RECENT NEWS
Motley Fool  10 hrs ago  Comment 
We can all buy into Warren Buffett's business through Berkshire Hathaway stock, but do you know what you're actually getting?
Motley Fool  Aug 31  Comment 
Why investors shouldn’t blindly follow Berkshire Hathaway’s decision to reduce its energy holdings in the second quarter.
Motley Fool  Aug 31  Comment 
Warren Buffett changed his billion-dollar empire for the better.
Motley Fool  Aug 31  Comment 
Disney's CEO could be just the man to replace Warren Buffett.
CNNMoney.com  Aug 31  Comment 
Read full story for latest details.
Motley Fool  Aug 31  Comment 
Warren Buffett has put a massive amount of money into a fast-food chain, but too many are missing the important thing about the deal.
Clusterstock  Aug 31  Comment 
Warren Buffett turned 84 years old on Saturday. And even at that age, the billionaire "Oracle of Omaha" continues to be involved in some of the biggest investment plays in the world. Buffett is undoubtedly the most successful investor in...
Motley Fool  Aug 31  Comment 
Warren Buffett may not know who is going to step into his billionaire-shoes.
Motley Fool  Aug 30  Comment 
In his 2013 shareholder letter, Warren Buffett admitted that Berkshire Hathaway Inc. made a big mistake. However, it’s in the ashes of that mistake that we find a Brookfield Asset Management Inc. in search of profits.
Motley Fool  Aug 30  Comment 
For Berkshire Hathaway and 3G Capital, Burger King-Tim Hortons is no one-time deal.




 
TOP CONTRIBUTORS

Warren Buffet is considered one of the most successful investors in modern history. He is the Chairman and CEO of Berkshire Hathaway (BRK) and manages its capital as well.


Warren Buffett has been moving his personal investments from safe Treasuries into U.S. stocks, he wrote in a New York Times opinion piece on October 17, 2008. [1]



Entry Moves on Subprime lending

- Constellation Energy Group (CEG)  : investment in nuclear energy. EDF already owns almost 10 percent of Constellation and is a joint venture partner in the construction of four 'new nuclear power plants.' $4.7 billion bid from MidAmerican Energy Holdings Co., a subsidiary of Warren Buffett's Berkshire Hathaway Inc [2]

- 10 percent stake in BYD Company Limited (BYDDF) [1] Warren Buffett Invests In Chinese Company Developing 'Green' Cars [3]


- Goldman Sachs Group (GS): $5 billion equity stake in Goldman. He also got more than 43 million warrants to buy Goldman shares at $115 and a 10% annual dividend to boot. the value of each of Berkshire’s warrants is $60.26 a piece.If you add it all up, Berkshire is walking away with $8.2 billion for its $5 billion cash infusion. That’s equivalent to buying dollars for 61 cents each[4]


- General Electric Company (GE) he is getting perpetual preferred stock with a 10% dividend that is callable after three years at a 10% premium. He’s also snatching up warrants to purchase $3 billion of common stock at $22 [5]

- Wells Fargo (WFC) in August, Buffett told Becky that Berkshire had been adding to its holdings in Wells Fargo.Wells Fargo announced a deal to buy Wachovia Bank [6]

- Burlington Northern Santa Fe (BNI)After high-profile investments in Goldman Sachs (NYSE: GS - News) and GE (NYSE: GE - News), Buffett made a lower-profile move last week when a unit of his company, Berkshire Hathaway (NYSE: BRK-A - News, BRK-B - News), sold puts in railroad Burlington Northern Santa Fe (NYSE: BNI - News), according to filings with the SEC. Burlington Northern is joined by the other two railroads he has been investing in: Norfolk Southern (NSC) and Union Pacific (UNP) . [7]

Exit ?

What is the system or the hidden hand who helps Warren Buffet to decide ?

