Warren Buffett

Warren Buffett

Last Update: 08-27-2015

Number of Stocks: 49
Number of New Stocks: 1

Total Value: $107,071 Mil
Q/Q Turnover: 1%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Warren Buffett Watch

  • Berkshire's Shares Drop to Near Buffett's Buyback Price

    Market volatility beginning late last month reached even stalwart Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) and created a scenario close to the type in which owner Warren Buffett (Trades, Portfolio) said he would repurchase shares.

    The massive, $325.6 billion insurance conglomerate generally followed the stimulus-fueled rally in the market over the past five years, advancing 67.8% compared to an 82.9% rise for the S&P 500 Index. After moving only a few percentage points during the past year, the market contraction last week then brought the stock down to a 52-week low of $190,007.


  • The Two Keys to the Magic Formula for Long-Term Investment Success

    Investing in anything comes with a degree of uncertainty because all investing returns happen in the future. And even though the future is unpredictable, the future is what everyone who invests is investing for. These realities present important challenges that every investor must face and deal with in order to succeed.

    But even though we cannot predict the future with perfect precision, there are prudent and rational actions that investors can take that can bring an element of certainty into an uncertain process. This article will review two key strategies that investors can implement to improve their odds of successfully investing in common stocks in an uncertain world.


  • JRW Financial August Commentary

    JRW Financial has released its commentary on August called, "The Business of Investing." The firm discuss value investors in today's market and goes on to discuss Warren Buffett (Trades, Portfolio) and Benjamin Graham. President and Chief Investment Officer Joseph R. Weidenburner discussed the company's portfolio and how he picks investments.

    'The business of investing'


  • The Earbud Stock Market

    The earbud is nothing new, but it seems to be everywhere. The first implication of wearing earbuds is the solitary nature it creates. People signal through earbuds that they want to be left alone. Second, earbuds represent a willingness to disengage from the moment — a willful nonparticipation in society. This seems true in a world that is tied at the hip to technology and dominated by the largest population group between 20 and 36 years of age. This seems even truer for the markets, which greatly matters to long-duration stock owners like us.

    The big winners of the past two years have been the companies which make money from those with ears plugged. You can pay Apple (NASDAQ:AAPL) to hear music from a download on a device Apple made. You can buy things from Amazon (NASDAQ:AMZN) online without ever interacting with a human. Starbucks (NASDAQ:SBUX) will let you order online and all you have to do is call out your name when you get to the store. You don’t even need to take out your ear plugs to do any of these activities. Netflix (NASDAQ:NFLX) will let you watch a movie or TV show without mixing with others at the theater or tuning in at the time of the original broadcast. Facebook (NASDAQ:FB), Tinder and others help those who wear earbuds find dates, because they operate in solitude much of the time. Stocks which benefit from the earbud mentality have soared in value the last two years.


  • My Personal Holdings: Dover Corporation – September 2015 Update

    I am often asked if I utilize the methods I teach here on ModernGraham, and the answer is yes. I fully believe that Benjamin Graham's methodology can be used in the market today, especially after taking time to analyze each one of his ideas and modernize it as needed. The ModernGraham method can be a great way to narrow down investment opportunities to the strongest companies, and then a little bit of further research can help one determine in which companies to invest.

    This series of posts looks at each of my personal holdings, putting them through a full ModernGraham valuation and adding a level of further research to provide rationale as to why I selected the company for my portfolio. Here's a page with more information about my portfolio, including my thoughts and goals on asset allocation and an overview of my current holdings.


  • Investing For The Long Haul – JRW Commentary July 2015

    Earnings season has been in full swing over the last few weeks as corporate officers kneel before the analyst community and lay bare the fortune or misfortune that has befallen their firms over the previous three months. Company reports usher in a period of volatility in the stock market as market participants make their feelings known through aggressive buying or selling shares in response to what the company has to say. This volatility in response to incredibly short periods of performance has caused me to reflect on the long-term nature of our investing philosophy.

    I find it remarkable how short-term oriented many market participants are in practice. This goes for investment professionals as well as clients and other individuals who have money invested in financial securities. There seems to be an overwhelming desire to do something at all times. I believe this mindset has deleterious effects on long-term portfolio returns.


