Warren Buffett 01 (May 08 - Jan 10)

[winston]

Buffett: Stocks Still Represent Good Value By: Dan Weil

In October, when the Dow Jones Industrial Average stood at 8,979, Warren Buffett was bullish on U.S. stocks.

Nine months later, with the Dow trading above 9,000, he's still bullish.

He would much rather own equities at 9,000 on the Dow than have a long investment in government bonds or a continuously rolling investment in short-term money,he tells CNBC.

That doesnt mean Buffett sees rabid growth in the U.S. economy. Business is flat, he points out.

Buffett's bullish call last October came in a New York Times op-ed piece. He said in that article that if you wait until you see robins, spring will be over, Buffett explains.

You cant wait for business to turn up and be very clear about the fact that it'll turned up ... The market is very likely to turn up before business.

That's why Buffett doesnt try to time stocks, he says. Ill try to price stocks. Stocks were a decent value when I wrote that article.

Buffett stresses that he doesnt know where stocks are headed in the next year, but he is bullish for the long term.

Still, he is worried about inflation. The massive fiscal and monetary stimulus programs are the right thing to do. But 10 years from now, the dollar will buy a lot less than it buys now, Buffett says.

Buffett isnt the only one who likes U.S. stocks. Renowned mutual fund manager Bill Miller, in his latest report to shareholders, says the conditions for a bull market are where we are now.

© 2009 Newsmax.

http://moneynews.newsmax.com/streettalk ... 39732.html

[millionairemind]

What happened to Buy American, I am???

Warren Buffett stocks up on foreign government bonds
Warren Buffett has increased his holdings of foreign government bonds as the billionaire investor's spending on equities fell to its lowest in more than five years.

Mr Buffett's Berkshire Hathaway owned about $11.1bn in foreign government bonds in its insurance units at the end of June, up from $9.6bn three months months earlier, Berkshire said in a regulatory filing, according to a report on Bloomberg.

In the second quarter, Mr Buffett spent $2.6bn on bonds compared with $350m on shares. The billionaire investor, whose views on financial markets are closely followed around the world, has benefitted as equity markets rallied over the past three months.

“Some of the normal places he’s gotten the cash to invest are just getting killed in the recession,” Gerald Martin, a finance professor at American University’s Kogod School of Business in Washington, told Bloomberg News.

“So he’s locking in these guaranteed returns, moving from the volatility of stocks to a steady stream of income that, in some cases, is almost at the return you normally get from the stock market.”

Mr Buffett booked a $4.1bn (£2.5bn) paper profit on the $5bn he invested in Goldman Sachs at the height of the financial crisis.

Known as the "Sage of Omaha" for his money-making ability, has made the return in one of the bleakest periods for investing in decades, benefiting from the recent uptick in Goldman's share price.

[winston]

Be Smart With Your Money... Buy This Guy By Dr. Steve Sjuggerud

Donald Trump is out...

Americans are in the midst of changing how they live... And it has happened in less than three years.

Conspicuous consumption is now out. Being "smart" with your money is in... And it may take a long time for conspicuous consumption to return.

Donald Trump is the poster boy for the excesses of three years ago. These days, he's struggling more than he'll admit, swallowed by debt.

For example, Trump won't pay the $40 million personal guarantee he owes on a Chicago condo project that isn't selling. His excuse? The financial crisis was an "act of God." I'm not kidding.

And just last month, his lawsuit against a writer was dismissed... Trump sued the author of the 2005 book Trump Nation, who said Trump's net worth was more like $200 million back then, not the billions Trump claimed. Who actually sues someone for that?

Meanwhile, Warren Buffett, the world's second-richest man, is the poster child for "being smart" with your money. He still lives in the house in Omaha he bought over 40 years ago. And he drives a pickup truck.

( Does he drive a pick up truck now ? I thought he has a car with the license plate "Thrifty" )

Trump and Buffett have handled the crisis as you might expect. Trump is getting swallowed by it because of debt. And Buffett is reveling in it...

Around the same time Trump was claiming "an act of God" and avoiding his $40 million personal guarantee, Buffett did exactly what a great investor does... He had cash when nobody else did and he put it to work.

At the height of the crisis last year, Buffett spent billions propping up Goldman Sachs, and he got an absolutely ridiculous deal. (Part of the deal was stock warrants giving him the ability to buy $5 billion worth of Goldman stock at $115 a share. Today's price is $163 a share... That gives Buffett's investment vehicle, Berkshire Hathaway, a paper profit of more than $2 billion.)

I don't want to waste your time singing Buffett's praises. You already know he may be the greatest investor who ever lived. He's made a career of making distressed loans to big businesses for a high interest rate, plus an arm and a leg.

You know the basic story. I simply suggest buying shares of his company today...

I have just one "exhibit" for you that explains why now is a great time to buy: the price-to-book ratio of Berkshire Hathaway shares.

"Book value" is a very rough measure of the liquidation value of a company. Whenever the shares of the greatest money manager in the world trade near the liquidation value of his company, they're a buy.

They traded almost this low in 1992, and it was good for a near 100% gain in just a year. It happened in 2000 and was good for a 50% gain in just a year.

We're here again... and the shares are even cheaper this time around. So last month, in my newsletter True Wealth, I recommended buying some Berkshire Hathaway. Since the shares are around $100,000 each (Buffett has never done a stock split), I suggest you consider the "B" shares, which trade around $3,333 per share. They're basically an "A" share divided by 30.

There's another nifty way to "backdoor" into a good stake in Berkshire – at a 20%+ discount! The Boulder Total Return Fund (BTF) holds approximately 40% of its assets in Berkshire Hathaway. The rest of its portfolio is similarly high quality. Check it out at www.boulderfunds.net.

Trump is out, Buffett is in. Conspicuous consumption is out, being smart with your money is in. Buffett is the best at it. And his stock is really cheap. Consider "buying Buffett" today...

[LenaHuat]

He drives a Maybach.

[kennynah]

Buffett & Berkshire Hathaway Q2-2009 Holdings P to Z (BRK-A, PG, SNY, STI, TMK, USB, USG, UNH, UNP, UPS, WBC, WMT, WPO, WFC, WLP, WSC)

Posted: August 14, 2009 at 5:22 pm

Buffett ImageBerkshire Hathaway Inc. (NYSE: BRK-A)(BRK-B) has released its public stock holdings for Q2-2009 as of June 30, 2009. Buffett did make some portfolio changes that have been seen here from the end of Q1 and we have broken these down into 3 groups of ‘A to F’ and ‘G to O’ and ‘P to Z’ so these are easier to see on one page. Here are Warren Buffett’s holdings and accompanying notes for the group ‘P to Z.’

* Procter & Gamble (NYSE: PG) 96.3 million, same as before.
* Sanofi Aventis (NYSE: SNY) more than 3.9 million shares, looks same as before.
* Sun Trust Bank (NYSE: STI) more than 3.2 million shares, same as before.
* Torchmark Corp. (NYSE: TMK) roughly 2.82 million, same as before.
* US Bancorp (NYSE: USB) roughly 69 million is same as before after it had been raised in Q1.
* USG Corp. (NYSE: USG) 17.072 million shares, same as before.
* United Health Group (NYSE: UNH) 4.5 million; down from over 6 million.
* Union Pacific Corp. (NYSE: UNP) 9.55 million shares, same as Q1 after growing the Q1 over Q4 position.
* United Parcel Service (NYSE: UPS) 1.429 million shares, same as before.
* WABCO Holdings (NYSE: WBC) 2.7 million shares, same as before.
* Wal-Mart Stores Inc. (NYSE: WMT) over 19.9 million shares, same as before.
* Washington Post (NYSE: WPO) over 1.72 million shares, same as before.
* Wells Fargo & Co. (NYSE: WFC) over 302 million; ABOVE the 290+ million shares the quarter before.
* Wellpoint Inc. (NYSE: WLP) 3.5 million; DOWN from the 4.7773 million shares in Q1.
* Wesco Financial Corp. (NYSE: WSC) 5.7 million shares, same as before.

[kennynah]

Buffett & Berkshire Hathaway Q2-2009 Holdings A to F (BRK-A, AXP, BAC, BDX, BNI, KMX, KO, CMCSA, CDCO, COP, COST, ETN, CEG)

Posted: August 14, 2009 at 4:45 pm

Buffett ImageBerkshire Hathaway Inc. (NYSE: BRK-A)(BRK-B) has shown its Q2-2009 holdings as of June 30, 2009. There are some portfolio changes that have been seen here from the end of Q1 and we have broken these down into 3 groups of ‘A to F’ and ‘G to O’ and ‘P to Z’ so these are easier to see on one page. Here are Warren Buffett’s holdings and accompanying notes for the group ‘A ot F.’

