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Warren Buffett 2009 Letter To Shareholders
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Buffett said this year that the CEOs and boards of directors of companies that failed during the credit crisis shouldn’t be able to pass blame to those below them. Boards should insist on CEOs taking full responsibility for risk, he said.
“If he’s incapable of handling that job, he should look for other employment,” Buffett wrote.
Risky business: http://2.bp.blogspot.com/_wkgIzuqJM0w/S4k9ZQQV6YI/AAAAAAAACrg/B7pb_-OZu7...
P 11--"within a year or so residential housing problems should be behind us"..
Really???
Try keeping that clause in the context of the whole paragraph, there are a number of caveats...
"Our country has wisely selected the third option, which means that within a year or so residential housing problems should largely be behind us, the exceptions being only high-value houses and those in certain localities where overbuilding was particularly egregious. Prices will remain far below “bubble” levels, of course, but for every seller (or lender) hurt by this there will be a buyer who benefits. Indeed, many families that couldn’t afford to buy an appropriate home a few years ago now find it well within their means because the bubble burst."
This is easy for Buffett to say, since he was able to buy at the bottom. Now prices are propped up artificially for everyone else, thru government intervention.
He didnt buy much at the bottom.
He looks back with regret that he did not commit more significant assets. And really he has committed more assets in the last 6 months (than 1 yr ago)... at much higher (but still attractive) prices.
-BBH
p 15 Buffett's weapons of mass destruction (derivative bets) are ok because " these contracts (don't) lead to leverage and/ or counter party risk that is extreme". Wonder who the counter parties are? Note the $5B swing from quarter to quarter.
The debt heavy Railroad purchase also blew up the AAA rating--wonder if that impacted collateral requirements on those oh so savvy long term (tail) bets that Warren and Charlie think are undervalued?
Not your father's BH.
Buffett sold a bunch of naked puts to an undisclosed group of investors for around 4.85 billion.
My recollection is that he was selling the future index at current levels in a trade with insurance companies that wanted a backstop for their annuities.
Wouldn't it just be hilarious if AIG is involved? Ha!
Remember when he threw billions at Goldman?
Not that the Oracle would ever fess up but part of that deal might have been Goldie doing that voodoo that they do to help Buffett offset possible collateral demands on that trade.
It was a rumor at the time...
Nov 21, 2008 :
The problem is that stocks worldwide have gone downhill in a hurry, and with a lot of the sort of volatility that makes put contracts swell in value. And due to accounting rules, this has made Buffett already need to mark down a $6.7 billion loss on the trade even though the trade has another 14 years to work out. Because of its solid-gold credit rating, Berkshire Hathaway was not required to put up collateral to make this trade. But now rumors are flying on Wall Street that the owners of the contracts have demanded that broker Goldman Sachs put up collateral for the rest of the amount due. Since the value of the trade could be enormous, the collateral demands are said to be very large, and fears that Goldman will struggle to make good on its obligation has panicked shareholders.Indeed one theory making the rounds this week is that Buffett put 5 billion into Goldman at around $125 per share in September not as an investment but to help provide funds for the collateral.
he wrote puts. He is short vol, i.e. he is the counterparty where the concern rests...
I'm not a fan of Buffett. Buffets, however, I'm a big fan of.
What about the part that WFC, Moody's etc., played in causing the crisis? What about the too big to fail backstop at GE & GS that they relied on when making loans and buying equities?
Take everything he says with a grain, or bushel of grain, of salt. People listen to him for the same reason they (currently) listen to John Paulson. He made a lot of money. Few, especially outside the ZH public, will question the logic of his conclusions -- they judge performance, and then blindly obey until such time that they get screwed. He has some business sense, no doubt, but Warren has the audacity to claim business acumen as the sole reason for his success (See: pre-last paragraph). The magnitude of his success is a tell tale sign of luck, not mental prowess.
I insured my cars with GEICO for five years until Buffy bought the company. In that year the cost of my policy increased by 30%, so I cancelled it. I understood at that moment what Buffy's business plan was. I am amazed that people don't shop around for their insurance.
We've Had It, Warren
A majority of Americans believe that the federal government is "an immediate threat to the rights and freedoms of ordinary citizens," a new poll suggests.
According to a poll conducted for CNN, 56 percent believe the federal government has grown so large and powerful that it poses a risk to rights and freedoms, while 44 percent disagree.
http://rawstory.com/2010/02/government-threat-rights-freedoms/
I remember well how many tinfoil hat wearing internet clowns were screaming how Buffet was going to blow up. What a tiny difference a year markes. Thousands of ultra pro share holding amateur bears have blown up and Buffet is still here. Too funny.
Let's see how it goes for him in the next 12 months
Wonder how BRK will fare in the coming hyperinflation.
And I thought we were heading for deflation. Can't we just have a consensus so we can get on with our bloody lives?
deflation is impossible with a fiat currency.
BNSF acquisition soon to be reflected in a utility bill near you.
I'm guessing Mr. Buffet is not aware of the option ARM reset tsunami that will continue to rain misery well into 2012? Don't worry, I'm sure the interest rates will still be just as low as they are now; not.
What a tool, talking his book like every other Wall St profiteer pig.
Wait till there's really blood in the streets...
um, Warren, your beloved WFC is a piece of crap propped up by phony mark to menagerie accounting and dependent on governmental and Fed support.
It'll be interesting to watch the action on WFC when Buffett buys the farm.
That place has been rotting from the inside out ever since the Norwest merger back in 98. Took a while for the legions of dumbass, do-nothing middle managers from NW to infect the place but once they did, it was all downhill. Shame because it used to be a fantastic place to work (spent 7 years out of SF with them).
As far as their books, yeah, they're having fun with numbers like everyone else now. Big Daddy Fed pretty much *is* the banking system at this point.
we all know the system is a rort, so why not rort the system like warren is.
stop playing the pissed off little guy and start swinging like a crony.
"We were a supplier of liquidity, and capital to the market, not a supplicant"
Translation: After I called my buddies Lloyd Blankfein, Hank Paulson, Barack Obama, and John McCain, and after I got assurances that they'd be willing to STEAL from taxpayers to bailout many of my investments, and after they'd assured me that they'd do EVERYTHING in their considerable power to backstop any further investments I might be inclined to make, well, I went ahead and made those investments - and we've done VERY well with them.
Oh and by the way, I'm a really principled person. I've take an aw-shucks, self deprecating attitude toward taking people's money, I find that having such an attitude is the "spoonful of sugar, that makes the medicine go down".
Non-steroidial annual homerun king:
Roger Maris - 61* (extended season - 1961)
Lifetime investment king (by average annual return):
Warren Buffet - 20.3%* (lobbied for and received govt. bailout - 2008)
100+
Redefining the meaning of "insider trading".
Clever!
History will not be kind to this man. He is a robber baron, plain and simple.
buffet has miles to go before the water goes out and we see who is swimming naked ,
sold his silver at 4.50 .. nice call,, related to brown who sold gold at 260,,
read what the bright person of the two has to say monger
Oh Icurus I warned you not to rely on your wings if you fly upward to the Sun.
This man proposes that what is past will be in the future but he fails to see that he is, in all his greatness, subject to the laws that govern all.
Pride surely comes just before the fall from grace.
You are Warren, at the mercy of your assumptions and they have great flaws, the greatest being you think you are immune from the effects of gravity.
Daedalus
The equity uptrend since March 2009 has been a bear market rally contained within a much larger downtrend that started in 2000.
http://www.zerohedge.com/forum/market-outlook-0
Fascinating to read the Buffet comments.
So many people with strongly held convictions.
So few who know much about him.
(I'm a semi-fan.)
I'd strongly suggest "Snowball", the recently
published biography - one he's come not to like -
to anyone with even a scintilla of interest in the
man.
Why not form opinions based on something more than
one's own strongly-held beliefs (also know as "projection")?
Fascinating to read the Buffet comments.
So many people with strongly held convictions.
So few who know much about him.
(I'm a semi-fan.)
I'd strongly suggest "Snowball", the recently
published biography - one he's come not to like -
to anyone with even a scintilla of interest in the
man.
Why not form opinions based on something more than
one's own strongly-held beliefs (also know as "projection")?
what is the story of CMKX & SEC lawsuit doing rounds of CNN news ?
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