, the big global reinsurer, and another reinsurance business geared toward catastrophes such as hurricanes and earthquakes that has achieved great results under Ajit Jain -- a manager whom many consider brilliant. Buffett called Berkshire's insurance operation "one of the best in the world." In recent years, Gen Re has been the weak link, suffering $7 billion in underwriting losses from 1999 through 2002. But Gen Re had an underwriting profit in the first six months of 2003. "In my view, Gen Re is fixed," Buffett declared.

With his trademark insight and wit, Buffett also touched on the drug, technology, banking, supermarket, life-insurance and auto-insurance industries, as well as long-time Berkshire investments Coca-Cola and Gillette.

"We've got more cash than ideas," Buffett said. "The question is whether that will prevail for an unduly long time." Buffett added that he's "optimistic" that good opportunities will turn up, and noted that Berkshire had gone through fallow new-investment periods in the past.

Berkshire has made two sizable acquisitions this year, paying $1.7 billion for Clayton Homes, a manufactured-housing maker and lender, and $1.5 billion for McLane, a leading grocery wholesaler purchased from Wal-Mart Stores. Buffett is excited about both deals. He said that McLane, already a big supplier to 7-Eleven and other convenience stores, now can do business with Wal-Mart competitors that once shunned it.

Berkshire paid about 12 times after-tax earnings for Clayton, a price deemed inadequate by many of the manufacturer's stockholders, who unsuccessfully tried to block the transaction. Berkshire paid roughly seven times pretax profits for McLane. In the past five years, Berkshire has shifted gears and focused on buying entire businesses, thus gaining full control over their earnings, rather than stakes in large public companies.

Buffett's market-related comments are consistent with those made in Berkshire's annual report, which was released in March, and at Berkshire's annual meeting in early May. In the annual, Buffett wrote that "despite three years of falling prices, which have significantly improved the attractiveness of common stocks, we still find very few that even mildly interest us."

In the interview, a gracious and energetic Buffett didn't provide any fresh information about who eventually will succeed him, an issue that probably is the top investor concern now about Berkshire. Buffett has said he plans to split his job in two, with one successor running Berkshire's investments and the other, the operating businesses. At Berkshire's annual meeting, he said there are four strong internal candidates, but he didn't name them. The long-time chief of investments at Geico, the 66-year-old Lou Simpson, probably will head Berkshire's investment side if Buffett dies or steps down in the next few years. But Buffett said he has no plans to retire.

Buffett, who doesn't give many interviews, made his comments in his downtown Omaha office and over lunch at the private restaurant in his office building (Buffett had a bacon, lettuce and tomato sandwich and an iced tea). His modest-sized corner office is dominated by a large photograph of his father, Howard, from the early 1940s, around the time the elder Buffett was elected to the U.S. House of Representatives from Nebraska. Unlike most chief executives, Buffett has no computer or financial-data terminal in his office. His e-mail is routed to his assistant, who prints it out for him.

There is a TV in a cabinet that Buffett will tune to CNBC when he's active in the stock market. Among the photos on the walls is one of his friend, the late Katharine Graham, former head of the Washington Post, and her son, Don Graham, the current Post CEO, who has benefited from Buffett's advice over the past 30 years. Berkshire owns a 17% stake in the Post, which under Don Graham has become one of the best-run U.S. media companies.

On Buffett's messy desk were reports from Berkshire subsidiaries, an earnings release from U.S. Bancorp and a video about Al Davis, owner of the Oakland Raiders football team.

Perhaps to add a dose of humility, Buffett has a set of the World Book encyclopedia on a table. The World Book business was part of an otherwise successful acquisition of the conglomerate Scott Fetzer in the early 1980s. The World Book, which once sold 300,000 encyclopedias annually at $600 each, saw its business erode as encyclopedias migrated to cheaply priced CD-ROMS, in a move led by Buffett's friend, Microsoft's Bill Gates. Microsoft bought the Funk & Wagnall's business and then renamed it Encarta. Buffett says he still likes to peruse the old encyclopedias.

When this reporter arrived, Buffett was looking through e-mails sent to him by Michael Dell, the CEO of Dell Computer, about the progress of Dell's wife, Susan, in the Ironman Triathlon in Hawaii. Susan Dell, 39, successfully completed that grueling event -- involving swimming, biking and running -- in 13½ hours, four hours behind the leading women, according to the Ironman Website. Buffett joked that, in contrast, he gets winded "walking up a flight of stairs." Buffett does have a computer at his Omaha home; he's an avid player of online bridge.

For a company with 60 subsidiaries and a market value of $115 billion, Berkshire has unusually quiet offices. Buffett's phone didn't ring once during an hour in his office.

Berkshire's cash position grew to over $24 billion on June 30 from $10 billion at the end of 2002, largely reflecting first-half operating profits of $2.7 billion and the sale of about $9 billion of long-term Treasury bonds held in actively managed portfolios. Berkshire sold the bonds as long-term rates fell to their lowest levels in 40 years -- a smart move given the rate rise since midyear.

Buffett, who has spent a lifetime successfully playing the percentages, says that buying Treasury bonds at current levels probably isn't a smart move. He noted that Berkshire could be earning $1 billion more annually on its investment portfolio if it shifted its cash holdings into longer-term Treasuries, but Buffett doesn't believe the risk is worth the added income. As he said in the Berkshire annual, earnings less than 1% after taxes on short-term investments is "no fun. But occasionally, successful investing requires inactivity."

Berkshire's reinsurance operations are all about playing the percentages and taking the kind of big risks from which most insurers shrink. Thanks to its fortress-like balance sheet and a triple-A credit rating, one of the last in the insurance industry, Berkshire can take billion-dollar risks involving hurricanes, earthquakes and offshore oil rigs, if the premiums are right. Berkshire is benefiting from the upturn in pricing seen in the past two years, as well as from its financial strength, which appeals to conservative primary insurers that want to lay off risk.

IN WARREN'S WORDS

The Berkshire boss' views on topics large and small:

On the stock market:

"We're not finding anything. … We have more cash than ideas. The question is whether that will prevail for an unduly long time."

On junk bonds:

"We don't see anything attractive."

On Berkshire's many acquisitions:

"I'm happy with what we've done over the past five years." Deals were done for an average of "seven times pretax income."

On General Re, which suffered $7 billion in operating losses from 1999 through '02:

"Gen Re, in my view, is fixed. …We have one of the best insurance operations in the world."

On the drug industry versus technology:

"Drugs are a better business, in the aggregate, than technology. … It's hard to find a drug company that has failed."

On Wal-Mart:

"It's a terrific operation that delivers good value. It's killing" the supermarkets.

On auto insurance:

"Our competition is Progressive. We and they have the best systems long term."

On "independent" board members at Fortune 500 companies:

"Aggregate board fees account for at least a third of the income of 20% of board members."

On his foundation's charitable mandate:

Find uses that "have a high benefit-cost ratio for society and no natural funding constituencies."

On Coca-Cola and Gillette:

"I made a mistake" in not selling them at their highs in the late 1990s. "They weren't the focal point of the bubble, but they achieved bubble prices."

Berkshire recently insured a PepsiCo sweepstakes that offered one lucky contestant a 1-in-1,000 chance of winning $1 billion. The present value of that prize was about $250 million. Buffett said other insurers wouldn't touch the contest because of the fear of losing $250 million in a single event and wrecking their quarterly profits. But Berkshire took the risk because the premium was right. Buffett wouldn't divulge it, but says the premium was more than $250,000, which is 1/1,000th of $250 million. The bet paid off for Berkshire: The contestant lost. Turning toward this reporter, Buffett said he'd bet $1 billion on the flip of a coin if the odds were 3 to 2 in his favor; the actual odds are even. As Buffett has often said: "At Berkshire, we would rather earn a lumpy 15% over time than a smooth 12%."

