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Posts Tagged ‘Warren Buffett’

Bershire Hathaway Portfolio Update

As of 12/31/2011, Berkshire Hathaway (BRK.B) owns 34 stocks with a total value of $66.2 billion.  The classic value investor Warren Buffett made a number of stock moves during the 4th quarter of 2011.  These are the details of the buys and sells.

Added: CVS Caremark Corp. (CVS)

Warren Buffett added to his holdings in CVS Caremark Corp. by 25.53%. His purchase prices were between $32.97 and $41.16, with an estimated average price of $37.2. The impact to his portfolio due to this purchase was 0.09%. His holdings were 7,106,500 shares as of 12/31/2011.

Added: Intel Corp. (INTC)

Warren Buffett added to his holdings in Intel Corp. by 23.17%. His purchase prices were between $20.62 and $25.66, with an estimated average price of $23.87. The impact to his portfolio due to this purchase was 0.08%. His holdings were 11,495,000 shares as of 12/31/2011.

New Purchase: Davita Inc. (DVA)

Warren Buffett initiated holdings in Davita Inc. (DVA). His purchase prices were between $60.64 and $76.81, with an estimated average price of $71.05. The
impact to his portfolio due to this purchase was 0.31%. His holdings were 2,684,500 shares as of 12/31/2011.

New Purchase: Liberty Media Corp. Liberty Cap (LMCA)

Warren Buffett initiated holdings in Liberty Media Corp. Liberty Cap. His purchase prices were between $61.11 and $79.67, with an estimated average price of
$46.2. The impact to his portfolio due to this purchase was 0.2%. His holdings were 1,701,400 shares as of 12/31/2011.

Added: International Business Machines Corp (IBM)

Warren Buffett added to his holdings in International Business Machines Corp by 11.43%. His purchase prices were between $173.29 and $194.56, with an estimated average price of $184.45. The impact to his portfolio due to this purchase was 1.83%. His holdings were 63,905,931 shares as of 12/31/2011.

Added: The Directv Group Inc. (DTV)

Warren Buffett added to his holdings in The Directv Group Inc. by 378.85%. His purchase prices were between $40.6 and $47.87, with an estimated average price of $45.35. The impact to his portfolio due to this purchase was 1.03%. His holdings were 20,348,400 shares as of 12/31/2011.

Added: Wells Fargo & Company (WFC)

Warren Buffett added to his holdings in Wells Fargo & Company by 6.18%. His purchase prices were between $23.18 and $27.785, with an estimated average
price of $25.68. The impact to his portfolio due to this purchase was 0.93%. His holdings were 383,703,628 shares as of 12/31/2011.

Added: Visa Inc (V)

Warren Buffett added to his holdings in Visa Inc by 25.02%. His purchase prices were between $84.26 and $103.15, with an estimated average price of $93.81. The impact to his portfolio due to this purchase was 0.09%. His holdings were 2,865,008 shares as of 12/31/2011.

Added: General Dynamics Corp. (GD)

Warren Buffett added to his holdings in General Dynamics Corp. by 26.52%. His purchase prices were between $55.67 and $66.92, with an estimated average price of $63.53. The impact to his portfolio due to this purchase was 0.08%. His holdings were 3,877,122 shares as of 12/31/2011.

Added: Verisk Analytics Inc. (VRSK)

Warren Buffett added to his holdings in Verisk Analytics Inc. by 63.96%. His purchase prices were between $33.06 and $40.13, with an estimated average price of $36.75. The impact to his portfolio due to this purchase was 0.08%. His holdings were 3,445,029 shares as of 12/31/2011.

Reduced: Johnson & Johnson (JNJ)

Warren Buffett reduced to his holdings in Johnson & Johnson by 22.51%. His sale prices were between $61.27 and $66.02, with an estimated average price of
$63.97. The impact to his portfolio due to this sale was -0.91%. Warren Buffett still held 29,018,127 shares as of 12/31/2011.

Sold Out: Exxon Mobil Corp. (XOM)

Warren Buffett sold out his holdings in Exxon Mobil Corp.. His sale prices were between $71.15 and $85.28, with an estimated average price of $78.88.

Warren Buffett Talks About His Purchase of IBM (VIDEO)

Warren Buffett shared his purchase of IBM on CNBC Squawk Box with Becky Quick. Joe Kernan and Andrew Ross Sorkin.

