Market Currents

• Tuesday, November 24, 2009

• 17:06 PM UBS ponders a "Buffett bubble" in shares of rail stocks, which have risen 10-14% since Berkshire Hathaway (BRK.A) agreed to acquire Burlington Northern Santa Fe (BNI). Noting boom-and-bust cycles have followed other Buffett rail moves, UBS warns of a "risk of industry underperformance between now and year end if some of this Buffett-inspired enthusiasm for the group begins to wane." UNP -2.6%. CSX -1.4%. NSC -1%. 3 Comments
• 16:52 PM Berkadia - a partnership between Berkshire Hathaway (BRK.A) and Leucadia National (LUK) - wins court approval to buy the loan-servicing unit of bankrupt Capmark Financial Group for about $468M, beating an affiliate of PNC Financial Services (PNC). (previously) 1 Comment

• Monday, November 16, 2009

• 17:25 PM A Berkshire Hathaway (BRK.A) regulatory filing shows it nearly doubled its stake in Wal-Mart (WMT), to 37.8M shares valued around $1.86B. The company also took new stakes in Nestle (NSRGY.PK) and Exxon Mobil (XOM), and increased its stake in Wells Fargo (WFC). 1 Comment

• Friday, November 13, 2009

• 17:19 PM The $44B deal for Burlington Northern (BNI) was no bargain, Warren Buffett tells Charlie Rose, but the railroad's results in the next 100 years will justify it. "It’s a good asset for Berkshire (BRK.A) to own over the next century ... You don’t get bargains on things like that. It’s not cheap." 4 Comments

• Monday, November 9, 2009

• 16:49 PM As Warren Buffett (BRK.A) takes on a giant "lifetime" investment in Burlington Northern (BNI), he's looking to sell his stakes in two other railroads, Union Pacific (UNP) and Norfolk Southern (NSC). Comment!

• Sunday, November 8, 2009

• 16:21 PM Berkshire Hathaway (BRK.A): Q3 net income of $3.24B vs. $1.06B last year. Operating income $2.06B vs. $2.07B last year. Book value +10.1% from Q2 to $81,247/share. Derivative gain of $1.13B vs. -$819M last year. Was required to post $50M of collateral vs. $650M in Q2; could be required to post another $1.1B if its credit ratings are downgraded. (PR, 10-Q) 1 Comment

• Friday, November 6, 2009

• 10:48 AM Also buried in Fannie Mae's (FNM) SEC filing yesterday was that it agreed to sell $2.6B in unused tax credits to unnamed buyers, and received approval (.pdf) for the deal from its regulator, the FHFA. The Treasury is thought to be leery of signing off on the sale, reportedly to Goldman Sachs (GS) and Berkshire Hathaway (BRK.A). 8 Comments

• Thursday, November 5, 2009

• 14:10 PM Fitch joins S&P in considering a downgrade to Berkshire Hathaway (BRK.A), sharing concerns that tilting the company from insurance to rail makes it more sensitive to general conditions. 1 Comment

• Wednesday, November 4, 2009

• 08:43 AM Sources say Berkshire Hathaway (BRK.A) has joined Goldman Sachs (GS) in a bid to buy $3B in tax credits from Fannie Mae (FNM); the credits are virtually worthless to Fannie Mae. The government, which controls Fannie, is thought to be reluctant to approve a deal that would allow Goldman to save on taxes, but taking widely-respected Buffett as a partner could reduce the tension. 6 Comments

• Tuesday, November 3, 2009

• 15:51 PM Buffett watchers say the Oracle's next move will likely be to replenish his coffers by selling off some holdings. The Burlington (BNI) deal leaves Berkshire (BRK.A) with about $20B in cash and $8B in debt, which means it's almost fully invested by Buffett's standards. 1 Comment
• 14:25 PM The climate story of the day, Clean Air Watch president Frank O'Donnell writes on his blog, isn't the psycho-drama being played out in the Senate Environment and Public Works Committee (webcast), but rather Warren Buffett's (BRK.A) decision to buy the coal-hauling Burlington Northern Santa Fe (BNI) railroad. "This is a $34B bet that coal will remain the centerpiece of American energy policy in the future. Buffett clearly believes that coal use will remain strong - and possibly grow." 7 Comments
• 07:37 AM Berkshire Hathaway (BRK.A) to acquire Burlington Northern (BNI) for $100/share in cash and stock - a 30% premium to Monday's close of $76.07. The transaction, which will give Berkshire the 77.4% of BNI it doesn't already own, is worth $44B including $10B in outstanding debt. (PR) Comment!

• Thursday, October 15, 2009

• 09:57 AM Watching AIG. Chatter about Buffett (BRK.A) clearing the way to buy stock. 2 Comments

• Wednesday, October 7, 2009

• 09:58 AM Insurance risk specialist Verisk Analytics (VRSK) prices its IPO at $22/share, above the expected range of $19-21. The $1.88B raised makes Verisk the biggest IPO since Visa (V) in March 2008. Berkshire Hathaway (BRK.A), the only major shareholder not selling a stake through the IPO, will double its stake to 10.7%. Abbi Adest has the IPO overview. Comment!

• Tuesday, September 8, 2009

• 09:39 AM Just 13 of the newsletters Mark Hulbert follows, or about 7%, managed to beat the market during both the bull and bear markets. These geniuses' top picks include Berkshire Hathaway (BRK.A), Coca-Cola (KO), Johnson & Johnson (JNJ), Microsoft (MSFT), UnitedHealth (UNH) and Wal-Mart (WMT). 1 Comment

• Friday, September 4, 2009

• 10:02 AM Berkshire Hathaway (BRK.A) cuts its holdings of Moody's (MCO -1.5%) by 2%, the second reduction in as many months. But with 39.2M shares remaining, Berkshire is still Moody's largest shareholder. 1 Comment