Editor’s Note: Related tickers: Berkshire Hathaway Inc. (NYSE:BRK.A), American International Group, Inc. (NYSE:AIG), Union Pacific Corporation (NYSE:UNP), Johnson & Johnson (NYSE:JNJ), The Coca-Cola Company (NYSE:KO), Wells Fargo & Company (NYSE:WFC)
Warren Buffett‘s track record and the performance of his conglomerate Berkshire Hathaway Inc. (NYSE:BRK.A) speaks for itself. No can question the high-quality businesses that he has assembled under one umbrella. American International Group, Inc. (NYSE:AIG), on the other hand, served as a prime example of a low-quality and poorly managed business during the financial crisis. However, as AIG cleans itself up and looks toward the future, is its stock a more attractive long-term play than Buffett’s giant? In this video, Motley Fool financials analysts David Hanson and Matt Koppenheffer debate which stock offers investors the most opportunity.
Will Warren Buffett’s Newest Move Challenge the Competition? (Fool)
Union Pacific Corporation (NYSE:UNP) has the type of one-year stock chart that dreams are made of, marching steadily higher with very little volatility. Moving stuff around the country is a great business, and one that appears to produce the type of steady returns we’d all like to see in our portfolios. Unfortunately for holders of Union Pacific stock, Warren Buffett may be angling to spoil all of that. A few weeks ago, Berkshire Hathaway Inc. (NYSE:BRK.A) BNSF Railway Co. announced that it would be launching a pilot program to test the viability of transitioning locomotives from burning diesel to running on liquefied natural gas, or LNG. Despite the significant cost of retrofitting BNSF’s 6900 engines to accept the alternate fuel source, the comparable amount of energy available from LNG to a gallon of diesel is dramatically less expensive. Such a change would completely upend the rail industry and force holders of Union Pacific stock to evaluate how such a change might impact their shares.
Warren Buffett firm bets big on mobiles, social media in India (EconomicTimes)
With an aim to become a leading online insurance provider, the Indian venture of Warren Buffett-led Berkshire group is betting big on the popularity of mobile phones and social media to boost its business. Berkshire India sells motor, travel and health insurance products online at on BerkshireInsurance.com and it will soon start selling life insurance products as a corporate agent of Bajaj Allianz Life Insurance.
The 1 Medical-Device Company Warren Buffett Should Buy (Fool)
You would think that the medical-device sector would be rife with big gainers thanks to an aging population, but it’s not quite as simple as that. Just as we saw when we examined the biotechnology sector last week, there are pros and cons to investing in medical devices. …But, just as we saw with regard to biotech, I think Buffett and Berkshire Hathaway Inc. (NYSE:BRK.A) are missing a crucial component in their investment portfolio by predominantly passing up the medical-device sector. It’s true that Buffett and Berkshire do have some medical-device exposure thanks to ownership in shares of Johnson & Johnson (NYSE:JNJ), which purchased Synthes last year for nearly $20 billion. Synthes has a large spinal implant operation, which will give J&J plenty of fast-growing emerging market exposure and will probably put big smiles on Berkshire shareholders’ faces. But overall, J&J is a diversified conglomerate with only partial exposure to medical devices.
WARREN BUFFETT WINS AGAIN: Train Traffic Is Going Through The Roof (BusinessInsider)
EUROPEANS have long pitied Americans for their rotten passenger trains. But when it comes to moving goods America has a well-kept freight network that is the most cost-effective in the world. It is, however, a capital-intensive business. Since the Staggers Act of 1980 deregulated the sector (see chart), rail companies have invested about 17% of their revenues in their networks. This is about half a trillion dollars of private money over the past three decades. Even the American Society of Civil Engineers, which howls incessantly (and predictably) about the awful state of the nation’s infrastructure, shows grudging respect for goods railways in a recent report.
Coke Stock: One of Warren Buffett’s Biggest Investments Might Be His Worst (Fool)
Global beverage titan The Coca-Cola Company (NYSE:KO) has for a long time been one of Warren Buffett’s largest holdings at Berkshire Hathaway Inc. (NYSE:BRK.A). Buffett began purchasing Coke stock in 1988, and the stock saw tremendous gains for the next decade, leading some observers to call Coca-Cola one of his greatest investments. Yet the stock’s performance since 1998 has been decidedly mediocre. Coke stock has joined in the recent market rally, more than doubling off its Great Recession low. That said, I’m skeptical that the company will be able to grow its bottom line enough to justify its generous P/E ratio of 20.7. Coca-Cola may therefore continue its long run as one of the biggest dogs of Buffett’s portfolio.
Wells Fargo Does Right By Buffett (Fool)
When Warren Buffett was just beginning to build Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK-B) stake in Wells Fargo & Company (NYSE:WFC) back in the early 90’s, he gushed over the bank’s top managers, Carl Reichardt and Paul Hazen. In a short “how do I love thee, let me count the ways” tribute in Berkshire’s 1990 shareholder letter, Buffett highlighted three things he particularly liked about the leadership of Reichardt and Hazen: …Reichardt and Hazen no longer run Wells Fargo. Nor does Dick Kovacevich, who followed Hazen. But it appears that current CEO John Stumpf may be carrying on in the same tradition — and is likely making Mr. Buffett very happy in the process.
