The 13-minute “60 Minutes” segment on Howard Buffett (Hint to CBS – don’t have more than one ad per online video, it is absolutely irritating):

60 Minutes “Overtime”: Growing up Buffett

60 Minutes: Why Howard?

Video: Breakout Blog’s 4-minute discussion of Howard Buffett.

From the “interesting but not to the point” series, Howard has some interesting things to say about plowing:

Berkshire’s isn’t the only board he’s in: count Coca-Cola Enterprises (the bottler) ConAgra and Archer Daniels Midland as very important companies he’s been in the boards of. He is an accomplished philanthropist as well.

The reading lists come one from Seth Godin and another from the Financial Times. The FT named “Poor Economics” its 2011 Business Book of the Year, but other finalists also look pretty interesting. In this page you can see how the process works, excerpts from all finalists and the winners of past editions. One of the 2011 finalists, Daniel Yergin’s “The Quest”, was reviewed recently in the New York Times. Mr. Yergin is the famous author of “The Prize”, about the “history” of oil – reviewed by the NYT in 1990 – while “The Quest” is about its “future”.

Last but not least, an article that says something we’ve been saying for a while, although they only apply it to “western sovereign debt”: that one should question the “risk-free” status associated with it. In this asset class’ case, it has regulatory implications that could have a huge impact. In summary, it’s generally OK for banks to assume ‘zero’ risk for a western sovereign bond, so it’s collateral for huge leverage for riskier assets, loans, trades etc. – what happens when this ‘safe’ part of your balance sheet isn’t safe anymore? You can check out our articles on the subject below:

Life without a risk-free benchmark – July 22nd, 2011

Beware of safe havens – July 29th, 2011

Don’t panic – August 9th, 2011

The “risk-free” conundrum – September 7th, 2011

Is high volatility the new reality? – September 14th, 2011

Now for the meat of this post, a one-hour video (also embedded below) with Buffett and Ajit Jain, who emerged from the Dave Sokol affair as a very likely “candidate” for Buffett’s succession – and we say “candidate” because Mr. Jain has already said he didn’t really want the job… Also a great opportunity to reveal new Blogroll inductee ValueWalk.com!

Jacob Wolinsky et. al.’s excellent blog ValueWalk.com is a superb source for all things value investing, and we finally get to list it in our Blogroll.

The video itself was shot in India during Buffett’s recent visit. (1:01:30)

Here’s a series of charts by the New York Times showing how GE works its magic:

NYT charts on GE's tax "voodoo"

As the NYT said:

“(…) Buffett undoubtedly told Lubrizol that he would refuse to participate in an auction. And here is where you see Buffett’s cleverness at work. He puts his targets in a dilemma that really only has one answer:  take the price that looks very good or let Buffett walk away. Buffett’s real genius is a mix of these tactics and his ability to identify undervalued companies combined with the courage to act quickly on his analysis. That mix has been a recipe for big profits for Berkshire.”

The last paragraph, albeit unfair and simplistic, quite honestly still sounded like music to our ears.

“So this is how the Oracle works. He pays a fair price. He refuses to permit his bid to be shopped. He makes his bid very attractive to management, which discourages them from suggesting alternative transactions. He allows a reasonably fair post-signing opportunity for a topping bid—keeping a leg up against other bidders and, in this case, a fat $200 million breakup fee if he gets topped. And, if he is true to form, he gets a bargain.”

Second, Dealbook today highlighted an interesting story on Jeffrey Kaplan, who for 24 years was involved with M&A – including some of the largest deals such as HCA (the $33 bi LBO, not the recent IPO). The Deal Magazine interviews Mr. Kaplan and it’s an interesting inside view on M&A, private equity, even debt markets.

Bonus: one of our readers has sent us a very useful transcript of Buffett’s June 2010 testimony at a Congressional Hearing about the 2008 financial crisis. They sought Mr. Buffett’s opinions and recommendations about the crisis’ causes, amplification factors, the role of different agents and so on. We thank him for, once again, sending us great stuff. You can do it, too. We’ve embedded both the PDF and the video here.

The transcript PDF by Santangel’s Review:

Transcript of Warren Buffett Interview With FCIC

Warren Buffett’s testimony at the FCIC hearing on Credit Rating agencies (2 hours and 17 minutes). Get the rest of the hearings here.

Here’s the funny part about gold:

BECKY: Well, speaking of gold, though, we’re looking at gold prices and they were at another record high. They’re up another $3 today, $1,434 an ounce. And there have been some big fat hedge fund managers, like a Paulson or a David Einhorn, who have really buckled down on these bids. Why would you steer clear? And do you think what they’re doing is the wrong thing?

BUFFETT: Well, I just don’t know. I don’t know whether cotton’s going to go up.

BECKY: OK.

BUFFETT: I mean, we use a lot of cotton. I’ve watched it go from 80 cents to $1.90. You know, we use a lot of copper and I’ve watched it go from $2 to $4-plus, so I mean there’s all kinds of things in this world that are going to go up and down in price. You know, maybe hamburgers will tomorrow. And— but I— I’m— I don’t know how to judge that. I do know how to judge to some extent the earning power of some businesses. And the real test of whether you would like it as an investment is whether you would be happy if it never got quoted again, and just in terms of what the asset did for you. But that doesn’t— I will say this about gold, if you took all of the gold in the world it would roughly make a cube 67 feet on a side. So if you took all the gold in the world, we could have a cube that went down there 67 feet…

BECKY: Uh-huh.

BUFFETT: …67 feet high and that would be the whole thing. Now for that same cube of gold it would be worth at today’s market prices about $7 trillion. That’s probably about a third of the value of all the stocks in the United States. So you could have a choice of owning a third of all the stocks in the United States or you could have a choice of owning that little block of gold, which can’t do anything but kind of shine there and make you feel like Midas or Croesus or something of the sort. Now, for $7 trillion, there are roughly a billion of farm— acres of farmland in the United States. They’re valued at about $2 1/2 trillion. It’s about half the continental United States, this farmland. You could have all the farmland in the United States, you could have about seven ExxonMobiles, and you could have $1 trillion of walking around money. And if you offered me the choice of looking at some 67-foot cube of gold and looking at it all day, you know, I mean touching it and fondling it occasionally, you know, and then saying, you know, `Do something for me,’ and it says, `I don’t do anything. I just stand here and look pretty.’ And the alternative to that was to have all the farmland of the country, everything, cotton, corn, soybeans, seven ExxonMobiles. Just think of that. Add $1 trillion of walking around money. I, you know, maybe call me crazy but I’ll take the farmland and the ExxonMobiles.

BECKY: All right, that makes sense. Carl, you’ve got a question, too?

CARL: I’m still trying to get the image of Warren fondling a giant block of gold out of my mind.

JOE: Yeah, and his fondling it occasionally was what stuck with me.

BUFFETT: Well, bring me a giant— bring me a giant block— bring me a giant block of gold and you’ll see me fondle like you’ve never seen before.

CNBC Warren Buffett Transcript, March 2, 2011

The 3:25 video starts after a 10-15s ad: