Buffett abroad

[Nords]

(I was originally going to title this post "Buffett Unleashed" but I didn't want to make CFB spew hot caffeine through his nasal passages.)

I don't watch much TV so I didn't pick up on this until last night, but Buffett let a CNBC reporter (I know, oxymoronic) accompany his recent trip to China & Korea. Becky Quick has interviewed him a few times before so they turned the road show into a whole series of website transcripts & videos.

IMO Buffett has never made any particular effort to market to the press. Shareholders, sure, but not the media or the great unwashed public. He's played a lot of bridge with Carol Loomis (a Fortune editor) and he helped his ex-daughter-in-law with a biography (or at least didn't get in her way), but he generally ignores his press or even tries to evade disclosure.

That seems to be changing. Roger Lowenstein wrote an excellent Buffett biography in the 1990s completely without Buffett's help, and several other authors have made similar unaided contributions, but Alice Schroeder has spent over three years working with Buffett on his first authorized biography (due in April). She's a highly-regarded insurance analyst (especially on General Re) so it'll be interesting to see if this is a critical look or a hagiography.

Becky Quick's unprecedented access leads to more fan worship than reporting. Of course she wouldn't continue to enjoy this access if she said snarky things about him, but if Buffett (or his staff) were trying to conceal frailty or even a whiff of Alzheimer's symptoms then you know she'd break the story like a starving dog on raw meat. Buffett appears to be disgustingly healthy for his lifestyle, so the interviews are pretty light and full of earth-shattering queries like "What's in Warren's Wallet?"

What I found interesting was her overview of the trip, including her comments on Buffett's drive & stamina. She claims that the man is even more of a marathon machine than we've been led to believe.

CNBC's exposure might help persuade people that Buffett is still at the top of his game, but I think he's also opened Pandora's Box. Now that he's shared so much of himself with the public it'll be hard for him to hide the signs of aging by sequestering himself in his office. Either that or there's a conspiracy about Buffett body doubles...

The rest of the links at the bottom of her commentaries are as light as the wallet research, but there are interesting tidbits about China, Korea, & Iscar.

 

[deserat]

Nords - thanks for posting this - interesting articles - yes, puff pieces, but interesting to see how simple he really is.

 

[kcowan]

Nords - thanks for posting this - interesting articles - yes, puff pieces, but interesting to see how simple he really is.

I have to admit that the lousy weather here enabled me to see most of the video segments. I was surprised that CNBC would spend so much for so little. It helped to cure me of my CNBC habit. Now I am on the comedy channels and also watch US election posturing for more comic relief...

(Seldom has so much network coverage been devoted to so little of any consequence...)

 

[clifp]

Now come on folks, I thought Becky did a good job interviewing Warren. What did you expect her to get his next major stock purchase, what company he is buying next?

It was about the same level of depth as a Barbara Walters celebrity interview. Plus how often have you seen A. Rod asked about his investments LOL.

The man comes across as geniune and very happy. I don't think he is a former drug addict, murderer, or shoplifter so there is a limit of hard hitting questions to be asked.

 

[katwoman]

I caught the interview as well.

Buffett healthy? When I told my personal trainer that he boasts about drinking 5 cherry cokes every day for years and years.....well let's just say you could hear her jaw hit the floor. (My trainer is highly disciplined. She ran her first marathon (Chicago) in the sweltering heat and managed to finish in 4 hours)

I like the guy but I don't see him living for too much longer. It's a shame.

 

[Nords]

My trainer is highly disciplined. She ran her first marathon (Chicago) in the sweltering heat and managed to finish in 4 hours

Maybe you'll have to compare her physical condition to her net worth too...

I'm hoping that Buffett can train a successor, but expecting the anointed to survive a diet of cherry cokes, burgers, and ice cream is probably asking too much. Shouldn't that diet have killed Buffett years ago?

The "B" share price is now above $4900 (5-6 Dec), up 35% for the year, and looking at its biggest annual gain since 1998. Lest I be accused of [-]relentless shilling via pumping & dumping[/-] overweighting our asset allocation, on 2 January we'll be liquidating the kid's college fund and rebalancing the shares in our ER portfolio. However you won't even see it in the volume...

 

[cardude]

Nords,

How far is your kid from college, timewise?

I've got a couple of college funds for my kids funded by Berkshire shares, but they are 8 and 10 years from college so I hadn't planned on selling yet. However, this 5K level for B shares has me thinking............

 

[Nords]

Nords,
How far is your kid from college, timewise?

According to our computer's counter: 982 days, two hours, and 43 minutes. Unless she forsakes a [-]real[/-] civilian college to start USNA a month earlier (July 2010).

Quite a ride, eh? I thought $5000/share was going to be a hard psychological barrier, but apparently that's not the case. Wish I knew who was driving this up-- it can't be merely mutual-fund window-dressing. Of course the share price could end up breaking $5000 several times in both directions.

At $5000/share Berkshire is over 55% of our kid's college fund. At her age a more appropriate asset allocation is probably "zero", but at your kid's ages you have a few years left to [-]deathwatch[/-] keep holding.

I've had a difficult time getting to the point of actually selling Berkshire shares, but our breakthrough was deciding that feeling stupid was only a matter of degree, not "if". I think it's far better to stick to asset allocation by rebalancing every few years, and 2008's tax reductions (plus the prospect of filling out a FAFSA on 2009's finances) make this a great opportunity.

Berkshire's runup also encourages the optimism that one could sell now and see a future reversion to the mean, although timing Berkshire is a very dangerous thing. I'm not so sure that we'll be buying back in.

 

[cardude]

Wish I knew who was driving this up-- it can't be merely mutual-fund window-dressing.

I guess a real "flight to quality" may be happening, and maybe since a few did it the entire heard is piling on. Who knows?

I keep wanting to trim, but can't pull the trigger. I was going to trim at around $4500, but didn't do it then and I can't seem to do it now. I've got 7-8 years of cash to live on if I quit in 2008, and I figured I had another 5 years or so to start trimming before something bad happened to Buffett, but with this crazy run up it may just go sideways for a few years now (or go down).

When to sell seems to be a harder decision than when to buy, for me anyway.........

 

[clifp]

My theory is the boring old Berkshire is now a momentum stock. Not only is included regularly in chatter among the CBNC types but even by everyday investors, including my ex girlfriend.

A few years ago I took over my girlfriend (now ex) investments. Even after we split I continued to do so but once she left the state it didn't make a lot of sense.Just over a year ago I bought some Berkshire. It took a bit of prodding on my part, since it isn't a very glamorous stock. The main reason I gave her is A. It is undervalued probably worth at least 4000 to $4500 a share, B. Warren Buffet runs the company. and C. in a bear or scary market it it likely to do very well.

So we've been going over what she do in the future now that I am (mercifully) out of the picture. In every email we've exchanged she has asked about Berkshire. I just log on to her account today and the very first thing she has bought since retaking control is BRKB at $4,950.

Now a couple of things are important to understand about my ex. First, she is pretty smart about money, she has MBA, a career in finance, and despite supporting an non-working "artist" husband for 20+ years, she has managed to accumulate a substantial sum. Second she is a very aggressive investor, it was a struggle to get her to buy any bonds (her,"they don't anything" , me not during bull markets, but 10-15% bonds at age 51 isn't overly conservative and they are good to have during bear market.). She made a nice profit buying AAPL in the 90 and selling it in the 180s. So I find it telling that because Berkshire has performed so well in the last few months while the rest of the market has tanked that she elected to buy more Berkshire, despite me telling her I (and M*) didn't think it was worth much more than $5,000-$5,500.

Now since many of us are value investor, it is a little hard for us to understand momentum investing, but it is a alternative way of investing and can be very profitable. Warren himself has said that markets tend to go over in extremes. As a value investor, I almost invariably buy too early and sell to early. I am holding on to Berkshire until more momentum folks jump on board, of course I don't have a daughters college to fund.
I think I'll post this also over at Berkshire board.

 

[lswswein]

I hope in a few months or maybe a couple of yrs the momentum investing of BRK will collapse and BRK atleast flattens out for a while. I sold my BRK around $4000 and my limit orders are sitting around (my amazing timing skills)!. I would love to own BRK again but not at these levels.

-h

 

[clifp]

I hope in a few months or maybe a couple of yrs the momentum investing of BRK will collapse and BRK atleast flattens out for a while. I sold my BRK around $4000 and my limit orders are sitting around (my amazing timing skills)!. I would love to own BRK again but not at these levels.

-h

Best of luck, but I don't see it back down to $4,000, although I'd say you have a much better chance of getting your limit order that I have for getting my old limit orders for GOOG at $80... (yup below the IPO LOL)

 

[RetireeRobert]

5 cherry Cokes a day? Not sure I want to bank on how well he has trained his successor.

 

[clifp]

5 cherry Cokes a day? Not sure I want to bank on how well he has trained his successor.

Good health habits are overrated. My hero Sir Winston Churchill, drank like a fish, smoked a couple of cigars a day, ate rich food in large quantities. Stayed up all night, slept as little of possible, and other than fairly regular swimming didn't exercise. He lived past 90 and still was Prime Minister at age 80. He like Warren was blessed with bountiful energy.

 

[unclemick]

Good health habits are overrated. My hero Sir Winston Churchill, drank like a fish, smoked a couple of cigars a day, ate rich food in large quantities. Stayed up all night, slept as little of possible, and other than fairly regular swimming didn't exercise. He lived past 90 and still was Prime Minister at age 80. He like Warren was blessed with bountiful energy.

I dunno - two packs of Salems per day, some Ensure, chocolate candy very little exercise. Died at 89.

If Mom could have dumped the cigs she might have made 90. Her Mom smoked unfiltered - went at 89 also.

heh heh heh - Buffett may fool everybody.

 

[Texas Proud]

Just read that Buffet is now the world #1 richest man!!!!

Gates has dropped to third....

And who knows the youngest self made BILLIONAIRE ever At age 23 no less...

Who said the dot com hype is gone....