Editor’s Note: Related tickers: Berkshire Hathaway Inc. (NYSE:BRK.A), Moody’s Corporation (NYSE:MCO), Apple Inc. (NASDAQ:AAPL), SPDR Gold Trust (NYSEARCA:GLD)
Warren Buffett said the US economy is gradually improving, but low interest rates have made bonds “terrible investments” while stocks remain “reasonably priced.” Speaking on CNBC on Monday, the chairman and chief executive of Berkshire Hathaway Inc. (NYSE:BRK.A) said the economy is benefiting from an upturn in areas that had not previously performed well, particularly homebuilding. He also said the rebound is helping create increased traffic for Berkshire’s private plane unit NetJets, and could result in a record profit this year for Berkshire Hathaway Inc. (NYSE:BRK.A)’s railroad unit Burlington Northern Santa Fe.
Berkshire Hathaway sells off more Moody’s shares, stake down to 11.1% (ET)
Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A) sold off another 1.375 million of its Moody’s Corporation (NYSE:MCO) shares in the past three trading days, leaving it with an 11.1 per cent stake in the parent of credit rating agency Moody’s Corporation (NYSE:MCO) Investors Service. Berkshire sold the shares in several transactions on Thursday, Friday and Monday, yielding a total of $84.5 million and leaving it with about 25.3 million shares, according to a regulatory filing on Monday. Last Wednesday, Berkshire Hathaway Inc. (NYSE:BRK.A) said it had sold 1.75 million Moody’s Corporation (NYSE:MCO) shares in the first three days of last week, the first time since 2010 it had sold shares in Moody’s Corporation (NYSE:MCO).
Why Buffett Invited a Bear to Berkshire’s Annual Meeting (WSJ)
What did Warren Buffett hope to accomplish when he invited a short-seller to grill him at Berkshire Hathaway Inc. (NYSE:BRK.A) 0.00% annual meeting this past weekend? Buffett declined last week to elaborate on why he invited Kass, whose performance as an inquisitor has gotten mixed reviews, to join the panel of journalists and analysts who pose questions at each year’s meeting to Buffett and Berkshire Hathaway Inc. (NYSE:BRK.A)’s vice chairman, Charles T. Munger. But I got a sense of his thinking first-hand in October 2008, when Buffett asked me to be on the panel of journalists who would gather and pose questions to him and Munger.
Billion dollar bet on rate cut pays off (BusinessDay)
It may go down as one of the great currency bets in Australian dollar history – a $US1 billion gamble on a Reserve Bank rate cut that has delivered a $US19 million profit in 36 hours. The beneficiary, if you believe the rumour mill, is investment legend George Soros. Best of all, it appears the 82-year-old American pulled off the deal three times, all with difference foreign exchange brokers in Asia, for a tidy profit of almost $US60 million. Not bad for a bloke who, just three weeks ago, was wrongly declared dead. Soros is a Hungarian-American business magnate, investor and philanthropist, who has built a reputation over the past 25 years of picking the impact of government decisions on currencies and commodities.
Soros and Dell back Waypoint helicopter leasing group (FT)
The funds of two of the world’s highest-profile individual investors – Michael Dell and George Soros – are betting on future high levels of offshore oil production by investing hundreds of millions of dollars in a helicopter leasing company. Waypoint Leasing is one of only two significant lessors of helicopters, alongside Ireland’s Milestone Aviation, and plans to build up a fleet of up to about 65 aircraft. The fleet will mainly be aimed at meeting fast-growing demand for helicopters to ferry workers to and from offshore oil and gas platforms, which are gradually moving further from land. Mr Dell’s family investment vehicle, MSD Capital, and Mr Soros’s private vehicle, Quantum Strategic Partners, are the two biggest investors of three that have invested $375m in Waypoint. Two people involved said both MSD and Quantum had taken equal stakes, while a third investor, Cartesian Capital, had taken a smaller stake. The firms are expected to announce the investment formally early this week.