Berkshire's most notable investment last year was the purchase of about $7 billion of junk debt as the high-yield market cratered in the summer and early fall after the bankruptcies of WorldCom and Adelphia Communications.

Given the sharp rally in junk this year, Buffett doesn't see much allure there. "We don't see anything attractive in junk bonds," Buffett said. He wishes Berkshire had bought more junk last year, but he would buy the depressed debt only of companies he understood.

Perhaps Berkshire's best deal in recent years was buying control of Mid-American Energy. Under Berkshire, the utility has purchased two big natural-gas pipelines at attractive prices in the past year. "Mid-American will be a big business in 10 years." Buffett said. "The growth will come in lumps." Berkshire paid about $2 billion for its 80% stake in Mid-American and now is reaping profits at a rate of over $300 million annually.

Looking ahead, Buffett says his two biggest challenges are "allocating capital intelligently and keeping the [Berkshire] managers happy." The first job is the toughest. After all, as he notes in the annual: "In 38 years, we've never had a single CEO of a subsidiary elect to leave Berkshire to work elsewhere."

Buffett has never been comfortable with technology stocks, and he's somewhat puzzled by the current valuation gap between major tech and drug issues. Intel and Cisco Systems command double the valuation of pharmaceutical leaders such as Pfizer and Johnson & Johnson. "Drugs are a better business in the aggregate than technology," Buffett argues, citing higher returns on capital and greater product longevity, owing to patent protection. "If you look at the top 10 drug companies ranked by sales, the No. 2 or No. 3 company from the bottom is still earning a good return. It's hard to find a drug company that has failed," Buffett says. In tech, by contrast, "the outstanding ones are outstanding," but there are fewer of them, he says. Tech companies, he adds, are more sensitive to the economy.

The master investor says that 40 years ago, Benjamin Graham identified something that's relevant to current tech valuations: "Companies with mystery are worth more than those without mystery."

Berkshire has long been involved in property and casualty insurance, but it has done little in life insurance, whose economics and inherent risks make Buffett wary. All too often, he says, "the sales force dictates the contract." Sellers of variable annuities, for instance, often guarantee minimum values on the death of the policyholder. With the S&P 500 index well below its peak, life insurers have had to take financial charges to reflect the likely cost of those minimum death benefits. Variable annuities amount to mutual funds with a life- insurance wrapper.

Buffett also complains that life insurers often guarantee minimum interest rates on whole-life policies. If rates fall sharply, that can be very costly, as Japanese insurers have bitterly learned. Group life policies carry the risk that large corporate facilities could become terrorist targets. Buffett says that Berkshire was approached after Sept. 11 by a life company about reinsuring $2 billion of group life policies above a $1 billion threshold. The insurer balked at the high price that Berkshire felt would adequately reflect the true risk.

Buffett was criticized as irresponsible in the wake of Sept. 11 for discussing the risks of a terrorist attack involving biological, chemical or nuclear weapons. His response: The threat is real, if remote, and insurers owe it to their shareholders to consider such unthinkable events as a terrorist-inspired nuclear attack on Manhattan.

Buffett remains a big fan of Wal-Mart, noting that one of his biggest mistakes was not buying the stock years ago because it looked overvalued. "That cost us $8 billion," he says. Owing to Wal-Mart, he's down on supermarket stocks, which are favored by many value-oriented investors: In Buffett's view, Wal-Mart, now the nation's largest grocer, "is killing" the supermarkets. "Wal-Mart is a terrific operation that delivers good value to people."

Looking at the banking industry, Berkshire says it's "amazing" that so many companies continue to earn returns on tangible equity of 20% or more, given that they all deal in a commodity -- money. Few insurers boast a 20% return on equity; American International Group's is around 15%. Banks have relatively low valuations at about 12 times next year's projected profits, a sharp discount to the S&P 500, despite good earnings stability and persistently high returns.

