35 Burst results for "Berkshire Hathaway"
Snowflake's stock enjoys red-hot open, with first trade more than double the IPO price
"What a day to be a snowflake Red hot open for snowflake there first trade with more than double the AIPO prices is a cloud based software company. Other backed by Berkshire Hathaway. They're backed by sales for so this one has been in the works for a while, but it was a very successful AIPO the stock up 112%. On the day so strong start for
Why Warren Buffett is gambling on Japan’s distinctive dealmakers
"Buffett celebrated his ninetieth birthday doing what a lot of folks like to do when they wanNA treat themselves. He went shopping. Berkshire hathaway has stakes in the five leading trading companies in Japan Sumitomo. Oto Chew Mario Benny Mitsui and company and Mitsubishi Corp.. They. Import. Everything from. Energy and metals to textiles and food and. This is. Clearly a big move. In of itself. What does this investment on buffets parts? sadie. Let's start there. Well once again as always we have to remember that with Berkshire hathaway sometimes, the numbers almost feel like cheat codes because six point five billion dollars is not a huge investment for Berkshire Hathaway stake in Apple at stake. In Coca Cola are much larger than this but buffet for after years of not really looking outside of the United States has really started doing. So he's bought Israeli companies about German companies he's invested in China in Brazil and now he's investing heavily in a very interesting segment of Japan. These are extremely economically sensitive trading companies. Japanese are called Sogo Shosha. And they are they will trade in almost anything and I believe that one of the reasons that he wants to have he wants the stake in these companies is that is that because these companies are chameleons they will invest in everything they have joint ventures all over the world and so yet another way for Berkshire Hathaway to have additional boots on the ground additional is nears looking for new things that they can invest in. So really interesting timing for this it may be you know again, his suggestion I in a soft way that it's really hard to find opportunities here in the US that the Japanese market relatively inexpensive and. Like everyone else you know I'm sure a lot of everyone woke up this morning and was surprised by what Buffett has done and. By now, a lot of people are saying that makes that S-. You look at those five stocks. They're all up. You know five to ten percent. It's. A lot of times when buffet makes them move? One of the things we talk about is how buffet is to tell people like look just don't blindly follow me you shouldn't blindly follow anyone do your research and all that. But Is this something US investors should look at given what the comments you just made about the relative value of the market in. Japan. The best performing stock market in the entire world over the last decade. Stock Market Stock Index is the S. and P. Five hundred, and it's really not even close when you don't denominated in dollars. It's the number one. Japan's is actually since Ave came to power it, it has outperformed every other major stock exchange with the exception of China and the US S. and P. Five hundred it is a we tend to think of it as being more bond. I think American. Investors still have a dramatically too low exposure to two markets that are outside of the US. And Yeah there are I think that in the US almost every opportunity has at least in some ways been monetize whereas in a lot of other countries that is not the case at. Japan. Definitely one of those countries.
Berkshire Hathaway takes stakes in Japanese trading houses
"We've got some headlines coming on the Bloomberg terminal regarding the stakes that Berkshire has taken in five Japanese trading companies. They now past 5%. Now Berkshire, saying that the holdings in these companies were acquired over the past 12 months would be careful about making the connection to the of a resignation. However, Berkshire has gone on to say it may boost holdings in these companies by up to
Gov. Newsom asks Warren Buffett to back removal of Northern California dam
"Governor Newsome has appealed directly to investor Warren Buffett to support demolishing for hydro electric dams on a river along the Oregon California border. The goal is to save salmon populations that have dwindled to almost nothing. The governor on Wednesday wrote Buffet urging him to back the Klamath River project, which would be the largest dam removal in U. S history. Dams are owned by a Pacific Corps, an Oregon based utility owned by Buffett's Berkshire Hathaway company.
July Mailbag with Jason Moser
"The. Multiple answers I'm out Southwick and I'm joined, is always by broke camp. Personal Finance expert here at the Motley Fool. Hey, BRO, well! Hello Alison. It's the July mailbag where we answer your questions and this month it's with the help of multiple analyst Jason Moser. Should you buy a house now? What is modern portfolio theory and also here Jason's thoughts on a lot of stocks all that and more on this week's episode of Molly fully answers. Jason thanks coming back. you know I mean i. told you you invite me. I'M GONNA. Be here every single time. Thanks for having me back. I mean we appreciate it because we know you're a busy man, and so we do appreciate that you carve out time for us in our little show, don't. Always always make time for those important people in my life rule number one make time for allison and Bro I love. It sounds like a good one to me. Everybody wins. All right well, I guess we should just get into it, so the first question comes from Darren I've subscribed to the full for over a year and I'm really pleased with the service. I would like to know your thoughts about my holdings in Shop Affi- I've bought several times over the last three years, and it's now over thirty five percent of my portfolio and I. Don't know if I should continue holding or trimmed down. What would you advise a good problem to have I was gonna say that exact same thing? That's a good problem have? In a very glad, you have subscribed to our services in your really pleased. That's that's what we aim to to do. We aim to please help you make money and so yeah. This is one of those situations that we will find ourselves in from time to time as investors. A nice problem to have but something you do need to address at some point because it is going to be a little bit different for everybody. In so coming from the perspective of I, also own shop, a Fi stock in it's it's a wonderful investment. It certainly is taking up a bigger. Part of my portfolio a not at thirty five percent where you are. I think for me. It really does boil down to. That sleeping at night test in other words, you need to be able to go to sleep at night without worrying about this kind of stuff, and if you feel like shop, a Fi represents too much. Of your portfolio if you feel like you're overly allocated their, then, you may need to consider pulling it back a little, but now I mean it's. It's I think it's always important. Note you know. It's a big difference between building up a position buying a position to make this size to make this type of allocation in your portfolio. It's another thing entirely to have position grow into beat into becoming that size i. mean that that is that is in a little bit of a different dynamic there, so people all the different ways, some sometimes folks will, they will just sort of looking at it from the house money, concept or you. You just sell enough shares to recoup your initial investment, and then you let the rest of it go. Some people are perfectly fine with thirty five percent. Some people are not. They want a pair back so i. do think you need to kind of figure out what helps you sleep at night I do think that shop by a great business. I think the biggest risk in only shop, if I right now is valuation, just because it's dominating, it's space, but it's not making any money yet, and it's probably going to be a little while until they do so that valuation risk is there, but ultimately yeah I think determine. Where you feel most comfortable with it, and if you feel like you need to put a little bit of that money off the table, and he thirty five percents a lot, certainly very understandable. If they've said something you need to do if you do decide to pair it back a little bit. You've made multiple purchases, so you can identify the shares to sell to manage the tax consequence if this isn't a brokerage account and not an IRA. All right next question comes from Steven. If you are forced into unemployment, you are paying federal income taxes on unemployment payments are not contributing to social security nor to Medicare. How does this affect your future calculation of social security benefits and can one contribute to the social security fund during unemployment to mitigate any adverse effects on benefits, it is a little bit adding insult to injury, but you do owe federal income taxes on your unemployment benefits, and if your state charges has a state income tax, you probably have to pay state tax on that, although there are a handful of states that exempt unemployment benefits, so that's good news. And by the way you, you could have taxes withheld from your unemployment benefits you file. This form called form w four V. if you want, they withhold ten percent, or you can do quarterly estimated payments if you wanNA avoid that big tax bill at the end of the year, but if you're strapped for cash is probably just better to get the money now worried about your taxes later Eh. Stephen notes out. You do not pay payroll taxes. Those are the things that go into social security and Medicare so. So. It could result in a lower social security benefit, however, keep in mind that social security is based on your thirty five highest earning years, so if you enter the workforce at say twenty two and you work until you're mid to late sixties. That's more than forty years where the working so hopefully. If you miss out, if this year is not so good somewhere among those other forty, five or so years, you've had thirty five really good year so that this year won't be that big of a deal. So it probably will be okay. And then to address the last question. Unfortunately, no, you cannot make voluntary contributions to social security. There is at least one academic working paper out there. That suggested that people could buy into social security by like extra credits as opposed to contributing to your 401k, but so far that has not been passed by Congress I had an ex. Question comes from Sam. I heard to stocks discussed on another full podcast. When I read articles about them, it mentions they are thinly traded. I have two questions one I'm sure my position would still be quite small so I think I'd still be able to get in and out, but are there other things I should think about when it's a thinly traded stock and question number two. Is there a certain amount of? Daily volume you like to look for when considering a stock foreign investment. What volume do you want to see to not be? Quote thinly traded stock. Yes very good question in thinly traded stock just refers to the either the amount of shares or the dollar volume of shares that would trade on any given. Market Day and so. The. Thinly traded stock. The the problem is that you may not necessarily able to buy and or sell at the prices. You necessarily think you might be able to in other words when you look at a stock's price and you're looking through the. What what's going on throughout the day on the market, you'll see that did ask spread, which is essentially the bid. Ask spread is it's what someone's willing to pay for the stock versus what someone is asking to be paid for the stock? Because you know you have a buyer and a seller on on in every transaction they're. Normally most cases, these business business bread is very tiny, the couple of pennies maybe for most stocks because they're. They're heavily traded right there. There are plenty of dollar volume. But there are a lot of smaller companies small caps in particular in in you know a micro cap, specifically that don't necessarily meet these kinds of thresholds, and so you definitely have to be aware of that now I'll go back in time just a little bit, too. When we were running the service here at the fool called million dollar portfolios Roman Romani portfolio that we help manage members, and it was never really a problem, but we did have a condition in there. We were always looking for at least ten million dollars in average. Trading volume total daily volume now understand I'm not saying the number of shares saying the amount of money so basically shares times price, but we're always looking for at least ten million dollars. That wasn't set in stone it. It was an idea for us. It wasn't ever really a problem because we had a very diversified portfolio with a number of different types of companies, but when you're looking for smaller companies, you would've just keep that in mind that did ask. Spread is is something that just because it says the stock is twenty dollars. That doesn't necessarily mean you'll pay twenty dollars if there is a a big spread there between the bid, and the ask in so I think whenever you're considering stocks that have any lighter trading volume or thinly traded stock. Just be sure to use limit orders. Limit Orders of let us stipulate the price that you are willing to pay for or that you're willing to. To accept a if you're selling a limit, order is just a really good way to protect yourself from any unwanted surprise thinly traded stocks. You might not always necessarily get them when you want them, so you might have to lead that limited are in there for a little while, but but a limit order is a great way to protect you from any unwanted surprises. Next question comes from Randall. I'm in my late thirties now, but earlier in my life. I was very very bad with my money. Collection Calls Welfare and bankruptcy or not strangers to me. I've been at the bottom then I met the love of my life, and she convinced me to turn things around ten, and a half years later and I have done a complete one eighty, I took control of our finances rebuilt my credit and started investing and listening to all you find folks all. I opened it investing account with the goal of saving and building enough a down payment on a home. I'm happy to say we've now reached that goal. I recently sold at a profit because I didn't want that. Money tied up in the market. If we are close to needing it for a house, but now that we're here, I'm not sure what to do. We currently rent a basement apartment and our neighbors general living situation are less than ideal to put it mildly. So, we're champing at the bit to jump into the housing market that being said the experts have been calling for a drop in the housing market for a while, and that was before the pandemic hit now I'm worried that if we buy right away a year or two or three from now, interest rates will spike, and we could be put in a difficult situation. I live near Toronto. Canada or the housing market is already highly inflated in relation to the rest of the country should I be worried? While Randall first of all congrats on turning your financial life around love hearing success stories like that so good job on that. So I'll start with my standard answer with the rent versus buy decision, and that is just pull up spreadsheet and compare the all in cost of renting, including what you could earn on the money that use for down payment versus the all in cost of buying including the opportunity cost of putting down payment as opposed to having invested as well as insurance and taxes and maintenance, and all that stuff and project, where you might be in five to ten years based on various scenarios on what happens to stocks, if you. Rent an invest the down payment versus what happens to? What you'd look like depending on where home prices go. Generally speaking. If mortgage rates go up, that could way down on real estate prices we did see mortgage rates. Go Up for a bit a few years ago, but the housing market did find, but you could certainly envision a scenario where rates went much much higher, making houses, much less affordable and prices would have to adjust. But I don't expect that to happen anytime soon. I think we're. GonNa have low rates for awhile, but beyond that I don't know I've given up trying to predict where interest rates are going or even paying attention to people who try to predict where interest rates are going, so who knows? That said since you live in Canada. I thought I'd check. In where rates are these days and I and I got a brief reminder that things are actually different in Canada so I did a little bit of research. And then realize I had reach out to someone who knows, I reached out to Canadian Motley fool analysts Jim Gillies, and he had some thoughts so first of all just for you non-canadians out there. It is really different so in America. We get this thirty year mortgage than we have the same payment for thirty years. It's fixed. They don't have that in Canada. What's the most common is a twenty five year? But only the first few years or fixed. And then adjusts so in that context you can understand why Randall is worried about interest rates going up because over the next depending on which alone he