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Archive for December, 2007

Sovereign Wealth Fund Investments

Recently, there have been a spate of sovereign wealth funds buying big stakes in distressed financials. Singapore’s Temasek Holdings and GIC, China’s China Investment Corp, and middle eastern funds flush with oil dollars have all injected cash into Morgan Stanley, Citigroup, UBS and Bear Stearns.

In an interview on CNBC, Warren Buffett mentions that he has been approached by some financial companies about buying a stake too but he has not seen anything that has caused him to be interested. Here’s a short extract from the interview:

…Continue reading » Sovereign Wealth Fund Investments

Free Briefs or Boxes

Joke by Warren Buffett:

At the Omaha airport on Saturday, we will have the usual array of aircraft from NetJets available for your inspection. Just ask a representative at the Civic about viewing any of these planes. If you buy what we consider an apprpriate number of items during the weekend, you may well need your own plane to take them home. And, if you buy a fraction of a plane, we might even throw in a three-pack of briefs or boxes.

Berkshire Annual Letter 2001 (Part 3)

Warren Buffett recommended reading Jack Welch’s book, Jack, Straight from the Gut.

In the words of Warren Buffett, Jack Welch is smart, energetic, hands-on, and expects much of both himself and his organisation.

In investing (just like insurance), you can produce outstanding long term results primarily by avoiding dumb decisions, rather than by making brilliant ones.

…Continue reading » Loss Development in Insurance Accounting

There are many reasons why an investor or a trader can lose money.

One main reason is being too fixated on the price of his stocks.

When Warren Buffett buys shares, he treats it as a purchase of a business (either whole or part of). The market price is simply a quote that he can use to buy up stakes. He can choose to take it or ignore it. If the price is favorable, he makes use of it to his advantage. If the price is not, nothing needs to be done.

…Continue reading » Why do Most Investors Lose Money?

Christmas Video Gift

A Christmas video from me to you. This is a beautiful dance. Try not to cry when you watch this.

A few days ago, Warren Buffett was in San Francisco doing a fund raising campaign for Hillary Clinton. While he was there, he was interviewed by CNBC’s Becky Quick on Squawk on the Street.

These are some of the points covered during the interview:

…Continue reading » Becky Quick Interview With Warren Buffett on Squawk on the Street

Fed Rate Cuts to an Investor

The Fed had just cut rates by 25 basis points. This is the headline I see from Yahoo news.

Stock Falls After Fed Cuts Rate

This is another headline I see from the previous month:

“Stocks Rise on Fed Cut” 

If you are a long term investor, should you even be concerned with whether the Fed is cutting or raising rates? This is what Warren Buffett has to say:

…Continue reading » Fed Rate Cuts to an Investor

Last week, Warren Buffett put $2 billion of Berkshire Hathaway’s cash to work by buying high-yield bonds issued by Dallas-based power producer TXU Corp.

Berkshire(NYSE:BRK) bought into two bond issues by TXU. One was a $1.1 billion purchase of 10.25% bonds at 95 cents on the dollar to give Buffett an effective yield of 11.2%. Berkshire also bought $1 billion of 10.5% PIK-toggle bonds (bonds whose interest can be paid out in cash or more bonds) for 93 cents on the dollar, giving an effective yield of 11.8%.

Back in 2002, Berkshire had actually purchased stock in TXU when it appeared close to bankruptcy, and then sold out at a large profit in 2004.

CNBC’s Becky Quick recently traveled to Omaha, Nebraska to shoot additional material for her one-hour special focusing on Warren Buffett’s whirlwind tour of Asia.

While Becky was there, Warren Buffett gave her a tour of the Berkshire Hathaway offices. He talked about some of the mementos he’s collected and their personal significance to him, and to his investing style. Here are some points from the conversation:

…Continue reading » Warren Buffett’s Video Tour of Berkshire Hathaway Headquarters