Berkshire Hathaway

Cruising For Deals At The BRK Tradeshow

-47.jpgBerkshire Hathaway’s annual shareholder meeting kicked off Friday and, as luck would have it, one of the 27,000 (tiny) fractional owners of the company is a DealBreaker reader. Curtis Walker has been liveblogging the jamboree, which, in year’s past, has included Warren Buffett losing to an 11 year old at ping pong, and teaching a tantric sex class. So don’t be assholes—he’s one of you!
Rather than leaving any space unused at the Omaha Qwest Center, Berkshire takes over the convention hall for many of it’s subsidiary companies to exhibit their wares, sell discounted goods and hold meet ‘n greets with the public. Geico shows up with an army of insurance agents ready to do quotes and write plans on the spot. Fruit of the Loom lets it all hang out with a full crew of mascots and discount underpants. Kirby shows off their pricey, but shiny, Dyson eaters and Dairy Queen’s got frozen treats.
The best part, however, is the bookstore, where each year a selection of handpicked books, DVDs and CDs are up for grabs at a discounted price. Old Charlie’s Almanac, introduced in 2004 has managed to sell around 50,000 copies before this weekend without any marketing or any book store availability. I’ll be honest with you here, I own the book, but I haven’t ever read it. One guy who did read it asked Charlie what to do about his inability to understand it. Charlie replied “start by giving it to someone more intelligent.”
I didn’t spend more than an hour on the floor, but I did manage to get a Polaroid with the Fruit of the Loom guys and another with Geico bike builder, Big Rick Hoffman. I felt this was especially important with the recent demise of Polaroid film. I couldn’t resist getting a few books too: “A Weekend with Warren Buffet and other shareholder meetings” by Randy Cepuh, “Seeking Wisdom, From Darwin To Munger” by Peter Bevelin and “Foods You Will Enjoy – The Story of Buffett’s Store” by Bill Buffett. Two of these authors were on hand for signings, but that had no impact on my willingness to purchase the books. The first intrigues me, because this guy managed to pull a book out of his various shareholder experiences, while I, so far, have managed to pull a measly 5 posts out of the weekend. The second book interests me as a philosophical text on the collection of famous quotes, thoughts, missives and contextual interpretations of them all by the author. Finally, the final book had a lot of pictures in it, and I will probably be sick of reading soon, so I thought it’d be a nice break.
After the meeting and a brief nap, we relocated to the parking lot of the Nebraska Furniture Mart where my mom picked up a new bed with her shareholder discount. I fondled a few iPods and a deeply discounted
Plasma TV that remained a bit out of my price range. Overall, it was a great weekend, and I plan on cheaping it up again in Omaha next Spring.
Curtis Walker is a writer based in Las Vegas, NV.

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Qwest Center Stake Out

bkmeeting.jpgBerkshire Hathaway’s annual shareholder meeting kicks off today and, as luck would have it, one of the 27,000 (tiny) fractional owners of the company is a DealBreaker reader. Curtis Walker will be liveblogging the jamboree, which, in year’s past, has included Warren Buffett losing to an 11 year old at ping pong, and teaching a tantric sex class. So don’t be assholes—he’s one of you!
After a terrifying night of storms and 19 tornadoes at my mom’s remote survivalist compound (Hi Mom), we hit the road after my daily Twitter fix. Fortunately, aside from wind, the weather was cooperative. We couldn’t pass up a chance to stop at Costco* to get some Cokes and burn a few dollars off my AmEx. So far, it’s a good day for “going Berkshire,” though the motorhome isn’t by Carefree of Colorado and it’s not insured by Geico… yet; Geico recently entered the ATV and RV insurance business.
Omaha has greeted us with a wide open parking lot (as expected) and a gloomy, overcast sky. After a bit of freshening up, we’ll be scooting over to the reception at Borsheims, which is pretty much a mob scene with endless lines at the free grub and drink stations. We try to save a few bucks by getting in line over at the Hilton and sharing a cab with some other rich people. If it weren’t so cruddy outside, we could fire up the grille and have the smallest tailgating party ever.
Curtis Walker
Earlier: BKH Meeting: En Route
*BRK doesn’t own any stock in Costco, but they only accept AmEx credit cards.

Warren Buffett Is Either A (pick one):

warren_buffett.jpgMarketWatch’s David Weidner has finally narrowed down the choices and now you must choose between the two: liar or genocidal maniac?