gets the most popular is a five year fixed, and then you basically have to go get a new loan probably. So that put that in context, a little more, but also Toronto, really is crazy expensive. Vs from the end of last year that put it as the most overvalued real estate market in the world behind Munich. As Jim pointed out in our call here in the US we had our housing peak in two, thousand, six, two, thousand seven, and then we had what he called a reset, which is basically prices came down significantly candidate and have that slight downturn at home prices, but then they just kept on going up, so it really is different there, so when Jim explain all this to me, the difference in mortgages and the difference in home prices. Frankly he was inclined to say to this guy. You Might WanNa rent for while more and see what happens, but he also had the good advice of okay. What if you buy in prices? Come Down Fifteen percent twenty percent. What if they come down to a point where he upside down? You owe more than the home is worth. Are you okay with that? If. You're okay with that. Maybe it's okay to do that. But it certainly sounds like dicey situation than if someone were telling me like I'm thinking of do this in Dubuque Iowa or something like that. couple of other differences. In case you're curious about Canada in the US. Your mortgage is portable in Canada south. You Buy A. Get the five year mortgage, but then move get to take the mortgage with you for the next house and interest is not tax deductible. US Look at you, Robert, broke? Camp Can Canadian real estate experts there you go. Next! Question comes from Chris. I was on twitter the other day and saw that one of your contributors Brian Feroldi tweeted that he doesn't believe in a long list of technical trading terms and then modern portfolio theory. Can you help me understand what not believing an MP? T with mean this? He believed that diversification doesn't reduce risk. Also every financial adviser I've ever talked to his preached empty, so I would love to hear the counterargument. Jason you're not Brian for all the. Question I am not Brian for all the do get the talk of Brian Pretty good bit though. I I must admit I. Don't know what he said here in regard to modern portfolio theory and all of these technical trading arms. But I think I can take a guess. Generally speaking I agree with them, and I think you could sit there and look up the portfolio theory in you know read about it as much as you want. Just go to google modern portfolio theory, and you can dig right in there, but in a nutshell ultimately, what modern portfolio theory is the intention behind it? It's meant to reduce risk while maximizing returns. It assumes that investors don't like risk. They prefer less risky portfolios to riskier ones in order to achieve a certain level of return so right there. I kind of kind of lost me right there because I don't believe that every ever investors risk averse I think some investors have a very. Healthy, appetite for risk, and frankly I would say I got a pretty high tolerance for risk when it comes to investing, made it just because of what I do for a living but I. You know to me I like having that trade off least unhappy. Happy to take some risks there. If I feel like that upside, it's going to be potentially worth. So with modern portfolio theory, it introduces a lot of fancy math in the form of variances and correlations in order to come up with this. Quantifiable, investing strategy that ultimately helps reduce risk while allowing the investor to achieve. Certain returns in. Maybe it works for some not I'm not dismissing it personally I. Don't use it, I don't personally subscribe to it I. Don't need it. I think honestly for us. In a really believe it's extends to to most people in our full universe is that is individual investors I think a more meaningful way to reduce risk. is to just extend your timeline like invest longer. So like Tom Gardner said a number of years back when we were. Working on Motley, fool one basically take your take the time line that you think you want to own any individual stocks you buy shares of starbucks and I plan on owning it for you know five years. Okay, we'll just double it. Cloning it for ten in all of a sudden right there. You've given yourself more time. Time is one of the big advantages we have is individual investors. Money managers don't have that advantage, Wall Street done generally handed abandoned, either, but if you can be patient and just invest in good businesses. That risk really starts to come down over time. There are plenty of studies out there. That show that risk comes down the longer you hold onto those stocks, which into me, just renders modern portfolio, theory, more or less not useful mean on things, not useful for everybody, but it's not useful for me and based on Chris. Question It sounds like a agree with what Brian was saying there. We think I'll add to. That is I agree that risk is really not that much of a consideration if you are saving for retirement. But once you are in retirement man, and just say like you know what the market's not I'm going to extend my time highs in ten years. Because you need to spend money in that situation, I think diversification is important. It's important to have assets that don't always move the same direction at the same time. For some fools. That's just as simple as keeping any money need the next five years in cash, so you're right out any ups and downs, and that can be fine. But I. do think it makes sense to have. A mix of investment so that right now, technology stocks are doing very well, and we hope that continues to do well, but we remember was that happened in two thousand from two thousand to two, and there were down for quite a while anyone who retired in one, thousand, nine, hundred nine, or so it was very happy to have some small caps value maybe a. A little international, some reits to ride out the storm Yeah I think we talk about that often like recognizing where you are as an investor in life, are you in the grow your wealth stage, or are you in the protector stage, because they are two very different strategies, and we're all hopefully going to be in both of them at one point or another right? I personally and still on the grow your wealth stage I. Think we all probably are, but you will at some point get to where you need to focus on protecting the wealth that you've made so that you can then have that money to spend, and that definitely will dictate your investment strategy things that you're invested in and whatnot. Generally speaking I do like the idea for people who are just risk averse and have this notion that investing is just too risky. I mean the fact of the matter is not investing as far away greater risk like not investing. You will never grow your money if you don't the best, so if if if risk is a problem, I think generally speaking. Along the lines of diversification idea that that bros. talking about him, he just invest in invest in SNP index fund is something that just follows the progress and p. you know you're going to be participating in and if you look at that over the over the stretch of time, their five ten twenty thirty years, I mean that trend does go one way. It, but clearly the older you get, the more you need to start focusing on protecting your wealth, and that will change the way you view things. Right next question comes from Alex from Alexandria if I buy Muny bonds from another state in my IRA. Is it still taxable and Alexander with who we have a bond on and we do have a bunch. I know Alex up super excited about having a bunch on in Alexandria to I can't believe I haven't been there. It's like two miles from my house, but we still haven't been oh i. know because there's a global pandemic going on and we. saw. Alyx if we buy me bonds from another state in my IRA is still taxable. Bro, help him out or her or so Muny Barnes. People Invest Immunity bonds because they're free of federal taxes and in many cases. If you're buying bonds issued by the place you live, they might be free of state and local taxes, so that can be doubly triply tax free. That's why people buy 'em. There are some times, however that if you own immune, abound outside of an IRA. Pay Taxes and this surprises some people. There's something called the minimum tax. If you buy immunity bond at a discount, and then it matures at par. If you buy a distress, Muny bond for like you put an eight thousand dollars, and you sell it later for ten thousand dollars as a capital gain. You'll be taxed on that. So, there are some times when you would pay taxes on media. Now, Alex is asking what if it's an IRA? Do I have to worry about paying tax interest. If it comes from another state and the answer is no, you won't have to worry about that. The only thing I would say is. Generally speaking immune bond already has built in tax advantages, so you wouldn't keep it in an IRA, unless there's the example of the stuff I was saying previously like for. It's one of those exceptions when him UNIBOND would result in taxes than you might WanNa keep it an IRA, but generally speaking. If you're going to buy Muny Bond, keep it out of an IRA. Next question comes from Boone. I just did my first. Roth conversion and looked at that old account for the first time in. There was the expected dividend producing fund I remembered, but there was a stock chesapeake energy that I had completely forgotten about since I purchased the stock in two thousand, six fifteen. It's down way down like eight point five percent off the purchase price. What should I do with it now? It's in a tax deferred accounts so I. Don't think the loss is realized until I. Start to pull money out of the account and that might not. Not Be for fifteen years current value of all my shares will be about one percent of the value of the account after the conversion. Do I sell in the very little value? I had left and depend on E. Trade to keep up with lost for me or should I hold on based on the slim chance. The stock will be worth more in the next ten years. Oil Stocks do act unusually on occasion, only oil stocks. Stock everything else makes that usually. Chesapeake has been really. Interesting Story to follow and frankly. I don't I. Don't know that I would look at it today. As a business that I'd WANNA own so typically if I. You know I think it was yet idea. Didn't sound like a position are actively building united investment didn't work out. I mean that that happens to all of us. We don't get them all right. We have a philosophy here at the full. A lot of do we like to? Water flowers and pull the weeds, and that's just a nice way of saying. Add to our winners in to get rid of losers in. This I think is more than likely slated to continue being a loser I mean. Chesapeake has lost a lot of value. In it does sound like based on when you purchased this, these is absolutely busted I mean. There there are all sorts of reasons to sell one of them is if you thesis busted and the reason why you invest in the company is is no longer the case, and I would he probably is the case with Chesapeake so to me like you know, you could sit there and let it go, but but what's the goal trying to get back to even, or are you trying to get back a couple of bucks for me a lot of times? I'll I'll take a little opportunity here and there to just go ahead and pull those weeds sell it. Be Done with it. In even though it's just unique out a little bit value there, you can still take that money and do something more productive with it. So. Yeah T to me. I can't tell you to buy or sell obviously, but I can certainly understand. Selling in this case, but I you know. As as oil and natural gas energy can can turn around. This is going to be one that has a lot of headwinds in in. You might be waiting a very long time to to get any of this money back. I point out here that I it seems that maybe boone has a slight misunderstanding of how taxes in aries work because he talked about realizing the loss when he takes the money out and trade keeping track of the loss for him, it sounds to me that he thinks that he can write the loss off whence he takes the money out. That may not be the case, but just to be clear. One of the great benefits of an IRA is you don't pay taxes on the gains, interest and dividends from year to year. But. One of the drawbacks is. You can't take a capital loss on that as well so there's really no no way to benefit on your tax return from this loss. Next question comes from Benjamin. You recommend seeing a fee. Only financial adviser for check in every so often I know there is the Garrett planning network and others to help find an advisor. But what questions do you ask? And what answers do you listen for when trying to find one that is worth his or her one hundred fifty to two hundred fifty per hour. So I would say start first with asking yourself some questions. What are you looking for? You could go for the whole launch. Lada where someone is managing your money analyzing retirement plan helping new save and a five twenty nine. Maybe even doing your taxes with some financial planners do help with the state planning, or are you looking for something more targeted? You just want advice about am I saving enough for retirement, or are you close to retirement? You're like I just WanNa make sure that I'm doing right when terms like choosing my Medicare plan and claiming social security at the right time, so first of all just be very clear of what you're looking for. Then if it involves investments in any way, you WanNa, make sure that you find someone who is at least in the general same area philosophically and I say this, because many financial planners are hardcore index. And if you come to them as a motley fool, listener member with a lot of individual stocks. They may say okay. I'll give you some general asset allocation guidance, or they'll say I don't care if you like to pick. Stocks are not my advises, sell the stocks and go to index funds, so you want to make sure that if you're gonNA, ask for any sort of investment. Advice that you wanna find someone who's someone somewhat at least aligned for what you're looking for. Once, you've got that then. Just asked some of the typical stuff. You might expect so credentials certified financial planner. Are they a CPA either their personal financial specialist. How long they've been in the business. There are lots of people who. have not been in the business very long. Even though they're not young people, a lot of people choose financial planning as a second career, which I think is great, but just because someone may be look like they're in their forties or fifties. Sixties doesn't mean they've been in the business that long, and you WANNA. See if they've worked with someone like you right so if you have. Maybe. You have a large amount of wealth large income huge portfolio. You WanNa make sure that they have experienced with dealing with those issues, but on the flip side to if if you have, are you know middle income, decent size portfolio, but nothing too complicated. You don't WanNa. Go to someone who's used to dealing with someone who's wealthier partially because those people charge a lot more. You want to find someone who's kind of a little more lined up with what you're doing. Then make appointments with three folks. All of them will do get do free. Get acquainted means, and you're just looking for someone who you feel comfortable with. Since, you mentioned Garrett Big Fan of the Gary Planning Network and other is is not for the National Association of Personal Financial Advisers. But Garrett on their website has a how to choose an adviser section. Just Google attitude visor Garrett Planet Network has a great chapter from a dummies book that they wrote about how to choose adviser, and they have a good questionnaire that you can print out in US asking lots of good questions of financial planner. It's tough. Choosing a financial planner like my mom just went through that Bro! Is You know and she didn't really have a lot of options in Boise Idaho. Maybe two and one of them, she I never called her back, and never got back her, and the other one was just so busy just so busy, and just she just never. It's it can be rough. Finding a financial planner can be I. Think what we'll see is one of the consequences of this. Of the coronavirus pandemic. Just, like we are all used to working from home, many financial advisors and financial planners an now working from home. So in what they're doing is they're becoming licensed in more states. So, if you are more comfortable, working with someone over zoom remotely I think you don't have to stick with someone in your area. You can go beyond your locations, but you know some people don't feel comfortable that if if they're going to have someone managing their life savings, they want to be able to meet them in person. That's just a personal choice. All right next question comes from twitter. Is that right from sully what I hear? Okay? I just listened to the episode mentioning Your Weakness Two. Shopping carts and Tj, Maxx that me or you Jason. Accused me. Thoughts on the stock. If I had a war on Amazon, basket would be Costco TJ maxx Home Depot tractor supply. What would be your basket against online retail? That's funny. Well okay, listen I wouldn't have basket against online retail, because online retails where it's at. The whole idea. The whole idea behind the basket approaches to find a long term trend that you feel like the world is headed toward and so the war on cash basket, for example that was always one about people using cash war, traffic payments now with that said I get the spirit of the question some going to answer it because I do like some of these ideas. And I I would definitely include Costco in their in Home Depot's well. Home Depot gets a lot of my money. Doesn't, but they have a very loyal fan base of customers that just are happy to renew year in year out. So I love those membership models there, so costco and a Home Depot for sure you know I'm going to give a little shout at my wife Robin I. Know that she would approve of my adding target to the mixer. She hasn't been raving about targets APP and ordering on the APP the able to go to the store. Just pick it up right there I've talked with Ron Gross on more than one occasion about target and how this really has. Become a twenty first century resale right they're doing. They're doing everything online and in physical stores. What they call Alma Channel and then my fourth and I'm GONNA. Take this. You probably aren't expecting this when Alison. I'm GonNa Shock and all you. I'm ready. I'm ready Alta. We're going. Make up my I know my daughter's love. It ugly ugly Mug like this. What do I know about makeup? Tell you what. Get! A House with two daughters and a wife. That's what I know about make. There's a lot of it in an Ulta is a really really good business. They actually have a very nice diversified revenue stream. They've got the salon a`dynamic of the business which encourages people to go there they do have an online business. They have an augmented reality function there at where you can actually like. Try things on makeup to see how it looks. Mary Dillon just a phenomenal other adults of that's my fourth, their Ulta but they I appreciate the spirit of the question I like the idea I'm not saying this is the basket. I'm not tracking this basket in a not a not backing this basket, but in the spirit of the question if I had to develop. A basket, such as this one I think it'd go with those four. Yeah, I mean I guess you just have to think about what retail out there is something that you would still physically go to. Because the actual retail experience is being in the space is the experience and what you're there for? And I know I mean before Corona virus we I would go to target and just just couldn't believe how much money I had spent from walking through a few of the aisles. TJ Max is just a phenomenal business I mean what they've done through the years. Is really capitalized on the nature of the business, the advantage they have in that treasure hunt kind of nature like you go to TJ Max, maybe not necessarily looking for something, and then you end up finding a lot of things, and it can be a little bit lumping at times, but but generally speaking like management's a very good job of running that business, and they know how to exploit the advantage of experience. I think they're online game. Though I think they could probably get something going with online, and they just have not have not yet and so I. Haven't since Corona Virus for example. I haven't spent a single dollar there, but I continue to still shop at. Home Depot I. Think Yeah! We still shopping at home depot because we're doing. You know you gotta buy lumber somewhere. And I know my grandparents out in my my inlaws out in rural Virginia. They love tractor supply store, but that's not. That's not in where we live, but. Still New deck at the house there allison. I mean you, can you see? A big exposed beam behind me and some drywall work that needs to happen. Have lots of drywall work that needs to happen now though. Yeah Anyway get to that. All right next question comes from Matthew. I got married to my amazing wife nine days ago in a small Kobe nineteen wedding in our front yard after we postponed it from its original date in April all. It was definitely different, but still very special. My question is in relation to this wonderful event. My salary has been at a level that has allowed me to fund a roth. Ira I love the optionality of it, but after marrying my bad ass, wife are combined. Salaries are now over the limit that would allow me to fund the Roth. IRA does this affect occur immediately? Do I need to now open up a traditional. IRA and begin funding it or do I have until the end of the year. Matthew wants a Roth Bachelor party one last. Well Matthew I have bad news. When it comes to most things in taxes, your status and your age and things like that depends on where you are on the last day of the year, said if you're married on the last day of the year, you were considered married for the whole year. So that means if you contributed started contributing to a Roth IRA for twenty twenty. You need to call up your brokerage. Firm and re characterize that as a traditional. Now don't have any other traditional IRA, as it's very easy to do the back door, Ross which we've talked about before you can just google it or even when you call the brokerage, just say I want to do the backdoor. Roth and they'll tell you what to do. If, you have other traditional IRA as you can still do. It just becomes more complicated and you'll probably pay more taxes. So you, but you may not be totally out of luck and I should say that's only if you have a traditional IRA doesn't matter if your wife has traditional areas. One exception by the way of of what I just said. In terms of tax status and last day of the year is distributions from retirement accounts before it's age fifty nine and a half, you actually have to be age fifty nine and a half to avoid that ten percent early distribution penalty, unless some of the many exceptions that are out there exist. Right next question comes from Warren Warren Buffett. Maybe I don't know that's why I was thinking. He's asking about coq, so maybe maybe. Once James Opinion on coke. By? Or hold? Wants to now. I'd give buffet night give. Kiesel Warren of the same advice and I would say. For some I'm not buying it. Not Buying it I'm not holding it if I own it. I guess that means sell it. Even Atlanta Georgia person like you i. feel like it's almost sacrilege. I am pretty close to probably not being ever even invited back. But the facts are the facts. Okay, I mean you do have to look at the stock itself has been ain't bad stockton for the last five years. I mean I do understand why when you look at it what they do, I mean they have. Four hundred master brands, and less than fifty percent of them are the big global brands that are actually responsible for almost all of their revenue when I say almost only ninety eight percent, so it's a business. It's very reliant on on. You know a small portfolio of really successful grants. The problem is now. We've always talked about cocoa beans such a great distribution story and that's true. They've got a distribution network. It's just phenomenal, but the problem is now. They're what they're distributing is is being seen as not so good for you in so you're seeing them. Have it into to essentially pivot away from what you know brought them all of the success for all these years. Years in soda and that that's not going to change I. Mean you're always GonNa have people to drink soda? People are not to drinking as much soda going forward in the numbers of just kind of the kind of shown that through that through the quarters in the years of Coca, Cola and Pepsi Pepsi. Has the salty snacks division, which I've always been very. Impressed by I, mean I love a good Cheeto, and so I mean anytime you can throw a bag of those cheetos in my Patriot Amok GonNa, turn it their coq. Interrupting, but I think this is also very important point. You tried the Jalapeno White Cheddar crunchy cheetos. The White Shit or so. I've tried to Jalapeno ones but I've not seen the white Cheddar White Cheddar Jalapeno crunchy cheetos. Don't get the puffy. The poofy ones are not as good, but the crunchy white Cheddar Jalapeno Cheetahs. them by them. They're amazing. I have to back. Pain you. I'll get those next time. I promise I, mean Eh. One. crunchy wants the puffy ones, so that people won't you're not? You're not seeing poopie. Who using poofy Joe Copy? We'll be Coca doesn't have that dynamic of their business. They don't have that dynamic to their business, and they've suffered from that Pepsi's Pepsi's outperform coca-cola over the last several years. It's not safe. Pepsi or coke get it back. I'm sure they probably can. But what I am saying is I think there are a lot of better ideas out there, and so I wouldn't be putting new money into Coca Cola and frankly if I did own it. I probably would look at selling it and you know if you've got a beverage company, maybe own starbucks. It seems like the science coming out in support of coffee, right? It's coming and telling you that these sodas. They're gonNA. Make you fat. Coffee, it could extend your life. It could help you live longer. SMART Mexican looking this a starbucks as well is. That sounds like study from the copy roasters of America. Do! Something that Chris Hill sent me the other day. that. We sleep at night. I'm glad I've been drinking coffee as long as I have God knows what I would look like otherwise. You're a good looking man. Rick. good-looking next question comes from. A. I'm trying to save money for my kid's College. Fund while the five nine is a great option. I'm limited to investing in mutual funds, which means at best I'm going to get what the market gets assuming I do some sort of low cost index fund and I be a capital F. Fool investor have been doing much better than the market in the last three years of being a member of. Of Stock Advisor Enroll breakers, even during this pandemic mess by listening to every full podcast and following David and Tom's and yours and every one else's in the full universe. My portfolio of about one hundred stocks is up here today. Thirty percent to the market's down five percent as of day as of today weighed down by three sluggish five to nine plants that are also down five percent each. I feel like throwing away money by using the five to nine, and not being allowed to select my own great companies in which to invest. What's more, my understanding is that the five to nine does not count as an asset for the kid when applying for student aid, but the coverdale does. So I come to you with a simple question. Can I have my cake and eat it, too? What if I wanted to use the coverdell to buy individual stocks? Until the child is nearing college? At which point I then converted to a five to nine. This allows me to get better returns and avoid it being an asset for financial aid and get the favorable tax benefit. So, chose this question, because first of all Dune does a good job explaining the benefits of the coverdell over the five twenty nine, you can buy individual stocks. You can buy and sell them all day long. We recommend that, but you can. Whereas with the five twenty nine, you can only make two changes to the investments a year, and it's all mutual funds. So. That's you did a good job of explaining that. I will point out with the coverdell. It's gotta low contribution limit of only two thousand dollars a year, so for some people save more for college, but they can max out to cover it out, but then put the rest in a five twenty nine. One thing that doomed does not have quite right. Is The financial aid treatment the financial aid treatment? Coverdale's and five twenty nine is identical. They're treated as assets of the parent, not the kid that is favourable from a financial aid perspective. It's not negligible doesn't mean it doesn't have any effect on financial aid, but it's better than an asset that is owned. By the kid. He can. Transfer money from the Coverdell to the five twenty nine. If for some reason, he decides to do that, but you can't transfer it. The other way around so were convinced to try out the covered. You have money in a five twenty nine. You can't move it from the five twenty nine. To the coverdale. What other interesting thing that he pointed out is that he is doing very well with his investments, and he owns about one hundred stocks. We get this question a lot. Either on the show, or on the full live that we run every day for members of full services, and that is how many stocks should I own, and if I owned too many are not just owning index fund watering down my returns, but here's an example if someone owns a one hundred stocks is still crushing the market. Idol last question comes from Cameron thoughts on the valuation of Stone Co in light of the corona virus for a fragile country like Brazil. This could be the tipping point after so many other headwinds. But how does that affect stone? coz Business Jason I. Don't even know what Stone Co is. What is still business? Yes, don't Coz a payments company that's focused on Latin American markets in Brazil and particular in so I guess it could be. Draw you can draw a parallel to to a with square through pay pal at, but generally speaking I mean it's payments. Company focused on Latin America. Primarily Brazil. Is the big money making market kind of like Marco Libra, they're. In I, I, it's a it's. A NEAT opportunity, gained a lot of headline recently, when and it was, it was seen that Berkshire hathaway. Warren Buffett's company Berkshire hathaway taken a five percent position in the company, which is pretty considerable i. Think in the near term. You have to acknowledge the fact that. They're gonNA, be some real headwinds in in Brazil particularly because of the pandemic I mean. The flip side of that is role in same boat kind of in that regard. The entire world is dealing with it, so it's not specifically you know it's. It's not particular to one economy or one country some. To get hit harder than others I, do feel like Brazil. Be at a place where they can recover from this given You know some of the other businesses in the area. I mean that that that I think is. Who knows ultimately how? That's GONNA shake, but generally speaking. I think the move away from cash towards cashless. Transactions in and financial software that's not stopping if anything, this hastens that which which is what I think, Cameron's talking about there and for a company like stone. Co, neither are other companies in the space pags bureau in roquetas libra to but you know moving money around is a big big market opportunity, and there's nothing that says they won't be able to expand well beyond the Latin American markets, too, so I I'd say cautiously optimistic I mean I
Fed buys more corporate bonds
"The Federal Reserve said Friday that it purchased $1.3 billion in corporate bonds in late June as part of its effort to keep U. S interest rates low and ensure large companies Khun borrowed by selling bonds. We fed bought bonds issued by several 100 large companies, including AT and T, Pepsico and Berkshire Hathaway, controlled by billionaire Warren Buffett. Combined with purchases from earlier in the month, the Fed has bought nearly 1.8 billion in corporate debt. If bond interest spiked, it would make it harder for companies to borrow by selling debt. Chuck's Iverson, ABC
Fed Discloses More Corporate Bond and ETF Purchases
"It's purchased 1.3 billion in corporate bonds last month is part of its effort to keep U. S interest rates low and ensure large companies continue to borrow the Fed purchasing bonds issued by several big companies, including a tea and tea perhaps ago in Berkshire Hathaway. Goodbye with purchases from earlier in the month of feathers now bought nearly 1.8 billion in corporate debt. Stocks
Top 10 Most Valuable Brands in the World in 2020
"Brands keeps doing them, so we'll keep talking about cult of Mac. Says the Brandon Valuation. Firm brands on. Has Put together a list of the most valuable brands today and apple is so close to the top. For the fifth year in a row, apple has taken second place. According to the report bested only by Amazon. The report says brand's values apple's brand at three hundred fifty two point two billion dollars. Unlike market CAP, which values the business as a whole this brand. Is designed to assess the value of the branding itself. Running through the top ten list Amazon I apple second Microsoft third. Google fourth visa round out the top five. Followed by Alibaba tencent facebook McDonald's. And Mastercard rounding out the top ten. Maybe, the weirdest part of the story. Besides this, actually being a thing is how the brands are categorized. Apple is actually the top tech company according to brands that's because the organization classifies Amazon in retail. Even while noting the hardware, it makes the e book video. Music Services. It offers and Amazon. Web Services. which is about as tack as you can get? Number two brands, but number one for Warren, Buffett. Well forty-three percent of Berkshire Hathaway's holdings, anyway, that is the word from Motley fool by way of cult of Mac. According to the cult Berkshire Hathaway's two hundred forty five million apple shares have increased in value by more than fifty five billion dollars since the start of twenty nineteen to be worth upward of ninety one billion dollars. Buffets firm is currently apple second largest shareholder with around five point, five percent ownership of apples publicly available stock. According to the report.
"berkshire hathaway" Discussed on We Study Billionaires - The Investors Podcast
"And there are other decisions like that it is not more compelling to buy the shares now than it was when we were buying them it's not it's not less compelling as wash but we didn't do any we got the price is not gotten to a level or not been at a level where it really feels way better to us than other things including the option value of money to stop up in a big big way so. I JUST WANT TO START OFF. By saying as we've played all the questions we're gonNA play for both episodes. I think becky quick should be the only person it's allowed to ask questions at these meetings are now on like having gone to my fair share of these meetings and sat through them like dude. Becky crushed it with her questions. She was asking really good questions. And when you go to the meeting. I'm always highly annoyed at half the questions that come up. Because they're just so just nonsensical and of no value add. I think becky crushed this. So becky quick. I'm sure you're not listening. But in the very odd chance. It's your Bravo Great Yup. I don't really have much to add on his response because I think he just totally sidestepped it and I don't think that he even provided a good response. I think they're wanting him to get into a wire. You seeing the valuation different now than you were when you purchase it thirty percent higher. And he just didn't want to even broach the subject so I can't really comment on it. It seemed to me like they might be interested in conducting repurchases here in the future and so he was fighting the question but stig. I'm kind of curious to hear what you think he always get. How do you value stocks question? And he also gets the widest berkshire-hathaway worth now. Could you please save me a lot of time? So you know I don't I don't have to do the valuation. He just give me a number and I can just put him a limit or and so. It's interesting reading through buffets latest filing. He bought most of his stocks back at two hundred and forty dollars so the person asking the question would be thinking. Why not just buying a ton back right now? You know. There's a lot of focus on that cash. Position has and a lot of people wants us to pay a dividend interesting enough not to many of the actually shareholders. But a lot of people want him to pay dividends or buybacks. Yes so especially in recent years. You've seen more questions. Popping up. With spiky quick was also referring to the amount of she s that he's buying back is around one percent on annual basis. That's a buyback yield right now Kim. The current market cap now buffet sold of ended a few different things that the fact has changed. And what I put into. That was that you can't really use the buyback price of Satan fourteen two months as a benchmark because even though that Berkshire is now trading at coal tournaments and lower the value of the business also changed because the value of the discounted cash flows in the next few years have changed. And that's just basically what makes the biggest difference like whenever you start this kind of those cash flows and try to figure out what is the intrinsic value days from a mathematical perspective. That is why something like a crisis actually has a somewhat significant impact even an accompanying that has been assistant for Long berkshire-hathaway but clearly it's not anywhere near twenty percent whenever that happens but what also read into this was he talked about opportunity costs and it's just very important to understand like yes. Berkshire is cheaper but if all other stocks and universal also cheaper you know that's whenever you need to figure out what you should do with your cast pile so I think that was one key takeaway. I have and then the last thing was that. It's a very thinly traded stock even in a time like this so when they were the stock plants like percents but looks like it's more or less or night. It really wasn't but for a company the size of Berkshire Hathaway. It was almost like overnight. Can't just go in and buy like all start at whenever it hit one hundred. Sixty two wasp before bounceback back. Let's take a quick break and hear from today sponsor. You know how it feels when you find extra cash in your pocket now. Imagine you found five times that surprise money. That's the feeling with capital one. We're new savings account earns five times the national average savings rate on any balance. That means you earn more every day. Just for saving this hassle-free hardworking savings. This is banking reimagined. What's in your Wallet Capital One? Na member FDIC or right that was the four questions that we selected from the Berkshire Halloway annual shareholders meeting. We always thoroughly enjoy him these discussions and share them with you but at this point in time the show we'll play question from the audience and this question comes from Jeff. Here we go. Hi Stieg High Preston. My Name's Jeff Mason. An investor in Victoria British Columbia Canada. I wanted to thank you both for all of the knowledge that you've shared all the great guests you've had on your show. It's really improved my confidence as an investor. My question relates to some advice that I've heard from guests on your show and I've also heard it in some of the great trading books. The advice is don't sell your winners. I've tried to follow this advice in my own trading and investing and I found him often disappointed. It doesn't seem like very good advice. So my question to both of you is. Do you follow this advice. Do you sell your winners. And in what situations would you definitely hold onto your winners as long as you can? In what situations would you definitely sell the thanks so much and have a great day? Jeff great question. I think first of all I look at a sell order as a point where I'm going to have liquidity and then I have to have some other opportunities. That's going to perform what I think the previous holding is going to do. So if let's just say I own something I have a mass of gain and if I sell it. I'm going to have a massive capital attacks. A capital gains associated with it. And so let's just say that. That was a long-term holding so whatever principle I get from the sale. I now have fifteen percent less of that. That's lost due to capital gains tax when I employ that new capital. What kind of return am I expecting to get out of that? And then when's IT GONNA basically exceed the previous holding previous valuation? That I had for the business as far as return goes so. That's kind of like the mathematics behind my thinking. Whenever I do exercise a sell order another time that I'll sell that doesn't follow. That model is if I think. There's something fundamentally wrong with the business and I think there is some type of issues and I just want to liquidate the position. So that's typically because impairment on their balance sheet for one of their major assets that I think there's some competitor that's come in is going to basically take all the market share and going to cause a lot of punishment for the pick so those are kind of the two main ways that I look at it now. How do I manage some of that risk? If you ask me ten years ago I would tell you that what I just described. His was exclusively how I look at selling positions today. I would tell you that. I also incorporate the momentum status of our we have a momentum to want or finance one of the Nice things about this momentum tool is it looks statistical volatility ranges of a pick any pick and it's tailored towards that pick so like let's say the S. and P. Five hundred going up it's going within a certain volatility range and then whenever it steps outside of that volatility range the momentum says something's different this is most likely going lower because it's outside of this trading volatility range and then it turns into a red status so the way that the tools working is it's basically selecting a stop limit for that underlying pick and that stop limit is dynamic and so as the price goes higher and higher. The Stop Limit keeps adjusting higher and higher. And so I use that tool especially for indexes by use that tool. Because it's really hard to come up with an intrinsic value for the S P five hundred outside of just looking at the price to earnings and so my opinion is that if the price goes through that volatility range in hits that stop limit on an index. It's more macro related than it is earnings-related functioning of the business. So I use that to also assist me in knowing when to stop holding winner and so for example like the S&P five hundred momentum told the thing has been green for a very long period of time and recently went red and then it just went back into a green status. So there's a tax realization to that but there's also the implication that I'm protecting my downside risk because if the market would crash forty percent in a day which you had in one thousand nine hundred seven or some other events. That were very deep. You're protecting yourself from those types of events so I would add that in there as well as a way that I also protect downside risk in that I continue to hold winners that. Just keep on running really like the Christian too and actually I would like to put into the mix if you funds about buffets before I go into my own strategy was very similar to what you also described there before Preston but I think buffet is one of the best example of not selling your winners. The vast majority of buffets portfolio is concentrated in just a few companies including American Express Apple Bank of America and Core Cola. Very famous example of a position has worked really really well and all the investments that adjustments before have been very profitable and side from the application that was initiated. Back in two thousand sixteen is all socks that he has health for very long time. Now I really agree with that sentiment because in the sense that I really Sell winners to generally jumping out of windows heart and if you find relief good stocks. That are compounders. You don't want to jump in out of it too often part of is tax as precedence before you live in the US that's fifty percent so in that sense you just have to be more right than wrong so really to sell you. A it has to trade a lot higher than intrinsic values to say a company like in Berkshire Hathaway trading one hundred and seventy two today. If there was going to three hundred tomorrow yeah I would take the tax loss out. Take the tax on that and sell my position but the more capital gain that you have earned the Harvard simply becomes you know. Colby example like you mentioned before buffet build that position for one point three billion dollars in the last time I looked it up. He was trading and around eighteen billion dollars. So it's a lot of taxi has to pay. Even though the cocoa at times have been quite expensive. It just doesn't make.
Warren Buffett and the Berkshire Hathaway Annual Meeting
"Okay. Let's talk about Warren Buffett and his comments at the Berkshire hathaway meeting. He talked for over four hours so I might not be able to get to everything in fact. I'm just going to get to a few topics that really stood out. And this is by the way. If you haven't listened to it you can go listen to it just Google Berkshire Hathaway shareholder meeting yacht. Yahoo Finance has it and you can find it on Youtube. And it's worth it. It's worth listening to Warren Buffett. Talk for four hours. Once a year it really is even if you disagree with every syllable that comes out of his mouth. It's still worth listening to. So I think one of the really big perhaps the biggest topic that he covered couple of weeks ago he became public that he started selling his position in the Airlines. And he put one slide up the beating that showed the first quarter purchases of equity securities by Berkshire hathaway including buying back their own stock but they made investments in equities of fourbillion. They sold two point two billion of equities and they bought back a billion seven of their own stock not really huge numbers for Berkshire but then he put up a slide. That showed in the month of April because the first quarter ends March thirty first right month of April purchases of equity securities. Four hundred twenty six million peanuts nothing for Berkshire. He was asked about it. He couldn't even remember what it was and he said I might not have done. It might have been you know. His his top capital allocation lieutenants. Ted In todd. He bought bags zero stock. We'll talk about that in a little bit and sold in the month of April alone. Six and a half billion including all the rest of the airline stocks okay. Why did he do this? Well he he put up a slide and he said you know it was not one hundred percent that's six and a half billion was not one hundred percent of what we sold in April. But you knows mostly mostly airlines said. I made a mistake and he went through the history of the position and if you look at the filings. He started buying these things in late. Two Thousand Sixteen. He said we paid. Oh I don't know seven or eight. Billion couldn't even remember how much to own ten percent of the four largest airlines starting at that time and then into two thousand seventeen you kept by and he figured that for seven or eight billion. He was getting a billion dollars worth of earnings that he thought was likely to go up over time and at that time he did an interview with. Becky quick of CNBC. And he said the airlines have had a bad century and they've had like over one hundred bankruptcies and it's been terrible and they've consolidated into four big ones. That are doing pretty well etcetera etcetera. And you know we want a piece of it and those four those top four American United Delta and southwest accounted for like eighty percent of the domestic airline capacity. So right there. It sort of felt to him. It seems like when he bought the railroads who had been through. I don't know about a difficult century. But yeah pretty pretty tough time over the past decades before he bought and then turned into a pretty good bet because they had consolidated down they had been through restructurings same type of a situation and they had some pricing power to and I remember hearing about that idea from the guys at allegany well run insurance company PUBLICLY COMPANY TICKER SYMBOL. Why the letter? Y and was by when Burlington northern was like I don't know twelve bucks a share or share or something like that maybe even cheaper and Buffett bought the whole thing of Burlington northern for one hundred dollars a share so late to the party but still thought it was a good bet and same thing he said we treated it mentally as if we were buying a business meaning as we were buying one hundred percent of a whole business and if you've heard him talk over the years they liked to buy one hundred percent of the business they liked by as much as they can once they liked to sing and like the hold it forever. That's their favorite thing to do. And you know this look like an equity position that he might hold effectively forever and he said you know the companies were well managed and all that stuff but now he blew out the whole position when the whole world he sold into weakness right. This is the guy who says be greedy when others are fearful while he's fearful when others are fearful because he's not buying anything and he sold this massive position and is not spending any of his giant hundred and thirty billion dollar pile of cash. So that's kind of unusual. And he said the airline business. I'll just quote a few little things he says. The airline Business Blah Blah Blah. I think it changed in a very major way is obviously changed. And he said these four companies are going to borrow tenor. Twelve billion. Each in some cases they're having to sell stock or the right to buy stock that takes away from the upside then a little bit after that he said. I don't know the two three years from now. That people will fly as many passenger miles as they did last year. In Twenty nineteen so in other words this business has changed so much and these companies are so deeply impaired that it makes no sense for him to continue to hold the equities. He's held things through bet. He's a publicly traded companies through bankruptcy. At least one right. Us G it was an unusual bankruptcy situation. So this really tells you. The buffet thinks that people have changed their their travel. Habits have changed and they're not gonna fly as much even when things are all opened up and who knows one would think over this time period. He's talking about two three years. Whatever that the corona virus will be a thing of the past? Nobody's worrying about it anymore. You know we'll see but I just thought it was really interesting that you know we find buffet just being really fearful not deploying capital and blowing out this position into weakness having bought it in the first place. I've never recommended an airline stock in extreme value. And I never will and I was shocked when he did it and I always wonder like how how going to work out but you know obviously not too well so the airlines and I here where he's coming from because the airlines I read today. One article said they're burning ten billion monthly as as an industry. And you know they've already gotten something like fifty billion and bail out. There's another there's more money that they're going after under this. Cares Act Law. That was passed but united like they got five billion bucks and only one and a half billion. That was alone. The other three and a half billion was a grant grant. Yeah you've heard me money. Just taxpayer money just given to the airlines. And of course they put stipulations on this thing but they've already found the loophole and the stipulation was. You can't fire anybody you gotTa keep all your employees and you can't reduce anybody's hourly pay or you can't reduce anybody salary right and I think you can't even buy back stock and other things. But they found a loophole. And you might have heard it already. And they're reducing people's hours. They don't pay them less per hour but they pay them less by reducing their hours which you know as a business move makes sense with dramatically reduced demand for this service but I can understand how nobody would want to get involved with the airlines. Who knows if the equity value is going to be anything like what it is right now impaired as it is. Let's talk about buybacks? Buffet talked about buybacks. He didn't buy back any shares in April at all they bought back a billion seven in the first quarter which is really nothing for them and basically the important tidbit here. Is that the stock to him. He says was no more compelling around two hundred and fifty thousand share than it was when he was buying it back at three hundred thousand share. What does that mean? Well it means exactly what you think. It means. It means the intrinsic value of Berkshire Hathaway's impaired at least that amount like roughly seventeen percent. I believe that is so or more bright. If it's not compelling at either a at two hundred fifty thousand no more so than than it was thirty or three hundred thousand. That's a big deal. And he also mentioned in the same breath telling you why he wasn't buying the shares back in the same breath. He mentioned the option value of cash. Right I it other words. I'd rather hold onto my cash than by back my stock seventeen percent off where I was buying back before. Wow so he did this whole thing. He started out with this whole long thing about never bet against America and he went all through history and all this stuff and he's got a great knowledge of history. It was fun to listen to it but he says all this stuff about don't bet against America in the long term and that was another thing he kept doing. Saint don't bet against long-term but he constantly throughout his talk and answering questions. He was constantly differentiating from the long term. Bet and the nearer term couple years to three years. What does that tell you that tells you that? He thinks that we are not out of the woods yet. And you can't call him barish but he's nothing like bullish. Some investors Whitney Tilson commented. He was part of the presentation and he commented said you know he went and he thought it was raining. Gold in March when the market was getting absolutely obliterated buffet obviously did not think it was raining. Gold Okay. That's really interesting. So they bought by zero in April. You know. That's that's the evidence there he said I would rather be holding my cash. And he also talked about the general idea of buying back stock because he was asked about it one of the shareholders sentence a question about it and he framed it in a really good way that. I think I think you need to hear about. He said imagine that we were just partners. In a business you know fuel vessel. Each put in a certain amount of money in the business does well over time and goes up in value and you know after many years of success one of us wants to take money out of the business. Well if your partner came to send that you say well. That's perfectly reasonable and a way to do that would be for the other partners to buy a little bit of stake and so you know. Maybe he owns thirty three percent. Let's say there are three of you and and he sells a little bit and after that hill own thirty percent or something and you you know then you'll each own a little bit more right. So that's the way he looks at share repurchases as an individual partner can choose. An individual shareholder can choose. Whether or not they WANNA participate and sell the shares whereas if he issued a dividend. It's you're forcing cash down everyone's throat and they get hit with taxes and you're taking money out of the business off the table right. I thought that was pretty interesting. And he's like he doesn't buy any of the political what he calls political correctness about share repurchases. He's a most people do them wrong. He said that consistently for a long time. You have to do them right and the right way to do it is the buy it back in a discount to the intrinsic value and he even said. You won't always be right when you're doing that. You'll make mistakes and doing that but you should still do it that way. And the steak is probably you know. He bought it back at a higher price. A billion seven worst and then he refused buy back in a lower price so he might have even talk about his own mistake and buying shares back but over time the right thing to do is buy it back at a discount. And you know you'll be right enough. If you do it over a period of many years I found all that really intriguing. Him telling US why he didn't buy back the stock and he mentioned specifically that he said you know for example.
