Anyone have access to the FOX Business Network? Came across the following on the Orlando Sentinel website earlier today:

Warren Buffett will discuss the financial crisis on “Bulls & Bears” at 4 p.m. Friday on Fox Business Network. Liz Claman will ask Buffett about his advice for the unemployed.

I’ve seen Ms. Claman interview the “Oracle of Omaha” before, and she does a great job.

While giving advice to the unemployed is important, I hope that’s not all he talks about.

Source:

“Guest list: Warren Buffett on Fox Business Network, Dr. Laura Berman on ‘Oprah,’ Natasha Bedingfield on American Music Awards, Christina Aguilera on Grammy nominations special”
Hal Boedeker
Orlando Sentinel, November 20, 2008

An Israeli toolmaker which is part of Warren Buffett’s Berkshire Hathaway is looking to acquire companies that are involved in the same business. Bloomberg’s Calev Ben-David and Alisa Odenheimer wrote yesterday:

Warren Buffett’s Iscar Metalworking Cos., the Israeli toolmaker that agreed to buy Japan’s Tungaloy Corp. in September, is seeking more acquisitions and sees the global financial slump as a buying opportunity, Chairman Eitan Wertheimer said.

“I’ve learned from my guru to be greedy when others are fearful,” Wertheimer said in an interview in Jerusalem, echoing a statement frequently made by Buffett. Iscar is part of Buffett’s Berkshire Hathaway Inc., which made two acquisitions in October and has committed $8 billion to buying stakes in General Electric Co. and Goldman Sachs Group Inc.

Iscar, based in Tefen, northern Israel, makes cutting gear for industries ranging from aerospace to auto manufacturing, for clients including Toyota Motor Corp. Berkshire paid $4 billion two years ago for an 80 percent stake in Iscar, which competes with market leader Sandvik AB. Iscar is looking for industrial companies that are in the same business, according to Wertheimer.

“We like to stick to basics,” he said. “If you sleep on the floor, you can’t fall out of bed.”

NEW VIDEO: What’s ahead for Apple?

Source:

“Buffett’s Israel Unit Iscar Seeking More Acquisitions (Update3)”
Calev Ben-David, Alisa Odenheimer
Bloomberg, November 18, 2008

Today, a guest post of mine appears on “MarketClub Trader’s Blog” from INO.com:

“Investing Legends Buying Up Stocks”

Legendary investors Jeremy Grantham and Warren Buffett recognize stock investors are in a panic, and are taking advantage of the situation by actively acquiring equities.

Regulatory filings this past quarter revealed that legendary investors Warren Buffett and George Soros increased their stakes in two well-known oil producers. Bloomberg’s Erik Holm, Edward Klump, and Linda Shen wrote on November 14:

Warren Buffett’s Berkshire Hathaway Inc. became the largest shareholder in oil producer ConocoPhillips… in the third quarter as stock markets tumbled.

Berkshire had more than 83 million shares in Houston-based ConocoPhillips as of Sept. 30, compared with about 17.5 million on March 31, the company said today in a regulatory filing…

ConocoPhillips traded as low as $67.31 a share in the third quarter after closing 2007 at $88.30.

According to the Bloomberg reporters, the Chairman of Berkshire Hathaway is taking a chance on the oil producer based on the forecast for increased global consumption down the road. They wrote:

Berkshire, which purchased MidAmerican Energy Holdings in 2000 and reported record profits last year from selling holdings of PetroChina Co., is betting on a long-term increase in energy demand worldwide. Global oil consumption will increase about 25 percent to 106 million barrels a day by 2030, the International Energy Agency said this week.

Petrobras Oil Derrick

Like the legendary stockpicker from Omaha, George Soros also increased his position in a major oil producer. MarketWatch’s Tony Cooke wrote on November 15:

The hedge fund of billionaire investor George Soros increased its stake in Brazilian state-run oil company Petroleo Brasileiro (PBR) to 21.1 million American Depositary Receipts as of Sept. 30 from 11.5 million at June 30.

Soros Fund Management LLC made the move as the ADRs tumbled during the quarter to about $44 from about $71 each…

The Petrobras stake was by far the largest in the Soros fund’s reported holdings, which totaled $3.8 billion at Sept. 30, up from $3.7 billion at June 30.

FREE VIDEO: Dollar…Stocks…Crude…what’s next?

