Focus On Value Investing

Jim Rogers Discusses the "Stimulus" Package

2009-02-16T23:38:00.000-05:00

Being Hated A Good Thing?

2009-01-02T22:08:00.004-05:00

It is no secret that Sears Holdings is a hated stock by analyst. However, I didn't realize it was rated at the bottom according to a recent Bloomberg commentary article by John Dorfman.

Dorfman states in the article: "According to Bloomberg tabulations as of Dec. 29, the average rating on the Hoffman Estates, Illinois-based company was 1.29 on a scale where 1 equals “sell” and 5 is a strong “buy.” That gave Sears the worst score among the 2,678 U.S. stocks with a market value of at least $250 million."

As you probably guessed, analyst opinion doesn't typically amount to a fatter brokerage account. Dorfman studied loved and hated analyst stocks from 1998 through 2007 which resulted in the most hated outperforming the loved on average. It seems it's not always wise to follow the crowd.

Read the full article: Sears as Most-Hated Stock Might Be a Good Thing: John Dorfman

GMO's Jeremy Grantham

2008-12-02T22:03:00.000-05:00

Value investor Jeremy Grantham on WealthTrack for his first TV apperance.

T. Boone Pickens '60 Minutes' Interview

2008-10-26T22:32:00.000-04:00

Watch CBS Videos Online

Watch CBS Videos Online

Watch CBS Videos Online

T. Boone Pickens who heads BP Capital Management was profiled this week on 60 Minutes. This is an interesting segment which goes beyond his normal message of eliminating the U.S. from dependence of foreign oil. His portfolio can be viewed here.

Schwarzenegger and Buffett Talk The Economy

2008-10-26T22:07:00.000-04:00

Warren Buffett and Arnold Schwarzenegger gathered at the 2008 Women's Conference to dicuss the economy.

A transcript of the event can be found here.

Kekorian Dumps Ford Shares

2008-10-21T20:20:00.001-04:00

Things are really bad here in the Detroit area, in case you haven't heard. The housing market is one of the worst in the country, Detroit's political landscape has been riddled with scandal, and of course the auto industry is in a dismal state to say the least.

Today, billionaire investor Kirk Kerkorian sold 7.3 million shares of Ford (F)and may sell his remaining 133,500,000 shares "depending on market conditions". Kekorian had originally been buying shares in the $7-$8 range. Shares closed at $2.17.

Apparently the $25 billion federal loan package the government handed the Big 3 didn't entice Kerkorian to stick around. Even with government aid, the word seems to be that the Big Three may become the Big Two. Whether the new Big Two is a result of a merger or a failure is still speculation which we will likely have a clear answer soon.

If the auto makers cannot compete, they must be allowed to fail in order for the free market to self correct. As much as I would hate to see one of these great symbols of capitalism fail, in the long run it is the right economic decision for Detroit and America.

I believe economist Fred Foldvary's conclusion on the auto industry from progress.org should be the policy we take with the auto industry:

"There was a bad precedent 25 years ago, when the federal government bailed out the Chrysler Corporation. Now that the whole US automobile industry has failed, declarations of bankruptcy would not be a catastrophe. Other firms would buy the factories, and could start clean with no legacy costs. A bailout would lead to further demands from other industries. It would be best for the American economy to avoid any more bailouts, but also to restructure government policy to stop both the taxes and the subsidies that have distorted the economy."

"Government is not allowing prices and profits to do their economic jobs, and further interventions will just make the problem that much worse in the long run."

Warren Buffett: Shaping the Snowball

2008-10-20T22:46:00.000-04:00

Alice Schroeder wrote the recently released book The Snowball: Warren Buffett and the Business of Life. She will be posting eight "webisodes" relating to the life of Buffett. The first video is posted above and more can be found here.

Buffett: Cash Isn't King

2008-10-19T20:13:00.001-04:00

CNBC discusses Warren Buffett's NY Times article Buy American.I Am.

From the article: "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now."

Jim Rogers on Financial Mess

2008-10-11T11:25:00.001-04:00

Jim Rogers states the Federal Reserve is "unleashing an inflationary holocaust". Money being pumped into the economy ultimately creates inflation which weakens the dollar.

Here is an interesting long term chart of the US dollar against other major currencies. Speaking in recent terms, the dollar has seen major declines since 2006 and even bigger declines since 2002.

Barron's Gives Bad Review to New Buffett Book

2008-10-05T21:59:00.001-04:00

The Snowball: Warren Buffett and the Business of Life by Alice Schroeder was recently released and the above review from Barron's of the biography isn't favorable. I haven't read the book but I will sometime in the future when I can find a cheap used copy. I will be curious to see what additional Buffett knowledge can be gain which isn't in Buffett: The Making of An American Capitalist. If anyone reads Snowball, let me know what you think.

Warren Buffett on Charlie Rose

2008-10-05T01:11:00.000-04:00

Warren Buffett appeared on Charlie Rose this week to mainly discuss the financial crisis.

Buffett Talks GE Investment

2008-10-02T19:24:00.000-04:00

Warren Buffett talks to his CNBC gal pal Becky Quick on the GE investment. Also, Whitney Tilson discusses Berkshire.