 

Covered Call Recommendation on Berkshire Hathaway B Shares

Covered Call Recommendation on Berkshire Hathaway B (BRK.B) trading at $72.09

Strategy: Look to sell one October 2011 72.5 call for wach 100 shares of Berkshire Hathaway (BRK.B).  The net debit will be $69.89 (72.09-2.20) for an assigned return of 3.73% in 24 days or 56.8% annualized.

Research Notes:  This is the first time Berkshire has bought back its own shares.  It tells us that the world’s best investor, Warren Buffett, thinks his own business is dirt-cheap.

Berkshire has plenty of cash to commit to this program – $48 billion of it. And the company announced it was willing to pay up to 1.1 times book value for its own stock… which means it’s willing to pay nearly $109,000 per “A” share or roughly $72.50 per “B” share. (These numbers are not exact, just close and easy to remember.)

This creates a “floor” in the stock price.   Any time the stock falls much below that, Berkshire will buy it… or investors will buy it thinking that Berkshire will. As I write, both share classes are below those prices.

I like it… Your downside is limited thanks to the new buyback creating a “floor.”  Meanwhile, Warren Buffett, the world’s greatest investor, is managing your money.  This is a trade that can be updated each month so that the call premium recieved is monthly income.  WOW!  I like getting monthly income from Warren Buffett.

Warren Buffett On The Tax Debate

Investment guru Warren Buffett gave a wide-ranging interview to Charlie Rose, which aired on Monday evening. He discussed the economy’s prospects, the state of Washington and who will succeed him as the chairman of Berkshire Hathaway.

The interview came shortly after Buffett published an Op-Ed piece in the New York Times, called “Stop Coddling The Super Rich,” in which he urged the government to make billionaires (including him) pay more taxes.

In the interview, Buffett stressed that it was vital for politicians, and the newly appointed congressional super-committee in particular, to work together to help resolve the country’s economic difficulties.

Watch: Buffett On The Tax Debate

 

Warren Buffett’s View on Buying Gold

A video from CNBC showing Warren Buffett discussing his thoughts on investing in gold.  Would you buy a 67 foot cube of gold or farmland and stocks?  This is part of my rationale for investing for monthly income rather than taking a cube of gold.  See video below.

 


 

Lessons from Warren Buffett and Bill Gates

In a Town Hall event titled Keeping America Great, Warren Buffett and Bill Gates were at Columbia University in New York City on November 12, 2009.  Both self-made billionaires, Buffett and Gates are the embodiment of the American Dream.  They both put their stock in America and reaped the benefits of the capitalist tradition.  Since the financial collaspe and ensuing recession, who better to ask about how to keep America great in the coming years.
 
This article details the lessons shared by Buffett and Gates during this event.
 
Lesson 1: Pay attention to the world around you.  Buffett suggested that students should learn their ethics in the home rather than at business school.  Buffett is suggesting that most students already have a value system in place before attending business school.  It is the values displayed by parents, mentors and the world around us that form our values. So pay attention.
 
Lesson 2: To be successful in life, find what turns you on.  Buffett was so passionate about learning to invest with Ben Graham that he offered to work for nothing.  Likewise, Gates was so passionate about software programming that he literally created the industry through Microsoft.  The secret to success is to find what you are most passionate about and make it your career and life.
 
Lesson 3: Learn how to disciper a competitive advantage when you see it.  Buffett invested in Burlington Northern not because it was a great current value, but because it has a competitive advantage when moving goods throughout America.  Burlington Northern can move a ton of freight 470 miles on one gallon of diesel fuel.  That is far mor efficient and green than what happens during trucking freight over the highways.  By the way, more goods are being produced in other countries like China that will be imported into America and distributed via the rail system.  Buffett realizes that this advantage is where he will get a return on his investment in the future.
 
Lesson 4; Don’t underestiamte the value of a good education today.  Buffett made a comment that he would pay any student in the audience $100,000 for 10% of their future income.  Doing the math, this equates to a value of $1 million in future earnings just to break even.  An MBA student graduating from a reputable business school today will easily surpass $1 million in their careers.
 
Lesson 5: Cash helps you sleep better at night.  Buffett knows that cash is not a good investment but he likes to have enough cash available to handle any issues that come his way.  Buffett also said that “you always want to keep enough cash so that no one else can determine your future.”  It is not only important to have an emergency fund but you never know when you will need a “kiss my a$$” fund when employment disaster strikes beyond your control.
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