HLO

Buffett's Recent Portfolio Changes: What's the Message?

Disagree. He made some really smart investments in convertable preferred stocks (remember Goldman Sachs & GE?). If your looking for Buffett to show substantial gains on anything he's "bought lately", then you're trying to evaluate a long-term value investor with the investment perspective of a day-trader.


On Aug 16 09:02 PM qwktrder wrote:

> You are 100% correct. He should just retire.He really hasn't made
> any substantal gains on anything he has bought lately.

Buffett's Recent Portfolio Changes: What's the Message?

I agree. I can't figure out KMX either. This was supposed to be a long-term bet that the American people's overconsumption habits are nearing an end. Real estate is done as a way for the average American to buy that new car every 4-5 years. I thought it was a smart move when he started accumulating KMX - I think it was around $16 when he was buying but even if it's under water now Buffet wouldn't care unless his long-term thesis is wrong or he doesn't have as much faith in KMX management as he did before. I have to think his economic premise is still valid so my uninformed bet is he's seen something in KMX management that he feels is a weakness.
It will be interesting to see if he says anything about this publicly. Obviously, he won't directly criticize management so we'll have to read between the lines.


On Aug 16 11:50 PM Paul168 wrote:

> Silly me, I was thinking that he sold HD because it is fairly overpriced
> and he wanted to take a profit.I was also thinking that the health
> care companies he sold aren't run well enough or efficiently enough
> to do well against the public option. The only move I don't understand
> is KMX which I don't follow. Not knowing where he bought it, I figure
> he is either taking a small gain or a loss for writing down some
> losses against the huge gains he has made on other sales.But what
> do I know?.I don't go around bashing Obama, who has only been in
> office 8 months and has had a lot of crap to clean up and can't magically
> get it done fast enough for you folks that think things were just
> fine before he took over.

Buffett's Recent Portfolio Changes: What's the Message?

<Incidently, pretty soon HE will pay more taxes than his secretary, (Thanks to his buddy Obama)>
Not gonna happen unless he starts paying himself more than $100k salary from BRK. Of course, if he did that then you would criticize him for being a greedy CEO.


On Aug 16 11:13 AM Ralph Hunkey wrote:

> This individual is a "puke"......He should take his bag lunch and
> get out of "Dodge",,,,,,I think he realizes we are not falling for
> his "slick" interpertatrions that only benefit him......Incidently,
> pretty soon HE will pay more taxes than his secretary, (Thanks to
> his buddy Obama)
> If he buys a stock that I own, I sell it

Buffett's Big Bet: The Real Value of the Berkshire Investment in Goldman Sachs

Dividends paid from one company to another are 80% exempt from corporate income taxes. Otherwise, company profits would be subject to potential "triple taxation" (tax at earning, tax at distribution to another company, tax at distribution to individual shareholder). Since GS is paying a dividend to Berkshire, however, it does not receive a tax deduction like it would if it were paying interest on a debt obligation.

Buffett's Big Bet: The Real Value of the Berkshire Investment in Goldman Sachs

One point that seems to be missed by most comentators regarding Buffett's Goldman Sachs deal is that Berkshire Hathaway will not owe income taxes on 80% of the $500 million annual dividend it receives. On the other side, Goldman Sachs doesn't get a tax write-off for this payment. So Buffett's "real" return, when compared to other taxable investments, is closer to 15% annually on a pre-tax basis with respect to the preferred stock dividends.

What's the Smartest Money Doing? Buffett's Buying Goldman Sachs

Buffett's getting a whopper of a deal. The 10% return Berkshire receives will be 80% exempt from taxation, which equates to around a 15% return if it were fully taxed. On top of that, Berkshire obviously gets the warrants. Depending on what the value of the warrants are, it's likely that Buffett's total return is well over 20% on an equivalent fully taxed basis.