Oct. 20, 2013, 8:56 PM
- It's no surprise fixed income is a hated asset class, but how much so? Just 4% of respondent's in Barron's Big Money poll of money managers are bullish on the sector, with 85% bearish. By contrast, 79% have a positive view of equities vs. 7% negative.
- Not surprising given negative feelings about the bond market, the utility sector garners the most votes (32%) for being the worst expected performer over the next year. Taking first place for the sector expected to perform best is - what else - tech.
- WIth 91% of managers in agreement, Sears (SHLD) tops the list of most-hated stocks. Next at 87% is Tesla (TSLA). After that with 80% Is Herbalife (HLF), followed closely by ZIllow (Z) and Netflix (NFLX).
- Apple (AAPL) and Berkshire Hathaway (BRK.A, BRK.B) top the list of most-loved stocks with 70%, followed by Citibank (C) at 60%.
- Broad fixed-income ETFs: AGG, BND, LAG, SCHZ, BOND, SAGG, MINC.
- Broad equity exposure ETFs: IYY, VTI, EXT, TOTS, EUSA, ITOT.
- Utility ETFs: IDU, PUI, XLU, VPU, RYU, FXU, PSCU, UPW, SDP, UTLT.
Oct. 16, 2013, 5:18 PM| Oct. 16, 2013, 5:18 PM | 14 Comments
Oct. 16, 2013, 7:43 AM
- Appearing on Squawk Box, The Oracle doesn't disappoint:
- On JPMorgan (JPM): "If a cop follows you for 500 miles, you're going to get a ticket."
- On possible U.S. default: "Idiocy ... this is like poison gas."
- On Apple (AAPL): He wishes he bought it years ago and chides Carl Icahn, saying companies shouldn't be run primarily to please Wall Street.
- Berkshire (BRK.A, BRK.B) has about $40B of cash on hand at the moment, and Buffett's a buyer despite the D.C. standoff.
Oct. 16, 2013, 3:58 AM
- Berkshire Hathaway's (BRK.A, BRK.B) Marmon Group has agreed to acquire beverage dispense and merchandising businesses for £690M ($1.1B) from British engineering group IMI.
- Marmon is buying the beverage operations, which make valves for drink dispensers, even though it has been struggling as major customers delay capital investment. The merchandising unit makes marketing displays.
- The deal is expected to be completed early next year. (PR)
Oct. 14, 2013, 8:38 AM
- Typically, Warren Buffett prefers to let Berkshire's (BRK.A. BRK.B) companies choose their own successor CEOs, but the old ways aren't working as well. Behind this is the ever-expanding number of Berkshire subsidiaries and the aging of their CEOs. "Occasionally, you’re going to find subsidiaries that just don’t have a second-in-command," says Buffett fan Robert Miles.
- Most recently, the Benjamin Moore paint unit named its 3rd CEO in two years, this time bringing in an executive who worked before with Buffett deputy Ted Weschler.
- Berkshire investors needn't worry, says investor James Armstrong. Turnover may be heavier at the smaller units, but these aren't moving the Berkshire profit needle. Most profit comes from the larger more stable businesses like Burlington Northern, Santa Fe, and Geico.
Oct. 10, 2013, 4:02 PM
- Berkshire Hathaway's (BRK.A, BRK.B) MiTek Industries unit has acquired Kova Solutions, a provider of software that allows residential production builders and manufactured housing firms to monitor/manage their operations. Terms are undisclosed. (PR)
- MiTek already provides software for residential component manufacturers, to go with structural connectors, machinery, and engineering services. In July, the company bought Benson Industries, a maker of curtain wall systems for commercial high-rises.
Oct. 7, 2013, 2:04 AM
- Warren Buffett's Berkshire Hathaway (BRK.A, BRK.B) has so far made $10B from the $26B of funding it provided to six companies during the financial crisis, the WSJ calculates.
- Using its huge war chest to act as a lender of last resort, as well as the confidence that Buffett's reputation inspires, Berkshire was able to move quickly and obtain lucrative terms.
- Buffett's return so far is almost 40%, well above the government's 12% proceeds from TARP.
- The companies that Berkshire invested in were Bank of America, Goldman Sachs, Swiss Re, Dow Chemical, General Electric and Mars.
- "In terms of simple profitability, an average investor could have done just as well investing in the stock market if they bought during the panic period," Buffett says.
Oct. 4, 2013, 11:03 AM
- Candy-making giant Mars confirms it repurchased from Berkshire Hathaway (BRK.A, BRK.B) $4.4B in bonds it sold to the House of Buffett in 2008 to help finance its mammoth purchase of Wrigley. Berkshire reportedly sold the paper back at 115.45% of face value, giving it a profit of about $680M (not including the interest it's received).
- Berkshire retains a $2.1B preferred stock stake in Wrigley.
- Add the Mars deal to Goldman, BofA, GE and other profitable maneuvers the cash-rich Berkshire and its opportunistic chief were able to pull off amid the financial crisis.
Sep. 30, 2013, 3:16 AM
- Berkshire Hathaway (BRK.A, BRK.B) is set to receive over $2B in Goldman Sachs (GS) shares via warrants that the holding company obtained at the height of the financial crisis in 2008, when its investment helped save GS from collapse.
- Warren Buffett's firm invested $5B for a preferred holding - which GS redeemed in 2011 - and received warrants to acquire $5B in stock for $115 a share.
- In March, Berkshire agreed to exercise the warrants through a cashless transaction in which it will receive an amount of stock equivalent to its paper profit.
- GS shares closed at $159.85 on Friday.
Sep. 20, 2013, 3:19 PM
- "We have a track record. We're there in good times and bad," says Bob Benmosche on Berkshire Hathaway's (BRK.A, BRK.B) push into AIG's commercial insurance turf. Corporate buyers appreciate AIG's decade-long history in the business, says Benmosche. It's not something the house of Buffett can match.
- Berkshire has hired nearly 20 top people from AIG this year, and Warren Buffett has big plans for the unit, expecting the business to reach "into the billions." Last week, the WSJ reported on a tenuous truce between the companies as Berkshire agreed not hire any more from AIG for a little while, and AIG has backed off plans to sue.
- Earlier: Benmosche on the NY regulator.
Sep. 20, 2013, 9:33 AM
- "Basically we love the position of being an owner," says Buffett of the 10-year warrants Berkshire (BRK.A, BRK.B) received when it purchased a $5B preferred stake in Bank of America (BAC) in 2011. The warrants are struck at $7.14 each and allow the purchase of 700M shares of BofA common up to the year 2021 (last night's close was $14.61; bravo, Mr. Buffett).
- Buffett expects to hold the warrants until near-expiration and then convert them to common stock, though that calculation could change were the bank to institute a significant dividend.
- On redeeming Buffett's preferred stake, BofA CEO Moynihan says the bank has more expensive capital to retire first. "There will be some day that we’ll talk about this, but that’s far out there."
Sep. 20, 2013, 7:47 AM
- "We're having a hard time finding things to buy," says Warren Buffett (BRK.A, BRK.B), who feels the stock market is essentially fairly priced at the moment. Appearing with Bank of America (BAC) CEO Brian Moynihan, Buffett stumps for his choice for next Fed chief: Ben Bernanke. "He's done a terrific job."
- Buffett does allow that higher interest rates have inflated stock prices and warns about a QE exit - "Buying securities is usually easier than selling securities."
- Moynihan doesn't rock his large investor's boat: "You have an economy ... growing at 1.5-2% ... until unemployment is down, (Bernanke) has to keep this economy going in the right direction."
Sep. 18, 2013, 12:56 PM
- Narrowing oil price spreads aren't stopping railroads such as Union Pacific (UNP) and Warren Buffett’s Burlington Northern (BRK.A, BRK.B) from planning more capacity, optimistic that crude-by-rail shipments will keep boosting revenue even with the risk of stiffer regulations.
- Brent crude, the benchmark for U.S. imports, traded at a premium to domestic WTI oil by nearly $28/bbl in late 2011, but the spread has narrowed and is now ~$3; it generally costs an extra $12-$15 to ship a barrel of oil by rail vs. slower pipelines, but the economics aren't as attractive once the difference falls below that range.
- “Spreads go up, spreads go down, but just looking at the geography of oil production and refining capacity, railroads will play a strategic role in moving crude from the shale for years to come," a Susquehanna analyst says.
Sep. 13, 2013, 10:00 AM
- It's a "war" says one person close to the issue as Berkshire Hathaway (BRK.A, BRK.B) pushes into the commercial insurance market dominated by AIG. The initial bomb was dropped with Berkshire's April poaching of four senior AIG executives to start a new commercial insurance unit.
- Berkshire has since hired about 15 more from AIG, but agreed not to hire any more for a year, and the companies have also agreed not to disparage one another.
- Buffett has made no secret of his ambitions: "I think you will see us become a very significant factor world-wide in the commercial insurance business. It could be a business that reaches into the billions ... We've got the right people. We've got capital like no one else has."
- AIG publicly brushed off the initial poachings, but privately seethed, with some executives wanting to sue. Ultimately, the two companies reached an agreement outside of the courts. AIG is also taking its reinsurance business elsewhere.
- Marsh & McLennan (MMC) U.S. insurance chief David Bidmead says the new Berkshire unit has been winning plenty of business, but doesn't see it as "uniquely troublesome to AIG."
Sep. 6, 2013, 1:02 PM
Aug. 19, 2013, 11:41 AM
- The Oracle and the Bank of America (BAC -1.1%) CEO had a private dinner together in Omaha earlier this month at which Buffett praised the bank's turnaround efforts.
- Berkshire (BRK.A, BRK.B) gets a 6% dividend on the $5B of preferred shares it purchased in 2011, but the real cheese is the warrants struck to buy $5B of common stock at $7.14 each. With the shares at $14.27, they're more than a little bit in the money.
- What's not known are the details of any discussion about Berkshire's exit from its BofA stake. It wasn't the purpose of the dinner, but it "very likely came up," reports CNBC, citing sources.
Berkshire Hathaway Inc is a conglomerate holding company owning subsidiaries engaged in a number of business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, service and retailing.
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