WEB:The Oracle of Omaha- Warren Buffett

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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

Top 274. Nov 24, 2005 6:29 AM

» Kirk - Warren Buffett may lose $34 million on Bermuda fund

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Warren Buffett may lose $34 million on Bermuda fund

Bloomberg) – Bermuda-based Value Capital LP, a $570 million hedge fund backed by billionaire investor Warren Buffett, may report an annual loss for the first time in seven years after making a bad bet on US interest rates.

The miscalculation cost Buffett's Berkshire Hathaway Inc. $34 million before taxes in the first nine months of 2005, according to a November 4 filing with the US Securities and Exchange Commission. Omaha, Nebraska-based Berkshire Hathaway had $3.4 billion in net income over the same period.

Mark Byrne, who runs Value Capital, said he erred by anticipating that long-term borrowing costs would rise faster than short-term rates as the US economy strengthened. Instead, the gap between 2-year and ten-year bond yields, known as the yield curve, narrowed by more than 1 percentage point to the smallest since January 2001, as the Federal Reserve raised the overnight bank lending rate 12 times.

"I don't understand why the yield curve is so flat," said Byrne, whose fund is down about 5 percent this year. "We had bets in the direction of a steepening yield curve as the US recovered from its cycle and the Fed started to raise rates."

Byrne, 43, former head of fixed-income arbitrage at Credit Suisse First Boston, founded Hamilton, Bermuda-based Value Capital in 1998 to profit on price discrepancies between bonds sold by developing countries, including Brazil, Mexico and Egypt. Berkshire Hathaway, the publicly traded investment company that Buffett uses to buy stocks and companies, was Value Capital's sole outside investor from 1998 until last year.

Berkshire Hathaway invested about $430 million in the fund through the end of 2002 and recorded $173 million of profits, a March 2003 filing with the SEC shows. From 2000 to 2002, Byrne also ran Berkshire Hathaway's derivatives unit, General Re Financial Products.

Debbie Bosanek, Buffett's assistant, said Berkshire Hathaway doesn't comment on individual holdings.

Byrne wasn't the only money manager caught off guard as foreign demand for US Treasury bonds flattened the yield curve. The average so-called relative-value arbitrage hedge fund is down almost 1.7 percent this year, according to data compiled by Chicago-based Hedge Fund Research Inc.

"A lot of people who placed bets on the yield curve steepening did get hammered," said Duncan Hennes, chief executive officer of PFG Advisors, a Greenwich, Connecticut, hedge fund firm that specialises in fixed-income strategies.

This year's 65 percent increase in foreign holdings of Treasury bonds reduced price fluctuations, or volatility, in the bond market. Value Capital relies on volatility to make profitable trades. Byrne invests in government bonds, interest- rate derivatives and currencies.

"A huge excess of liquidity in the world has created a lot of buyers for bonds," Byrne said in an interview. "That could explain both the low volatility and the low level of long-term yields."
West End Capital Management Ltd., Byrne's fund-management company in Bermuda, opened Value Capital to outside investors in 2004, raising about $300 million. Berkshire Hathaway withdrew about $125 million from the fund in December, reducing its stake to 62 percent from 90 percent on June 30, 2004, according to an SEC filing in March.

Byrne said his fund has been profitable for the past six years and generated average annual returns of 7.5 percent for Berkshire Hathaway after fees and expenses.

Berkshire Hathaway shareholders asked Buffett, 75, about his investment in Value Capital at annual meetings during the past several years because it's unusual for him to entrust money with another fund manager, said Whitney Tilson, principal at New York-based T2 Partners Management LLC, which owns Berkshire Hathaway shares.

"To my knowledge, it's the only investment Berkshire Hathaway has in an outside money manager," Tilson said.

Byrne is the son of Jack Byrne, who became chief executive officer of Geico Corp. in 1976 and saved it from bankruptcy after Berkshire Hathaway invested in the auto insurer. Patrick Byrne, Mark Byrne's brother, worked from 1997 to 1999 as CEO of Fechheimer Brothers Co., a uniform maker owned by Berkshire Hathaway.

"We've made a lot of money with the Byrne family," Buffett told Berkshire Hathaway shareholders at the company's 2003 annual meeting, according to a transcript prepared by T2's Tilson. At the same meeting, Buffett said, "I've looked at Mark's portfolio and I like the positions."