Greenlight Re’s Einhorn says he added to Apple position (ET)
David Einhorn‘s Greenlight Capital has added to its investment position in Apple Inc. (NASDAQ:AAPL), Einhorn, the hedge fund’s president, said on Tuesday. “We’ve added to our Apple Inc. (NASDAQ:AAPL) position. Now we just wait for the release of Apple Inc. (NASDAQ:AAPL)’s next blockbuster product,” Einhorn said on a conference call for his Cayman Island-based reinsurer Greenlight Capital Re Ltd. He did not specify when the hedge fund added to its Apple Inc. (NASDAQ:AAPL) position or the size of its current holdings. At the end of the first quarter, the $8.8 billion Greenlight Capital held 1.3 million Apple Inc. (NASDAQ:AAPL) shares, according to a regulatory filing. At the market close on Monday, the shares were worth about $600 million.
Hedge fund manager David Einhorn said first-quarter gains from betting against the Japanese currency cushioned declines tied to gold, and told investors that monetary policy affirms his strategy on both assets. “The Bank of Japan officially joined the global monetary printing race,” Einhorn said today on a conference call held by his Greenlight Capital Re Ltd. (GLRE) reinsurer. “It seems that every time a central banker takes a more aggressive action, without short-term negative consequences, it reinforces the behavior of other central bankers. We believe that recent events, including the regime change at the Bank of Japan, support our long-term thesis of both a weaker yen, and stronger gold.”
Cohen vows to clean up SAC (NYPost)
SAC Capital’s Steve Cohen told investors yesterday he is determined to clean up the $14 billion hedge fund that has seen five former employees either plead guilty or confess to insider trading. Cohen, in a May 2 letter to investors — a copy of which was obtained by The Post — said that starting Jan. 1, 2014, SAC will claw back compensation of any analyst or portfolio manager whose conduct leads to regulatory or criminal sanctions. SAC will also claw back deferred compensation for those who leave during or after a probe. Cohen is also beefing up his compliance department by adding nine people to its 36-person team. And he is limiting employee calls to four a year to any single person in an expert network, where much of the insider trading has occurred.
Vanity Fair’s ‘The Hunt for Steve Cohen’ (ComplianceWeek)
I already gave you a head’s up on the great Moby Dick-themed art that accompanied an article in the June 2013 Vanity Fair entitled, “The Hunt for Steve Cohen.” The article by Bryan Burrough and Bethany McLean is now available online (click here), and it is a terrific, in-depth look at the broad investigation conducted by Preet Bharara of the Southern District of New York into insider trading by hedge funds. Burrough and McLean are not newcomers to this world. Burrough is a former investigative reporter at The Wall Street Journal and the co-author of Barbarians at the Gate, the famous look at the leveraged buyout of RJR Nabisco.
Paulson Gold Fund Said to Lose 27% Last Month as Metal Falls (1) (BusinessWeek)
Billionaire John Paulson, the hedge- fund manager seeking to reverse two years of losses in some of his strategies, lost 27 percent in his Gold Fund last month after the precious metal and related securities plummeted, according to two people familiar with the matter. The loss brings the strategy’s decline to about 47 percent this year, said the people, who asked not to be identified because the information isn’t public. The fund is made up primarily of Paulson’s own money, one of the people said. The strategy has about $500 million, down from about $700 million at the end of March.
Gold may get a break if Paulson, other big funds are flushed out (MarketWatch)
John Paulson’s Gold Fund lost 27% in April, according to a report on Bloomberg Tuesday, citing someone familiar with the matter. That’s a chunk of change, and explains why the SPDR Gold Trust (NYSEARCA:GLD) -1.65% keeps heading south, says Tyler Durden over at ZeroHedge. Durden says there may be a gold lining amid signs of major selling from Paulson and others. ”The good news is that once levered players such as Paulson are finally blown out, there is hope that only far more rational, ‘non-weak handed’ players remain at the table,” he says.
