WEB:The Oracle of Omaha- Warren Buffett

Top 265. Sep 10, 2005 7:25 AM

» Kirk - Gen Re CEO threatened by SEC fraud suit

As of 9/10/05 the Total Return for "Kirk's Newsletter Portfolio" since 12/31/98 is Up 173%
(For 2005, Kirk’s Newsletter is Up 5.3% YTD vs QQQQ down 0.8% YTD )

Gen Re CEO threatened by SEC fraud suit

Brandon received 'Wells notice', according to Berkshire, which may result in action against him.
September 9, 2005: 12:18 PM EDT
http://money.cnn.com/2005/09/09/news/for...

NEW YORK (Reuters) - Warren Buffett's Berkshire Hathaway Inc. said Friday securities regulators may file a civil fraud complaint against the chief executive of its General Re Corp. unit over a questionable insurance transaction.

Berkshire said Joseph Brandon received a "Wells notice" from the Securities and Exchange Commission on Thursday, indicating that SEC staff may recommend action against him for alleged violations of securities laws. The SEC may also seek to fine Brandon, force him to give up any ill-gotten profits, and bar him from serving as an officer or director of a public company.

Marc Hamburg, Berkshire's chief financial officer, did not return phone calls seeking comment.

A Wells notice indicates the possibility of civil action and gives the recipient a chance to mount a defense.

The Justice Department and the SEC have been examining whether Brandon played a role in a controversial 2000 transaction between General Re and American International Group Inc. (up $0.69 to $60.45, Research) that helped AIG, the world's largest insurer, improperly increase reserves by $500 million. Brandon became chief executive of General Re, a reinsurer, in 2001.

Two former General Re executives, John Houldsworth and Richard Napier, in June pleaded guilty to charges that they helped AIG misstate financial results. They were also fired.

Federal investigators and regulators have examined e-mails and notes and asked about conversations between Brandon, Buffett and other executives. Buffett, the world's second richest person, was interviewed by regulators in April.

The investigations are part of an industry wide probe into whether General Re and other companies helped clients use nontraditional or "finite" insurance to improperly smooth earnings.

Berkshire's Class A shares (down $400.00 to $84,000.00, Research) edged lower in early New York Stock Exchange trading. The loss is high in terms of dollars because Berkshire has few shares outstanding.

As of 11/23/05 the Total Return for "Kirk's Newsletter Portfolio" since 12/31/98 is Up 186% while the NASDAQ is up 3%!!! (my portfolio beta is roughly equal to that of QQQQ.

For 2005, Kirk’s Newsletter is Up 10.1% YTD vs QQQQ up 4.7% YTD vs DJIA UP 1.2% YTD vs S&P500 Up 5.9% YTD

-- posted by Kirk

URL http://www.app.com/apps/pbcs.dll/article...

Top 266. Sep 23, 2005 6:52 AM

» Kirk - Buffett #2 on Forbes List @ $40B

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Gates #1 on Forbes List @ $51B
Buffett #2 on Forbes List @ $40B

I wonder if the $40 and $51B was in August when MSFT and BRKa were higher?
<img width=452 height=366 src=http://www.marketwatch.com/charts/int-ad... >

The richest

Bill Gates and Warren Buffett head the Forbes annual list of the wealthiest Americans, but Google's founders make a big move up.

Published in the Asbury Park Press 09/23/05

NEW YORK — Google Inc.'s mammoth initial public offering has netted its two co-founders an interesting side benefit: an entree into the upper echelons of Forbes magazine's list of the 400 richest Americans.

Bill Gates, Microsoft Corp.'s co-founder and chairman, was the nation's wealthiest person for the 11th straight year with a net worth of $51 billion, followed again by Berkshire Hathaway Inc. chairman and chief executive Warren Buffett's $40 billion, according to Forbes, which released its annual rankings Thursday.

Perhaps more noteworthy is the ascent of Google founders Sergey Brin and Larry Page, who were ranked 16th by Forbes with $11 billion each, up from No. 43 last year when they each had a net worth of $4 billion.

Google went public last year, but the Internet search engine returned to the capital markets this month with a follow-up offering of shares that raised $4.18 billion. The company has earned $1 billion since going public.

According to Forbes, whose reporters assembled the list through a series of interviews and company filings with the Securities and Exchange Commission, Brin's and Page's post-IPO wealth is accruing at speeds faster than Gates' wealth after Microsoft went public.

Collectively, the top 10 richest Americans saw their collective net worth climb $125 billion, the magazine said. The poorest members of the list each had a net worth of $900 million.

Paul Allen, a childhood friend of Gates who co-founded Microsoft in 1975, was third wealthiest with $22.5 billion, while Dell Inc.'s chief executive and co-founder, Michael Dell, was fourth with $18 billion and Lawrence Ellison, chief executive of Oracle Corp., was No. 5 with a net worth of $17 billion.

The rest of the top 10 were members of the Walton family, relatives of Wal-Mart Stores Inc. founder Sam Walton. Jim Walton and Christy Walton have $15.7 billion, while Forbes says S. Robson Walton has $15.6 billion. Alice Walton has $15.5 billion and Helen Walton has $15.4 billion.

Others on the Forbes 400 list to enjoy the fruits of high-tech and the Internet include Steven Ballmer, Microsoft's chief executive who was No. 11 with $14 billion, and Amazon.com Inc.'s Jeff Bezos who has $4.8 billion and ranked 42nd.

But a significant number of Forbes 400 members also found there is money to be made in sports. Twenty-seven members of the list are sports investors, including owners of basketball and football teams as well as an English soccer team.

For example, Allen owns the NBA's Portland Trail Blazers and the NFL's Seattle Seahawks. And Malcolm Glazer, who ranks No. 258 with $1.3 billion, gained fame in this country but infamy in Britain this past spring after he bought a controlling stake in Manchester United, perhaps the world's best-known soccer team.

-- posted by Kirk

Top 267. Sep 27, 2005 7:32 AM

» Kirk - Buffett testifies in suit against IRS

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Posted on Tue, Sep. 27, 2005

Buffett testifies in suit against IRS

The Associated Press
http://www.timesleader.com/mld/timeslead...
LINCOLN, Neb. — Billionaire investor Warren Buffett testified Monday in the trial of his investment firm’s two lawsuits accusing the Internal Revenue Service of denying it more than $23 million in tax deductions.

The trial began in U.S. District Court after about three years of legal wrangling between Berkshire Hathaway Inc. and the IRS.

The case stems from allegations the IRS made an “erroneous, wrongful and illegal” interpretation of the U.S. Tax Code when it denied the deductions.

The original lawsuit, filed in 2002, said the IRS wrongly assessed more than $16 million in taxes against Berkshire in 1989 and 1990. A second lawsuit said the IRS wrongly assessed nearly $7 million in taxes in 1991. The two lawsuits were combined for trial.

The IRS first disallowed the deductions after tracing $750 million in borrowed money to purchase stocks in several companies, including Coca-Cola Co., Time-Warner and Wells Fargo & Co., according to court records. The agency based the denial on a tax code passed by Congress that reduced deductions if borrowed money is directly attributable to the investment that pays the dividend.

Congress passed the code because of concern that some corporations were deliberately borrowing money for the purpose of buying dividend-paying stock, combining the dividends-received and interest-on- indebtedness deductions, and converting pretax losses into after-tax gains.

Complicated!

-- posted by Kirk

Top 268. Oct 22, 2005 6:19 AM

» Kirk - Book: How Warren Buffett Collected Friends, Wisdom & Wealth

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Massive deal for book on Warren Buffett
The Snowball: How Warren Buffett Collected Friends, Wisdom and Wealth

Hillel Italie
Associated Press
http://www.canada.com/entertainment/book...

Friday, October 21, 2005

Warren Buffett. (AP File/Nati Harnik)

NEW YORK -- A bidding war for an authorized biography of the "ideas" of billionaire Warren Buffett has been won by the Bantam Dell Publishing Group, a division of Random House Inc.

Tentatively titled The Snowball: How Warren Buffett Collected Friends, Wisdom and Wealth, the book is scheduled to come out in 2008.

Several publishers were interested and a representative close to the deal said it was worth more than $7 million US, although not as much as the reported $10 million to $12 million for former President Clinton's My Life.

Former General Electric Co. CEO Jack Welch reportedly got $7.1 million for his bestseller, Jack: Straight From the Gut.

The Snowball will be written by Alice Schroeder, a former insurance analyst at Morgan Stanley, where she met Buffett. This marks the first time a book will be written with his co-operation, but the contract was negotiated with Schroeder.

"Our deal is with her. She is the author," Bantam president and publisher Irwyn Applebaum told The Associated Press Wednesday through spokeswoman Barbara Burg.