Berkshire has done very well with its Coca-Cola and Gillette stakes, accumulated in the late 1980s. But Buffett says he erred by not selling them at their late 1990s peaks. Coke, at 45, and Gillette, at 30, are about 50% below their highs. "Coke and Gillette weren't the focal point of the bubble, but they achieved bubble prices," the Berkshire chief observes.

At their highs, Coke and Gillette traded for about 50 times earnings. Buffett said his role as a Coke and Gillette director would have made it nearly impossible for Berkshire to sell its stakes several years ago. As a director, Buffett might have been deemed to be in possession of insider information.

Those situations show the downside of being on corporate boards, Buffett adds. He's still a director at Coke, but not at Gillette. In the Berkshire annual, he and Vice Chairman Charlie Munger said they were "increasingly comfortable" with Coke, Gillette, American Express and other key equity holdings, but didn't view the stocks as being "undervalued." Coke and Gillette now trade at 20 to 25 times projected 2003 profits.

At a time when scandals involving Enron, Tyco International and WorldCom have thrown the spotlight on the role of corporate boards, companies are being forced to add more independent directors as a check against management. But Buffett wonders about their effectiveness. He estimates that for 20% of board members of Fortune 500 companies, "aggregate board fees account for a third of their income." Buffett questions how such directors can truly exercise independent judgment when they depend on the goodwill of management to remain on the boards.

Looking at the auto-insurance industry, Buffett had high praise for Progressive and Mercury General, both rivals of Berkshire's Geico.

Buffett views Progressive as Geico's chief competitor. "They and we have the strongest systems, long term," he comments. Progressive, like Geico, is growing rapidly by selling policies directly to drivers. Its stock has risen sharply in the past few years. Mercury General has become one of the largest California auto insurers through tight underwriting standards and the use of agents to weed out bad risks. Buffett calls Mercury's CEO, the 81-year-old George Joseph, "a hall of famer." Joseph and Hank Greenberg, the 78-year-old chief executive of insurance giant AIG, are renowned for the intimate knowledge of their organizations. "Not only do they know when every sparrow falls, they know what every sparrow is thinking," he says.

Buffett talked with Barron's on the day that Morgan Stanley's property and casualty insurance analyst, Vinay Saqi, began coverage of Berkshire with an Overweight rating and a price target of $90,000 and downgraded AIG to Underweight from Equal Weight, citing the risk of the contraction in AIG's price/earnings multiple. He joked that Saqi should have done the opposite -- downgrading Berkshire and upgrading AIG -- because "Hank cares about that. I don't." Buffett says he doesn't focus on Berkshire's stock price and doesn't want a shareholder base that cares about market "squiggles." Buffett reiterated that he wants Berkshire investors to take a long-term view.

The Berkshire leader, who boasts that he's never sold a share of Berkshire, is pleased with its current base of shareholders, many of whom bought the stock in the mid-1960s, when he ended his investment partnership and took control of a textile maker called Berkshire Hathaway. Institutional ownership is low. Buffett's 31% stake is worth over $35 billion.

Buffett says he's uninterested in splitting Berkshire stock or doing anything to promote it. He's proud that annual turnover in the A shares is less than 3% -- the lowest figure for any major U.S. company.

Buffett adds that Berkshire holders come in two classes, those who own the company on "faith" and those who analyze it extensively.

The "faith" investors tend to be those who've held it for a long time. A few years ago, the New York Times reported on a formerly unknown Brooklyn couple who left a $750 million estate in Berkshire stock. Such fortunes are possible because an original investment of 1,000 shares of Berkshire in 1965, which would have cost $20,000, is now worth $75 million. Buffett says there are other investors like the couple, including four Berkshire billionaires not listed in the Forbes 400.

As for dividends, he says that most Berkshire shareholders "don't care" about them. And Buffett doesn't seem eager to offer any. (The company hasn't paid a cash dividend since 1967.)

Nevertheless, dividends are a possibility down the line because Buffett has said that if Berkshire can no longer create shareholder value by retaining profits, it will pay out its earnings to shareholders. Some investors would like to see an appreciable dividend, especially in light of the tax break individual recipients now get.

Berkshire may earn $3,500 a share this year, or more than $5 billion. Those earnings could easily support a dividend of $1,500 a share, producing a 2% yield.

And in the post-Buffett era, Berkshire is apt to pay a dividend. That would remove some of the pressure on Buffett's successors to invest annual profits. It would also provide income to Buffett's foundation, which will receive about 99% of his Berkshire holdings following his death and that of his wife, Susan.

The foundation's goal, he says, will be to find uses that "have a high benefit-cost ratio to society and no natural funding constituencies." Buffett, who says he's in excellent health ("the top 1%" for his age, according to his doctor, he says), could be at Berkshire's helm for another five or 10 years or longer.

Late last week, Buffett flew to a California resort for a gathering of the "Graham Group" -- disciples and admirers of the late Benjamin Graham, one of the 20th century's great investors and an early Buffett mentor. The Berkshire chairman is the unofficial leader of this aging gang, which meets every two years. The 50 or so attendees, including spouses, were slated to include Charlie Munger, Walter Schloss, Bill Ruane and Lou Simpson.

Another attendee was Bill Gates, who injects some relatively young blood into the event. Gates turns 48 this week. One of the main topics at prior retreats for these wealthy men has been philanthropy.

As Buffett describes it, the group's focus has shifted over the years: "First, it was: 'How do we make money?' Then it was: 'How do we spend money?' Now, it's: 'How do we give it away?'" Buffett says that Gates, who has given away $25 billion so far, including funding to eradicate malaria in parts of the developing world, has done a great job.

So has Buffett at Berkshire, in part because he knows when it's time to invest and when it's time to be patient.

Subscribe to Barron's & WSJ Online @ http://www.wsj.com

....Jen

-- posted by Jen_

Top 185. Jan 23, 2004 6:15 AM

» Q_out - Alaska Gas Pipeline

.
A Berkshire Hathaway affiliate filed applications with the State of Alaska Department of Revenue for approval under the Alaska Stranded Gas Development Act for authority to negotiate tax and financial terms with the State of Alaska to facilitate the transportation of stranded Alaskan natural gas. The proposed 745-mile, $6.3 billion pipeline extends from the North Slope area near Prudhoe Bay southward to the Alaska-Yukon border near Beaver Creek.

The 48-inch diameter high-pressure natural gas pipeline would have an initial design capacity of approximately 4.5 billion cubic feet of gas per day. At the Alaska-Yukon border, the pipeline will interconnect with a new, companion pipeline in Canada. This line will be built either by TransCanada through its Foothills Pipe Lines Ltd. subsidiary, or others. The new pipeline could be an extension of the existing Foothills prebuild pipeline or may be developed by other entities. In either event, the new Canadian facilities would connect Alaskan gas for delivery into multiple existing downstream pipeline systems into virtually every market center in Canada and the lower 48 United States. Proven reserves of stranded gas on the North Slope exceed 35 trillion cubic feet.

MEHC Alaska Gas Transmission Company will be responsible for the Alaska segment of the project. MAGTC is pursuing project development in anticipation of a Dec. 31, 2010, in-service date.
http://biz.yahoo.com/prnews/040122/lath1...

Natural gas prices are expected to stay above $5 per million Btu for quite some time.

<img src="/files/mysites/qout/bhoestarts.gif" width=53 height=34 align="left">
Q_out
DISCLAIMER: My words and observations are general in nature, and are not meant as specific investment advice. Individuals should consult with their own advisors for specific investment advice.

-- posted by Q_out

http://www.berkshirehathaway.com/2003ar/...

Top 186. Mar 8, 2004 7:10 PM

» Normxxx - BERKSHIRE HATHAWAY INC.

BERKSHIRE HATHAWAY INC.
2003 ANNUAL REPORT

-- posted by Normxxx

Top 187. Mar 13, 2004 11:20 AM

» Kirk - WEB on On Taxes

.
I think WEB is wrong. Corporations should not pay taxes, period. This would make the US a good place for them to set up head offices. Then we counter with a higher tax rate on indidivuals, especially the upper income to replace this lost tax.

Right now, we gave the tax breaks to "everyone" which ammounted to most of the dollars going to the wealthy since they pay the most taxes. We should actually change this and give the tax breaks to the corporations. This income would flow to either reinvestment, dividends, higher salaries or higher stock prices from share buy backs.

Of course, nobody benefits directly so there is no easy votes from this simple solution. Ideally, we'd want the top companies from all over the world to put their headquarters and top paid executives in the US so we could then tax these folks!

On Taxes
http://www.siliconinvestor.com/stocktalk...

On May 20, 2003, The Washington Post ran an op-ed piece by me that was critical of the Bush tax proposals. Thirteen days later, Pamela Olson, Assistant Secretary for Tax Policy at the U.S. Treasury, delivered a speech about the new tax legislation saying, “That means a certain midwestern oracle, who, it must be noted, has played the tax code like a fiddle, is still safe retaining all his earnings.” I think she was talking about me.

Alas, my “fiddle playing” will not get me to Carnegie Hall – or even to a high school recital. Berkshire, on your behalf and mine, will send the Treasury $3.3 billion for tax on its 2003 income, a sum equaling 2½% of the total income tax paid by all U.S. corporations in fiscal 2003. (In contrast, Berkshire’s market valuation is about 1% of the value of all American corporations.) Our payment will almost certainly place us among our country’s top ten taxpayers. Indeed, if only 540 taxpayers paid the amount Berkshire will pay, no other individual or corporation would have to pay anything to Uncle Sam. That’s right: 290 million Americans and all other businesses would not have to pay a dime in income, social security, excise or estate taxes to the federal government. (Here’s the math: Federal tax receipts, including social security receipts, in fiscal 2003 totaled $1.782 trillion and 540 “Berkshires,” each paying $3.3 billion, would deliver the same $1.782 trillion.)

Our federal tax return for 2002 (2003 is not finalized), when we paid $1.75 billion, covered a mere 8,905 pages. As is required, we dutifully filed two copies of this return, creating a pile of paper seven feet tall. At World Headquarters, our small band of 15.8, though exhausted, momentarily flushed with pride: Berkshire, we felt, was surely pulling its share of our country’s fiscal load.

But Ms. Olson sees things otherwise. And if that means Charlie and I need to try harder, we are ready to do so.

I do wish, however, that Ms. Olson would give me some credit for the progress I’ve already made. In 1944, I filed my first 1040, reporting my income as a thirteen-year-old newspaper carrier. The return covered three pages. After I claimed the appropriate business deductions, such as $35 for a bicycle, my tax bill was $7. I sent my check to the Treasury and it – without comment – promptly cashed it. We lived in peace.

I can understand why the Treasury is now frustrated with corporate America and prone to outbursts. But it should look to Congress and the Administration for redress, not to Berkshire.

Corporate income taxes in fiscal 2003 accounted for 7.4% of all federal tax receipts, down from a post-war peak of 32% in 1952. With one exception (1983), last year’s percentage is the lowest recorded since data was first published in 1934.

Even so, tax breaks for corporations (and their investors, particularly large ones) were a major part of the Administration’s 2002 and 2003 initiatives. If class warfare is being waged in America, my class is clearly winning. Today, many large corporations – run by CEOs whose fiddle-playing talents make your Chairman look like he is all thumbs – pay nothing close to the stated federal tax rate of 35%.

In 1985, Berkshire paid $132 million in federal income taxes, and all corporations paid $61 billion. The comparable amounts in 1995 were $286 million and $157 billion respectively. And, as mentioned, we will pay about $3.3 billion for 2003, a year when all corporations paid $132 billion. We hope our taxes continue to rise in the future – it will mean we are prospering – but we also hope that the rest of Corporate America antes up along with us. This might be a project for Ms. Olson to work on.

-- posted by Kirk

Top 188. Mar 15, 2004 7:22 AM

» Kirk - WEB: Nothin but a very rich chicken thief.

.
Bob owns a GM dealership in Texas.

To:richardred who wrote (14027)
From: robert b furman Monday, Mar 15, 2004 5:56 AM
http://www.siliconinvestor.com/stocktalk...

Hi Richardred,

Down in Texas we have a name for people like Mr. Buffet.

Most call him a "Value Investor" We call people like him a "Chicken Thief".

You know the guy who comes on your lot and wants to buy that low mileage beautiful corvette for $2000 below what you can sell it for at a wholesale auction.

To play his game you have to wait like a fox and find somebody big - who has just screwed up and then be opportunistic.

His move into insurance has been brilliant - insurance companies have been reapiers of business ever since 9/11.They've consolidated and bumped up rates while restricting the exposure and coverage they provide.

When you have his size - you must wait for chaos to rule - so you are masked as you implement your plan.

The fact that he cannot find good value is exactly what Chief just said.

He missed the bottom and can't find anything to steal at a low ball - so he's patiently building excess funds.

I personally hope he chokes on his money.This is intended to be a time where money doesn't pay - therefore it should be productively applied not horded.

His style of investing is not well suited for low interest rate scenario's.

Remember he was the only other alternative to Allan Greenspan when LTCM went belly up.I still don't think he has forgiven Greenie for stepping in and saving the market.

For a guy who hates derivatives - he stalks those in the game rather close.

Buffet is also kicking himself in the butt for bailing out of Coke and holding Disney.

The guy is'nt all that good - but he is patient to apply his capital.

If there is a genius about him - that is the lesson I think.

JMHO

Bob

Nothin but a very rich chicken thief.

-- posted by Kirk

Top 189. Mar 15, 2004 9:09 AM

» Normxxx - Re: WEB: Nothin but a very rich chicken thief.

In response to message posted by Kirk:

TO: robert b furman

Do I detect the color of Green? But maybe you are just molting for St. Patty's day.

"His style of investing is not well suited for low interest rate scenario's."

I guess not for last year. But it sure was over the the preceding three years. I guess you have long term memory problems.

I guess in your book there is no such thing as a prudent investor, only predatory investors. I suppose you don't consider a buyer a 'gentleman' unless he is willing to pay at least a 20% premium for that piece of s__t you purchased.

Well, in that case there will be no end of distressed businesses to buy shortly; but there may be a shortage of buyers, such as Buffet.

FYI, Warren started in the business some 40 years ago, His 40+ year stint with Berkshire is legendary; when he started (in 1962)the stock was selling under $8 a share; it is currently selling north of $93,000 a share (Warren doesn't believe in stock splits). I suppose you can say that that is just luck or 'sneakiness.'

The guy is'nt all that good - but he is patient to apply his capital.

Well, more power to partiotic investors such as you that got us into this mess in the first place.

"This is intended to be a time where money doesn't pay - therefore it should be productively applied not horded."

Very interesting philosophy. Where did you learn it? I take it you are not rich? Well, I guess patriots like you are too busy supporting the economy.

-- posted by Normxxx

Top 190. Mar 15, 2004 9:52 AM

» Kirk - Re: Re: WEB: Nothin but a very rich chicken thief.

.
In response to message posted by Normxxx:

I think this quote says it well:

"In this game, the market has to keep pitching, but you don't have to swing. You can stand there with the bat on your shoulder for six months until you get a fat pitch." - Warren Buffett

I think Bob is saying much the same thing.

Buffett is a great investor... I think Bob is just expressing frustration over having to sell Buffet that 'vette below wholesale auction price. smile

I was pissed that Buffet was able to buy bonds in failed companies and get assets that Stockholders invested in. Tight money and stupid CEO's caused defaults on these companies so it lets chicken vultures like WEB come in and eat up the scaraps due to their large piles of capital. They are taking advantage of all those who lost jobs and money... He is not an altruist by any stretch.

-- posted by Kirk