"berkshire hathaway" Discussed on Invested: The Rule #1 Podcast
"Huge and that totally and I think that they are on and and the reason they're doing that is because the federal government thinks they're critical industry. Nobody thinks your critical industry. Hate to tell ya but nobody's coming to your rescue except you. You better start rescuing yourself ahead of when you need it. The worst thing about banks. They will only lend you money when you donate it. So if you don't need right now go get a pile of it if you need it right now. I'm sorry but you probably not gonna be able to get it too late. So we're the wise. Follow the the examples of the best CEOS in America who are in trouble right now and they are all loading their balance sheet with debt as fast as they can get it as much as they can get it so he should do the same thing I think I mean. That's just an opinion. I'm just saying it's just an opinion. Just an applied do not see why that is any less ethical than what Boeing's doing so let's get back to me buffet and Berkshire Hathaway. I won that one. Tonight you're taught me. What did you think about Greg? Evil sitting next above it and making comments well. I think that's an obvious indication of WHO's GonNa take over of Warren. Get sick this year dies. I think absolutely he's pointing to Greg. Able I don't I don't and Greg is younger than than a Jane. And that's probably why as she'd isn't up there Vowed genius in buffets been raving about him for years. But you gotta you gotTa get a new guy in there. You Probably WanNa get a guy who's not seventy you know it's like it's like Charlie Munger. Charlie Mongers Board Meeting Daily Journal. Like we've just brought in a new director who's seventy five which dropped the average age of the board by ten years or something? That was funny. It was really funny so I think that's a big part of you've got to to really superstars there and I think he picked the one. I mean it's not a final pick but I think that's an indication who's going to be running Berkshire obviously. It's a very strong indication of confidence. Yeah A to that question of who runs yeah. I don't know but I found that he was he was all right like I didn't really feel like he added that much he didn't. He definitely lacks the sort of interesting talk that the buffet gives and the Banter in the stories. And the you know ways of explaining things that make profits so interesting and and obviously hardly anybody is like buffet. He's one of a kind but it was very much like if this is the future. I don't know how much how much longer people are. GonNa get excited about it. But who knows it's an interesting question about Berkshire itself I mean. Buffet was pretty clear that At in previous to the meeting that prior to the meeting that he wouldn't think berkshires massively undervalued. Right now He basically that you were to sell off Berkshire in pieces and pay the taxes And the liabilities. Pay All that off By the time you cleared all the tax bill Which would be enormous. You would have a break even more or less and that might have been a little sobering for Berkshire investors because the stock went down ten percent. This already well not just that he also answering the question about why they didn't buy stock back in March. It wasn't just that they want to conserve money. Although I think personally I think that's the main reason but and why would you spend money buying Berkshire stock unless he had nothing else to do? But also because he said the intrinsic value of Berkshire went down last month burst of all he lost was it. Six billion on the airline investment and then Many of their businesses have been really adversely affected by the Down he said Berkshires intrinsic value has changed and so he didn't really think that actually the price change showed a massive discount the way it would have seemed and I thought that was really interesting so I don't. I wasn't real surprised by that the fact that he didn't buy a lot of Berkshire buying a little. I mean a little few billion dollars worth of March or April now but over the last year. Oh yeah when they bought exactly but they didn't buy a lot and so to me. It's been he's been saying right along more. I think what I'm hearing from buffet as more. We're going to see a time when we can by Berkshire I really cheap. Yeah hit it. I think it's that it's that plus we would rather buy some massive awesome business at eight seventy five percent discount because we're the only ones who can cause we're the only ones with a hundred billion dollars to spare and still leave forty billion on the balance sheet to cover all of our expenses and random obligations that come up so. I think that's what he's hoping for and he doesn't WanNa Penny Ante little purchases here and they're not these being for that he doesn't want the US to crash. But I think he he sees it as a possibility and I think we should too. I do too. I think I mean. I think we're GONNA wrap up here but my prescription for me is going to be sit tight be patient. Charlie said we make money when we wait. That's what I'm planning on doing. We've certainly picked up a couple of companies without. We're we're pretty nicely priced in. And they've gone down from where we bought them and we WANNA buy more But we're sitting in a lot in cash and I think that that's I'm very very comfortable without right. Now that this market will look a lot worse. I think there's a very good chance. This market will look a lot worse in a year that it looks right now and we'll see we'll see if that's true. Yeah we'll see. He didn't answer becky too quick. Didn't ask my question which I was bummed about my question. Was My question was considering that we're in a recession. So many small and medium businesses are going bankrupt and not gonNA come back. People are losing their jobs. Unemployment is at a massive high. Do you think that Wall Street is completely divorced from the plate of Main Street? Ooh That's very sophisticated question. What do you think the answer is? I think it is divorced and I think we're going to look back and go these. What's the vote was that occupy Wall Street thing? We're going to look back and go these like fat cat. Rich people were sending stocks way up with no justification except for a few of them are doing well legitimately have good earnings but the rest of them don't and yet for some reason. Wall Street has suddenly gone. Long-term mysteriously and companies with no earnings going but in a year. They'll be fine doesn't me to any sense at the same time. People are losing their jobs and it's not just jobs it's small and medium businesses are many of them are not gonna come back and they weren't able to get the loans from the government because the US government screwed up the process and that's a whole other story but it's really discouraging and I just don't see these these two. I don't know it's like these two opposing forces but they're not really opposing the kind of Har- and they just don't make sense together. I really wanted to hear from him about that. Like this market is is almost back at its high like why considering all the data why nobody asked him that I can tell you why why and I think I'm very likely to be right. And that is that the market meaning. The vast majority of our money in the market is run by professional fund managers who have learned over the last decade that you should never fight the Fed. It's a it's a fact of life and it's a. It's like a headline. Don't fight the Fed and anybody that's fought the Fed meeting if the Fed reserve raising interest rates. You think the market is gonNA go up and you buy stocks and it goes down like a brick because you fought. The Fed raise interest rates market. Goes DOWN THEY DROP? Interest rates market. Goes up these guys have learned that over and over and over and over again and they're fundamentally traders even though the so called long-term investors dot hold socks more than about three months and they're judged on their three-month performer sector judged on a one month performance. A years forever. You know years like you know light years away so you. You may not have a job in a year. You'd better perform now. And so they can't sit there and wait while their peer group jumps in as the Federal Reserve cuts rates to zero and promises with the federal government to put in six trillion dollars. They can't wait if they wait. They're gonNA look so stupid in three weeks which they did anybody. That waited look like an idiot. The market jumped back boom. And so guess what they. They've made it more volatile there jumping in just out of pure momentum guessing nothing to do with mainstream nothing to do with what's going to happen a year absolutely blind to it out of necessity to protect their jobs. That's why it went Jack and backup all right there right again. Do Not Take Silence. Ask Agreement. Well proportioned give my love the Nuno and stay healthy and you all stay healthy out there to you guys and we'll be talking to you next week. Thanks guys next week. We're going to have an interview With Dan Heath great book called upstream. So check that out. And then we'll be back talking about companies because we've promised you guys good companies that we like and that's what's coming could good depression companies to get onto that list to go. Thanks everybody hi guys. Thanks for listening to invested if you enjoyed this episode and you want more information including show notes and more episodes visit us at invested. Podcasts DOT COM. There's a special offer waiting for podcast listeners to attend my three day investing workshop absolutely free so just head to invested PODCAST DOT COM. Everything discussed on his podcast. It's either my opinion or Danielle's person and is not to be taken his investing advice. Because I am not your investment advisor nor have I considered your personal situation as your fight. Do -ciary this. Podcast is for your entertainment and educational only and I hope you enjoy it..
Here’s What Warren Buffett Says About The Coronavirus And His Outlook On Stocks
"May kicked off with one of the biggest events of the investment calendar the Berkshire Hathaway annual meeting. Hey hurrah but instead of forty thousand people flocking to Omaha. Warren Buffett sat at a table in a near Empty Auditorium. Under did either of you watch it at all. It was kind of the surreal experience. Now I saw two seconds of it. I haven't gotten around to it but it is always. It still blows my mind. That forty thousand people go to Omaha just to maybe get a chance to see Warren Buffett. That's crazy and it's crazy that he can sit up there for that long and answer question after question after question now usually also joined by Charlie. Munger this year he was not instead he was joined by Greg able able. Who is the vice chairman in charge of all operate operate instead of Insurance? But it still went on for more than four hours. Wow I more than an hour was a presentation that he gave so I listened to the entire meeting. Impasse episodes I would. I've said that sort of my personal investing philosophy is be a short-term pessimist at a long-term optimist and that sorta seems to me was the message of the whole meeting so on the pessimistic side. They're clearly not doing anything you know. They've still kept most of their one hundred thirty billion in cash. He did not use the downturn as an opportunity to go on a buying spree. He essentially he likened previous downturns to train. That is slowing down. This time. He said we took the economic train off the tracks. And I don't know of any historical parallel in the range of possibilities on the economic side are still extraordinarily wide in other words. They're still sitting pat on what they're going to do. He also said quote. We have not done anything because we don't see anything that attractive to do. Heels actually spent a good deal of time talking about some of the past challenges and failings America's history so for example. He pointed out that. Despite the fact that we have a declaration of independence that claims that all men are created equal. When you look at the three point nine million people living in the original thirteen states and seven thousand nine hundred fifteen percent were slaves pointed out that during the civil war six percent of the male population between the ages of eighteen and sixty died. The twenty twenty equivalent of that would be four million deaths according to Warren Buffett and then it took one hundred thirty one years for women to have the right to vote at another sixty one years until a woman was appointed to the Supreme Court so we often talks about the long term success of America. He did spend a good bit of time talking about some of the things that we have not done so well. He spent a particular amount of time on going over the Great Depression I think partially because he was born in the middle of the Great Depression so he pointed out. It's September nine hundred twenty nine. The Dow was at three eighty one. Five hundred didn't exist back then so he just using the Dow and then in a little more than two months it was down forty nine percent to one ninety eight. You Move Ahead to August twenty ninth nineteen thirty. Which is the day before he was born. It was backed up to two forty so and it rebounded twenty percent. People have found that like okay. Stocks went down but there. They've gone back up back then. People were thinking that they were on the verge of the Great Depression. You go ahead less than two years to July thirty two. The Dow is down to forty one so from the peak went from three eighty one to forty one a decline of eighty nine percent and the Dow did not get back to its nineteen twenty nine peak until nineteen fifty four. Wow he did point out that people got dividends at back then. Dividends were higher but still price percentage the market was down for more than twenty years so buffet called the Great Depression a testing period. That caused some people that lose faith in America. I don't know if he was playing out to say like times ahead could be tougher than we think or just pointing out that America has seen worse times but regardless he says that anyone's going to lose faith in America that's a big mistake which brings us to his persistent message of being a long-term optimistic pointed out that despite all these challenges from seventeen eighty nine until today the wealth of the of the United States has grown five thousand percent and that's adjusted for inflation. He also pointed out that since the year he graduated from college in Nineteen Forty nine at the age of nineteen one dollar in the Dow has grown to one hundred dollars. So how do people benefit from what he calls the American miracle? Well as he often does and I think it's always interesting that he does this during the Berkshire hathaway annual meeting because it's an annual meeting of people who own individual stocks. He thinks the vast majority of people should just by an S. and P. Five Hundred Index Fund and. He mentioned that's what he does. That's what he has directed his will when he passes away swimming. He predeceased. His wife. Ninety percent of that wealth will go into an SAP hundred index fund. In fact one question asked about Berkshires underperformance as a stock. It's underperformed this year as well as the last decade a something. I know personally because I've owned Berkshire for more than a decade and he was basically said. I agree that that's an issue. He said that the truth is that I recommended. Sap Five Hundred Index Fund. To most people. And I happen to believe that Berkshire is about a solid is any single investment can be in terms of earning over time. But I would bet my life on whether we beat the sap five hundred over the next ten years so as always with buffet. It comes down to betting on America for the long term. But it's clearly means the long term to be like very long-term it mentioned the timeframe twenty to thirty years a couple of times the only truly positive thing he said about shorter timeframe at least that I can remember was in response to a question about whether Berkshire expect significant significant layoffs among its workforce which at this point. It employs almost four hundred thousand people in response. He said that some businesses will have to make adjustments. See's candies closed down. Nebraska Furniture Mart. Some of their factories may have issues. It's the funniest list of companies. I'm sorry Oh it's like it's very clean seas it's like what. Why Energy facturing? Yeah it's it's everything it's all these companies that you like. Yeah I think I've I think I've heard of Kim or have it at all. It's quite amazing. But well while he expects it some there will be have to be some layoffs. He doesn't expect them to be significant in that five years from now he expects Berkshire we'll be employing considerably more people so that to me says he expects five years from now. Things will fully recover and I think that's a reasonable timeframe. I certainly expected in five years. This time period will feel like somewhat of a distant memory. I certainly hope so But it's certainly possible that over the next year or two things could turn out to be pretty rocky
Nasdaq finishes higher as stocks stage late-day rally
"Stocks have kicked off the week on a positive note rallying late in the session to close higher Dow finishes up twenty six nasdaq up a hundred six SNP five hundred up twelve the late upside push came as crude oil futures gained for a fourth straight day rising more than seven percent back about twenty one dollars a barrel energy stocks were the biggest gainers the S. and P. five hundred led by Exxon Mobil and chevron thanks to that oil surge but U. S. airlines were hit hard after Warren Buffett said over the weekend the Berkshire Hathaway has sold off all its shares in the top four U. S. airlines American delta United and
Warren Buffett's company Berkshire Hathaway sells US airline shares