According to a statement issued Wednesday by Dell, the book will focus on Buffett's business strategies. It will be based on the "thousands of hours" Schroeder spent with Buffett and on "unprecedented access to his files, friends and associates."

The 75-year-old Buffett is considered of special interest both for his personal wealth, estimated by Forbes magazine at $40 billion, and his folksy style.

Buffett is known as the man who built a 1956 partnership of four relatives and three close friends into a holding company worth about $100 billion. Berkshire Hathaway Inc. owns insurance, soft drink, candy, furniture, restaurant and carpet firms.

Yet Buffett is also known to wear sweat pants and sweat shirts in his spare time. He is a longtime fan of hamburgers, french fries and Cherry Cokes, and enjoys bridge and playing the ukulele.

-- posted by Kirk

http://news.yahoo.com/s/nm/20051028/bs_n...

Top 269. Oct 28, 2005 1:27 PM

» SteveT - Berkshire Hathaway wins IRS tax case

A federal judge on Friday ordered the U.S. Internal Revenue Service to pay billionaire Warren Buffett's Berkshire Hathaway Inc. $23.1 million plus interest for not allowing the company to take some tax deductions.

The 38-page decision by Judge Lyle Strom of the U.S. District Court in Nebraska ends three years of litigation over the tax treatment of Berkshire's purchases of dividend-paying stocks such as Coca-Cola Co., Time Warner Inc. and Wells Fargo & Co. The purchases in question took place in 1989, 1990 and 1991.

An IRS spokeswoman said the agency does not comment on court rulings. Berkshire did not immediately return a call seeking comment. The company reported a $2.81 billion profit for the first half of this year.

The IRS had claimed that Omaha-based Berkshire used portions of $750 million of borrowings to buy several stocks. Citing a tax rule that it said governed the purchase of these stocks with borrowed money, the agency argued that Berkshire overstated its dividends-received deductions.

Berkshire, in contrast, said the main reason it borrowed the money was to strengthen its finances.

In his opinion, Strom said it is "virtually impossible for the (IRS) to trace debt proceeds and thus assess tax deficiencies ... against companies like Berkshire who engage in numerous investment transactions." He said the agency "erroneously" applied its tax rule to Berkshire's purchases.

In his 1998 annual letter to Berkshire shareholders, Buffett wrote: "Writing checks to the IRS that include strings of zeros does not bother (me). Overall, we feel extraordinarily lucky to have been dealt a hand in life that enables us to write large checks to the government."

Friday's decision covered lawsuits in which Berkshire had sought respective refunds of $16.3 million and $6.8 million.

Strom ordered the IRS and Berkshire to determine the total refund, and to submit a proposed judgment by November 28.

-- posted by SteveT

http://www.bloomberg.com/apps/news?pid=1...

Top 270. Nov 7, 2005 7:22 AM

» Kirk - Buffett Reduces Berkshire's Bet Against Dollar

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Warren Buffett Reduces Berkshire's Bet Against Dollar (Update2)

Nov. 7 (Bloomberg) -- Warren Buffett's Berkshire Hathaway Inc. reduced a bet against the U.S. dollar after losing more than $900 million from foreign-currency investments this year.

Buffett, who has said the U.S. trade deficit would weaken the dollar, cut his foreign-currency forward contracts to $16.5 billion in September from $21.5 billion in June, Berkshire said in a Nov. 4 statement. The dollar in July reached a 13-month high against a basket of six major currencies.

``To his credit, he reduced his exposure before the recent run-up of the dollar cost him more,'' said Tom Russo, a partner at Gardner Russo & Gardner in Lancaster, Pennsylvania, which owned about $250 million of Berkshire stock as of June. The Omaha, Nebraska-based company had $2.96 billion of foreign- exchange gains from 2002 to 2004.

Berkshire, which relies on insurance units including General Re and Geico for more than half of annual earnings, reported its smallest quarterly profit since 2001 after Hurricanes Katrina and Rita led to almost $3 billion in claims. Third-quarter net income fell 48 percent to $586 million, or $381 a share, from $1.14 billion, or $739 a share, a year earlier.

Buffett, 75, who called his bet against the dollar a ``very long-term'' position as recently as June, may have changed Berkshire's mix of currency investments as he reduced the bet. After $926 million in pretax currency losses in the first half, the company posted $29 million in gains in the third quarter, even as the dollar strengthened against the euro, yen and British pound.

Canadian Dollar

``I don't know exactly how he did it,'' said Chris Melendez, president of Tempest Asset Management, a currency hedge fund in Laguna Beach, California. ``The Canadian dollar has been having a lot of strength. He could have gotten into Canadian dollars.''

The Canadian dollar rose 5.3 percent against the U.S. currency in the three months ended Sept. 30, the third-best performer of 61 major currencies tracked by Bloomberg. The Chilean peso climbed 9.1 percent and the Iceland krona gained 6.4 percent.

The dollar traded at $1.1821 per euro by 10:44 a.m. in London today, according to electronic foreign-exchange dealing system EBS. Against the yen, the dollar was at 117.79.

Buffett, whose estimated $40 billion ranks him as the world's second-richest man after Microsoft Corp. founder Bill Gates, said in his 2004 annual report that the company had spread its forward contracts, or agreements to purchase a foreign currency in the future at a preset price, among 12 currencies.

`Function of Timing'

``It's possible he may have closed out positions when there were periods of time when the dollar was weaker,'' Russo said. ``It's a function of the timing.''

Buffett hasn't reported a smaller foreign currency position since the end of 2003, when it stood at $11 billion. Berkshire Chief Financial Officer Marc Hamburg didn't return a phone call seeking comment.

``He is a big name and it may give the dollar a bit of a lift,'' said Kamal Sharma, a currency strategist at Bank of America Corp. in London.

Berkshire hasn't reported lower earnings since the fourth quarter of 2001, just after the Sept. 11 terrorist attacks in the U.S. Buffett may benefit in future quarters as Katrina's damage allows insurers to raise their rates, said Kevin Callahan, an analyst at Century Capital Management.

Hurricane Loss

``There's obviously a huge loss from the hurricanes,'' said Callahan, whose Boston-based firm owned about $14 million of Berkshire shares as of June. ``But pricing should improve, and he'll be able to take advantage of it.''

Since Katrina flooded New Orleans on Aug. 29, shares of Berkshire have risen 6.5 percent, outpacing the 1.3 percent advance of the Standard & Poor's 500 Index. The stock closed unchanged at $88,300 on Nov. 4 in New York Stock Exchange composite trading before the company reported profit.

Berkshire earned about $69 a share before investment gains in the third quarter, less than the $180 expected by Fox-Pitt Kelton Inc. analyst Gary Ransom. The company's insurance underwriting loss widened to $1.17 billion from $215 million as Katrina and Rita cost more than twice as much as four hurricanes in Florida last year.

`Time to Diversify'

``It's time for Buffett to diversify,'' said Joseph Parnes, president of Technomart Investment Advisors in Baltimore. Technomart, which publishes Shortex Market Letter, includes Berkshire among companies whose stocks are likely to decline.

Katrina and Rita probably cost insurers $60 billion to $70 billion, Berkshire estimated. Katrina alone is the industry's most expensive U.S. disaster, according to storm modeler Risk Management Solutions Inc.

Buffett has spent the past four decades transforming Berkshire from a failing textile manufacturer into a $135 billion holding company by acquiring out-of-favor securities and businesses. In that time, the company's book value per share has risen to more than $58,000 from $19.

Berkshire reported that General Re received a new subpoena from federal prosecutors in Virginia investigating its role in the collapse of Reciprocal of America, a failed medical malpractice insurer that bought reinsurance from General Re.

State and federal regulators are also probing General Re's role in accounting errors at American International Group Inc., the world's largest insurer. Berkshire said it's cooperating with the investigations.

-- posted by Kirk

Top 271. Nov 7, 2005 4:45 PM

» axolotl - Re: Buffett Reduces Berkshire's Bet Against Dollar

There are a couple of amusing commentators - one says "to his credit he reduced his holding prior to the dollar runup". Well, why didn't he reduce 100% if reduction was good? Also, the other person suggests that Warren "diversify". He obviously does not know much about Warren who has said that diversification is for an investor who does not know what he is doing. I am up about 3% year to date - I hope that I can beat Ol Warren for 2005.

-- posted by axolotl

http://www.chicagotribune.com/business/c...

Top 272. Nov 17, 2005 9:48 AM

» Kirk - 5x more Home Depot

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Buffett's company expands its holdings in Home Depot

By Josh Funk
Associated Press
Published November 17, 2005

OMAHA -- Warren Buffett's investment company recently expanded fivefold its stake in Home Depot Inc., the nation's leading home improvement chain.

