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PSA: Breakfast w/ the Oracle of Omaha Mon 3/4/13
Old 03-01-2013, 03:05 PM   #1
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PSA: Breakfast w/ the Oracle of Omaha Mon 3/4/13

I know CNBC isn't terribly popular on this board, but if anyone's interested, Warren Buffet is going to be on from 6am - 9am Monday, 3/4/13.

They're taking questions via Tweet (don't know if email or other mode) for him to answer then.

Tyro
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Old 03-01-2013, 04:00 PM   #2
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That should be interesting. He always seems to be a good talk on this show in the past. I don't mind the early morning CNBC always intertaining as long as you take it with a grain of salt. If not there is always ESPN!!

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Old 03-01-2013, 09:30 PM   #3
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Thanks for the alert - I'll be on the road for a volunteer committee meeting but just set it up to record on DVR.
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Old 03-02-2013, 07:35 AM   #4
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Warren Buffet is going to be on from 6am - 9am Monday, 3/4/13
Is that Pacific Time? I don't see any mention of it on their website.
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Old 03-02-2013, 07:53 AM   #5
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I always enjoy listening to WB, but his message is consistent. Optimistic, stay the course, fearful when others greedy, etc.
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Old 03-02-2013, 08:06 AM   #6
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Is that Pacific Time? I don't see any mention of it on their website.
EST. Sorry, I usually think to include that.

Here's the mention on their website (wasn't easy for me to find either).

We Want Your Questions for Warren Buffett

Apparently, this is an annual (6th) event.

Tyro
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Old 03-03-2013, 07:59 AM   #7
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EST. Sorry, I usually think to include that.
Ok, thanks. I don't treat his word as gospel, but I enjoy hearing what's inside his head.
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Old 03-04-2013, 08:30 AM   #8
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What amuses me is the way the CNBC men and women fall all over themselves to fawn over him.
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Old 03-04-2013, 09:20 AM   #9
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What amuses me is the way the CNBC men and women fall all over themselves to fawn over him.
Yea, you'd think he's rich.
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Old 03-04-2013, 10:15 AM   #10
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Yea, you'd think he's rich.
Oh, i'm not talking about him. I 'm talking about the people who try to whip up retail investors into a frenzy.
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Old 03-05-2013, 09:44 PM   #11
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I taped and watched the whole 3 hours. I agree with much of the criticism of CNBC, but honestly if you want to really understand how company operates there in depth interviews (in this case QA from the audience) are hard to beat.


He remains bearish and nervous about bonds especially long term government one. In particular, he said that a lot of smart money manager are waiting for the first hint that fed is going to change course and stop buying treasury. The clear implication is that when that happens there will be a lot of fast selling of bonds, and it won't be good for stocks either.

He also reiterated something he discussed in his annual letter. How times are going to be really rough for insurance companies. Most insurance companies (except for Berkshire) lose money on writing insurance. Example it may cost them $102 in claims for each $100 they collect in life insurance policies. In the past they made money by investing the float (e.g. the collected $4/year for 25 year before paying out the $102). However, as interest rates have plummeted the new bonds they are purchasing are making them far less money. This doesn't bode well for insurance companies. Buffett thinks smart money managers have figured this out, but he is sure that this is true for everybody else.

I point I have been making about relying on exclusively on insurance companies to fund your retirement. In order to fund your annuity insurance companies have to make money, and they face the same investment environment the rest of us do.

Berkshire business are seeing a steady, albeit weak recovery. In everything from, carpet and brick sales, to the realty business. He still thinks that if you are going to stay put for 5 years, one of the best investments you can make is to buy your own home and take out a 30 year mortgage.

I never cease to be amazed at the quantity of economic that he remembers and can recall instantly. e.g. government spending as percentage of GDP, ditto deficit, healthcare. Then use the data to make his point e.g. he pointed out that 30? years ago the US and bunch of developed countries all spent about 5-6% healthcare and now we are at 17% of GDP the nearest country is 11%. That 6% addition is a real drag our our economy worse than our high corporate taxes which only represent 1.25% of GDP.

Also next time you hear a CEO testify that he didn't about XYZ that went on in his company. I'll think of Buffett rattling of the number of trainloads of coal and oil that BNSF shipped, what percentage of total shipping (20% down from 25%) each commodity represents and how much of the total oil US production is shipped by BNSF (10%). He can also tell you the conversion rate of sales calls into customers at GEICO. The details of Berkshire's portfolio, and practically anything else about the business.

In the days before Google largely leveled the playing field on knowledge, what an amazing competitive advantage Warren must have over regular investors when he is evaluating the fair price of a company or stock.
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Old 03-06-2013, 07:48 AM   #12
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.....He also reiterated something he discussed in his annual letter. How times are going to be really rough for insurance companies. Most insurance companies (except for Berkshire) lose money on writing insurance. Example it may cost them $102 in claims for each $100 they collect in life insurance policies. In the past they made money by investing the float (e.g. the collected $4/year for 25 year before paying out the $102). However, as interest rates have plummeted the new bonds they are purchasing are making them far less money. This doesn't bode well for insurance companies. Buffett thinks smart money managers have figured this out, but he is sure that this is true for everybody else.

I point I have been making about relying on exclusively on insurance companies to fund your retirement. In order to fund your annuity insurance companies have to make money, and they face the same investment environment the rest of us do. ....
I agree with Buffett's point but not with yours. Buffett is right that the low interest rate environment is a huge challenge to insurers making profits in excess of their cost of capital and generating profits at levels that make investments in insurers attractive to their shareholders.

However, I don't think those challenges of making enough profit that make them attractive to investors in insurance stocks necessarily translates to higher risk to policyholders as you suggest. Insurance is a very highly regulated industry and the regulations are all focused on insurer solvency and having sufficient assets to provide the promised benefits. Over the last 20-25 years the industry as a whole has an excellent record of keeping the promises they make and given the regulatory framework in place, the role of the rating agencies, their current balance sheet strength and their performance during the recent financial crisis, I don't see that excellent record of providing the promised benefits changing.

You're interpreting his comments as them not making money - I don't think they will have losses, but they will be challenged to make enough to make their stock attractive.
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