Human-rights groups said they were disappointed Darfur didn’t figure into Buffett’s decision. Don’t believe a word of it…If it were all about the profit, Buffett, by his own admission, left money on the table. “I still sold it way too soon,” he said. This doesn’t sound like investing the Warren Buffett way. Berkshire owned more than 11% of PetroChina when it bought its stake in 2006. So, with the stock rising, he sells all of it in a matter of months after an investor protest at the Berkshire annual meeting? Unlikely. Warren Buffett was uncomfortable with this investment. And if he wasn’t? Then he’s as deluded as the sick people who are profiting from the suffering in Africa.

Not to influence your choice, but we’ve received no fewer than five emails to tips at dealbreaker dot com more or less implying that the Oracle has the heads (like, the skulls) of several Amnesty International officials in his basement meat locker. But he’s also looked Food and Drug Administration officials in the face and flat out lied about the fat content in one of Dairy Queen’s large Oreo Blizzards (he says zero grams, they counter that it’s more like 25). So this is a tough call.
Oracle and PetroChina [MarketWatch]

bearstearns.jpgThough China Citic Bank Corp, the banking unit of China Citic Group, said as recently as Thursday that it hadn’t spoken with Bear Stearns about buying a stake in the awesomely declining Madison Avenue stock, nor did it plan to “in the next three months,” China’s Citic Securities Co., another unit of Citic Group*, agreed to pay $1 billion for about 6 percent of BSC (with the right to buy an additional 3.9% in the public market), and to also give Bear a 2% stake in the Beijing-based firm for $1 billion, with the option to buy an addition 5% of the company over the next five years. Sneaky! And also, pretty good news for both firms. For Citic (Securities), whose shares have more than tripled so far this year, the deal offers a larger presence in the global market, even if that entryway comes at the price of being associated with Bear Stearns. For Bear Stearns, whose shares are down 28% on the year, the deal means that there’s at least one company out there still willing to work with Bear Stearns. The odd couple is also said to be planning a venture that will combine their operations outside of China. The deal apparently came together in the last few months, though its roots can, completely unsurprisingly, be traced back to 1992, when Citic Group President Chang Zhenming first met Jimmy Cayne, while “playing cards.” (Both men, along with Citic Securities Chair Wang Dongming, are said to share each other’s philosophy of placing hobbies before actual work).
On a related note, Warren Buffett maintains that he “wouldn’t touch Bear Stearns with an 80-ft pole,” and that the only way you’d ever see something “so sickening” actually come to pass would be if it were the conclusion to a series of escalating dares. But he could very well be lying so…on your toes.
Bear Stearns, China’s Citic to Invest in Each Other [Bloomberg]
Bear Stearns, Citic Reach Deal [WSJ]
Bear Stearns and Chinese Bank to Form Joint Venture [NYT]
Bear, Citic Strike Deal [CNN Money]
Bear Stearns and Citic enter a finger trap [Market Watch]
Citic Says It Doesn’t Now Plan To Seek Stake in Bear Stearns [WSJ]
China Citic Bank: No Plan To Buy Bear Stearns Stake In 3 Months [CNN Money]
Buffett and Citic Deny Bear Stearns Talks [DealBook]
*Start at the beginning and take a shot every time I say “China” or “Citic.”

Buffett Denies Bear Interest, Objectifies PetroChina

In an interview with Liz Claman’s sweater puppets Thursday on Fox, Warren Buffett rebuffed the rumor that Berkshire Hathaway is considering a stake in Bear Stearns, following Citic’s denial on Thursday of having any desire to purchase shares of the precipitously declining stock. Referring to a New York Times article from last month that claimed he might buy as much as 20 percent of the bank, Buffett said, “That was an incorrect story. We were not taking a stake. That one had no basis.” (“First of all, Jimmy Cayne’s bridge game leaves much to be desired. Second of all, the only way you could get me to buy a piece of Bear Stearns would be as the conclusion to a series of escalating dares. Which is how I ended up with Fruit of the Loom, or as I like to call it, “The Poor Man’s Hanes.”)
Buffett also disclosed that Berkshire had unloaded all its shares in PetroChina, but claimed that he sold out “100 percent because of valuation,” and not because human rights groups have been telling him since May that he was personally responsible for the genocide in Darfur. WB said he “sold a little too soon,” since shares of PTR rose even higher after he began to pull out.
When asked how he could have possibly predicted the value of buying into PetroChina four years ago, Buffett told Claman, “other guys read Playboy. I read reports. [I came across PetroChina] and said, this is a great centerfold.”
Earlier: You Say Harem, I Say Whorehouse

Buffett Tells FOX Business He’s Sold PetroChina Stake
Buffett Avoids Bear Stearns, Countrywide Financial [Bloomberg]
Citic Bank:No Plan To Buy Bear Stearns Shares In Next 3 Months [CNN Money]

Having cut its stake to 652.9 million shares, down from 2.3 billion at the end of 2006, Berkshire Hathaway now owns less than 5 percent of PetroChina, and won’t be required to file additional updates on stock sales, leading analysts to believe that the rest of it could have been sold already. Some people want to know why. Money or genocide? (You know what we think).
Earlier: Why Doesn’t Warren Buffett Want To Fund Genocide Anymore?