* American Express Co. (NYSE: AXP) over 151.6 million shares, same as before.
* Bank of America Corp. (NYSE: BAC) 5 million shares; same as last quarter.
* Becton Dickinson & Co. (NYSE: BDX) appears to b a new holding over last quarter according to our records. Berkshire holds 1.2 million shares (listed in SEC filing as Beckton Dickson).
* Burlington Northern Santa Fe (NYSE: BNI) 76.77 million shares; same as Q1 after the Q1 position was raised from Q4.
* Carmax Inc. (NYSE: KMX) 9 million shares is lower than the 12 million in Q1 and marks three straight quarters of declines.
* Coca Cola Co. (NYSE: KO) right at 200 million shares, still has stayed the same as before.
* Comcast (NASDAQ: CMCSA) 12 million shares, same as before.
* Comdisco Holdings (NASDAQ: CDCO) roughly 1.5 million shares, same as before.
* ConocoPhillips (NYSE: COP) was listed as 62.485 million, which is officially lower than the Q1 period but we had already been told of cuts after that date so mostly the same.
* Costco Wholesale (NASDAQ: COST) 5.254 million shares, same as before.
* Eaton Corp. (NYSE: ETN) 3.2 million shares; looks like new holding but may have been missed before.
* Constellation Energy Group (NYSE: CEG) appears to be completely sold off now.,but this was already being cut.

[Cherry]

Buffett Says U.S. Federal Debt Poses Risks to Economy, Dollar
2009-08-19 05:21:20.164 GMT


By Shamim Adam
Aug. 19 (Bloomberg) -- The U.S. must address the massive amounts of “monetary medicine” that have been pumped into the financial system and now pose threats to the world’s largest economy and its currency, billionaire Warren Buffett said.
The “gusher of federal money” has rescued the financial system and the U.S. economy is now on a slow path to recovery, Buffett wrote in a New York Times commentary yesterday. While he
applauds measures adopted by the Federal Reserve and officials from the Bush and Obama administrations, Buffett says the U.S. is fiscally in “uncharted territory.”
The government is trying to spark business and consumer spending through a $787 billion stimulus plan spanning tax cuts and infrastructure projects, while the Treasury and the Fed have
spent billions more on separate programs to rescue financial institutions and resuscitate the banking system. The U.S. budget deficit is forecast to reach a record $1.841 trillion in the
year that ends Sept. 30.
“Enormous dosages of monetary medicine continue to beadministered and, before long, we will need to deal with their side effects,” Buffett, 78, said. “For now, most of those
effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.”
The “greenback emissions” will swell the deficit to 13 percent of gross domestic product this fiscal year, while net debt will increase to 56 percent of GDP, Buffett said.

Record Deficit

The U.S. budget deficit reached a record for the first 10 months of the fiscal year and broke a monthly high for July. The excess of expenditure over revenue for July climbed to $180.7
billion compared with a $102.8 billion gap in July 2008 as the government spent more than in any month in U.S. history, the Treasury said Aug. 12.
Officials must still do “whatever it takes” to get the U.S. economy back on its growth momentum, Buffett wrote.
“Once recovery is gained, however, Congress must end the rise in the debt-to-GDP ratio and keep our growth in obligations in line with our growth in resources,” Buffett said. “With
government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can’t come close to bridging that sort of
gap.”
Pacific Investment Management Co., which runs the world’s biggest bond fund, said in an Emerging Markets Watch report that the dollar will weaken as the swelling U.S. deficit erodes its
status as a reserve currency. The Dollar Index, which tracks the greenback against a basket of currencies, has fallen 12 percent from this year’s high in March.

“Unchecked greenback emissions will certainly cause the purchasing power of currency to melt,” Buffett said. “The dollar’s destiny lies with Congress.”

Buffett is the chairman and chief executive officer of Omaha, Nebraska-based Berkshire Hathaway Inc. Buffett built Berkshire into a $155 billion enterprise over four decades with
dozens of acquisitions, buying companies that sell ice cream, lease private jets and operate power plants.

[Cherry]

The U.S. must address the massive amounts of “monetary medicine” that have been pumped into the financial system and now pose threats to the world’s largest economy and its currency, billionaire Warren Buffett said.

“Unchecked greenback emissions will certainly cause the purchasing power of currency to melt,” Buffett said. “The dollar’s destiny lies with Congress.”

Could anyone guess how the following issues could be addressed?

1.How is the U.S. going to address the massive amounts of "monetary medicine" that have been pumped into the financial system?

2.What are the threats posed to the world's largest economy and its currency?

3.Will the unchecked greenback emissions cause only the purchasing power of U.S. currency to melt or other currencies as well? Which are the likely ones? What about Singapore currency?

4. What could Congress do to manage the dollar's destiny?

[kennynah]

i dont even know why i am attempting with my unqualified views...perhaps...gay kiang here lah... so, just let me talk cock here...

Could anyone guess how the following issues could be addressed?

1.How is the U.S. going to address the massive amounts of "monetary medicine" that have been pumped into the financial system?

one way to drain excess money from the system is obviously to raise interest rate...it is a very effective way..

it is a matter of time that this will occur... but for now, when the house is on fire... the fireman's objective is to hose it down and worry about the collateral damage done on all assets... which is correct, since letting the inferno rage on will eventually destroy all assets anyways...

another less popular approach will be to begin increasing corporate taxation... but like the one above, it will inadvertently lead to uncontrollable inflation.... in the face of ~10% unemployment, this may not be an immediate cure...

it certainly would be unwise to raise income tax, although this is also another means of tightening money supply in the system... consumerism fuels american economy... lowering consumers' net disposable income is a sure way of dampening the economy...hardly a smart move at this juncture...

creating military tension with rogue States, declare war/invasion in the name of democracy... this is an indirect approach to justify the huge amount of fiat money printed... the surge in demand for war machines produced by america, will lead to a substantial increase in demand for greenback...buying up the extra money in the system... this shall be a satanic approach...but not as if america had never gone down this path...

2.What are the threats posed to the world's largest economy and its currency?

with loose monetary policy...it is to be expected that the greenback will suffer in value in time... however, the thing about currency is that it is always traded in pairs... with the global trade ever so entwined, no one currency can have a decided advantage over another for a long period... the main reason is that PPP (Purchase Power Parity) phenomenon will kick in...

the biggest threat to USD, and hence US economy, will be when its major creditors should decidedly adopt another foreign currency as their reserves.. but this is not an easy, to near impossible task to achieve....until a super power clearly emerges, no country will dare challenge the greenback's supremacy today...

3.Will the unchecked greenback emissions cause only the purchasing power of U.S. currency to melt or other currencies as well? Which are the likely ones? What about Singapore currency?

suppose you had a stack of USD100K sitting quietly in your locked drawer at home...or left in a FCFD in a bank... would you be concerned about its value in future given the excessive xeroxing? i think you would. if so, chances are that you would have considered selling the dollar in exchange for another currency... if you and i and everyone else adopt this stance, soon enough, the weakness of the USD will translate into the strength of another set of currencies...

for example, Aussie dollar in the recent months...the evident strength of the RMB from 8:1 to ~ 6.5:1 USD over the years.... the value of a currency is very tightly correlated to the state of economy... if viewed from this angle, the only reason for the USD to have not dropped off the cliff is the world's believe that american economy will eventually pick up pace...

i don't believe the SGD is too highly correlated to USD... while US is an important business partner, Singapore's export orientated economy is not solely dependent on US trading with us... we are rather diversified in our exports globally.. our SGD strength must come from our ability not only to export high ended finished goods, it depends largely on us offering the world a service that no others can do better than us...

unfortunately, we have yet to discover a niche product and/or service that others cannot replicate at a lower cost and quality.... the only way out of this rut, is NOT to build casinos to fuel the economy temporarily, but to invest in Singaporeans.... invest in our talents... groom our minds to the best levels comparable to the world's Nobel Laureates.. and not buying transient foreign talents that will not take roots here permanently...

the strength of a nation lies in its people...it is its people who create machines, technology, new ideas that lead to innovation...look at Japan, South Korea... they have found their place in the world... what have we done for ourselves so far? granted, we have a small population, and to produce an Einstein, a Mitsubishi, a Bill Gates, will be challenging... but it must not deter us from persevering... to make matters worse... as a people, we are happy to get by... to obey blindly the nation';s leaders without meaningful inquisitions.. they lead our lives...they engineer the outcome... we allow them to do so...

i'm afraid, the SGD will be as strong as how we continuously prostitute ourselves to the world...we can only be a proud nation when we pride ourselves in what we can offer the world...in other words, on a grand scale it is a useless currency... if i was a foreigner, it would only in my nauseous nightmare that i have a pile of SGD....

4. What could Congress do to manage the dollar's destiny?

this will be best left to them to answer....

[millionairemind]

Op-Ed Contributor
The Greenback Effect
Article Tools Sponsored By
By WARREN E. BUFFETT
Published: August 18, 2009

IN nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenhouse emissions.

The butterfly effect reaches into the financial world as well. Here, the United States is spewing a potentially damaging substance into our economy — greenback emissions.

To be sure, we’ve been doing this for a reason I resoundingly applaud. Last fall, our financial system stood on the brink of a collapse that threatened a depression. The crisis required our government to display wisdom, courage and decisiveness. Fortunately, the Federal Reserve and key economic officials in both the Bush and Obama administrations responded more than ably to the need.

They made mistakes, of course. How could it have been otherwise when supposedly indestructible pillars of our economic structure were tumbling all around them? A meltdown, though, was avoided, with a gusher of federal money playing an essential role in the rescue.

The United States economy is now out of the emergency room and appears to be on a slow path to recovery. But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.

To understand this threat, we need to look at where we stand historically. If we leave aside the war-impacted years of 1942 to 1946, the largest annual deficit the United States has incurred since 1920 was 6 percent of gross domestic product. This fiscal year, though, the deficit will rise to about 13 percent of G.D.P., more than twice the non-wartime record. In dollars, that equates to a staggering $1.8 trillion. Fiscally, we are in uncharted territory.

Because of this gigantic deficit, our country’s “net debt” (that is, the amount held publicly) is mushrooming. During this fiscal year, it will increase more than one percentage point per month, climbing to about 56 percent of G.D.P. from 41 percent. Admittedly, other countries, like Japan and Italy, have far higher ratios and no one can know the precise level of net debt to G.D.P. at which the United States will lose its reputation for financial integrity. But a few more years like this one and we will find out.

An increase in federal debt can be financed in three ways: borrowing from foreigners, borrowing from our own citizens or, through a roundabout process, printing money. Let’s look at the prospects for each individually — and in combination.

The current account deficit — dollars that we force-feed to the rest of the world and that must then be invested — will be $400 billion or so this year. Assume, in a relatively benign scenario, that all of this is directed by the recipients — China leads the list — to purchases of United States debt. Never mind that this all-Treasuries allocation is no sure thing: some countries may decide that purchasing American stocks, real estate or entire companies makes more sense than soaking up dollar-denominated bonds. Rumblings to that effect have recently increased.

Then take the second element of the scenario — borrowing from our own citizens. Assume that Americans save $500 billion, far above what they’ve saved recently but perhaps consistent with the changing national mood. Finally, assume that these citizens opt to put all their savings into United States Treasuries (partly through intermediaries like banks).

Even with these heroic assumptions, the Treasury will be obliged to find another $900 billion to finance the remainder of the $1.8 trillion of debt it is issuing. Washington’s printing presses will need to work overtime.

Slowing them down will require extraordinary political will. With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can’t come close to bridging that sort of gap.

Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes. In fact, John Maynard Keynes long ago laid out a road map for political survival amid an economic disaster of just this sort: “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

I want to emphasize that there is nothing evil or destructive in an increase in debt that is proportional to an increase in income or assets. As the resources of individuals, corporations and countries grow, each can handle more debt. The United States remains by far the most prosperous country on earth, and its debt-carrying capacity will grow in the future just as it has in the past.

But it was a wise man who said, “All I want to know is where I’m going to die so I’ll never go there.” We don’t want our country to evolve into the banana-republic economy described by Keynes.

Our immediate problem is to get our country back on its feet and flourishing — “whatever it takes” still makes sense. Once recovery is gained, however, Congress must end the rise in the debt-to-G.D.P. ratio and keep our growth in obligations in line with our growth in resources.

Unchecked carbon emissions will likely cause icebergs to melt. Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar’s destiny lies with Congress.