  • Think Twice Before Following Warren Buffett Into Phillips 66

    Berkshire Hathaway has disclosed a $4.5 billion stake in Phillips 66 (NYSE:PSX). Phillips 66 is organized into four operating segments: Midstream, Chemicals, Refining, and Marketing & Specialities. It might turn out to be a great investment, but before you piggyback off Buffett, I urge readers to research and make independent judgements. Earlier in the year, I looked at Phillips 66 when it was selling in the mid 60’s. I passed. Obviously now that it’s $77 per share, I wish I owned some. However, any profit that I would have enjoyed would have been from dumb luck. I passed on Phillips 66 because there was no way for me to predict the crack spread or to have confidence in its future earnings.

    What is a crack spread? The technical definition of crack spread is the difference between market prices for refined petroleum products and crude oil. The most common crack spread term is the 3-2-1 crack spread which is three barrels of crude oil producing two barrels of gasoline and one barrel of diesel. For Phillips 66, their profitability is influenced by the price differential between Brent crude prices and West Texas Intermediate (WTI) prices. Phillips 66 takes crude oil and refines it into a finished product. The Energy Policy and Conservation Act of 1975 prevents U.S. oil companies from exporting most crude oils. That means U.S. refiners have access to WTI oil and international refiners don’t. As a result, when WTI is lower than Brent Crude which comes from the North Sea, U.S. refiners like Phillips 66 enjoy a cost advantage. While U.S. oil producers are restricted from exporting crude oil, refiners are allowed to export their product.


  • Understanding Fair Valuation: A Common Sense Approach to Long-Term Investing Success


    In order to understand what the intrinsic value or fair value of a common stock is, you must think like a long-term business owner and not like a stock trader. Additionally, you must think like a business owner that has no intention of selling their business. Put another way, your business generates your livelihood. Therefore, your primary focus and attention is on answering the question: how’s business?


  • 5 Investing Quotes for Recessions

    The stock market has been incredibly volatile recently. The global economy has become increasingly unstable.

    Could it be possible that we’ve reached the end of this current six-year-long bull market and are headed for another recession?


  • Long-term Contrarian / Value Investing: Turning an Oxymoron Into an Opportunity – Tocqueville Asset Management

    In my observation, there is more than one discipline that can lead to investment success, and some of the proven ones are quite different from each other. The secret to investing successfully, therefore, is to adopt and follow a discipline that is in harmony with your personality.

    For my part, I feel in total harmony with the contrarian and value disciplines that have guided my investments for 40 years. At the same time, I also claim (and aim) to be a long-term investor. Yet, almost from the start of my career, I have had the somewhat uncomfortable feeling that, in practice, these claims may be contradictory.


  • Warren Buffett by the Numbers

    Ahead of his 85th birthday Forbes has prepared a numerical walk-through of Warren Buffett's investing career.

    From buying his first publicly traded securities at age 11 to making his largest acquisition ever this month at 85 Buffett has always been all about the numbers.


  • Present-Value Analysis and the Difficulty of Forecasting Future Cash Flow

    In "Margin of Safety," Seth Klarman (Trades, Portfolio) touches upon Net Present Value and its use (or misuse) in valuation methods:

    "When future cash flows are reasonably predictable and an appropriate discount rate can be chosen, NPV analysis is one of the most accurate and precise methods of valuation. Unfortunately, future cash flows are usually uncertain, often highly so. Moreover, the choice of a discount rate can be somewhat arbitrary. These factors together typically make present-value analysis an imprecise and difficult task.


  • The Greats Talk About Fear and Opportunity in the Market

    With the recent market declines I find it very reassuring to read (again) some of the best quotes from my favorite investors, since they provide a long-term view and keep me focused on the important aspects of investing instead of getting carried away by my emotions. I have found these among others, and I share them with you hoping that you find them as useful.

    I think it is critical to re-evaluate some of the critical assumptions that we made to our investment thesis, review the estimates of intrinsic value and act upon them with objectivity and patience.


  • Volatility + Fear Is a Good Combination for Long-Term Investors

    What exactly happened Monday (Aug. 24)? Near the open, the futures were pointing to a negative start to the day but nothing too extreme. The S&P 500 was down 2-3% but the decline accelerated to near 5% at the opening bell. Stocks rallied heavily until losses were less than 1%. However, by the closing bell, stocks began to show losses again with major indices closing about 4% lower. A ride of down 5%, up 4% and then down 3% in a matter of 6.5 hours is not normal. It's no wonder that the CBOE VIX Index, nicknamed the "fear gauge," soared to levels not seen since spring of 2009 (even higher than the U.S. debt ceiling crisis in 2011). Fear was evident in the market.

    A Lehman moment


  • Warren Buffett Banks on U.S. Bancorp. Should You?

    The Oracle of Omaha Warren Buffett (TradesPortfolio) recently added to his position in U.S. Bancorp (NYSE:USB). With the likelihood of interest rates rising from all-time lows, financial stocks will benefit from this expected change in the Federal Reserve’s policy. As a result, U.S. Bancorp may be an undervalued banking stock that will see its profits rise with the increase interest rates.

    7 Steps to Successful Stock Investing


  • Cherry Coke, See's Candy and Effortful Mental Activities

    The “healthy eating habit” of Warren Buffett (Trades, Portfolio) and Charlie Munger (Trades, Portfolio) is no secret – both consume a significant amount of Coca-Cola (NYSE:KO) and See’s Candy’s peanut brittle every day. Given the amount of sugar they consume every day, the fact that both are still very healthy and sharp at their respective ages may befuddle many nutritionists. I’m not a health nut myself, but I have always wondered whether there is something about Coke and peanut brittle that get two of the most rational human beings on earth hooked.

    I found a speculative and interesting answer in Chapter 3 of the great book "Thinking, Fast and Slow."


  • Lessons From the 1957 Buffett Partnership Letters

    A young Warren Buffett (Trades, Portfolio) discussed his views on the market and described the appropriate activities for money managers to follow in an overvalued environment.

    “My view of the general market level is that it is priced above intrinsic value. This view relates to blue-chip securities. This view, if accurate, carries with it the possibility of a substantial decline in all stock prices, both undervalued and otherwise. In any event I think the probability is very slight that the current market levels will be thought as cheap five years from now. Even a full-scale bear market, however, should not hurt the market value of our workouts substantially.


  • Walmart: One of Berkshire Hathaway’s Top 5 Is Still a Worthwhile Investment

    Walmart (NYSE:WMT), the world’s largest retailer, has dropped 20% since February when it was announced they were raising the minimum wage for their employees. Investors who are already worried about the razor-thin margins were concerned this would hurt the languishing retailer even more. However, recent developments may prove Walmart is still an attractive investment.

    Recent developments


  • Inside the Brain of an Investing Genius

    Those readers who have frequented my Investing Caffeine site are familiar with the numerous profiles on professional investors of both current and prior periods (See Profiles). Many of the individuals described have a tremendous track record of success, while others have a tremendous ability of making outrageous forecasts. I have covered both. Regardless, much can be learned from the successes and failures by mirroring the behavior of the greats – like modeling your golf swing after Tiger Woods (O.K., since Tiger is out of favor right now, let’s say Jordan Spieth). My investment swing borrows techniques and tips from many great investors, but Peter Lynch (ex-Fidelity fund manager), probably more than any icon, has had the most influence on my investing philosophy and career as any investor. His breadth of knowledge and versatility across styles has allowed him to compile a record that few, if any, could match – outside perhaps the great Warren Buffett (Trades, Portfolio).

    Consider that Lynch’s Magellan fund averaged +29% per year from 1977 – 1990 (almost doubling the return of the S&P 500 index for that period). In 1977, the obscure Magellan Fund started with about $20 million, and by his retirement the fund grew to approximately $14 billion (700x’s larger). Cynics believed that Magellan was too big to adequately perform at $1, $2, $3, $5 and then $10 billion, but Lynch ultimately silenced the critics. Despite the fund’s gargantuan size, over the final five years of Lynch’s tenure, Magellan outperformed 99.5% of all other funds, according to Barron’s. How did Magellan investors fare in the period under Lynch’s watch? A $10,000 investment initiated when he took the helm would have grown to roughly $280,000 (+2,700%) by the day he retired. Not too shabby.  

