Buffett
TV show “60 Minutes” had a profile of Howard Buffett following Buffett’s appointment of him as his preferred choice for non-Executive Chairman after Buffett somehow relinquishes that role. As a guardian of Berkshire’s unique culture, he is as good as it gets. We collect a few links and videos about Howard Buffett.
Much noise has been generated by MidAmerican’s purchase of First Solar’s $2 billion Topaz solar energy project. Yes, MidAmerican is Berkshire’s utility/ energy subsidiary and this sizable acquisition has certainly been cleared by Warren Buffett. That does not mean that “Buffett is buying/ betting on solar” as a category. It is Berkshire taking advantage of an opportunity.
Today we have both a big, weekend-reading type article and a smaller one. The small one is a summary of Warren Buffett’s impressions about Japan, which he visited in another trip to an Iscar (IMC) plant abroad. The larger one is a New Yorker profile on Peter Thiel, the “dystopian utopian” VC/ hedge fund investor who founded Paypal and was the first outside investor in Facebook. No easy takeaways but he remains one of the most provocative thinkers in our realm.
Landmark announcement today: the Berkshire board of directors has approved an “authorization” for a share repurchase program. Berkshire being what it is, it’s a bit different from the usual buyback: there’s no maximum amount, no set period of time and nor is there the obligation to buy any stock at all. There are only two rules: if share purchases do occur, Berkshire will not pay above 110% of book value per share and it must maintain a cash balance superior to US$ 20 billion. As Buffett likes it, there’s no “mandate” other than “intelligent investing”.
We’d usually prefer to post “beefier” updates, but this article grabbed our attention. Alice Schroeder has a very interesting piece that, in the first part, sheds more light on Ted Weschler’s background and achievements. The next part is “noisy” and speculative, but it’s still thought-provoking enough to merit a highlight: Ms. Schroeder then looks at the details of the press release and comes up with interesting questions about Buffett’s succession – mainly that Mr. Weschler appears to have qualities that could make him more than a capital allocator.
Buffett has hired another manager to join Todd Combs: Ted Weschler, hailing from Peninsula Capital Advisors, a US$ 2 bi highly-concentrated equities manager. The point here is not (yet) to try to distill Mr. Weschler’s experience, holdings over the last year and – much more importantly – investment processes. We don’t know much about him yet, although a story by Carol Loomis certainly helps in establishing “motivation”. The point is the interesting dynamic this creates – Mr. Buffett will now have two managers whose performance he will review, and who can learn from him and – we hope – collaborate with one another. That collaboration will be a vital aspect: whether there’s true “team spirit” or unchecked competition – declared or not – may determine whether both, or even of them, stay on and prosper.
Buffett turns 81 today and, according to Berkshire staff, he’s celebrating it by running the company just like any other day. Almost so: Berkshire has had to issue a press release to counter a Wall Street Journal editorial that came out today. Buffett’s tax editorial caused extreme reactions – some of the harshest coming from the WSJ. We have no problem with differences of opinion. The problem is basing a personal attack story on a factual error. Fact-checking is never out of season…
As per our post on Monday, Buffett’s article on taxing the mega-rich caused a wave of reactions – favorable, negative and the personal-attack type. Since then he went to Charlie Rose and discussed the article – and the deficit debate – for +50 minutes. There were at least three new strong reactions against the article as well, highlighted here.
Buffett’s recent article on taxing the rich has many interesting ramifications. The obvious one is analyzing the merit of his ideas. Another is studying the media reaction. Surely Buffett is a wonderful investor and his writing style is so clear and down to earth that one can’t help but pay attention to it. That doesn’t mean that his arguments on tax have to be taken without criticism. And yet the political climate in the US is so stormy that we must highlight the articles blasting Buffett’s ideas (after our comments).
Our article in the August 2011 edition of the Valor Investe magazine, discussing the financial education of Warren Buffett. The entire section on Financial Education in this edition is worth the time and couldn’t be more vital today – with the mess in Europe, the US debt/ global banking system imbroglios and general volatility. In a country like Brazil, the lack of concern with financial education is even more worrying. Initiatives such as this one are very important.
