icandoitdon

Buffett's Betrayal

the two faces of warren buffett. thanks for a good job exposing them.

Warren Buffett's Berkshire Hathaway's 2008 Annual Letter

yes, i think buffet (whom i also admire) might have stayed on a bit too long. assuming the risk of equity puts at the top of the market, investing in BNI and COP....these were, then and now, hard to understand.

as for jack welch, i can't think of a more overrated executive than him. he's the man who managed earnings for years through accounting trickery when it was given a wink and a nod by everyone, including the SEC. he's also the man who inflated GE earnings by turning that once proud industrial giant into a god damned bank...and a lousy one at that. he couldn't shine the shoes of gates, jobs or buffet.


On Mar 01 09:58 PM Equity Has No Clue wrote:

> Old guys are krazy. Remember Kapitan Kirk Keokrian with GM and Ford?
> There comes a time in Old Doods' lives when they care more about
> legacy and proving they can still get it up than rational investing
> decisions.
>
> I think Buffet wants to be remembered as a patriot. He has more than
> enough money. At this point he wants his legacy as the man that helped
> save America and not as the hedge fund whipersnappers of Wall Street
> that destroyed it.
>
> I gotta give The Buffet credit. He is a man willing to go down with
> the ship.
>
> If he wasn't so old I'd like to get a serving of some BRK.B at The
> Old Country Buffet. But like every great company with a charismatic
> leader, it is buyer beware when The Bill Gates, Jack Welsches, and
> Steve Jobs of the world step down.

Buffett's Gamble: $40 Billion Bet on Volatility

dlaw has it right.

i chuckle at the notion that there is little risk in these trades.

we're in a liquidity squeeze.

capital raising is all but impossible unless you have gilt-edged credit.

the economy is contracting at the most rapid pace in modern history.

financial markets have tanked

volatility is the highest in history.

junk bond yields are approaching historical levels. spreads have never been wider.

treasury yields are the lowest in recorded history as a consequence of the lack of confidence in our very financial system.

bank stocks are crumbling...and not just the Cs of the world. or haven't you noticed what's happened to share prices of the "leaders" (i use the term lightly) over he last 2 months...BAC WFC, GS, USB

insurance stocks with heavy investment portfolios have lost half or more of their market value in recent weeks...not months...weeks. BRK itself has been the latest victim of intense selling.

maybe BRK overcomes all this and their sale of puts works out as intended. but i'd be willing to bet that buffet would not make the same trade today. the world has changed since he put that position on.

Buffett and the Limits to 'Awaiting Better Times'

i've made a point of listening to pundits of varioius persuasian...bullish or bearish...and i've come to conclude that those most passionate about their beliefs have the poorest track records. i'll give buffett this...over the years he has demonstrated patience, never chasing stocks that he believes are not attractively priced. if anything buffett buys too soon. this market has been, and remains, a falling knife, and just because buffet thinks its time to buy doesn't mean it will stop falling.

as for the eternal optimists...you know who they are...the CNBC crowd and various pundits whose blogs or comments aren't worth the time it takes to write them because they are incapable of adjusting their mindset to new facts and circumstances.....i'll only say this: you were wrong every step of the way down, all the while insisting you were right. jason c's absurd notion that "you haven't lost a dime" in the face of a 40% decline from the peak speaks for itself. as if the holder of intel at $70 in the summer of 2000 hasn't lost a dime 8 years later because he still holds it at $15. not only has he lost capital, he has lost the opportunity of making positive returns elsewhere by refusing to sell. those with that kind of mindset belong in savings accounts...not stock markets.

Goldman Sachs: Buffett's the Milkman and He Always Delivers

"This effectively sets a floor price on the common stock of GS"

this is nonsense. buffet is a world apart from a GS shareholder. he owns preferred with a huge dividend payout. he put a gun to the head of that company and they caved because they were desperate for capital and nobody else would provide it. good for buffet but not so good for GS.

i'd also point out that our "world's greatest inverstor" admitted he wouldn't have done this deal absent a backstop from the taxpayer. you're welcome, warren.

way to go, warren...

Why You Should Short Companies Doing Share Buybacks

thofler:

repurchased shares reside in a treasury stock account, which is a contra-equity account (i.e. the balance is a reduction of shareowners' equity).

these shares may be reissued at any time without a formal secondary offering. i believe a "shelf registration" is required, however. in oher words the company has previously registered with the SEC it's intent to issue new shares "off the shelf." they may do so out of treasury or by issuing brand new shares.

this is based on distant recollection, as i've been out of the financial reporting field for some years....

Why You Should Short Companies Doing Share Buybacks

i agree with the author.

there can be certain cases where buybacks make sense, i.e....

1. when the firm has limited internal growth prospects
2. when the firm has no plans to grow by acquisition.
3. when the firm's future capital needs are modest and it has stable or growing operating cash flow.
4. when the firm is entrenched because of high barriers to competitive entry.

even under these circumstances i'd rather have a dividend, thank you very much. double taxation, the commonly perceived bugaboo of dividend payments, is a red herring. our system double taxes many things; neither do corporations pay as much in taxes as commonly perceived, as anyone who understand the concept of a growing deferred income taxes liability understands. besides....i'd rather have a company willing to put it's money on the line with a steady or growing stream of dividend payments to shareholders than not. it will do far more to support the stock price than share buybacks will ever do.

another reason i object to buybacks is simple but important....it shrinks the capital base of the firm. capital is a precious resource and it might be needed one day. citigroup, wachovia AIG, lehman, merrill lynch, etc. have learned this lesson the hard way. they're all issuing new equity at prices far lower than at which they've repurchased shares in the past. guess they aren't as smart as they thought they were....