Posts Tagged ‘Berkshire Hathaway’

Amazing Arrogance, Gall, Chutzpa, and Unmitigated Effrontery from Berkshire Hathaway

Amazing Arrogance, Gall, Chutzpa, and Unmitigated Effrontery from Berkshire Hathaway

Courtesy of Mish 

It’s hard to know exactly the precise words to describe the arrogance and unmitigated effrontery of Charles Munger, the billionaire vice chairman of Berkshire Hathaway, who today rattled off an insane barrage of insensitive comments regarding the bailouts.

Please consider Munger Says ‘Thank God’ Bailouts Came Before Handouts

Charles Munger, the billionaire vice chairman of Berkshire Hathaway Inc., defended the U.S. financial-company rescues of 2008 and told students that people in economic distress should “suck it in and cope.”

“You should thank God” for bank bailouts, Munger said in a discussion at the University of Michigan on Sept. 14, according to a video posted on the Internet. “Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies.”

“Hit the economy with enough misery and enough disruption, destroy the currency, and God knows what happens,” Munger said. “So I think when you have troubles like that you shouldn’t be bitching about a little bailout. You should have been thinking it should have been bigger.”

Germany was unable to stabilize its financial system in the 1920s, and, Munger said, “We ended up with Adolf Hitler.”

Nauseating Insensitivity

If that kind of arrogant insensitivity does not make you nauseous, what will?

It’s hard to know where to start, but let’s start with a blatant lie. This was no "little bailout", this was a multitrillion bailout, not just from the Fed and Congress but from every central bank in the world.

One of the beneficiaries of course was billionaire Charles Munger. Middle class America was the loser.

Displays of Ignorance

The biggest display of ignorance in Munger’s rant is his comparison of the current financial mess to Weimar Germany. Forgive me for asking but pray tell in what kind of fairytale fantasyland is the current deflationary credit bust remotely related to the war reparations imposed on Germany after the end of World War I that gave rise to Hitler?

Need for a Culture Change

The ridiculous Weimar comparison was not the Munger’s most galling statement, however.

This is: “Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them…
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Surprise! and Something Weird is Going On

Something Weird Is Going On With The Financials And Berkshire Hathaway

Courtesy of Joe Weisenthal at Clusterstock 

The big story of the day in the world of financial stocks is that they’re all getting hammered, and the idea is that it might have something to do with the fact that strong derivatives reform seems to be coming down the pike.

Now there was a report earlier in the day that perhaps Berkshire Hathaway might somehow get a fat exemption, but now according to WSJ that’s not the case. The Democrats have killed that provision.

So you’d think that Berkshire might be getting pelted, but it’s not.

chartIt’s actually up about 0.4%.

That’s not a huge move, except in comparison to other financials, in which case it’s significant?

So what’s going on?

The markets are probably figuring that the hit to Berkshire will be one-timey in nature — basically that it will cause the company to post collateral, but that derivatives aren’t central to how it makes money.

With the financial firms getting whacked, strong regulations may go at the heart of what they do, and actually hurt future profitability, thus the falling shares and blowout in CDS.

 

Previously today:

Surprise! Buffett Set To Get A Big Fat Gift In Financial Regulation Bill

Courtesy of Joe Weisenthal 

Warren BuffettBerkshire Hathaway (BRK) CEO Warren Buffett has generally maintained a sterling reputation (as far as financiers go), but longtime observers know that he’s as good as any at taking advantage of public policy to suit his needs.

(Ever wondered why he loves the estate tax so…
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The Big Apple

The Big Apple

Apple Introduces Video iPod Nano

Courtesy of Joshua M Brown, The Reformed Broker 

Apple ($AAPL) now has a market cap of around $215 billion.  Incredible, and it couldn’t have happened to a more deserving company – they’ve changed the world.

More astonishing than the number itself is the list of companies whose market caps have been eclipsed by the tech king…

Apple is now bigger than Berkshire Hathaway, General Electric, Proctor & Gamble, Johnson & Johnson, Google and JPMorgan Chase

The only companies larger right now are Microsoft, ExxonMobil and Wal-Mart.

One other thing to consider – it all started with a device shaped like a deck of cards that was created to compete with the Sony Walkman - The iPod.  Think of how many millions of devices sold as a direct consequence of the triumph and mass adoption of iTunes and the iPod.  The dollar value created on the back of that product pairing is absolutely mindboggling.