Buffett’s PetroChina Sale [WSJ]
*We say yes. The message, which Buffett is rumored to have seen before it was cleaned up, read, “Will your conscience let you off on a technicality? The answer is ‘no,’ you stupid Sudanese-killing motherfucker.” That would affect even the most calloused among us.

You Know How We Feel About This

warren_buffett.jpgWarren Buffett has once again reduced Berkshire Hathaway’s stake in PetroChina. Are you surprised? You shouldn’t be. This is the sixth time since July that Buffett has sold shares in the oil and gas producer, this time unloading 220.5 million worth about $362 million, at an average price of HK$12.80 each. BRK’s holdings in Petro are now down nearly half, to 5.44% from a summer high of 11.05%. The fact that PetroChina’s stock hit a record high last week has caused horribly naïve analysts to cite “money” as being a large factor, if not the only factor, in Buffett’s September 25 sale, though the true pink elephant in the room that no one will touch (not even Punk Ziegal & Co) is that sometime in July, Buffett started making a conscious effort to disassociate himself from genocide.
His choice to stop funding the population project in the Sudan—after rejecting a Berkshire shareholder’s proposal to sell the entire PetroChina stake because of the parent company’s ties to the Sudanese government in May—is just one in a series of truly bizarre decisions on Buffett’s part, including but not limited to (possibly) mulling a stake in a firm at which you can take a few days off to play cards in midst of an enormous crisis but the line is drawn (and fired) at two weeks, and not pressing charges following John Carney’s attempted burglary at Buffett’s Omaha house.
Earlier: Washing Our Hands Of The Situation
Why Doesn’t Warren Buffett Want To Fund Genocide Anymore?
You Say Harem, I Say Whorehouse
Buffett Sells PetroChina Shares for the Sixth Time [CNBC]

warrenbuffettwasrobbed.jpgFor reasons totally lost on us, Warren Buffett has once again scaled back Berkshire Hathaway’s stake in PetroChina. In July, Berk sold holdings in the company worth $27 million. Last week, it was $136 million. And just today, 28 million shares valued at $40 million, reducing BRK’s interest to a paltry 8.93 percent from over 11 percent this year.
For those of you who don’t know what this means, we’ll tell you what this means: slowly but surely, Warren Buffett is distancing himself from a government-run company that human rights activists claim has extensive involvement with the Sudan oil industry, and perpetuates what they call “the humanitarian crisis” in Darfur. (This is an overly dramatic way of spinning the truth, which is simply that the region is going through a restructuring of its population.)
Until fairly recently, Buffett had stood up to the anti-genocists, including BRK shareholder Judith Porter, who told WB that cutting ties with PTR would “send a signal to China and to the Sudan that there are costs for continuing this destruction.” Buffett argued that he and Berkshire had nothing to do with the “situation,” and that Judy and everyone else ought to quit their bitching. And when asked if today’s and last week’s and July’s sale had anything to do with a decision to take responsibility for aiding and abet serial killers, he said no. And analysts are in agreement: they think it’s just about “the money.”
But we know they’re lying. Nobody wants to admit it, but something’s going on with that old kook, and he’s going soft. Is it the new, young, probably liberal wife’s influence? A sudden fear that John Carney, against all odds, might’ve been onto something when he asked, “is Warren Buffett going to hell?” The fact that in May, two months before he started selling, we called him an “Equal Opportunity Genocide Supporter”? (That was a compliment!) A near-death, life-changing experience? An Oreo Blizzard epiphany?
Don’t answer that. ‘Cause we don’t want to know why this happening, we just want it fixed. Let things go back to the way they were, and no one gets hurt (except maybe the Sudanese. Whatever: details). If we isolate the problem now, we may be able to salvage this thing, but we have to act fast. Today he sells a percentage of his stake in PetroChina for allegedly purely monetary reasons. Tomorrow it could be standing up in a local Dairy Queen and saying “not on my watch.” I just pray it’s not too late.
Earlier: Warren Buffett Is An Equal Opportunity Genocide Supporter
Warren Buffett Trims PetroChina Stake for Third Time [CNBC]