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Warren Buffett 2009 Letter To Shareholders

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Sat, 02/27/2010 - 13:02 | 247924 williambanzai7
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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...

Sat, 02/27/2010 - 13:04 | 247934 Zippyin Annapolis
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P 11--"within a year or so residential housing problems should be behind us"..

 

Really???

Sun, 02/28/2010 - 19:18 | 249001 Anonymous
Anonymous's picture

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."

Sat, 02/27/2010 - 13:06 | 247937 perchprism
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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. 

Sat, 02/27/2010 - 20:04 | 248244 Anonymous
Anonymous's picture

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

Sat, 02/27/2010 - 13:11 | 247941 Zippyin Annapolis
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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.

Sat, 02/27/2010 - 14:56 | 248011 AnonymousMonetarist
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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.

 

Sun, 02/28/2010 - 14:43 | 248838 Anonymous
Anonymous's picture

he wrote puts. He is short vol, i.e. he is the counterparty where the concern rests...

Sat, 02/27/2010 - 13:14 | 247944 Nihilarian
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I'm not a fan of Buffett. Buffets, however, I'm a big fan of.

Sat, 02/27/2010 - 13:18 | 247947 buzzsaw99
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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?

Sat, 02/27/2010 - 13:29 | 247948 Nihilarian
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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.

Sat, 02/27/2010 - 20:13 | 248258 Anonymous
Anonymous's picture

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.

Sat, 02/27/2010 - 13:27 | 247951 Going Down
Going Down's picture

 

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/

 

 

Sat, 02/27/2010 - 13:38 | 247960 godfader
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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.

Sat, 02/27/2010 - 13:53 | 247975 Anonymous
Anonymous's picture

Let's see how it goes for him in the next 12 months

Sat, 02/27/2010 - 13:41 | 247962 Anonymous
Anonymous's picture

Wonder how BRK will fare in the coming hyperinflation.

Sat, 02/27/2010 - 15:52 | 248062 George the baby...
George the baby crusher's picture

And I thought we were heading for deflation.  Can't we just have a consensus so we can get on with our bloody lives?

Sat, 02/27/2010 - 23:27 | 248430 zerofaith
zerofaith's picture

deflation is impossible with a fiat currency.

Sat, 02/27/2010 - 13:41 | 247965 Anonymous
Anonymous's picture

BNSF acquisition soon to be reflected in a utility bill near you.

Sat, 02/27/2010 - 13:47 | 247969 Crab Cake
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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...

Sat, 02/27/2010 - 14:22 | 247994 deadhead
deadhead's picture

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.

Sat, 02/27/2010 - 20:52 | 248276 Get_to_the_choppa
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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.

Sat, 02/27/2010 - 23:28 | 248431 zerofaith
zerofaith's picture

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.

Sat, 02/27/2010 - 15:39 | 248046 Stevm30
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"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)

Sat, 02/27/2010 - 16:25 | 248098 Zippyin Annapolis
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100+

 

Redefining the meaning of "insider trading".

Sat, 02/27/2010 - 22:13 | 248345 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

Clever!

Sat, 02/27/2010 - 16:15 | 248091 Kevekev
Kevekev's picture

History will not be kind to this man.  He is a robber baron, plain and simple.

Sat, 02/27/2010 - 18:33 | 248176 dumpster
dumpster's picture

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

 

Sat, 02/27/2010 - 21:00 | 248282 Anonymous
Anonymous's picture

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

Sun, 02/28/2010 - 02:08 | 248559 Grand Supercycle
Grand Supercycle's picture

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

Sun, 02/28/2010 - 14:06 | 248794 Anonymous
Anonymous's picture

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")?

Sun, 02/28/2010 - 14:07 | 248795 Anonymous
Anonymous's picture

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")?

Mon, 03/01/2010 - 01:04 | 249216 Anonymous
Anonymous's picture

what is the story of CMKX & SEC lawsuit doing rounds of CNN news ?

Fri, 04/16/2010 - 10:44 | 303908 Tom123456
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