Sources:

“Buffett’s Berkshire Boosts Stake in ConocoPhillips (Update3)”
Erik Holm, Edward Klump, and Linda Shen
Bloomberg, November 14, 2008

“Soros fund ups Petroleo Brasileiro stake”
Tony Cooke
MarketWatch, November 15, 2008

The word is out that Warren Buffett is looking to acquire the floundering U.S. bond insurance arm of a Belgian-French financial services group. Reuters’ Philip Blenkinsop wrote yesterday:

The insurance businesses of billionaire investors Warren Buffett and Wilbur Ross are close to buying all or part of the U.S. bond insurance unit of Dexia (DEXI.BR), Belgian business daily De Tijd said on Tuesday.

“The transaction is in the final stages, according to several sources,” the newspaper said on its website.

Belgian-French financial services group Dexia, which received a 6.4 billion euro ($8.3 billion) bailout from the French, Belgian and Luxembourg governments in September, has said it will present the results of a strategic review on Friday.

This could include a decision on the fate of Financial Security Assurance (FSA), the U.S. bond insurance arm that made a first-half net loss of $752 million and whose triple A credit rating is under threat.

Blenkinsop noted that the Chairman and CEO of Berkshire Hathaway is supposedly interested in a particular area of FSA’s business. He wrote:

De Tijd said insurers Berkshire Hathaway Assurance and Assured Guaranty were particularly interested in the “healthy” part of FSA — guaranteeing municipal bonds — but there were also talks about its riskier activities.

The latter might be placed in a separate holding, De Tijd said.

Buffett started Berkshire Hathaway Assurance at the start of this year, while Ross is a large shareholder in Assured Guaranty (AGO.N).

Source:

“Buffett, Ross insurers eye Dexia U.S. unit: paper”
Philip Blenkinsop
Reuters, November 11, 2008

NEW BUFFETT BOOK!

Legendary investors Warren Buffett and George Soros are snapping up shares of companies at prices they perceive to be bargains. From The Hindu Business Line (India) earlier today:

In the midst of people selling their stocks as market values touch the nadir, legendary investors - Warren Buffett and George Soros - seem to be swimming against the tide and shopping for stakes in companies worldwide.

With the economic crisis ravaging global markets, the two billionaires are making investments in firms from America to Australia, which are expected to yield long term benefits.

The Indian publication detailed recent purchases by the two investing legends. From the piece:

The legendary investor [Buffett] had pumped in $5 billion to battered Wall Street giant Goldman Sachs and another $3 billion into diversified conglomerate General Electric.

According to reports, Soros snapped up a five per cent stake in Australian firm Sphere Investments. The company is reportedly looking to develop a multi-billion dollar iron ore mine in Mauritania. Moreover, in October, Soros had acquired over five percent in Australian mining firm Legend International.

The deal is pegged to be worth more than $8 million.

NEW VIDEO: Where is the bottom in Crude?

Yesterday, the Washington Business Journal’s Jeff Clabaugh wrote in the New Mexico Business Weekly about an acquisition by the “Oracle of Omaha.” According to his article:

CORT, an office furniture and corporate relocation services company acquired by Warren Buffett’s Berkshire Hathaway eight years ago, has acquired Aaron Rents Corporate Furnishings for $72 million.

CORT says the acquisition makes it the only national furniture rental company, with locations in more than 70 metropolitan areas. Aaron Rents operates rent-to-own furniture rental stores. Both companies have locations in Albuquerque.

Think the chairman and CEO of Berkshire Hathaway anticipates tough times ahead for American and British consumers? Clabaugh noted:

In January, Berkshire Hathaway (NYSE: BRK/A) acquired Roomservice Group, a furniture rental company in the U.K.

Sources:

“Buffett, Soros continue buying stake in cos”
The Hindu Business Line (India), November 7, 2008

“CORT acquires Aaron Rents division”
Jeff Clabaugh
New Mexico Business Weekly, November 6, 2008

This morning, legendary stock investor Warren Buffett laid his cards on the table in an op-ed piece for the New York Times. He revealed that he’s been buying U.S. stocks to take advantage of lower prices brought about by the latest financial storm. Buffett wrote:

THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So … I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

Why?

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.

Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

The “Oracle of Omaha” also advised investors to ditch their cash equivalents, as he suspected higher inflation down the road will erode their value. Buffett said:

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

Source:

“Buy American. I Am.”
Warren E. Buffett
New York Times, October 17, 2008

Barry Temkin wrote the following on AllAfrica.com (Mauritius) today:

INVESTORS should listen carefully to what investment gurus say and do. They are not always right but what is disseminated is part of the vast information that drives markets.

For example, Warren Buffett’s huge investment into what he believed were undervalued assets, undoubtedly persuaded a body of investors to follow his lead. No doubt there were many Harry Schultz followers who moved into gold on his tsunami warning and who are still buying gold shares and bullion now. The optimistic outlook on equities by Templeton Asset Management executive chairman Mark Mobius, widely reported and featured in yesterday’s Business Day, must have persuaded many investors to reappraise equity values.

Whether or not you follow the gurus, what they say and do are investment fundamentals. These fundamentals are distilled and discounted into the price of every counter - including gold, platinum, equities, bonds, warrants and futures, traded on the markets.

Lest we forget…

Click Here to get 4 Bonus Weeks of Investor’s Business Daily Digital Edition!

Source:

“Take Careful Note of Gurus’ Advice on Fundamentals”
Barry Temkin
AllAfrica.com (Mauritius), October 15, 2008

Here are the latest plays by legendary investors Warren Buffett, Jeremy Grantham, Mark Mobius, and Jim Rogers:

Warren Buffett

Equities:

(GurusFocus.com, October 13)

Warren Buffett has been one of the most notable buyers. After cutting an amazing deal with Goldman Sachs and watching shares of Berkshire Hathaway (NYSE:BRK-A) fall about 30% in the last month, he’s making plenty of other moves. Berkshire was perfectly positioned as it entered September with a $40 billion cash.

The bid to take over Constellation Energy Group (CEG) still stands. Berkshire has also agreed to put $3 billion into 10% preferred shares of General Electric (GE). Also, $6.5 of Berkshire’s dollars were committed as part of the Wrigley (WWY) LBO led by Mars.

His latest move is probably the timeliest. In order to capitalize on the Bull Market in Volatility, Berkshire is starting to write put options more aggressively. This week Berkshire disclosed it has written put options on Burlington Northern Sante Fe (BNI).

Berkshire sold put options that will force it to purchase 1.95 million BNI shares between $77 and $80 per share. The contracts were sold for a total value of $12.76 million and will just defray the costs of buying more BNI…which they were probably going to buy anyway. Berkshire also sold put options for 1.3 million shares of BNI earlier in the week.

Jeremy Grantham

Equities:

(Barron’s, Lawrence C. Strauss, October 13)

(Grantham speaking) In a nutshell, we are as conservative as we can possibly get. One bet that has been very successful for us, touch wood, has been long high-quality, blue-chip stocks, particularly in the U.S., and short risky companies. We have been screaming against risk-taking for a long time, and in recent weeks, it has paid off enormously…

Going forward, you can think about slowly moving back into the cheapest pockets of global equities. So the next move that we make will be back to moderate neutral in emerging-market equities and small-cap international value. I can’t say we are going to be in a great hurry, but that will be our next move. We had finished selling almost everything except emerging markets two years ago. We finished selling emerging market equities three months ago.

But the next move will be buying, and we are encouraged that there are a few pockets that are cheap on an absolute basis. We are not encouraged that they will rally immediately. But we will be looking to buy the cheap pockets of global equities as our next move some time in the next several months.

(Morningstar.com, Russel Kinnel, October 14)

Nonetheless he’s now more constructive about equities because he believes they are trading at severely depressed prices. He said that at the end of Friday, global equities were trading as cheaply as they had been since the 1980s. In fact, the U.S. had traded below GMO’s fair value estimate–though as we spoke Monday morning a rally had brought it back to around fair value. Specifically, he prefers blue chips to small caps or highly leveraged companies.

“We’re buying carefully and slowly,” Grantham notes. Why slowly? “When bubbles correct, they usually overcorrect so that the market is selling well below fair value.”

Interestingly Grantham also says he’s now neutral on financials–a sector he has long disliked. He notes that most of the credit crisis is likely behind us and that the newest plan of worldwide governments to inject capital into banks in exchange for shares is a big improvement on past plans.

Commodities:

(Barron’s, Lawrence C. Strauss, October 13)

(Grantham speaking) Commodities have a great long-term future, now that the long-term trend has shifted from falling commodity prices to rising commodity prices. Having said that, the next couple of years will be quite different. We are in a global slowdown, which I think will be worse than expected even today, and it will be longer than expected — so this is not a healthy environment for commodities. Over a shorter horizon, I would be getting out of the way of commodities or I would be short commodities. I’m personally short oil; the firm is short copper.

(Morningstar.com, Russel Kinnel, October 14)

Grantham expects that slowing growth will also keep commodity prices falling. “I would keep out of commodities for the near term,” he said.

Currencies:

(Barron’s, Lawrence C. Strauss, October 13)

(Grantham speaking) I’m speaking for the asset-allocation unit at the firm. We have been substantially long the safe-haven currencies. We have been very long the yen and somewhat long the Swiss franc and short sterling, which is one of our favorite bets. We have been short the euro for three months, and slightly long the U.S. dollar. One of the paradoxes is, if the world is worse than people expect, the U.S. dollar will outperform.

Mark Mobius

Equities:

(Reuters, George Georgiopoulos, October 13)

“We are buying stocks with single-digit price-to-earnings ratios, price-to-book little more than one, dividend yields of around 5 percent. Tupras refiner in Turkey, for example, now has a dividend yield of around 20 percent,” Mobius said. Templeton’s favourite emerging markets include China, India, Russia, Turkey and South Africa. Its funds also invest in Greek companies that have a lot of their earnings in emerging markets, such as National Bank and Hellenic Bottling.

Jim Rogers

Bonds:

(Bloomberg, October 14, Wes Goodman, Anchalee Worrachate)

“The U.S. government is taking on gigantic amounts of debt,” Rogers said in an interview in Singapore, where he lives. “They’re printing gigantic amounts of money. Printing money has always led to more inflation. The last bubble in the world that I can find is long-term U.S. government bonds.”

Rogers said he is “shorting” 30-year debt, or betting prices will fall.

Sources:

“What The Smartest Money Is Doing Now”
GuruFocus.com, October 13, 2008

“Still Holding Back”
Lawrence C. Strauss
Barron’s, October 13, 2008

“Grantham: Stocks Haven’t Been This Cheap since 1987”
Russel Kinnel
Morningstar, October 14, 2008

“UPDATE 1-Mobius sees markets close to bottoming”
George Georgiopoulos
Reuters, October 13, 2008

“’Long Bond’ Favored as Investors See Waning Inflation (Update1)”
Wes Goodman, Anchalee Worrachate
Bloomberg, October 14, 2008

The “Oracle of Omaha,” Warren Buffett, is rumored to be buying a German solar energy company and more shares of an American railroad. Bloomberg’s Nicholas Comfort wrote earlier today:

Solarworld AG rose from a two-year low in Frankfurt amid speculation billionaire investor Warren Buffett may take a stake in Germany’s third-largest solar company.

Solarworld climbed 1.77 euros, or 9 percent, to 21.51 euros as of 4:09 p.m. local time, valuing the Bonn-based company at 2.4 billion euros ($3.28 billion). The stock slumped 28 percent in the previous three trading days, falling to the lowest since October 2006.

Closer to home, the website GuruFocus.com posted the following yesterday:

Warren Buffett is selling puts on Burlington Northern Santa Fe (BNI), a filing of Berkshire Hathaway revealed today.

As of Oct. 6, Warren Buffett sold 1,309,524 shares of put options on Burlington Northern Santa Fe (BNI) at $7.02 an option, exercisable before 12/08/2008, with a strike price of $80 a share.

As BNI stock prices declines to where Warren Buffett bought them last year, it seems that Warren Buffett is trying to buy more Burlington Northern. Buffett started to buy Burlington Northern in 2007, he continued to add to his position until the first quarter of 2008. The share of BNI were traded at $110 a share in June. It declined to around $80 lately with the general market.

Buffett owns more than 67 million shares as of June 30, 2008, that is more than 18% of the company. His average purchase price is about $80 a share.

BNSF Locomotive

Sources:

“Solarworld Shares Climb Amid Speculation Buffett May Buy Stake”
Nicholas Comfort
Bloomberg, October 9, 2008

“Warren Buffett Sells Put Option On Burlington Northern Santa Fe, Berkshire Hathaway Filing Reveals”
GuruFocus.com, October 8, 2008