"B. billionaire investor Warren Buffett sold his entire portfolio of U. S. airline stock including delta investment strategist Warren Buffett sold all of his U. S. airline stock worth four billion dollars he only eleven percent of delta airlines Georgia's largest
Dow Jones Fights To Pare Losses After Early Stock Market Sell-Off
"V. time for David Johnson with a wrap up on the day on Wall Street this is a close call today wasn't well it really turned out to be just a wonderful day yeah we we were down all day long it down pretty big time Valdosta Georgia but at about three hundred points transportation average was getting clocked the nasdaq the S. and P. five hundred the Russell all down it all pretty much for the same reason we we lost that stadium on Friday is worries about a trade war with the Chinese she had hit the European markets they were closed on Friday but they caught up France was down for a quarter percent Germany down three and a half percent Hong Kong was down four percent at all pretty much for that well then we got a little more clarification on the one hand maybe it's not exactly the same kind of terror thing but baby baby an effort to get companies to disrupt their supply chains of breaking back here give companies of incentives or is something did you have something to get to be liberal less reliant on China then the treasury came out said by the way we're gonna have to borrow three trillion dollars this quarter to pay for all the body that we've been shelling out of the you know PPP program but also to compensate for the income tax or not collected on April the fifteenth well guess who the biggest buyer of U. S. status chide up so probably we're going to take it easy on China for right now three trillion dollars by the way I know that sounds like a lot of money well it is the old record was in two thousand eight with five hundred thirty billion in one quarter at three trillion represents twice what we had to borrow all of two thousand nineteen so the industrial average didn't close down three hundred point two closed up twenty six points and the nasdaq was the first to turn they bought all the Fang stocks back and the nasdaq was up one hundred five points the S. P. average was up a does of the Russell was up a couple of white the only other one the transportation average was down to percent that's because we found out the over the weekend that Warren Buffett they respected investor Berkshire Hathaway had planted all all the airline stocks that he owed so they were all down about ten percent right out of the chute at the close American was down eight percent south was down five and a half percent so they made back some of their losses to old one other thing well technically we were down there were a hundred and thirty more stocks down that up but all the averages were higher and we can celebrate that the Dow industrial average sure squeaked out a gain of twenty
Warren Buffett's Berkshire Hathaway loses $50 billion in first quarter
"Airline stocks are all lower after Warren Buffett said he was done Buffett's Berkshire Hathaway has sold its entire stake of the four largest airlines a steak is biggest ten percent Berkshire Hathaway itself posted a fifty billion dollar loss in the first
U.S. airline shares tumble as Buffett sell-off adds to worries
"Airline stocks are taking a hit today in the wake of Warren Buffett disclosing over the weekend that his holding company Berkshire Hathaway has sold all of its airline stakes in light of the corona virus pandemic also weighing on the carrier's word that Barclays has downgraded its ratings on American Airlines and delta shares of Americans are American heather are tumbling nearly ten percent both delta and United are down more than eight
U.S. airline shares tumble as Buffett sell-off adds to worries
"No airline stocks are certainly feeling the pain of this morning afterward that Warren Buffett has sold his stake in the four biggest U. S. carriers the Berkshire Hathaway chairman says the airline business has fundamentally changed since he bought in four years ago shares of delta of southwest American and United are down as much as ten percent in early
Berkshire sells entire stakes in U.S. airlines: Buffett
"Warren Buffett is reversing course on his airlines that again Bloomberg's Denise Pellegrini has more Buffett says Berkshire Hathaway completely exited stakes in the four major U. S. airlines the sale of shares of delta southwest American and United made up most of Berkshire's six and a half billion dollars in equity sales in April during his live stream annual meeting yesterday Buffett said the business had fundamentally changed following the economic fallout from the corona virus pandemic but that has had an on again off again relationship with airline stocks over the years but again for now he is
Warren Buffett's Berkshire Hathaway reports nearly $50 billion loss
"Warren Buffett's company reported a nearly fifty billion dollar loss on Saturday because of a huge drop in the paper value of its investments AP correspondent Shelley Adler reports even the very successful Warren Buffett is not immune to the financial woes that come with the corona virus Berkshire Hathaway says it lost nearly fifty billion dollars or over thirty thousand dollars per class A. share during the first quarter normally some forty thousand shareholders will be heading to Berkshire's annual meeting at this time but buff it plans to lead in the breezy aided online a version of it Berkshire is sitting on a pile of more than one hundred and thirty seven billion dollars in cash because Buffett has struggled to find major acquisitions for the company
"berkshire hathaway" Discussed on Venture Stories
"Made me look very sophisticated and sizeable And in reality it was just me and my underwear flipping my parents basement. I was good at talking and done so much business. Throughout my teen years that I was actually able to convince people to pay me a reasonable amount and give me a chance and so very quickly. In the first couple of months ago I started making twenty thirty forty thousand dollars a month and I'm going will. This is amazing. You know I can do whatever I want. I get to work on all these amazing problems with really interesting startups And you know I'm getting paid. Us dollars living in Canada. And so I had pretty high profit margins and I just kept doing that. I never moved to Silicon Valley. I kept getting more and more clients just through word of MOUTH BECAUSE AGAIN. No one was doing what we were doing. And you know we were pretty good at it and I started hiring first couple people. And that's how mental. I've got started and so what ended up happening was Was Living in Canada. I slide on Silicon Valley I would do a whole bunch of meetings and I just never mentioned. I was in Canada. I wouldn't hide it if someone asked me. But people just assume based in San Francisco and so and there was kind of a market price discharge so we charge the market price. So I'd fly down Silicon Valley. I do all the client relationships. Close all the deals. Fly back up to Victoria. Started building a team here and in Canada in Victoria. Especially you know we could pay exceptional high market salaries but still make a good profit margin so agencies typically are actually not very good businesses. They usually have like five percent margins we could operate with much higher margins and so. I had a good problem Which was we were profitable in. We're sitting cash. And I had no idea what to do with it. And around that time I started being about base camp and falling Jason Freedom David Hanson and I looked at these the SAS business that they were building and I was so jealous my business I had to get on planes. That had closed deals. There was always You know you always put the train down the track down in front of the train and win your next project with their business. They could build soffer once and they could sell it to people passively on a self serve model and make money while they slept on a recurring basis and so that appealed to me and so I started building my first SASS product. Which was called ballpark. And it was basically suffered a help me. Run my agency so metal. We're constantly sending estimates doing time tracking so logical thing was. Hey why don't we built some south for to help us with that? And I'm sure there's some other agencies want the same thing so we launched it and it was. It was Okay Success. We made you know a reasonable amount of money for what it was and how much it costs us But I started realizing you know. Some of the challenges of SAST are Indian competing with venture. Businesses I ended up. Starting another SASS. Company called slow Which was very early. Project management kind of astonishing editor which we still own today And then I also started a business called Pixel Union where we partnered with shop affi- back when they were about ten people to help them power to bisky helped power their themes marketplace. So we brought great designed to the shop five platform And built a whole bunch of games for the platform and that was kind of an accidental business. We kind of thought that was something that We would do as a favor to the team shop like you really liked them. And maybe we make a little bit of money. But it ended up turning into a very sizable business. And so we're that left me was I was running. An Agency is writing to Saas software companies as running a rapidly growing digital goods and themes business And I had a bunch of other business ideas which I there are too stupid dimension. So winning all these different companies You know I had like fifty employees or something by this point in kept doing that until the twenty twelve and in two thousand twelve. I just hit it complete wall. I was running too many companies once. I didn't really understand how to higher executives All the companies were jumbled together and I really was just kind of unhappy overwhelmed and so I was pouring her heart out to a friend of mine that he said Nude One. You just saw one of these companies that will take the pressure off. That'll put money in your genes. You can kind of figure out what you WANNA do next. You can start investing and so I did that. I ended up selling Hicksville Union to family office and suddenly I went from you. Know I'd always had cash flow but I suddenly had money on the balance sheet had cash a pile of ads to do something less and I realized that it wasn't sustainable. To just keep growing more and more starting warm or businesses I realized starting businesses with very very difficult and you know I really needed to just focus on the existing companies that we already had and so I started looking at stocks real estate conventional investments and those things. Were always very foreign to me. But I always heard the name. Warren Buffett and. I didn't really know. Think of him. And when they picked up a book about him and started reading. And when I read about this guy who has seventy seventy plus businesses four hundred thousand employees but spends all his time reading talking interesting people buying new companies and really doing whatever the hell he wants. All Day he famously brags about Having nothing on his calendar I just didn't understand that it was possible to have so many different businesses and have some be doing so many things without actually running them all and that sounded pretty good to me and so went deeper and deeper and continue to read about his company. Berkshire hathaway in the history of that. And I went you know. This doesn't seem like rocket science. I think we could actually do this. And we had over the years spoken to private equity firms. And you know we'd gotten stab you know in shut? People have been interested in buying the businesses and over and over and over again. They just made it way too hard to do this. Kind of miserable three to six months trudge of you know really really deep. Diligence you know auto tons and tons of in-person meetings in generally just a lot of wasted time and energy and renegotiation and so I started thinking about what would the founder focused version of this. Who WOULD I have wanted to sell to if I sold my business and so At that time You know my business partner. Chris in our formalized Are Holding Company tiny and we started buying businesses instead of starting them and so We hired CEO's to run all over existing businesses which had a few speed bumps but for the most part Went really well and we started buying these wonderful Internet businesses. That were found to run and we realized we just had this great advantage because we're founders ourselves and we're operators and we know the problems it founders have and what they do on a here and don't want to hear and you know ultimately people will realize that people want a great home. They don't just want the maximum amount of money on the best terms that they actually also care about their employees. While being longevity of the company the company will exist in five or ten years that the brand would be tarnished and really that their life's work will be protected and so You know very quickly. We're able to kind of establish this brand and start working with You know the founders of dribble and all sorts of other incredible businesses to figure out you know a long-term home for their businesses. And so we've been doing that for about seven years We're up to twenty five. I twenty five businesses twenty to twenty five something like that and And then on the side just as a result of working with a lot of interesting You know venture. Investors have equity investors entrepreneurs. We've also just passively made a bunch of venture investments and so he made about eighty venture investments. To be honest. A lot of that was more just to support people on our network and it was just kind of a happy happy accident. Tests putting down roulette chips on people like to support them But you know over time. That's also become a sizeable portfolio and so at the end of the day You know fifteen years later. I've kind of stumbled my way from Freelancer.
"berkshire hathaway" Discussed on We Study Billionaires - The Investors Podcast
"For having me guys all right guys so this show. We play Chris from the audience. And this question's very timely. It's from Nathan and Christian is about berkshire-hathaway high presidents take. My question is about Berkshire Hathaway in stock. It owns in his portfolio. Berkshire already owns a specific stock in its portfolio. How do you think about considering a by more than individually taking into account the fact that you already have some exposure to the stock through charts for Photo Nathan thing? That's a great question. I don't think that there are any issues. But you getting a bit more exposure to any of the stocks in buffets portfolio. Because when you do the math you have very little exposure to almost all stocks in his portfolio. Keep in mind. The Buffett's stock portfolio is less than half of the value of books. How the win the first place? They have a lot of operating companies to none even apple. You have two months exposure to now is the biggest position in Berkshire hathaway portfolio which is more than ten percent of the market cap off Berkshire hathaway in the first place and is almost a third of the entire public trade portfolio. But even so consider if you have ten percent Berkshire and then ten percent of that are made up of apple she s you still only have one percent exposure in your portfolio to apple. Now Bill is a little more. It might be closer to one point. Five one point seven in this example if you have ten percent in Berkshire hathaway but any case. It is very little. So even for buffets portfolio that is very top heavy and just an example if you look away from the top ten holdings the eleventh biggest holding is just a bit more than one percent above its entire public trade portfolio. So it's really not significant. It's really my way of saying that you shouldn't think of Buffett's stock picks at all whenever you consider your own portfolio unless you only hold berkshire-hathaway in your portfolio or very close to only hold on that one stock but where do think that. You should pay attention. Is THAT BUFFET. Like all the money. Managers with more than one hundred million dollars on the mennesman has to disclose with surprise the buy stocks. And that may give you good indication of with stocks that are currently undervalued. You can find those prices and those picks at guerrillas for free and we even have a resource Academy where can check out of its picks together with all the super invest us like spear Mona's pop rai and take a closer look at their portfolio. We'll make sure to linked both of those resources in the show notes and then four times a year. The stock picks become available. It's February fifteen may fifteen August fifteen and November fifteen. That doesn't mean that I'll do the same thing as they do but I do. Use Office picks and other supermassive specs ask inspiration and perhaps put a few on them on mental. What's List for further investigation? So Nathan great question. But I really can't add much value beyond Stig's response because I pretty much agree with exactly what he said. So with that Nathan for asking such a great question we're going to give you free access to our intrinsic value course for anyone wanting the checkout the course go to t I P intrinsic value dot com that's T- IP INTRINSIC VALUE DOT com. The course also comes with access to our T. I. P. Finance tool which helps you find and filter. Undervalued stock picks if anyone else wants to get a question played on the show go to ask the investors DOT com. And you can record your question there. If it gets played on the show you get a bunch of free invaluable stuff. All right guys knows all the press down. I had for this week's episode of the PODCAST. We see till again next week. Thank you for listening to ti to access our show notes causes or forums go to the investors. Podcast don't come. This show is for entertainment purposes only before making any decisions. Consult a professional. This show is copyrighted by the investors. Podcast NETWORK. Written permission must be granted before syndication forecasting..
"berkshire hathaway" Discussed on We Study Billionaires - The Investors Podcast
"High integrity decentralized to the point of abdication as Munger said capital Allocation Stock Selection Insurance underwriting king abandoned opportunities all these things are in the ethos of the company. I personally believe that there will generally be okay. It's hard to imagine that there isn't some impact so if I kind of go through each of the businesses like the insurance operations I think those don't change a ton thick. They've got plenty of brainpower with G to still manage that part I know. Buffet helps jeep but deal flow. I think absolutely has to be impacted. How many business founders sell their business for less than they could probably get somewhere else to sell to buffet specifically that I think is a very real advantage that he's built as a way of cashing in on his reputational capital that he's built over the last fifty years of doing business the right way. He deserves to pay less than market because he has done such a good job with his reputation. I also think the performance of any CEOS in the subsidiaries of all these different companies. It could go down. I mean when you are having to send a letter to Warren Buffett about your operations for that year and report to local Warren. Like how you did and you WANNA make him proud. He's not around. It could slip a little bit. I mean I think that's just sort of natural human nature. I think the portfolio management side of things will be just fine with Ted and todd. I think both those guys are really sharp but target imagine it. There isn't less remote host worn and Charlie just mostly probably because of the deal flow aspects. They have to get in line and pay. Whatever else is paying for acquisitions? You're just not going to get the same kind of deals and therefore the same kind of returns on the businesses that you're buying because you're probably GONNA have to pay a little bit higher price for everything so on net. It won't be as good but the ethos still makes it one of the better companies in the world as far as how clean they are and how they do business. Suject rule simply. What's the biggest threat to Berkshire Hathaway or opinion? I would probably say complacency and that can come in different ways. I think that this management team. That's been around since nineteen sixty five deserves the benefit of the doubt on all things they've earned it however is a shareholder you can get complacent about when things start slipping a little bit for instance picking the book value out of the report. It's a little bit of changing the goalposts somewhat. I mean the timing of when he's done it and there've been a few other changes. I won't go into them because they're they're down in the weeds for most investors. But if you want to read a deep dive on that I would suggest checking out semper. Augusta's letter I don't know if you've ever read that one. But Chris Bloom Strand I think is one of the best analysts on the planet and he does a call it. A fifty page write up of Berkshire every year. He's a true true expert at this company. But anyway I think he's highlighted some of the places where they will change a little bit of things in reporting or move parts of the business and it'll be a little bit less clear how that business did or what the returns on equity were for that segment of the business mostly in the name of trying to make the numbers easier for the average person to understand but for the very very deep dive analyst. It clouds some of what we used to be able to know about the company so those little things can slip here and there that the disclosures part of things because the management has earned such a reputation. You can get complacent about just assuming that they're always doing the right thing all the time and that can get you into a dangerous place. Let's take a quick break and hear from today sponsor brought to you by capital one. You know how it feels when you've saved enough for that long awaited home edition now. Imagine saving enough for an addition on that addition. That's the feeling with capital one. Where new savings account earns five times? The national average capital one is helping you earn more towards your savings goals. This is banking reimagined. What's in your Wallet Capital One? Na member FDIC USPS shipping rich are increasing so now is the time to save the central online from Pitney bowes starting at just four ninety nine a month with central online from Pitney Bowes is just clicking send you save up to four percent off. Usps or two male and for being the investment podcast listener. You receive a free thirty day trial to get started and free ten pound scale to ensure that you never overpay you can now print shipping labels and stamps right from your computer schedule package. Pickups Amtrak shipments from departure arrival and just for four ninety nine a month you can also calculate exact posted online and perhaps most importantly avoid trips to the post office go to PB DOT COM slash. T I P to get this special offer for a free thirty day. Trial plus a free ten pound scale to get started that's PP DOT COM slash T. I P experience. A savings initiatives cost a free trial of central online from Pitney. Bowes all right back to the show interesting speaking of those analysts and those people who are really into it. I have a very nerdy. Gigi questions for you here now. Jake how do you value the earnings retained by burks? Non Controlling investments in public companies game that only dividends are reflected in operating income. And perhaps you can just explain the framework behind. Why is that even a topic worth discussing sure? So if you imagine these companies that are owned by Berkshire inside of Berkshire but they're publicly traded companies and they're doing their own business they're generating their own cash flows and sometimes they're paying dividends to Berkshire and so last year there. Ten largest holdings in their securities portfolio delivered three point eight billion dollars in dividends. They got sent to Omaha. Checks that showed up in the Berkshire checking account while those companies had another eight point. Three billion dollars in retained earnings last year. So that's money that's created inside of the companies that they own but that Berkshire doesn't really have control over it. It's still within the company and when I say that eight point three billion dollars that's figured out by taking the percentage that Berkshire owns of the company and then applying that percentage to what the total amount was so just to make the math easier. Like let's say that. Let's say ten percent of Apple. An apple earned one hundred billion. Will inside of that you could imagine that Berkshire Kinda earn ten billion through their ownership of Apple. I think you can't assign a dollar for dollar valuation to those earnings is that it could very likely be that company. That is making the decisions on that dollar. Where does it go to could be making bad cap allocation decisions and even making that dollar worth zero like we've seen that before with companies that make stupid choices with the money that's generated? It does not accrue as shareholder value. It ends up disappearing so the first kind of metric that we have to look at is. What do they do with the money? And I think buffets obviously trying to choose companies that have the ability to invest in projects that will generate further returns on capital. And keep this engine running and even growing and so you start to see why he's such a big fan of buybacks is because that instead of that dollar inside of that portfolio company going off into maybe a project that is destroying value. Maybe it gets bought back now. And His share of the company now increases. Obviously the price paid matters for that as well. So if they're overpaying for their buybacks than they are destroying value for the remaining shareholders including Berkshire and then the other part that. I think you should think about there. Is that money stays within apple or wells Fargo or wherever it is that Berkshire owns berkshires. Not Having to pay taxes on it at the moment so there's already call it a fifteen to twenty percent. Maybe even twenty one savings by not sending that money to Berkshire to them control. So there's no easy answer there because it's very fluid on like what do they end up doing with the money that determines the future value of what that retained earning was worth but those are some of the parameters that I think about I look at the retained earnings inside of the portfolio companies. You know it's fascinating. This is a topic that Buffett has been talking about a lot lately. I think this is a great accounting discussion. And it's something that many young investors don't understand. I Know Stig and I have talked about look through earnings for the non operational subsidiaries numerous times on the show and it's really neat to see him bringing up more more and. I think it's important because there's a lot of value there. That's not immediately evident if you're simply looking at the income statement the consolidated income statement for Berkshire Hathaway Okay so with all of that said talk to us about your intrinsic value for Berkshire hathaway.
"berkshire hathaway" Discussed on We Study Billionaires - The Investors Podcast
"The Florida's you mentioned before stands one hundred twenty nine billion dollars. How do you see Burke Chef perform when it comes to macchia and profitability in the next day Kate specifically for the Insurance Division? I do recognize that. They are very disciplined in their underwriting. And the data point that I use to back that up as that. They've underwritten profitably in sixteen of the last seventeen years. That's a pretty good track record. If you know the insurance industry I found it very interesting that it seems like Geico's been the little slow to adopt telematics which things like snapshot that progressive has which is basically trying to figure out like. How much risk do you actually take while you're driving? Are you speeding or are you accelerating or slamming on your brakes all the time which is surprising to me given? Geico's history Of targeting originally government employees. That's the GE part of GE ICO so they were looking for operations that had lower risk profiles and one way of ascertaining that would be to keep track of how people actually drive and then base their insurance rates on this telematics idea but in the plus side of the category for them is that they've always had such a bulletproof balance sheet that they've been able to underwrite that no one else would really be able to take on. They've always operated at like one less deal than they could've been doing all along or one less big insurance underwriting thing and other companies even insurance industry I've seen their operating much closer to the full deals that they could do or even sometimes taking on leverage to do one more deal than they could've done and then they're always kind of digesting that deal so what it allows Berkshire to do is to use a lot of that float and invested into equities which earned quite a bit more than what most people were earning in their floats all the other insurance companies because they've stayed so far away from the edge of being bold deal maximize irs and full underwriting capabilities so they're conservative. Nature in a paradoxical way has allowed them to actually take more risk with their float. Better security portfolio. I've noticed the thing too about underwriting with prophet sixteen seventeen years and buffet has been very upfront by saying that he does not expect that to continue happening and you can put a lot of different things into not comment. Obviously wanted us that. Buffet always likes to play. Whatever he's saying. I mean giving the low interest red level. You would expect for this to continue at least for quite some time. The reason why I'm saying that as given the low interest rate you supposed to underwrite with the Prophet because the risk return you can get elsewhere. A lot of that goes into equity due to different regulations on all that can be put into equities. There was this matching principle so depending on the length of the claim You have to buy even long bonds which might seem a bit weird. These states interest rate. But that's just the way it is. It's not something we can do too much about. I'm sure buffet would if he could. But unfortunately that's not the case but the other thing that I found really interesting about how buffet has been addressing. The insurance business is also that concern shareholder Hussein with global warming with everything. That's been going on. What can we expect in terms of claims to Berkshire and he says you know most of these things by definition of renewed so like he can set new premiums and what he's saying is as much as it might seem bad one year. A lot of things happening from an insurance perspective. He's actually a good thing. Because the premiums would just go up and the mole uncertainty though are the better ensure because so many companies have to have insurance now Jig. Let's talk about the growing cast pile. It has been heavily debated for years among the shareholders off burks Halloway and today cast and chiltern investments are one hundred twenty eight billion dollars whenever I say. Today don't mean today much nine after the stock market has been tumbling for weeks. Now I mean that's the latest filing that have cast pile similar to what it was in Q. Three Twenty nineteen so as far as we know it's not growing but it stagnated at very high level. Well you know. I woke up this morning. And the market was down five percent plus and we had circuit breakers going so on days like today. You kind of have to love that cash pile right. I mean it's the optionality on it is growing with every tick down. I love the anti fragility of that cash pile when you combine that with Warren Buffett's cap allocation skills. He's proven that he can put up. Great numbers especially when the opportunities come along. I should say the only thing that I don't like about it is that it makes me a little bit sad that it's possible that he could be waiting for this one last chance to do some big deals that. Sorta cement his legacy. I've seen this before where grandparents are holding on to see that oldest kid graduate from college or something and then once it happens then they kind of let go a little bit and it'd be sad to think that longer that we can delay a crash and him putting money to work. Maybe the more time we get with him. I would be a little bit sad if he was able to bag that last elephant and now he's like I've done everything I need to do in this lifetime and I'm ready to move on but people typically do is look at decisive his portfolio and the thing here the year end it was around two hundred and forty odd billion dollars and then the look at the cast position and say wow he is a lot in cash that's not how buffet looks at it. He said actually just two weeks ago. I'm approximately twin percent cash right now and I'm that because I'm including the three hundred plus billion dollars in upbringing businesses plus we have multiple secure. It is and then we have cash if you do. The numbers is a different way of looking at it. He's looking had eight. Percent Equity is twenty percent cash. Who knows perhaps with everything that's been happening? He's not so much in passing anymore and the real ties into my next Christian. Warren Buffett kicked his stock buyback procam into high gear. Here lately spending two point two billion dollars on share purchase in the last three months of two thousand nineteen. And that's the most ever. He's done in a single quarter now. This is not significant. Pets the my cup of more than five hundred billion dollars and a lot of investors. See this estimate tunes. It's loading up on shares. It should also be noted here that the trading volume berkshire-hathaway is exceptionally low. So in that sense of buybacks yeahs. Buffet is restricted differently than other. Ceo's if he wants to repurchase a high numbers yes because he's so easily moves surprise he's been talking about how he look within the at the Osa who could buy back three four five percent without moving price but because of the volume of Berkshire hathaway she asked that is just Solo. He's been talking about or at least he's been hinting. He doesn't talk too much about it but he's been hinting of. Just one percent can actually move the needle in terms of influencing the price. But as much as we'll talk about later. What do you read into the stock buyback here? Siphon the obvious fact that buffet at times have found the shares modestly undervalued as. He puts his in his letter a lot of people. I talked to like to think that this buyback program puts a floor under the Stock. And he's talked before about in the one point two to one point three times book value ranges aware. Berkshire will kind of quote unquote defend the Stock Price. But not sure if I think that that's true or not. I think Mr Market can do a lot of crazy. Things in that can still apply to Berkshire. They'd spent five billion dollars over the last year to buy back one percent of the company. Roughly so that's in like two hundred dollars. A share for the B shares on the other side is selling. That's something that I always like to ask myself. And when it comes to Berkshire shares most of them are locked up in families who own the company. It's not the typical company that's owned by institutions or even like index funds. It's very under represented in indexes. Because of that so. I don't think that you may be get as much panic. Selling either there so maybe it's unlikely to go on crazy sale as much as other companies. I think I personally think that he would be better off looking for that next deal than buying out partners within. Berkshire itself and I don't think that there's a lot of willing sellers that will part with their shares at the prices. That are really mouth watering from a buyback perspective. It's just not the dynamics that I see in the company ownership structure. I think you bring up a good point because if you look at the ownership manual what he wants to do the least is to repurchase yash he wants to buy wonderful businesses and even before that he wants to build a widen the mortar round the assistant businesses. You wants to buy gas and other companies before he wants to buy out his own partners as he puts it is interesting especially at these prices ride now at the time of courting bricks hell awaits trading at one hundred ninety five and it would be interesting to see how much he loads up on his own. Yes in Q. Four if you look at the numbers the average spying price just for that quarter was two hundred fifteen so it might be well he would be buying back then but keep in mind that s the price of Berkshire hathaway's now trading much more appealing prices. So as more or less all the stocks on the planet you bring up a good point good. Cap Allocation is thinking of your shareholders as your business partners. And if you're buying back from them at breezy low prices you're benefiting one group of your shareholders at the expense of another and you're neglecting your duty as a captain of industry and as an allocated capital and a steward of capitalism by taking advantage of one party over another. I think you almost have a moral duty to try to keep your stock price. Trading close to the intrinsic value so that If some partner of Yours Aka shareholder needs liquidity for something. Perhaps they have to pay for a surgery. Or there's a charitable thing that there's really important to them that they need the liquidity. You should do what you can to help them. Get the liquidity that they need to run their lives. I think that there's a lot of good that can be done. The no one really talks about in capitalism by a CEO who keeps one shareholder group from taking advantage of the other too much. So that's really interesting. So buffet has mentioned in his letter to shareholders that ninety eight percent of his shareholders going into the year are the same shareholders. Going out at the end of the year and I think it's kind of an interesting metric because it shows you how strong his share by can be if he decided to use his significant cash position to conduct the buybacks. So something else I want to ask you about. Jake is your opinions on Warren. And Charlie's age There are many people that will argue that they're the true competitive advantage or at least significant portion of of the Companies Competitive Advantage. But as we all know Warren is going to be ninety. Charlie's ninety five ninety six years old. So what are your thoughts about the company with them eventually? Going TO BE REPLACED. Yeah I mean you really kind of have to get comfortable with answering. The question is Berkshire a man or is Berkshire a culture or is Berkshire and ethos or even maybe like an operating system for a business super.
"berkshire hathaway" Discussed on The Dan Le Batard Show with Stugotz
"Warren buffet is offering employee does something like this every year. He is offering employees of Berkshire Hathaway we've had worn on the show a couple of times. He's fantastic. I'll try to get them next week. He's offering them one million dollars a year for life if they can pick these Sweet Sixteen correctly. And so got me thinking, we should all try to get between now and Wednesday just some quick part time work at I'd lecture Hathaway's on this. Yes. That is. Well, we should all apply. Sweet sixteen. Yeah. Just this week. Six can only be one entry because I can turn out about fifty of those bad boys and get the Sweet Sixteen right? I'm reading straight off of Twitter from Forbes Warren buffet is offering his nearly four hundred thousand employees at Berkshire Hathaway companies a chance to win one million dollars a year for life. The catch you need to pick the correct Sweet Sixteen in the men's NCW basketball tournament Bill. So if I were to do this, I'm employee and I win right? Do I need to stay in -ployed by them. Or like, I just got a million dollars. I can retire. I am not certain. I haven't I'm just reading the headline having clicked on the article. One million life. I I would assume that you have an option to retire there. Right. I would assume that if you get the Sweet Sixteen right? You have the option to retire? I bet he could make your life, and like I can make you disappear. Someone actually did it. This is probably reckless but feel. Warren Buffett saying, I mean, if you wanted somebody disappear Warren Buffett can make someone disappeared we Warren Buffett who still lives in the same house who still eats like peanut butter and jelly sandwiches. Why do you have them eliminating people? I'm just saying. I mean, let's say yes, he can make you disappear too. And I would assume he's rooting for someone like in the sixties to win right sixty or seventy year old Martin for a win Bill. No. But I know, but if someone wins he doesn't want the up and comer twenty two year old just out of college. So when you think right? Can you put it on the poll can Warren Buffett make you disappear and also is Warren Buffett rooting for anyone to win both of those at lebatardshow on Twitter. You guys have I gave you five words here from Izzy family Cleveland Barkley Knicks marked for.