He wants certainly undervalued companies, that are undervalued through the current market situation. Hence companies falling in the first quarter of relative valuation are prime candidates. Since you can diversify risk away, Buffet is certainly not riskavert, he tries to combine non-correlating business together. And finally your company can correct his value if the company is a good performer. (High return on assets and equity, good economical added value)

Buffet style selection criteria

[9]

1. Demonstrated earnings power:

2. Good returns on employed capital:

  • ROE return on equity fe bigger then 20%
  • ROIC return on invested capital bigger then weighted average cost of capital
  • EBIT/Company value

3. Low debt:

  • Current ratio bigger then fe 7

4. Management in place:

  • “owner thinking”
  • conservative accounting
  • clear guidance

5. Economic moat:

  • Value approach on underwriting
  • Economics of scale
  • Diversification of their business

which screening tool mimics Buffet style ?

  • www.gurufocus.com [10]
  • S&P Missing: lacks GE - CEG - AIG hence worthless [11]
  • guru investor misses also the ball.. [12]
Ticker Sector Performance Risk Value PRVit


GE conglomerate energy industry 86% high 46%medium 14% undervalued strong buy 2.85 [13]


CEG energy electricity 30% low 60% high 16% undervalued strong buy -1.875[14]
WFC Bank 50% medium 54% medium 30% Buy -0.13 [15]
GS Bank 70% strong 56% medium 12% Undervalued Strong Buy 1.16
AIG Insurance 14% very weak 64% high 48% Hold -1[16]
BNI Railroad 64% high 42% medium 60% Hold 0.33[17]

are your friends mnikag a lot of money doing this? sounds like they are listening to one of those middle of the night commercials. here's basically what they are going to tell you buy a house in foreclosure for pennies on the dollar, fix it up and rent it out. use the equity from fixing it up to buy another house and so on and so on. However, what happens when 1 or 2 of your renters flakes on you and you are stuck with the mortage payments on several properties. it's a bad road to go down. if you want to make $ $ , save and pay cash for a beater, pay cash for fixing it up. sell it and pocket the cash. just always deal in cash it will help in the long run

References

  1. THE ASSOCIATED PRESS (Friday, October 17th 2008, 10:57 AM). Berkshire Hathaway's Warren Buffett: I'm buying US stocks 1. Retrieved on Friday, October 17th 2008, 10:57 AM.
  2. By Steve Gelsi, MarketWatch (EDT Sept. 30, 2008). Constellation Energy Partners may be on the block 1. Retrieved on EDT Sept. 30, 2008.
  3. Posted By:Alex Crippen (09-29-08). Warren Buffett Invests In Chinese Company Developing 'Green' Cars Topics:Automobile Industry 1.
  4. Andrew Mickey (September 28, 2008). Buffett's Big Bet: The Real Value of the Berkshire Investment in Goldman Sachs 1.
  5. by John Carney (Posted Oct 01, 2008 02:39pm EDT). Buffett Buys $3B of GE Preferred, Company Selling $12B of Common 1. Retrieved on Posted Oct 01, 2008 02:39pm EDT.
  6. Alex Crippen (10-2-08). [hhttp://www.cnbc.com//id/27011627?__source=yahoo Warren Buffett to CNBC: Rescue Bill Will Help, But Not "Panacea" for Economy] 1. Retrieved on 10-2-08.
  7. By the tickerspy.com Staff (Thursday October 16, 9:26 am ET). Buffett Makes a Bullish Bet 1. Retrieved on Thursday October 16, 9:26 am ET.
  8. Alex Crippen. CNBC: Warren Buffett No Longer In Talks With AIG.
  9. Sascha Seiler (October-5-2008). Value Idea Analysis: Munich Reinsurance Group.
  10. Guru Investor.
  11. S&P's New "Buy 'Em Like Buffett" Stock Screen.
  12. guru investor.
  13. GE PRVit analysis. |
  14. CEG PRVit analysis. |
  15. WFC PRVit analysis. |
  16. AIG PRVit analysis. |
  17. BNI PRVit analysis. |
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki