Warren Buffet who has stayed away from investing in Technology companies has made a big u turn and invested in IBM.
Berkshire Hathaway, the investment firm owned by U.S. billionaire Warren Buffett, bought in March $10.7 billion shares in IBM equivalent to 64 million shares.
This was reported when Berkshire Hathaway made disclosures on buys and sells in 2011.
With the buy-in, Berkshire now has a 5.5 per cent stake in IBM, making the company the second-largest shareholder.
Warren Buffet had a peculiar explanation on why IBM? Buffett said he changed his mind after he read IBM’s yearly reports and talked to IT department heads of Berkshire subsidiaries that IBM’s focus is no longer into hardware but providing service.
I’m surprised with his official statement…as if he recently discovered IBM was predominately a services company? Last I checked…they embarked upon that strategy in 1993 under Lou Gerstner.
written by Constantine Njeru
\\ tags: Berkshire Hathaway, IBM, Technology Companies, Warren Buffett
Although Warren Buffet is publicly known as a long term investor who is never interested in complex investments, the man invests in derivatives on the side. This is a big surprise considering he once referred to this type of investments as “weapons of mass destruction”
Warren Buffett, uses derivatives to speculate on long-term gains in stocks and the creditworthiness of corporate and municipal borrowers. The contracts tied to equity indexes, which aren’t scheduled to settle until 2018 or later.
This derivatives investments have been the cause of recent profit declines by Berkshire Hathaway. In November 2011, Berkshire Hathaway Inc. said third-quarter profit fell 24 percent as derivative bets declined in value.
This Warren Buffet Derivative Bet Could Be a Ticking Bomb
If the stock market continues to decline Buffet & Co could face a loss of $34 Billion. Warren Buffet sold the equity derivatives to undisclosed buyers for $4.9 billion. Liabilities on the so-called equity-index puts widen when four stock indexes fall from the levels they were at when Buffett made the contracts near the market peaks in 2006 and 2007. If the indexes are at zero when the agreements expire, the losses would be about $34 billion.
Warren Buffet has also invested in Credit-default swaps, in which Buffett bets on the solvency of borrowers.
written by Constantine Njeru
\\ tags: Berkshire Hathaway, Berkshire Hathaway Inc, Credit Default Swaps, Creditworthiness, Derivative Investment, Derivatives, Equity Index, Equity Indexes, Solvency, Stock Indexes, Warren Buffett, Weapons Of Mass Destruction
Long term investing is the secret to how Warren Buffet makes money. A $10,000 investment in Berkshire Hathaway in 1965, the year Warren Buffett started the company, would have grow to be worth nearly $30 million by 2005.
Buffett’s long term investing strategy is arguably the most successful ever. No one has come close to matching his annual stock market returns.
Warren Buffet Secret of long term investing is summed up by the following three quotes by him:-
- I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.
- Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.
- Our favourite holding period is forever.
More Warren Tips For Long Term Investing
- Always invest for the long term.
- Does the business have favourable long term prospects
- Do not take yearly results too seriously. Instead, focus on four or five-year averages.
- As far as you are concerned, the stock market does not exist. Ignore it.
- Stop trying to predict the direction of the stock market, the economy, interest rates, or elections.
Long Term Investing
written by Constantine Njeru
\\ tags: Berkshire Hathaway, Holding Period, Invest, Investing Strategy, Quotes, Stock Market Returns, Warren Buffett
In a speech given in New Delhi March 25, 2011, the chairman of Berkshire Hathaway, Warren Buffet predicted the decline of the U.S. dollar.
The billionaire investor warned investors to avoid “long-term fixed-dollar investments” such as 10-year U.S. Treasury bonds. Buffett worries that the $2.3 trillion in new money the US government has pumped into the economy, when combined with interest rates so low they’re practically giving money away, are combining to dilute the value of the dollar.
U.S Dollar Projection: Forecast : Prediction
As a result, Buffett warns: “If you ask me if the U.S. Dollar is going to hold its purchasing power fully at the level of 2011, 5 years, 10 years or 20 years from now, I would tell you it will not.”
written by Constantine Njeru
\\ tags: 10 Years, Berkshire Hathaway, Billionaire, Buffett, Decline, Dollar Investments, Economy, Giving Money, Interest Rates, Investor, Investors, March 25, New Delhi, New Money, Purchasing Power, Trillion, U S Treasury, U S Treasury Bonds, Us Government, Warren Buffet
Bill Gates was the richest man in the world from 1995 – 2009. Bill Gates invests his money through Cascade Investment, a private investment and holding company, incorporated in United States. It is controlled by Bill Gates, and is headquartered in the city of Kirkland, Washington.
According to Wikipedia article Bill Gates Investment firm has stakes in the following companies :-
- AutoNation
- Berkshire Hathaway
- Canadian National Railway
- Carpetright
- Dante Giovanni Corporation
- Coca Cola Femsa SAB de CV – 20% stake[2][3]
- Cox Communications
- Microsoft Corporation
- FEMSA (Mexican brewer)
- Four Seasons Hotels and Resorts – 42.5 percent
- ICOS
- Newport News Shipbuilding
- OANDA Corporation[6]
- Otter Tail Power Company
- Pan American Silver Corporation
- Republic Services, Inc – U.S. waste management firm
- Sapphire Energy[8]
- Schnitzer Steel Industries
- Scient
- Televisa
- Wisconsin Central Transportation
- EastMan Kodak
Just note, these companies are not final. Gates may have divested in some of them
written by Constantine Njeru
\\ tags: Berkshire Hathaway, Canadian National Railway, City Of Kirkland, City Of Kirkland Washington, Coca Cola Femsa, Cox Communications, Eastman Kodak, Four Seasons Hotels, Four Seasons Hotels And Resorts, Money Bill Gates, Newport News Shipbuilding, Oanda Corporation, Otter Tail Power, Otter Tail Power Company, Pan American Silver, Pan American Silver Corporation, Republic Services Inc, Richest Man In The World, Schnitzer Steel Industries, Wisconsin Central Transportation
The breaking news is Warren Buffett’s Berkshire Hathaway is to purchase chemical company Lubrizol for $9 billion in cash.
