When it comes to stock market returns, Warren Buffett’s Berkshire Hathaway (BRK.A) (BRK.B) has secured its place in the history books as one of the most successful stock investments ever. Over the past 44 years, this company has grown its book value per share at an incredible rate of 20.3% compounded, and rewarded shareholders richly in the process — about twice the rate at which the S&P 500 has appreciated. But could it be that when it comes to running an insurance business, Buffett isn’t all that much smarter than the cavemen who star in his insurance commercials? A recent report on advertising spending in the insurance industry suggests this may be the case.
Oracle leads bidding (WSJ)
Billionaire investor Warren Buffett is beginning to overtake hedge-fund maestro Wesley Edens in a heated bidding war to scoop up bankrupt mortgage lender ResCap. The Oracle of Omaha, who had been named as the lead bidder for part of ResCap — a portfolio of mortgage loans being auctioned as a part the company’s reorganization — is now emerging as a front-runner for the entire operation, sources tell The Post. That’s a stark turn of events for Buffett, who earlier had been rejected by ResCap.
The Future of Giving: Warren Buffett and Connected Philanthropy (Forbes)
As governments around the world pull back, the philanthropic sector will be a critical force in meeting global needs. In what is called the “Giving Pledge” 81 billionaires have committed to give more than half of their wealth to charitable organizations. This level of philanthropy, over $37 billion by Warren Buffett alone, is historically unprecedented. Warren Buffett most lasting contribution will not be his money; rather that he has successfully leveraged his social network and the media to inspire other billionaires to give extraordinary wealth for charitable good. He is reshaping the way the rich think about money and giving.
Warren Buffett’s Bank Stock Picks Show Value (TheStreet)
Bank stock investors canvassing the industry for stock plays have a big decision to make now the nation’s largest banks have reported earnings. Should investors chase a long-expected earnings rebound at suffering banking giants like JPMorgan Chase (JPM_), Citigroup (C_) and Bank of America (BAC_) potentially lifting shares from single digit price-to-earnings multiples, or should they put their money behind a safer premium-priced lenders like Wells Fargo (WFC_), U.S. Bancorp (USB_), BB&T (BBT_) and M&T Bank(MTB_)?
Mitt Romney: World’s Greatest Investor? (WSJ)
Just like Mitt Romney, Berkshire Hathaway CEO Warren Buffett is a capitalist who seeks to maximize profits at the companies he buys. And just like the firms backed by Mitt Romney’s Bain Capital, companies in the Berkshire portfolio sometimes have to let people go to maintain the health of the business. But while President Obama has attacked Mitt Romney for his work at Bain, the president has hailed Mr. Buffett as a financial sage, relied on him for economic advice, hosted him at state dinners and even given him a Medal of Freedom. Of course Mr. Obama isn’t the only one lauding Warren Buffett. The “Oracle of Omaha” is widely regarded as the world’s greatest investor.
RSI Alert For Catamaran Corporation (Forbes)
Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative Strength Index, or RSI, which measures momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30. In trading on Tuesday, shares of Catamaran Corporation (Toronto: CCT) entered into oversold territory, hitting an RSI reading of 29.9, after changing hands as low as $85.82 per share. By comparison, the current RSI reading of the S&P/TSX Composite Index is 44.4.
Railway Stocks: The Next Great Resource Play? (ResourceInvestingNews)
When legendary investor Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A, BRK.B) bought U.S. railway Burlington Northern Santa Fe (BNSF) for $34 billion in 2009, many saw the move as a big bet on the future of the country’s economy. That’s because the railway hauls a wide range of products, from agricultural commodities like corn to consumer goods imported from Asia. Buffett saw Burlington Northern as a way to profit from coal.
At Last, Everyone is Equal! (BernardGoldberg)
The American people woke up just the other day to find that their household wealth has been completely redistributed. That’s because it was the day on which the so-called Buffett Redistribution Rule took effect. The rule, named in honor of Warren Buffett, an Omaha investor and one of the richest people in the world, is contained in an executive order proclaimed last month by President Obama. The President had previously tried to get Congress to pass legislation that would put the rule into effect, but the attempt was blocked by the Republican majority in the House of Representatives.
Bottom Feeders Don’t Like The Taste Of Diamond Foods (SeekingAlpha)
In anticipation of the Nasdaq hearing on July 26th, Diamond Foods (DMND) has tumbled about $2.50, or approximately 13%, in the past five days on lower than average volume. Yesterday it reached a four year low of $16.75. Usually when a stock is in freefall like this, a floor emerges as value investors start nibbling. So why isn’t a big time value investor like Warren Buffett scooping up shares at such low prices? The answer is uncertainty. Investors hate uncertainty, and Diamond hasn’t given many updates with information about the company that really interests investors. Diamond does have the occassional fluff news like “Kettle Chips head chef travels the world to source flavors”, and “Happy 30th Birthday Kettle Chips!” , but it doesn’t say much for the bottom line.