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

Top 275. Dec 8, 2005 6:48 PM

» Normxxx - "Poor Charlie"

The World According to "Poor Charlie"

By Charlie Munger | 8 December 2005

Charlie Munger has been Warren Buffett's partner and alter ego for more than 45 years. The pair has produced one of the best investing records in history. Shares of Berkshire Hathaway, of which Munger is vice chairman, have gained an annualized 24% over the past 40 years. The conglomerate, which the stock market values at $130 billion, owns and operates more than 65 businesses and invests in many others. Buffett's annual reports are studied by money managers. But Munger, 81, has always been media shy. That changed when Peter Kaufman compiled his writing and speeches in a new book,

<img align="left" src="http://g-images.amazon.com/images/G/01/ciu/fc/3c/8f9c024128a0d931794a3010._AA240_.L.jpg" border="0"> Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger
by Charles T. Munger

Here Munger speaks with Kiplinger's Steven Goldberg.

Why has Berkshire done so well?
Just remember that we had a long run and an early start, particularly in Warren's case. It's much easier for me to talk about Warren than myself, so let's talk about Warren. Not only did he have a long run from an early start, but he got very smart very young— then continuously improved over 50 years.

Buffett was a student of Ben Graham, the father of security analysis. He was buying deep value stocks— "cigar butts"— until you got involved.
If I'd never lived, Warren would have morphed into liking the better businesses better and being less interested in deep-value cigar butts. The supply of cigar butts was running out. And the tax code gives you an enormous advantage if you can find some things you can just sit with.

There are a whole lot of reasons, and Warren was a natural for always just getting smarter. The natural drift was going that way without Charlie Munger. But he'd been brainwashed a little by worshiping Ben Graham and making so much money following traditional Graham methods that I may have pushed him along a little faster in the direction that he was already going.

How do you work together?
Well, it's mostly the telephone and as the years have gone on, and I've passed 80 and Warren is 75, there's less contact on the phone. Warren is a lot busier now than he was when he was younger. Warren has an enormous amount of contact with the operating businesses compared to what he had early in his career. And, again, he does almost all of that by phone, although he does fly around some.

What are your work styles like?
We have certain things in common. We both hate to have too many forward commitments in our schedules. We both insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think. So Warren and I do more reading and thinking and less doing than most people in business. We do that because we like that kind of a life. But we've turned that quirk into a positive outcome for ourselves.

How much of your success is from investing and how much from managing businesses?
Understanding how to be a good investor makes you a better business manager and vice versa.

Warren's way of managing businesses does not take a lot of time. I would bet that something like half of our business operations have never had the foot of Warren Buffet in them. It's not a very burdensome type of business management.

The business management record of Warren is pretty damn good, and I think it's frequently underestimated. He is a better business executive for spending no time engaged in micromanagement.

Your book takes a very multi-disciplinary approach. Why?
It's very useful to have a good grasp of all the big ideas in hard and soft science. A, it gives perspective. B, it gives a way for you to organize and file away experience in your head, so to speak.

How important is temperament in investing?
A lot of people with high IQs are terrible investors because they've got terrible temperaments. And that is why we say that having a certain kind of temperament is more important than brains. You need to keep raw irrational emotion under control. You need patience and discipline and an ability to take losses and adversity without going crazy. You need an ability to not be driven crazy by extreme success.

How should most individual investors invest?
Our standard prescription for the know-nothing investor with a long-term time horizon is a no-load index fund. I think that works better than relying on your stock broker. The people who are telling you to do something else are all being paid by commissions or fees. The result is that while index fund investing is becoming more and more popular, by and large it's not the individual investors that are doing it. It's the institutions.

What about people who want to pick stocks?
You're back to basic Ben Graham, with a few modifications. You really have to know a lot about business. You have to know a lot about competitive advantage. You have to know a lot about the maintainability of competitive advantage. You have to have a mind that quantifies things in terms of value. And you have to be able to compare those values with other values available in the stock market. So you're talking about a pretty complex body of knowledge.

What do you think of the efficient market theory, which holds that at any one time all knowledge by everyone about a stock is reflected in the price?
I think it is roughly right that the market is efficient, which makes it very hard to beat merely by being an intelligent investor. But I don't think it's totally efficient at all. And the difference between being totally efficient and somewhat efficient leaves an enormous opportunity for people like us to get these unusual records. It's efficient enough, so it's hard to have a great investment record. But it's by no means impossible. Nor is it something that only a very few people can do. The top three or four percent of the investment management world will do fine.

What would a good investor's portfolio look like? Would it look like the average mutual fund with 2% positions?
Not if they were doing it Munger style. The Berkshire-style investors tend to be less diversified than other people. The academics have done a terrible disservice to intelligent investors by glorifying the idea of diversification. Because I just think the whole concept is literally almost insane. It emphasizes feeling good about not having your investment results depart very much from average investment results. But why would you get on the bandwagon like that if somebody didn't make you with a whip and a gun?

Is finding bargains difficult in today's market?
We wouldn't have $45 billion lying around if you could always find things to do in any volume you wanted. Being rational in the investment world at a time when other people are losing their minds -- usually all it does is keep you out of something that causes a lot of trouble for other people. If you stayed away from the mania in the high-tech stocks at its peak, you were saved from disaster later, but you didn't make any money.

Should people be investing more abroad, particularly in emerging markets?
Different foreign cultures have very different friendliness to the passive shareholder from abroad. Some would be as reliable as the United States to invest in, and others would be way less reliable. Because it's hard to quantify which ones are reliable and why, most people don't think about it at all. That's crazy. It's a very important subject. Assuming China grows like crazy, how much of the proceeds of that growth are going to flow through to the passive foreign owners of Chinese stock? That is a very intelligent question that practically nobody asks.

What do you think of the U.S. trade and budget deficits -- and their impact on the dollar, which Berkshire is still betting against?
It's not at all clear exactly from some objective bunch of economic data just where the dollar ought to trade compared to the Euro. Who in the hell knows? It's clear that you can't run twin deficits on the scale that the U.S. has forever. As [economist] Herb Stein said, "If something can't go on forever, it will eventually stop." But knowing just when it's going to stop is a very difficult matter.

Is there a bubble in the real estate?
When I see people going to some old flea-bitten old condo and the list price is $1.8 million, and they decide to put it on the market for $2.2 million, and five people start bidding for it, and they sell it for $2.7 million, I say that's a bubble. So there are some bubbly places in the economy. I am amazed at the price of real estate in Manhattan.

So there is some bubble in the game. Is it going to go back to really cheap houses in good neighborhoods in good cities? I don't think so. So I think there will be huge collapses in some places, but, on average, I think that good houses in good places are going to be plenty expensive in future years.

Is there a bubble in energy stocks?
When it gets into these spikes, with shortages and uproar and so forth, people go bananas, but that's capitalism. If the price of automobiles were going up 40% a year, you'd have a boom in auto stocks. But if you stop to think about it, of the companies that you could have bought in, say, 1911, to hold for a long time, one of the very best stocks would have been Rockefeller's Standard Oil Trust. It became almost all of today's integrated oil companies.

How do you feel most corporate citizens behave in the U.S.?
Well, I disapprove of the way most executive compensation is arranged in America. I think it goes to gross excess. And I certainly don't like phony accounting that takes part of the real cost of running the business and doesn't run it through the income account as a charge against the reported earnings. I don't like dishonorable, lying accounting.

Do you think the stock market will return its long-term annualized 10% in the next decade?
A good figure for rational expectation would be no higher than 6%. I think it's unreasonable to assume that the world is going to try to arrange itself so that the inactive, asset-owning class is going to get a much higher share of the GDP than it normally gets. When you start thinking that way, you get into these modest figures. The reason the return has been so good in the past is that the price-earnings ratio went way up.

Ibbotson finds 10% average returns back to 1926, and Jeremy Siegel has found roughly the same back to 1802.
Jeremy Siegel's numbers are total balderdash. When you go back that long ago, you've got a different bunch of companies. You've got a bunch of railroads. It's a different world. I think it's like extrapolating human development by looking at the evolution of life from the worm on up. He's a nut case. There wasn't enough common stock investment for the ordinary person in 1880 to put in your eye.

What do you see for bonds?
The bond market has fewer opportunities now. The short-term rates are the same as the long-term rates, and the premium interest rate you get for taking risk is lower than it ought to be, given the risk. By definition, that's a world in which bond investment is much tougher to do with great advantage.

What do you expect in terms of returns for Berkshire Hathaway?
We have solemnly promised our shareholders that our future returns will be considerably below our previous returns.

But annual reports have been saying that year after year after year.
But lately we've been better at doing what we have long predicted.

What happens to Berkshire after the two of you?
Well, the world will go on and, in my opinion, Berkshire will still be a strong, rich place and with a central culture that will be shrewd and risk-averse. But do I think that we will get another person better than Warren to come in and replace Warren? I think the odds are against it.

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The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

The content of this message is not to be construed as constituting market or investment advice. It is intended for educational purposes only. Individuals should consult with their own advisors for specific investment advice.