"berkshire hathaway" Discussed on Stansberry Investor Hour
"And taxes and capital requirements to keep the business running and growing. So I would say that it is possible to make an investment in Berkshire Hathaway, can you speculate, and Berkshire Hathaway will sure you can you can place a bet on the stock going up over some period of time. You can say I think it's gonna go up. Ten percent, boom. I'm going to buy it. And if it doesn't go up ten percent during that time, maybe you're flat or maybe you made less than ten percent. Or maybe you lost ten percent or something. Okay. Let's move on to a couple more examples would about. How about like Amazon the Bank stocks that Facebook Amazon, Apple Google. Net. Flicks is one of the one of the FANG stocks. But I believe that one out Facebook Amazon Apple Google is it possible to invest. Well, you know from my previous example of Berkshire Hathaway. Yeah. It sure is right because they make they make cash profits. So you can figure out at least you can you can do some basic work to figure out if you think this cash flow stream is durable. And if you think the business model is going to be here in five or ten years or more. And if you think they're going to maintain their margins and all these other decisions you have to make it is possible to invest. Now with Amazon tends to trade at like forty or fifty times all the prophets ever made in its entire history. So that's another question is it possible for an investment in Amazon to take place at this valuation for me, it's not for you. It might be. It's subjective. Right. More examples how about craft Hines right, ticker symbol, cage the Kraft Heinz. Yeah. So, you know, craft cheeses, and dings and Heinz ketchup, and all that is it possible to make an investment in this. Well, Warren Buffett owns twenty seven percent of the company. So goodness. Say yes. But for me, it's extremely difficult to think about investing in this. Because and we'll cover this in what's new today in the what's new segment a little later on. But that industry is under assault technology has made things a lot different than we've talked about this before just one basic thing with consumer package goods companies. And I think the same thing applies to like Abyan, Bev and other companies. Advertising is not scarce the way it used to be it used to be you could reach a huge audience because everybody was plugged into their TV every night things are different. Now. People don't watch us. You know, they they don't necessarily watch TV on TV. They can get all kinds of stuff online. They can watch YouTube for goodness sake. So the margins in that that industry are gonna come down. Because you can't you can't have that intangible brand power the way you used to it's different. And I would say it's possible to invest in cage. See it's had regular cash lows over time. But there's something in that industry that makes it really super difficult. And I'm not even sure that I could say that I it was possible for me to make a real true investment in that not at current valuations. I think it has to come down a long way because of the destruction happening in consumer packaged goods. Okay. What about publicly traded banks? They're not investable for me. I'll tell you why you can speculate on all this stuff. Right. But but publicly traded banks most of them the overwhelming majority of them are not investable because the loans are made their an underwritten in a black box. They don't really tell me enough about what they're doing. They tell me what they've done. They tell you, you know, the percentage of loans that aren't performing and all of that things. But that's all historical. I need to understand what type of loans are being made. Now, I suppose if you really wanted to you could kind of tell their loan officers around and find out who they're lending money to and you know, you can get a general idea at some of them will tell you a general idea. Well, some of them are, you know, loans to you know, mortgage loans for homes their business loan. Loans auto loans, whatever they are they'll give you some information..
"berkshire hathaway" Discussed on 760 KFMB Radio
"Yeah and that's part of that me glad you bring that up because there's five hundred has a lot of high flyers in it like net flicks and for some reason the video these these high fires at a way overpriced which warren buffett would never by he's more of a long term investor and the berkshire hathaway bshares is his portfolio one tenth the size of the berkshire hathaway asia's but a little apple down i guess not a little you actually quite a bit of it i mean he jumped in and bought a lot of apple i think it's about i wanna say apple so big i think it's still about five percent of company but he bought gosh just bob was one hundred hundred billion he bought her seventy five billion plus he had some already so he's he's taking a big position into the numbers here on berkshire hathaway beat to see if it makes sense to get into this and again i love his management style but sometimes even that can become overprice as far as what you're paying for the stock of berkshire hathaway racial very expensive forty two point six versus seventeen prices sales two point one versus one point three price to book value two point one one point seven and price casual twentythree versus eleven so very expensive what you're paying for this stock here we do see sales are up point one percent year over year the initially up seven point seven earnings per share they fell by forty eight point eight the initial down seven point three some kinda surprising that number the balance sheet we see told that area of twenty eight point five versus thirty two that's okay return on equity is three point six eight point seven net profit margin is five versus seven point six so that's good we see will turn over i'm sorry that's not good we see we'll try seventeen point five or two point nine and inventory turnover levin point eight versus not material i excited about these and i've never bought a again my like warren buffett's management style is different what he holds.
"berkshire hathaway" Discussed on The Jordan Harbinger Show
"Zero exactly it went i actually argue maybe it would have helped it because it's a pretty good story to tell at a cocktail party i'm always thinking about cocktail party story but yeah so like it certainly not taking it down like it's not like a year a year goes by and you're like i had a miserable year because i had a flat tire one day it doesn't make any difference but yet in the moment it feels like it's everything so the question is how can you kind of zoom out so that you're looking at things more like that that the long term trend of berkshire hathaway as opposed to what might be happening at eleven thirty on tuesday and what i argue is to do one of two things basically just when you're feeling that emotion and we can all feel that emotion right because it's physiologically very powerful you know your heart is racing your cheeks or flushing you can feel yourself getting really upset to to take a moment to really commit when you feel those feelings to take a moment to ask yourself one of two questions in whichever one feels the best to you what the first is well if this had happened a year ago how do i think i would feel about it today or you can say in a year how do i think i'll actually feel about this latte tire for me personally it works better to say well if it happened a year ago how do i think i would have felt but that's just for me personally i think for other people it just depends some people find it easier to say well do i think this will matter in a year and i think that once you do that allows you to kind of step out of that emotional brain right kind of turns your limbic system off which is the emotional part of your brain it allows it to shut down and.
"berkshire hathaway" Discussed on KMOX News Radio 1120
"You just about everything you wanna know personal and professional about warren buffett but in any case he's built himself up to be the most successful investor of all time chairman of a company called berkshire hathaway he and his partner charlie munger are the most widely read and quoted invest news that you'll ever see or hear and for good reason they come up with some really good quotes and so this is the week warren buffett through despite being this one of the smartest guys ever and being so widely quoted and so widely studied and in some cases so misunderstood although he says he has a very simple philosophy has never written a book he's being interviewed he's you know he's very gracious with his time in his wisdom he's he's gone into business schools i know he's been into mizzou at least once and taught and our there with the students spent some time ate a lunch with them and so on but he's a ease off he's a above goldmine of information because this guy's done it he knows what works and what doesn't work in a year in february he writes this letter in sends it out two views shareholders at berkshire hathaway nad is required reading for anybody who does what i do which is manage money professionally for individuals and for institutions and so on and on these letters have come out for years they're you know they're available to the public so before you do anything else if you wanna learn how to pick stocks you want to understand warren buffett as best you can in the best way to understand him is to read what he writes and he doesn't again doesn't write a lot but he um he is out with this year's annual report to shareholders which you can go online i think it's berkshire hathaway dot com.
"berkshire hathaway" Discussed on Bloomberg Radio New York
"Of trying luxury automakers are finally figuring out how to appeal to women by not trying too hard that's in our pursuit section but fast we tend to be meg business week editor in chief joe weber to hear about some of his favorite stories in the magazine and you'll let's start in the business section a story that really fascinated came at a couple of weeks ago but it's about a try sector of individuals wellknown individuals warren buffett jeff bezos and also jamie diamond talking about fixing the health steve trevor era biggest guys around and this the details are out this still remain kinda hazy how you know what's going to actually be the solution in healthcare how are they going to try and fix us and they're trying to find a ceos still who can spearhead this initiative between the three companies amazoncom berkshire hathaway and jp morgan so dan interesting and where we try to pick up the narrative is the reaction within that industry because the health care industry is like amazon's out the door this is a big deal now and that's where we picked up no what we were expecting from thouray into the house can we should meet the pontiff at the moment digest tackling this situation with individual companies scale but as you point out what does this mean ultimately fool the individual players hit is the pharmacy benefit manages the middlemen particularly carla and that is all of this is just like this massive cocktail of guess what is happening in healthcare why are you prices keep getting so much higher and consumers feel like they're getting the shortest strove all right and speculation is like there's an middlemen pharmacy benefit managers and that is where there seems to be a focus the this 'triumvirate could bring to bear yes 'cause the big tom i say it's not our problem we not miss pie thing the drawn by a lot of the money he gets creamed by the guys in the middle the insurance that benefit manages he point i feel like when it comes to check pricing it's all like oh my god.
"berkshire hathaway" Discussed on GeekWire - Geared Up
"Yeah i'm i'm trying and struggling to think of something one thing that springs to mind as lake trip planning at an i don't really see them getting into the expedia can of arena but then again if they did i wouldn't be surprised i would expect up yeah i can't think of anything that would be surprising i mean yes i think that they have an appetite for everything they're like they're ethos their brand is to try stuff even if it doesn't seem like it said all related to their core business so like by definition they can't really do anything that would shock you one thing that i think is really interesting about this announcement the healthcare venture is that they are going into a as a deep partnership with two other companies and that's not something we see amazon do very often some really curious what their strategy is there they like to be really independent a nimble i wonder why berkshire hathaway and jp morgan were attractive partners for them and why they decided to make this kind of a joint venture instead of one that they just go on often and canada conqueror by themselves while if they want to be an insurer than they need a certain number of people who are buying into it right so maybe it's just the the fact that these three huge companies have so many employees that that gives them a bigger base to experiment with this new model that's really true actual it's a good point and they have a a total of one point one million employees between the three companies across the world so not all of those around the us and this is just going to apply to to the us for now but it's true that there are a lot of employees jp morgan chase in berkshire hathaway also have a lot of cash at their disposal much like amazon to help can of fund this and as a curt mentioned earlier jp morgan chase is led by jimmy diamond berkshire hathaway's led by warren buffett two very important figures in the business world so sauso can elevates jeff basis to their can of echelon and shows them working together yeah i gotta say i mean i'm not nambisan unemploy obviously but i am with kurt on this and i feel usually you and i are the ones who are like i want amazon to touch of.
"berkshire hathaway" Discussed on Invested: The Rule #1 Podcast
"The second largest position is seventeen percent which is in berkshire hathaway ddot be and so berkshire bshares uh that's what alan meet him had also exactly third position is bank of america at thirteen percent uh and i'm pretty sure guy got into bank of america way back when buffet did at a buffet at an option at six bucks is that i mean that's always the question is when did this yet you click on these you can go on our website rule one in dozen dot com and you can click on any of these guys in upul come their portfolio than you can click on the stock at a tell you when they got it nice okay and then this is an interesting one for you i don't think we've ever talked about these kind of things but this is a general motors warrant uh dare now i mean i know what warrants are right i didn't know that you can publicly that they treat their ain't that not all of them but some of them are tradable whom then so guy got it general motors warrant oh was it from the bankruptcy was through the as part as bankruptcy they put out warrants the are meeting we're not bad trade yeah ramona reading about that it was a really good deal it was a really good deal was really smart to joe what a warrant as as a right to buy stock it's not actual stock and it's a right to buy at a certain price certain price at a certain amount of time these expire in two thousand nineteen.
"berkshire hathaway" Discussed on KTLK 1130 AM
"You want to have the potential to have the retirement you want full we have someone who can take his deeper into that that debt analysis especially when it comes to real estate and his name is great cooper greg works for berkshire hathaway services in indiana and greg is an expert in real estate investing greg it is great to have you here on the show with us one question that we get a lot from folks who are in or near retirement is they wanna know should they pay off their mortgage or should they continue to plough that money into the retirement investments depends and and here's what i want to quantify that is is being first of all we wanna make sure when you pay off your mortgage in some places there are property tax implications in terms of you the deductions you may have or what nazi you wanna make sure you understand those clearly in terms of paying off your mortgage this is just me i'm a fan of continuing to plough the money into your retirement account the house is going to go up and value if that's what it's going to do or go down whether you pay off the mortgage or not so if it's a good investment just in that sense leave it'd be let it go put the money in your retirement i'm always in favour of cash so let's talk about the flip side of that some people are just absolutely dialed in they absolutely want to get out of debt as quickly as possible they have all of these plans and you see them and what do you tell the people who just are absolutely set on trying to get out of debt yes it depends and yes you want to try to figure out where the best bang for your buck is going to be what advice what what suggestions do you have for those people who do want to erase the mortgage well i think that i'm probably going to air a little bit on the other side than perhaps the anybody here might.
"berkshire hathaway" Discussed on MAD MONEY W/ JIM CRAMER - Full Episode
"John in michigan john again my love the show longtime launcher now that peabody energy has converted all other dead end into stack i was wondering what your thoughts were on peabody energy and the coal industry could up to celebrate here i think the fossil fuel of setting up this very bad i think was going to go back to the low forty s maybe take out maybe take out 42 41 and you don't wanna be anything in energy until i tell you that it's all clear which is against of their baton club members let's go on florida police daniel hello jim kramer this is daniel from endear beach florida i want to thank you for writing two of my most favorite financial books get rich carefully inch they met for life great guy thank you thank you i have the position in berkshire hathaway be and i have been wanting to slowly and carefully as you adviser for the thing just keeps going up uh we've got just the minimal a tiny dipped today but it's still not enough to our if i bought more i'll be violating my basis can you give me in the by yes i want you to wait i think that the sell off has some to it i don't like where the fixes is i don't like action so to speak i know that a lot of people have gains let them sell it down to your level and i want to make that case for a lot of stocks here now i see things i like i don't i'm not a bear but let people sell berkshire hathaway and other stocks dance.
"berkshire hathaway" Discussed on Masters in Business
"He preferred i think to keep the stock and give the money so mossy investors were cashing out some of them took some brochures stock and not not a whole lot happened with berkshire for the next decade and uh i was unaware that he was turning it into his own mutual fund but in 1982 of us sitting around doing something or other with the hedge fund i that immonen princeton report partners and heard some news item about berkshire hathaway and warren buffett said focused on it and i realised right away what had happened in the intervening the fourteen fifteen years that buffeted turn this a sick textile company into his own private investment tool so had by it had i known that i had i been able to invest in berkshire hathaway and 1960 four to nineteen seventy i might have invested some were in the twelve fifty dollar range but but now but now the stock with nine hundred eighty two dollars so multi was ag it's already had a malt a huge multiple you don't want to buy it now i said yes i want to buy it now side ah began buying in an end how long did you hold onto berkshire hathaway added you still have to this day so i'm compelled to ask one hundred dollars invested in berkshire hathaway when you put that in in 82 young what would a hundred dollars be worth today wells easier for me to thinking hers of a thousand because that was okay soccer slightly less so it's worth roughly two hundred fifty thousand that's a pretty good retired you how does what does that average out compounded that mid20s something like that those zaddar two hundred fifty.