For the details of who stands where by market cap, click the link below.

Source:

The Most Valuable Companies in America (Fortune)


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Warren Buffett & Bill Ackman Interviews

Warren Buffett & Bill Ackman Interviews

Courtesy of Market Folly

Warren Buffett of Berkshire Hathaway and Bill Ackman of hedge fund Pershing Square recently sat down with CNBC in two separate interviews. While the two men shared a talking point in the recent Kraft deal (they are both large shareholders), we thought it was interesting to hear their recent takes on the economy and markets.

In his interview, hedge fund manager Bill Ackman says that you are buying Kraft (KFT) at less than 14 times earnings and get a 4% dividend yield. He liked the fact that Kraft used a limited amount of shares (and used more cash) in the deal and in the end paid a fair price to get the deal done. As we covered earlier, Kraft is now Pershing Square’s largest holding.

Ackman argues that Kraft’s purchase of confectioner Cadbury now makes Kraft a more ‘defensive’ play. Obviously it will take a bit of time to integrate the two businesses, but the Pershing Square hedge fund manager points out that Kraft has done it numerous times before with other transactions.

Embedded below is Ackman’s video interview where he outlines his thoughts on the Kraft and Cadbury deal. RSS & Email readers will want to come to the site to view this post as there are a lot of videos included:


 

And here is part two of Ackman’s video interview where he talks about some of his other portfolio activity and his take on the economy:

Moving next to Warren Buffett, we see that he shares a different opinion on the matter of the Kraft and Cadbury deal. Below he gives his thoughts on Wells Fargo (WFC), the economy, Ben Bernanke, and much more.

 

We’ve followed these two gentlemen extensively before and have covered numerous resources such as Warren Buffett’s recommended reading list, Pershing Square’s research on General Growth Properties (GGWPQ). For more insight from these two big time investors, head to our resources on Warren Buffett as well as our resources on Bill Ackman.

Market Folly

 


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Breaking: Buffett to Acquire the Rest of Burlington Northern Railroad

Breaking: Buffett to Acquire the Rest of Burlington Northern Railroad

Buffett Railroad

image from Panoramio

It’s not for me to tell you what Warren Buffett must see ahead for transportation, energy and economic activity, you must draw your own inferences.  What I will say is that this is Berkshire Hathaway’s largest-ever purchase so you may want to come up with some kind of thesis to encompass it.

From MarketWatch:

NEW YORK (MarketWatch) — Warren Buffett’s Berkshire Hathaway on Tuesday said it is paying $100 a share to acquire railroad firm Burlington Northern Santa Fe. It will also take on $10 billion of Burlington Northern debt, valuing the total deal at $44 billion. Berkshire said the deal is its biggest acquisition ever. “Our country’s future prosperity depends on its having an efficient and well-maintained rail system,” Warren Buffett said in a press release. “Conversely, America must grow and prosper for railroads to do well. He added, “Most important of all, however, it’s an all-in wager on the economic future of the United States. I love these bets.”

Source:

Buffett Buying BNI (MarketWatch)

 


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Obama Drops The Hammer On Credit Default Swaps Traders

Obama Drops The Hammer On Credit Default Swaps Traders

Courtesy of Jay Yarow at Clusterstock

obama biden whispering tbiThe Obama administration has sent its plan to regulate those financial weapons of mass destruction, credit default swaps, to Congress:

WASHINGTON (AP) — The Obama administration on Tuesday sent Congress legislation seeking to impose broad new oversight on derivatives, the complex financial instruments blamed for hastening the global economic crisis.

The plan is designed to bring transparency to, and prevent manipulation in, a $600 trillion unregulated worldwide market. Credit default swaps, a form of insurance against loan defaults, account for about $60 trillion of that market. The collapse of the swaps brought the downfall of Wall Street banking house Lehman Brothers Holdings Inc. and nearly toppled American International Group Inc. last fall, prompting the government to support the insurance conglomerate with about $180 billion.

In a point long awaited by the financial industry, the plan defines types of derivatives broadly in a way it says will be ”capable of evolving with the markets.”

The plan sent to Capitol Hill was the final section of the administration’s sweeping legislative proposal for overhauling the U.S. financial rule book to help avert a repeat of the meltdown touched off last year. It capped a series of measures rolled out in recent weeks by the Treasury Department.

Under the proposal, the big investment banks that trade the derivatives would be subject to requirements for holding capital reserves against risk and other rules. A new network of clearinghouses would be established to provide transparency for trades in credit default swaps and other derivatives. All so-called ”standardized” derivatives would be required to go through clearinghouses and to be traded on regulated exchanges or electronic trading systems.

Customized derivative products, by contrast, are designed for specific users in a transaction and would remain largely unregulated — a gap that some critics fear could allow abuses.

The plan defines standardized derivatives broadly. An over-the-counter derivative that is accepted by an official clearinghouse would be presumed to be standardized. In addition, the Securities and Exchange Commission and the Commodity Futures Trading Commission would get authority to prevent attempts by market players to falsely portray derivatives as customized to skirt the oversight of clearinghouses and exchanges.

CFTC Chairman Gary Gensler recently estimated that about 80 percent of derivatives…
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Phil's Favorites

How The Patient Investor Sees the World More Clearly

 

How The Patient Investor Sees the World More Clearly

Courtesy of Cullen Roche, Pragmatic Capitalism 

?One of my favorite things to think about in investing is the theoretical investor who slept through 1987. We all know about “Black Monday”, the crash of 1987, when stocks fell 23% in one day. It was terrifying. But the craziest thing about 1987 is that the S&P 500 had a total return of 5.81% that year. The stock market was positive in a year that is known for being a terrifying crash! So, if you had checked your portfolio on January 1, 1987 and then slept through the entire year and woken on December 31, you would have looked at your portfolio and said “huh, pretty slow year in the markets, but not bad!”

...

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Chart School

Silver is cheap vs Gold

Courtesy of Read the Ticker.

Metal investors will be paying attention to how out of favor silver is relative to gold. And it is hard to wonder why with the well forecast boom of electric cars expected over the next 10 years. Who owns all the silver? JM Bullion has a series of charts here. Notice the stock pile held by JPM. They will do will if silver gets to $30 USD an once!

Chart up to April 2017



As of the 20th of March 2019 the US Federal Reserve has switched to dovish...

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Zero Hedge

"Fed Returns To The Punchbowl": The Biggest Surprises In Today's Fed Decision

Courtesy of ZeroHedge. View original post here.

The Fed is returning to the punchbowl.

That's how Bank of America summarized today's second consecutive dovish surprise by the FOMC regarding rates and balance sheet policy. As we noted earlier, there were two major developments in today's FOMC decision:

  1. the dots dropped substantially to show no further hikes this year and only one hike in 2020. This means that the increasingly "patient" Fed is signaling that policy will remain accommodative relative to the long-run rate expectation.
  2. the balance sheet unwind will start in May and be completed by the end of September....


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ValueWalk

Jamie Dimon On How JPMorgan Is Making The Planet A Great Place [Full CNBC Interview]

By Jacob Wolinsky. Originally published at ValueWalk.

CNBC Transcript: JPMorgan Chase CEO Jamie Dimon and American University President Sylvia Mathews Burwell Speak with CNBC’s Kayla Tausche Today

WHEN: Today, Wednesday, March 20, 2019

WHERE: CNBC’s “The Exchange

Following is the unofficial transcript of a CNBC interview with JPMorgan Chase CEO Jamie Dimon American University President & Former Obama Health...



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Kimble Charting Solutions

Banks Sending Warning Sign To Broad Markets Again?

Courtesy of Chris Kimble.

The financial / banking sector is often a good barometer of the economy and broader stock market.

So when the Bank Index (BKX) began to lag late last summer, it was an early warning sign for investors.

Looking at the chart below, we can see that the banks spilled lower with the December correction. That final swoon lower was set up by a bearish reversal candlestick (1).

Well, the recent rally has brought stocks back up to the scene of that crime! That area is marked by strong horizontal resistance.

Are banks creating a similar reversal ...



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Insider Scoop

Sage's First-Of-Its-Kind Postpartum Depression Drug Clears FDA Hurdle: What You Need to Know

Courtesy of Benzinga.

Shares of mid-cap biotech SAGE Therapeutics Inc (NASDAQ: SAGE), which focuses on therapies for central nervous system disorders, were trading higher Wednesday.

What Happened

Sage ...



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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Reminder: We are available to chat with Members, comments are found below each post.

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down

 

Facebook's cryptocurrency: a financial expert breaks it down

Grejak/Shutterstock

Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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