Berkshire Hathaway will acquire 100 percent of outstanding Lubrizol shares for $135 per share in an all-cash transaction.
As soon as this material announcement was made Lubrizol stock / share was up 28%. Previous close was $105 and the stock opened today at $133.
Lubrizol makes chemicals for pharmaceutical companies, fuel additives for gasoline and diesel and other ingredients for the transportation sector.
written by Constantine Njeru
\\ tags: Berkshire Hathaway, Breaking News, Cash Transaction, Chemical Company, Chemicals, Diesel, Fuel Additives, Gasoline, Lubrizol, Pharmaceutical Companies, Shares, Stock News, Stock Price, Stock Share, Transportation Sector, Warren Buffett
An interesting item from 2011 Warren Buffet Shareholder letter was the forecast/ prediction that Coca-Cola could double its earning power in the next 10 years.
“In his 2011 shareholder letter,” he wrote, “we Berkshire Hathaway will almost certainly receive $376 million from Coke, up $24 million from last year. Within 10 years, I would expect that $376 million to double.”
That is an annual growth rate of between 6 – 7 %
If Coca-Cola doubles its earning power in the next 10 years as Warren Buffett predicts, then expect Coke stock to continue growing.
written by Constantine Njeru
\\ tags: 10 Years, Berkshire Hathaway, Coca Cola, Coke, Earning Power, Stock Forecast, Stock Prediction, Warren Buffet Shareholder Letter, Warren Buffett
Forbes rich list for 2011 is out. The highlight from the list are:-
- Six people from Facebook made it into the list.
- Mexico’s Carlos Slim has topped the 2011 Forbes magazine rich list, as his wealth grew by more than a third.
- More than 200 people joined the billionaires list as their numbers rose to a new record of 1,210.
- Asia, for the first time in a decade, has more billionaires on the list than Europe, with 332 against 300.
- The collective wealth of the billionaires on the list also hit a new record of $4.5tn.
Top Ten Richest People : 2011 Forbes list
- Carlos Slim – $74bn – America Movil, telecoms
- Bill Gates – $56bn – Microsoft, software
- Warren Buffett – $50bn – Berkshire Hathaway
- Bernard Arnault – $41bn – LVMH, luxury goods
- Larry Ellison – $39.5bn – Oracle, software
- Lakshmi Mittal – $31.1bn – ArcelorMittal, steel
- Amancio Ortega – $31bn – Zara, fashion
- Eike Batista – $30bn – Mining, oil
- Mukesh Ambani – $27bn – Reliance Industries
- Christy Walton – $26.5bn -Wal-Mart, retail
written by Constantine Njeru
\\ tags: America Movil, Berkshire Hathaway, Bernard Arnault, Bill Gates, Billionaires List, Carlos Slim, Christy Walton, Collective Wealth, Eike Batista, Forbes List, Forbes Magazine, Forbes Rich List, Larry Ellison, Lvmh, Mukesh Ambani, Oracle Software, Reliance Industries, Wal Mart, Warren Buffett, Zara Fashion
In Warren Buffet 2011 Letter to Berkshire Hathaway Shareholders, Warren Buffet made an interesting forecast on the direction of the USA housing market.
The sage of Omaha suggested a housing recovery will likely begin within the next year, which would help the economy and several Berkshire subsidiaries, including ones that make carpets and bricks.
If Buffet is right then expect a pick up of mortgages and a rise in house prices going into 2011 & 2012.
written by Constantine Njeru
\\ tags: Amp, Berkshire Hathaway, Berkshire Hathaway Shareholders, Bricks, Carpets, Direction, Economy, House Prices, Housing Market, Mortgages, Sage Of Omaha, Subsidiaries, Us Housing Market, Warren Buffet
In a world where many fear the economic future of American economy, Warren Buffet is confident of the future.
Warren Buffett said in his 2011 letter to Berkshire Hathaway shareholders Saturday that he still believes America’s best days are ahead.
Highlights From the Warren Buffet Shareholder Letter 2011
Don’t trust companies financial statement, do your own homework – Buffett urged investors not to focus on the net income figures that companies report because they are easily manipulated through accounting tricks or by selling investments.
Dangers of investing in borrowed money – “When leverage works, it magnifies your gains. Your spouse thinks you’re clever, and your neighbors get envious. But leverage is addictive,” Buffett said. “Once having profited from its wonders, very few people retreat to more conservative practices.”
This is the time to invest – He plans to put to use Berkshire Hathaway $38 Billion cash hoard. “We’re prepared,” Buffett wrote. “Our elephant gun has been reloaded, and my trigger finger is itchy.”
Housing is set for recovery- He said a housing recovery will likely begin within the next year, which would help the economy and several Berkshire subsidiaries, including ones that make carpets and bricks.
To download a copy go to Berkshire Hathaway Shareholder Letters.
written by Constantine Njeru
\\ tags: American Economy, Berkshire Hathaway, Berkshire Hathaway Shareholders, Bricks, Carpets, Elephant, Elephant Gun, Financial Statement, Hoard, Homework, Leverage, Many Fear, Neighbors, Net Income, Shareholder Letters, Subsidiaries, Trigger Finger, Trust Companies, Warren Buffet Shareholder Letter, Warren Buffett
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