-- posted by Normxxx

Top 276. Dec 23, 2005 6:57 AM

» Kirk - P&G Files Suit Against Berkshire Unit

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P&G Files Suit Against Berkshire Unit
Thursday December 22, 9:18 am ET
Procter & Gamble Files Suit Against Berkshire Hathaway Unit, Charging Copying of Products

CINCINNATI (AP) -- Procter & Gamble Co. said Thursday said it has filed a lawsuit against McLane Co., a food distributor owned by billionaire investor Warren Buffett's Berkshire Hathaway Inc., charging it with selling items that copy the packaging for well-known P&G brands.

The lawsuit, filed in U.S. Federal District Court for the Southern District of Ohio, charges McLane and two subsidiaries with selling products that copy Procter & Gamble's Bounty, Charmin, and Vicks' NyQuil and DayQuil LiquiCaps brands, the company said in a statement.

"It is our belief that the defendants are selling products in packages that copy the famous P&G products and packages," P&G said. "These look-alike products can confuse people and are a disservice to consumers."

A P&G spokeswoman also said the company would seek damages from McLane. A spokeswoman for McLane, based in Temple, Texas, was not immediately available to comment.

Procter & Gamble, one of the world's biggest consumer products companies, also said it would ask for a preliminary injunction to order McLane to stop distributing the disputed products, and to notify their retailers to impound or return the products.

McLane is one of the nation's biggest food distribution and logistics companies, providing food, drinks, utensils and other products to convenience stores, mass retailers, fast-food chains and movie theaters around the world. Berkshire Hathaway acquired McLane from Wal-Mart in 2003.

-- posted by Kirk

Top 277. Jan 18, 2006 7:25 AM

» Kirk - Warren Buffett's Co. Buys Business Wire

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OMAHA, Neb. - Berkshire Hathaway Inc., the investment company run by billionaire
Warren Buffett, on Tuesday said it was buying Business Wire, a privately held distributor of press releases, for an undisclosed amount.

Business Wire, which is based in San Francisco, will operate as a wholly owned subsidiary of Berkshire Hathaway, whose other holdings include the insurer Geico Corp. as well as stakes in American Express Co., Anheuser-Busch Cos. and The Coca-Cola Co.

Business Wire and Berkshire Hathaway said they expected the deal to close in the first quarter of the year.

Lorry Lokey, a former journalist and public relations executive, founded Business Wire in 1961. It is a major distributor of press releases and regulatory filings.

Berkshire said Business Wire's management team will remain in place, and day-to-day operations will not be affected by the acquisition.

Buffett "gave me a mandate to keep doing what we've been doing," said Business Wire's chief executive, Cathy Baron Tamraz. "Nothing really changes other than we'll be backed by a real giant."

Lokey will remain as chairman of Business Wire but will concentrate on his philanthropic pursuits, the companies said. Lokey has made contributions of more than $160 million to educational and medical research project over the past 10 years.

Calls seeking comment from Berkshire were not immediately returned Tuesday.

"I'm extremely happy about it," Tamraz said of the sale. "It's a great fit for Business Wire and for Berkshire."

-- posted by Kirk

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http://www.kansascity.com/mld/kansascity...

Top 278. Jan 18, 2006 7:28 AM

» Kirk - Buffett firm cuts holdings 30% in H&R Block

Posted on Wed, Jan. 18, 2006
30 percent reduction reported
Buffett firm cuts holdings in Block
By MARK DAVIS
The Kansas City Star

Warren Buffett’s company reduced its holdings in H&R Block Inc. by 30 percent between March and September last year, according to new information made public Tuesday.

Buffett’s Berkshire Hathaway Inc., based in Omaha, reported its holdings in Block after “a request for confidential treatment” was denied Jan. 6. Berkshire’s previous reports of stock holdings for June 30 and Sept. 30 last year excluded its holdings of Block shares.

A Block spokesman declined to comment on Berkshire’s holdings but said Block shares have been a good investment. From May 2000 to the end of last year, an investment in Block would have grown 162 percent including dividends, said Nick Iammartino with Block. He said the Standard & Poor’s 500 lost 6 percent in that same period.

Berkshire’s new filing showed it held 18.76 million shares of Block at the end of September, or 5.7 percent of the company’s total shares. Berkshire held 21.83 million at the end of June and 27.02 million at the end of March, adjusting for an August stock split.

At Tuesday’s closing price of $25.42, Berkshire’s Sept. 30 holding of Block was worth $477 million.

Separately, Berkshire agreed Tuesday to buy Business Wire, a San Francisco-based firm that distributes news releases and other announcements by companies.

The companies did not disclose terms of the sale. Berkshire said Business Wire’s management would continue to operate the company.

For 2005, "Kirk's Newsletter Portfolio" was Up 13.2% vs. QQQQ up 1.2% vs. DJIA down 0.6% vs. S&P500 Up 4.8%

As of 12/31/05 the Total Return for "Kirk's Newsletter Portfolio" since 12/31/98 is Up 197% while the S&P500 only up 12%!!! & NASDAQ only up 1%!!! (my portfolio beta is roughly equal to that of QQQQ.)

What should be quite clear is a “buy and forget” market strategy using the DOW, S&P500 or NASDAQ would have under performed holding money funds over the past seven years while my newsletter portfolio nearly tripled every dollar invested

Key to my success is I pay attention to Garp. GARP stands for “Growth At a Reasonable Price.”

Make sure you read my latest article: NanoViricides, Inc. [NNVC] (01/09/06) where it seems I’ve had the good fortune to highlight a stock just before it took off to more than double!

-- posted by Kirk

Top 279. Jan 18, 2006 11:52 AM

» axolotl - Buffett warns about trade deficits - says $700 bill possible

in 2006. He says government debt does not worry him. I am concerned about both, Warren. Warren uses analogy that the USA is like a rich family that owns a hug farm the size of Texas and keeps selling off pieces - you don't notice how much it is adding up to. He says foreigners will own $15 trill one day - equal to size of current stock market. That is why I intuitively feel that Fortress America may be better, Warren, than Globalazation which I believe is mostly about cheap labor.

-- posted by axolotl

Top 280. Jan 20, 2006 8:18 AM

» Normxxx - Buffet warns of trouble

Buffet warns of trouble

By SCOTT SONNER. AP | 20 January 2006

RENO, Nev.— The U.S. trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to “political turmoil,” billionaire investor Warren Buffett warned.

“Right now, the rest of the world owns $3-trillion more of us than we own of them,” Mr. Buffett told business students and faculty Tuesday at the University of Nevada, Reno. “In my view, it will create political turmoil at some point .... Pretty soon, I think there will be a big adjustment,” he said without elaborating.

Mr. Buffett, head of Omaha, Neb.-based Berkshire Hathaway Inc., was in Reno for the opening of the company's R.C. Willey Home Furnishings store.

He spoke the same day Berkshire Hathaway disclosed its purchase of Business Wire, a privately held distributor of press releases, for an undisclosed amount.

San Francisco-based Business Wire will operate as a wholly owned subsidiary of Berkshire Hathaway, whose other holdings include the insurer Geico Corp. as well as stakes in American Express Co., Anheuser-Busch Cos. and The Coca-Cola Co. Business Wire competes with PR Newswire to distribute company regulatory filings and press releases to investors and the news media.

The U.S. trade deficit for the first 11 months of 2005 totaled $661.8-billion (U.S.), surpassing the previous annual record of $617.6-billion set in 2004. Economists say when December figures are included, the final deficit for 2005 will top $710-billion. Mr. Buffett said he expects it to top $700-billion this year.

“That's $2-billion a day,” he said. “We are like a super rich family that owns a farm the size of Texas. You sell off a little bit of the farm and you don't see it.”

Fifteen years ago, the U.S. had no trade deficit with China, he said.

“Now it's $200-billion. If we don't change the course, the rest of the world could own $15-trillion of us. That's pretty substantial. That's equal to the value of all American stock,” Mr. Buffett said.

“That's the big danger. Our national debt does not bother me. Our public debt is not at a crazy level,” he said.

Meanwhile, Mr. Buffett said U.S. companies generally are enjoying some of their best times ever.

“Profits are at close to record levels. So business in America is doing very well— better than its lower-paid workers, by some margin,” he said.

“This is a pro-business United States,” he said. “If you get a group of businessmen together, they'll complain about regulation and liability suits, all kinds of things. Some of those things they are right about and some of it they are just complaining to complain.”

U.S. corporations seem to be acting more ethically in the wake of scandals at Enron and elsewhere, but that's primarily due to bad publicity rather than new federal checks and balances, he said.

“I think corporate American to a fair degree has cleaned up its act,” he said. “The press has probably contributed very significantly to that. I think managers are behaving better because of fear rather than just becoming better managers.”

Mr. Buffett said students will have to decide personally whether a master's in business administration will benefit their careers or if they'd be better off plunging into the real world.

“The one piece of advice I can give you is, do what turns you on,” he said. “Do something that if you had all the money in the world, you'd still be doing it. You've got to have a reason to jump out of bed in the morning.”

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The contents of this letter/report does not necessarily reflect the opinions or viewpoint of normxxx. They are provided for informational/educational purposes only.

-- posted by Normxxx