  • Does Berkshire Hathway Make the Cut as a 'Retirement Stock'?

    Warren Buffett has made his investors a lot of money over his career. Over the past 35 years, Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) has grown its book value at a compounded rate of return of 19.0%. Over that same period, the S&P 500 has generated total returns of only 11.8%. For a manager as large and as closely followed as Buffett, those returns, spread out over three and a half decades, are nothing short of amazing.

    Buffett has evolved over the years, moving from a deep value “cigar butt” investor into one that buys great businesses at reasonable prices. He also transformed Berkshire Hathaway twice: First from a textile mill into a diversified insurance company and then into the vast conglomerate. But while no one questions Buffett’s investment acumen or his ability to transform both himself and his company, whether or not Berkshire Hathaway makes the grade as a retirement stock is another question entirely.


  • It Can Be Good to Have a Job You Don't Like

    That’s right.

    I’m glad I had a job that I hated.


  • Warren Buffett Sells Viacom and Buys Charter in the Second Quarter

    In the second quarter Warren Buffett (Trades, Portfolio) increasingly bet on Charter Communications (NASDAQ:CHTR) in the media industry while reducing his stake in Viacom (NASDAQ:VIAB). During the quarter Buffett bought approximately $456 million worth of stock in Charter and decreased his portfolio share of Viacom by approximately $250 million. After his second quarter trades Buffett’s portfolio allocation to the media industry was 5.21%.

    Charter has been a media stock in the spotlight recently for its merger with Time Warner Cable (NYSE:TWC). The merger attempt announced on May 26 follows an attempt by Comcast which was ended in April 2015. While the previous attempt was ended due to opposition and lack of support many industry speculators believe the Federal Communications Commission will more greatly favor the Charter-Time Warner Cable merger because of the competition it promotes in the industry and the service benefits it provides to consumers.


  • Seeking Disconfirming Evidence in Investing Research

    “And one of the great things to learn from Darwin is the value of extreme objectivity. He tried to disconfirm his ideas as soon as he got ’em. He quickly put down in his notebook anything that disconfirmed a much-loved idea. He especially sought out such things. Well, if you keep doing that over time, you get to be a perfectly marvelous thinker instead of one more klutz repeatedly demonstrating first-conclusion bias”


  • Berkshire Hathaway Sells Oil, Buys 1 New Stock in Second Quarter

    Friday, Buffett reported he and his two portfolio managers, Ted Weschler and Todd Combs, bought one new holding and added to only two others in the second three months of the year, before the acquisition of Precision Castparts (NYSE:PCP).

    They also only sold out of two stocks, which were both oil: Phillips 66 (NYSE:PSX) and National Oilwell Varco (NYSE:NOV).


  • Too Much Reading, Not Enough Thinking?

    We read a lot. I don't know anyone who's wise who doesn't read a lot. But that's not enough: You have to have a temperament to grab ideas and do sensible things.


  • Investors Should Say 'No' Because Knowledge Is Like Compound Interest

    The plight of the investor is to say, "No," "Nope”, or “Oh hell no! you lying, cheating… ” not once, twice but over and over again. The simple fact is that there are more unattractive opportunities than stellar prospects. It would be so much easier on the human psyche, if the amount of time we spent on research yielded a steady predictable return. Instead, we invest lots of time analyzing individual stocks only to find many “close but can’t pull the trigger” situations.

    I’ve found there’s another way to look at the arduous task of research. The more you say “no” and the more you improve as an investor, the more you can appreciate your own development. You begin to notice many of the companies you say “no” to drift down in price or languish. The more you say “no,” the more patterns and connections appear. The task is most difficult in the beginning because the knowledge base is nonexistent so no connections or patterns exist. But once you get over the hump and knowledge accumulates, saying “no” becomes satisfying. To quote Warren Buffett (Trades, Portfolio), “That’s how knowledge works. It builds up, like compound interest.”


  • 3 Reasons Buffett Blew It on IBM

    The following piece is intended to shed greater light on the issues causing IBM’s current struggles, their potential persistence, and the key points underlying the bull and bear cases. Despite being a technology stock, IBM has Buffett’s fingerprints all over it. Buffett started buying IBM in the $170s in 2011 (IBM most recently closed near $158) and upped his position during Q4 2014. Is Buffett making a big mistake buying more shares of IBM, or should long-term dividend investors look to add or initiate a position?

    Read on to learn if we think now is the time to add IBM to our notable Top 20 Dividend Stocks list.


  • Was Warren Buffett a True Value Investor When He Bought Precision Castparts?

    When I first became interested in investing in common stocks some 50 years ago, I thought it would be wise to research and then study the investing behaviors and philosophies of the recognized investor greats. My efforts first led me to Ben Graham, and from there to many other famous value investors such as Philip Fisher, Walter Schloss, William J. Ruane, Irving Kahn, Peter Lynch, and of course the venerable and perhaps most famous of all, Warren Buffett (Trades, Portfolio).

    Although each of these investing greats had their own unique style and approach, they were all investors that focused on value. Consequently, I patterned my own investment philosophies and beliefs on sound valuation. Admittedly, assessing sound valuation is not a perfect science. However, there are certain fundamental principles that do apply and have passed the test of time. One of those principles is to be only willing to invest when fundamentals, primarily earnings, can be purchased at a price that makes economic sense.


  • 3 Stocks Trading for Lower Price Than Berkshire Hathaway Paid

    Last week, individual investors missed a chance to buy Precision Castparts (NYSE:PCP) for less than Berkshire Hathaway paid for both Buffett's acquisition of the company and for shares it bought previously. This week, investors can still enjoy a cheaper price than Warren Buffett's Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.A) paid for three other companies in its portfolio: IBM Corp. (NYSE:IBM), Twenty-First Century Fox (NASDAQ:FOXA) and Sullivan Energy (NYSE:SU).

    Precision Castparts (NYSE:PCP)


  • Berkshire Hathaway: Second Quarter Review

    Berkshire Hathaway (BRK.B) reported second-quarter results after the close last Friday, capping off an eventful first half of the year. For the quarter, pretax earnings declined by 35% to $5.85 billion. As always, there are one-time items that we need to account for – in this case, more than $2.5 billion in investment and derivative gains in the prior year period, primarily reflecting the gains related to the Phillips 66 (PSX) and Graham Holdings (GHC) deals from a year ago.

    If we move up to the segment results to account for these “lumps,” Berkshire reported pretax earnings of $6.06 billion – down 7.5% from the year ago quarter (year to date, cumulative segment pretax earnings are 4% higher than a year ago). The change versus the prior year reflects weaker results in the insurance businesses – most notably at GEICO.


  • Berkshire Hathaway to Buy Precision Castparts for $37 Billion in Largest Deal Ever

    Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) announced on Monday it will acquire Precision Castparts (NYSE:PCP) for $235 per share in what will be its biggest deal to date, valued at about $37.2 billion.

    Precision Castparts is an industry leader in manufacturing complex metal components and serves the aerospace, power, and general industrial markets. The deal must be approved by a majority of Precision Castparts’ shareholders, and Berkshire expects closing to happen during the first quarter of 2016.


  • Warren Buffett on Precision Castparts, IBM, Disney and Media Stocks

    Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett (Trades, Portfolio) was on CNBC's Squawk Box this morning explaining why his purchase of Precision Castparts Corp. (NYSE:PCP) was different from his Burlington Northern acquisition in terms of price and how the idea originated with his portfolio manager Todd Combs, who now manages about $9 billion. He also talked about Precision Castparts' CEO, who "loves what he does," and what he thinks about IBM Corp. (NYSE:IBM), Walt Disney Co. (NYSE:DIS) and media stocks.


  • Precision Castparts: Buffett's Biggest Deal

    The oracle of Omaha said that Berkshire will pay $235 per share in cash for Precision Castparts Corp. (NYSE:PCP)´s outstanding stock. The deal is valued at about $37.2 billion, including debt.

    GuruFocus DCF Calculator gives a fair value of $249.46 per share, with 138.9 million shares outstanding, the total value of the Precision Castparts is $34.6 billion, which is very close to the deal price. Shares of the company surged more than 19%, or $37, to $230.85 in early trading today.


  • A Change in Scenery

    I wanted to start off my article today by announcing a relatively significant change in my career. As many of you know, Nintai – which was a management consulting business with its own internal fund – has been winding down operations and will shortly be nothing but a memory. Any assets in the firm will likely be fully dispersed by the time of publication. The only remaining part of the business will be my own managed portfolio of the newly created Nintai Charitable Trust. Accordingly, any mention I may make going forward referring to “Nintai” will be strictly associated with any trades or positions in the Trust portfolio.

    Additionally, (and far more importantly!) I am very excited to announce that I will be joining Dorfman Value Investments as Director of Marketing. Some of you may already know John through his writing here on GuruFocus. For those who don’t know, John has a tremendous record as a value investor and has long been seen on Bloomberg, CNBC, as well as a writer and editor at the Wall Street Journal and Forbes. It is an extraordinary privilege to be working with John and his team.


  • How Does the Math Work?

    One of the most important mental models advocated by Charlie Munger (Trades, Portfolio) is mathematics. Munger’s partner, Warren Buffett (Trades, Portfolio), is a math prodigy. The ability to use mathematics as a tool to figure out the investment implications is one of Buffett’s widest moats. It takes me a while to get the importance of figuring out the basic math for many of the concepts we talk about in investing. Even professional investors often fail to perform the mathematical computations that are essential. Consider the following half real-world, half made-up questions.

    1. A business can grow its sales 3.8% a year. Cost of goods sold increases 2.3% a year and total operating expenses increase 3.1% a year. The tax rate will decrease from 37.7% to 31.7%. The company will shrink its share count 1% every year. Assuming all of these will go on for 20 years, how fast can gross profit, operating profit, net income and earnings per share grow for the next 20 years?


  • Buffett’s Purchase of Precision Castparts Is a Validation of GuruFocus DCF Calculator

    Over the weekend news broke that Warren Buffett (Trades, Portfolio)’s Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) nears a deal for Precision Castparts (NYSE:PCP). Berkshire will take over Precision Castparts at the valuation of more than $30 billion. This puts PCP at around $220 a share. Interestingly, this is about where GuruFocus DCF calculator puts the fair value of PCP shares.

    This link is the GuruFocus DCF Calculator on PCP: http://www.gurufocus.com/dcf/PCP.


  • Not a Bad Time to Buy Berkshire

    Berkshire Hathaway is a beast of a company built from a failing texture manufacturing firm to a powerhouse in insurance. It is also the investment vehicle of the Oracle of Omaha, aka Warren Buffett (Trades, Portfolio). Its insurance operations make up its largest segment through the well known brands: GEICO, General Re, Berkshire Hathaway Reinsurance Group and the Berkshire Hathaway Primary Group. Over the past decade, Buffett's investment strategy has evolved, not unlike Picasso's Blue Period, Rose Period and Surrealism. Buffet has moved from investing in cigar butts (Graham style) to great asset light companies at decent prices (GARP style), and now he is ploughing Berkshire's cash into companies with a lot of opportunities to reïnvest capital like utilities and railroads. Burlington Northern Santa Fe and Berkshire Hathaway Energy are now solid contributors to Berkshire’s book value.

    Financial Strength


  • Which Warren Buffett Stock Fell Over 22% This Week? Is It a Buy?

    Viacom (NASDAQ:VIAB) fell from last week’s closing price of $57 a share to $44.10 a share for this week’s close. Media stocks in general were clobbered this week. Disney was the main catalyst as it didn’t meet expectations when it reported earnings on Tuesday, Aug. 4. The Wall Street narrative is that old media companies like Disney, Viacom, Time Warner, CBS and Fox are all being hurt as consumers shift to Netflix. Wells Fargo also downgraded the stock today. You can see which Gurus own VIAB here.

    Let’s take a closer look at Viacom.


  • GuruFocus Interview: Jeff Auxier of Auxier Asset Management

    At 11 years old, Jeff Auxier (Trades, Portfolio) began mowing the lawn of Georgia Pacific’s then-CEO Bob Pamplin Sr., who led the company to be one of the top-performing NYSE stocks of the time. After graduating college with his degree in finance and starting his career in 1982, Auxier decided to cold call Warren Buffett (Trades, Portfolio) — and got an answer.

    Whether by luck or simply taking a chance, Auxier was influenced by value investors from an early age, and this is reflected in his firm, Auxier Asset Management. The firm is based far from Wall Street on the opposite coast in Portland, Oregon, where Auxier lives on a 108-acre hazelnut farm.


  • ValueAct Started to Buy American Express

    Jeff Ubben is a founder, chief executive officer and the chief investment officer of ValueAct Holding LP. Prior to founding ValueAct Capital in 2000, Ubben was a managing partner at Blum Capital Partners for more than five years. Previously, Ubben was a former chairman and director of Martha Stewart Living Omnimedia, Inc., a former director of Acxiom Corp., Catalina Marketing Corp., Gartner Group, Inc., Insurance Auto Auctions, Inc., Mentor Corporation, Omnicare, Inc., Misys, plc, Per-Se Technologies, Inc., Sara Lee Corp. and several other public and private companies.

    The hedge fund today has bought a big stake in American Express Co. (AXP) with an investment of about $1 billion that amounts to less than 5% of AXP’s outstanding shares. After the news, shares of the company has risen by about 7%, to $80 and now the price is -15.82% from its 52-week high and +7.51% from its 52-week low and is trading with a P/E ratio of 18.64. Value Act said AXP is not yet a core active target for them, even so they see a strong growth potential for the business of the company that together with its subsidiaries is a service company that provides customers with access to products, insights and experiences that enrich lives and build business success.


  • Warren Buffett: It's Hard To Beat Coca-Cola

    Warren Buffett (Trades, Portfolio) of Berkshire Hathaway (NYSE:BRK.A),(NYSE:BRK.B) went to the Coca-Cola (NYSE:KO) annual shareholders meeting. Where he and the CEO of Coca-Cola had a joint panel discuss on Coca-Cola. They discussed various topics to the joy of shareholders who were happy to see Warren Buffett (Trades, Portfolio) come to Coca-Cola's Annual Meeting.

    Buffett At Coca-Cola Annual Meeting:


  • Charlie Munger: A Lesson in Elementary, Worldly Wisdom

    Back in 1994, Charlie Munger, vice chairman of Berkshire Hathaway (BRK.A),(BRK.B) gave a speech titled, "A Lesson On Elementary, Worldly Wisdom As It Related To Investment Management & Business." The speech is legendary in value investor circles; however, I believe every investor should read the speech he gave back in 1994. During that speech Munger laid out his mental models and how important they are for investment and business. He went through how to build mental models that you can use in business and life.

    Charlie Munger 1994 speech:


  • Robert Hagstrom Interview With Value Investing Podcast


    Robert Hagstrom, current senior portfolio manager of EquityCompass Strategies, has written numerous investment books. Almost every value investor knows who Hagstrom is since he's the man who wrote the legendary book, "The Warren Buffett (Trades, Portfolio) Way: Investment Strategies of the World's Greatest Investor." He has written numerous books on Warren Buffett (Trades, Portfolio) and his investment strategies and philosophy. Hagstrom did an interview recently with the Value Investing Podcast where he discussed his book and Buffett's investment philosophy.


  • Contest: Guess Which Stocks Warren Buffett Bought

    In just a few weeks, everyone’s favorite billionaire guru, Warren Buffett (Trades, Portfolio), unveils the stocks he (or one of his portfolio managers) bought during the second quarter. And once again, GuruFocus is holding a contest to see who can guess which companies these lofty managers bought.

    To participate, post up to three stock symbols and a brief reason for each guess in the comments section below. If more than three symbols are entered, only the first three will be counted.


  • China’s Command Economy: The Gift That Keeps on Giving

    With Beijing being selected to host the 2022 Winter Olympics, we at Smead Capital took a moment to reflect on China. We concluded that posturing against China’s attempt to defy business cycles could be one of the best decisions we have made and could be the gift that keeps on giving. Warren Buffett (Trades, Portfolio) once observed that you get to make approximately 20 major business decisions in your life. As long-duration common stock pickers, we think what you avoid can be just as important as what you select. In this missive, we will share why we tend to avoid companies with major exposure to China, and why that could be a good thing for stock-pickers like ourselves.

    Let us share the chronological order of our view of China and the way it has framed the risks in the U.S. stock market since 2008.


  • Warren Buffett's Bullish Stake in Costco

    In this article, let's take a look at Costco Wholesale Corporation (NASDAQ:COST), a $63.95 billion market cap company, which operates about 679 membership warehouses in the U.S., and other countries such as Puerto Rico, Canada, the U.K., Taiwan, Japan, Korea, Mexico and Australia.

    Expanding its business


  • A Short Story of Questionable Capital Allocation

    In late 2014, I wrote an article titled “Peter Lynch – The Perfect Stock” (link). One of the thirteen attributes listed for the perfect stock was material insider purchases (There’s no better tip-off to the probable success of a stock than that people in the company are putting their own money into it). In that article, I wrote about a company where that was happening in a big way:

    I’ll point you to a company that I’m interested in that has had significant insider buying as of late: WPX Energy (WPX). The company named a new CEO in May; since that time, he has purchased 44,000 shares on the open market. Due to the fact that energy companies have been routed in recent market trading, his cost on those purchases has totaled ~$836,000, or an average of ~$19 per share; that is nearly 100% higher than where shares recently traded. His most recent purchase was last week.


  • Warren Buffett's Family Secretly Funded A Birth Control Revolution

    Katherine O’Reilly, a certified nurse midwife in her 30s, works full time at the Mesa County Health Department’s clinic in Grand Junction, Colo., and she’s eager to show off the clinic’s stash of one of the most effective forms of birth control. First, though, she has to get out her electronic badge to unlock a heavy wood door with a paper sign, “PLEASE KEEP DOOR CLOSED AT ALL TIMES!!!” She surveys shelves packed with boxes of gloves and gauze, then walks over to an unmarked metal cabinet. She opens it and bends down to look at the bottom shelves. “There they are!” she says, as if they’d been hiding from her.

    She points to a stack of long, slim packages the size of a box of chocolates. Inside each is an intrauterine device and a tall, skinny straw that clinicians use to insert the flexible, T-shaped pieces of plastic into a uterus, where it can prevent pregnancy for as long as 10 years. “When I see patients, my goal is to be able to initiate contraception today,” she says. That means having IUDs in stock is essential.


  • Notes From Hillhouse Capital's Lei Zhang's Lecture At Columbia Business School

    In the high flying world of investing, Lei Zhang maintains a relatively low profile. Yet since he was seeded by David Swensen of Yale Endowment with $20 million in 2005, he has achieved a ~40% compounded annual return (28x not adjusting for inflation), making him one of the best performing investment managers. To put it into perspective, Warren Buffett has achieved a compounded annual return of ~22%, albeit for the past 50 years. Today, Lei Zhang’s Hillhouse Capital, named after a street nearby Yale where Lei received his MBA and master’s in public policy, manages ~$18 billion. Though not just focused on tech, Lei is best known for backing several most successful Chinese internet entrepreneurs and startups (e.g. Tencent, JD.com). On April 29, Lei paid a visit to the “Temple of Value Investing” Columbia Business School to share his investing and life lessons. Below are my summaries of his wisdom:


  • The Game Of Bridge and Investing – A Conversation Including Mohnish Pabrai

    What is it about the game of bridge that great investors find so interesting?

    Bill Gates (Trades, Portfolio) and Warren Buffett (Trades, Portfolio) are both avid players.


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