Berkshire Hathaway Inc. owned 5 million shares of Home Depot stock at the end of September while its holdings of competitor Lowe's Companies Inc. remained unchanged, according to documents filed Tuesday with the Securities and Exchange Commission.

Stock analysts say the investment in Home Depot fits well with Buffett's investment philosophy, but that it should not be seen as a criticism of Lowe's.

"How Home Depot manages their business is very much like Mr. Buffett manages his Berkshire Hathaway company," said Michael Cox, an analyst with Piper Jaffray who follows both Home Depot and Lowe's.

Similar to Berkshire, Cox said Home Depot generates significant cash, reinvests in its business and returns value to shareholders.

Berkshire officials did not immediately return calls Wednesday, but the Omaha-based company does not typically discuss its investments.

Buffett is chairman and chief executive of Berkshire Hathaway, which owns businesses and stock in a variety of industries.

-- posted by Kirk

http://www.siouxcityjournal.com/articles...

Top 273. Nov 23, 2005 6:14 AM

» Kirk - Buffett Sells some Beer & WalMart shares

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It is quite interesting to note that Buffett takes profits in core positions. He is not a "buy and hold forever" investor as many claim. This profit taking after a good run has been a key strategy of ine in "Kirk's Newsletter Portfolio" to lock in good returns over the long term.

Berkshire discloses $1.92 billion Anheuser-Busch stake

WASHINGTON (Dow Jones/AP) -- Berkshire Hathaway Inc., the investment vehicle for billionaire Warren Buffett, disclosed for the first time Monday its holdings in Anheuser-Busch Cos., saying it held a $1.92 billion stake in the St. Louis-based brewer at the end of the third quarter.

In an amended filing with the Securities and Exchange Commission, Berkshire Hathaway said it owned 44.7 million shares of Anheuser-Busch as of Sept. 30, down from 46.6 million shares in the brewer at the end of second quarter.

In April, Anheuser-Busch said it had recently learned that Omaha-based Berkshire Hathaway had become a "significant shareholder" but Buffett's money-manager disclosure filings to the SEC hadn't detailed the Anheuser Busch holding until Monday.

In its third-quarter filing with the SEC Nov. 14, Berkshire Hathaway reported that it had requested confidential treatment for some of its holdings from the SEC.

The agency permits some money managers to withhold information pending a judgment by the agency on whether revealing that holding would imperil a money manager's investment strategy.

Among the four amended filings by Berkshire Hathaway released Monday by the SEC was one that reported the investment fund's earliest holding in Anheuser-Busch to be as of Dec. 31, 2004, with a value of $481.6 million provided for a stake of 9.5 million shares at that time.

Berkshire Hathaway reported Monday that as early as the first quarter of this year it held a $1.92 billion stake in Anheuser Busch, which amounted to 40.5 million shares.

In the second quarter, Monday's filing showed, Berkshire raised that holding by about 15 percent in terms of number of shares. The second-quarter Anheuser Busch holding was valued at $2.13 billion.

Berkshire Hathaway's ownership of Anheuser Busch stock at the end of first quarter was reported as being the same in terms of market value as the stake at the end of third quarter, but Berkshire disclosed it held about 10 percent more shares in Anheuser Busch at Sept. 30 than it did on March 31.

Berkshire Hathaway also said Monday that it held $874 million worth, or about 20 million shares, of Wal-Mart Stores Inc., at Sept. 30. That compares with about $754 million, or 15.6 million shares, held in the discount retailer as of June 30. No holdings in Wal-Mart were reported by Berkshire Hathaway in its Nov. 14 report for the third quarter.

In that report filed earlier this month, Berkshire Hathaway disclosed stakes in various other companies, including increased holdings in Tyco International Ltd., Home Depot Inc. and Comcast Corp.

Buffett, the famed investor whose moves are closely watched by stock market participants, also reported holding fewer shares of Pier 1 Imports Inc. and Shaw Communications Inc. in its original filing for the latest period.

As of 11/23/05 the Total Return for "Kirk's Newsletter Portfolio" since 12/31/98 is Up 185% while the NASDAQ is up 3%!!! (my portfolio beta is roughly equal to that of QQQQ.

For 2005, Kirk’s Newsletter is Up 9.8% YTD vs QQQQ up 4.5% YTD vs DJIA UP 0.8% YTD vs S&P500 Up 5.6% YTD

-- posted by Kirk