Buffett Discusses Goldman Sachs Investment

2008-09-24T22:07:00.000-04:00

Buffett explains the Goldman investment and the financial crisis.

Berkshire Invests In Golman Sachs

2008-09-23T20:14:00.001-04:00

It looks as if Warren Buffett has found some value in Goldman Sachs (GS). Berkshire announced today that it has made a $5 billion investment in Goldman perpetual preferred stock.

Per the WSJ.com: "The $5 billion preferred shares pay a 10% dividend and can be bought back by Goldman at a 10% premium. The warrants give Mr. Buffett the right to buy $5 billion worth of Goldman stock at $115 a share, which is 8% below Goldman's closing share price on Tuesday of $125.05. At Goldman's current $50 billion market capitalization, exercising those warrants would give roughly Mr. Buffett 10% of the company."

It has been quite a week for Goldman; from a huge drop in its stocks price, to becoming a bank holding company, and now the Buffett investment. Hopefully this deal will mark the begining of some much needed stability in the financials.

'Meet The Press' Paulson and Bloomberg Interview

2008-09-21T19:26:00.003-04:00

Sectretary of the Treasury and former CEO of Goldman Sachs, Henry Paulson, talks about the financial crisis and where your tax dollars are headed. Also, Michael Bloomberg is interviewed on the same issue.

You can also read the Paulson Newsweek article referenced in the interview here.

MidAmerican CEO Talks Constellation Energy Deal

2008-09-20T12:50:00.001-04:00

MidAmerican CEO David Sokol discusses the acquisition of Constellation Energy. MidAmerican is a subsidiary company of Berkshire Hathaway which agreed to buy struggling Constellation for $26.50 a share.

Jim Rogers on Fannie and Freddie Nationalization

2008-09-09T11:58:00.000-04:00

If you know anything about Jim Rogers, you know he wasn't in favor of the Fannie Mae and Freddie Mac bailouts.

Rogers states in the video: “This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I’m not quite sure why I or anybody else should be paying for this.”

Warren Buffett CNBC Interview

2008-08-25T22:55:00.000-04:00

Buffett on Fannie / Freddie and Oil

Buffett on Energy

Buffett on John Edwards Affair

Buffett on Debt

Morningstar on Diageo

2008-08-17T00:54:00.000-04:00

I recently picked up a small stake in Diageo (DEO) at about $70.00/share. Above, Morningstar gives a good short synopsis of the company. The below link will take you to an interview with CEO Paul Walsh where he discusses growth.

Diageo CEO on Growth

Links

2008-07-31T22:09:00.001-04:00

Happy Day for Icahn

No one is smarter than the market

Bill Miller: Toughest market I've seen

Bill Miller Investment Commentary

Lmapert Buys More AutoNation

Time To Get Into Restaurant Stocks?

Tilson & Kilpatrick on Berkshire

Links

2008-07-28T22:51:00.002-04:00

Oak Value Fund Quarterly Letter

Video: Value in Berkshire?

Buffett March 31, 2008 Discussion Transcript

Sears: Finally, a Reason to Brag

Morningstar Looks At Credit Card Firms

KKR Going Public

2008-07-27T21:29:00.000-04:00

Kohlberg Kravis Roberts & Co announced today that it will go public via a merger with KKR Fund in order to create additional capital. KKR & CO is most famous for taking over RJR Nabisco in what was the largest private equity deal in Wall Street history for some time. I reccomend reading "Barbarians At The Gate" which gives an excellent account of the KKR deal with RJR Nabisco.

According to Bloomberg: "KKR forecasts it will post a profit of about $1.2 billion in 2009, said two people familiar with the transaction. KKR expects investors to value the company at 10 to 12 times earnings, or between $12 billion and $15 billion, said the people, who asked not be named because the information isn't public." The combined company (KKR and KKR Fund) is said will be valued between $15 -$19 billion.

It will be interesting to see how this one plays out.

Berkshire Hathaway Annual Meeting Links

2008-05-03T22:11:00.000-04:00

Buffett Says Credit Crisis Ebbs for Wall Street Firms

Buffett sees euro, sterling strong against dollar

Buffett Warns of Smaller Returns for Berkshire Hathaway

Derivatives Hurt Profit at Berkshire Hathaway

Berkshire's Moody's Stake No Conflict, Buffett Says

Buffett and Munger reassure shareholders about succession

Berkshire Hathaway Holds $4 Billion of Auction-Rate Securities

Buffett says Fed avoided chaos in Bear bailout

Links

2008-04-28T21:24:00.000-04:00

Warren Buffett Finances Mars-Wrigley Deal: The Complete CNBC Interview

Deep-Value Investing in the "G Ice" Age

How much home can $1 million actually buy?

Kerkorian Discloses 4.7% Stake in Ford, Seeks More

Links

2008-03-03T20:34:00.000-05:00

LIVE BLOG: Warren Buffett on CNBC's Squawk Box

Value stocks can perform well in both up and down markets

American Express Insiders Remain Confident

Growth vs. Value

5 Reasons To Own Small Cap Value

Buffett warns on US recession and dollar

Do Dell Share BuyBacks Create Value for Shareholders?