Warren Buffett News: “Investor Of Today Does Not Profit From Yesterday’s Growth”

BERKSHIRE HATHAWAYBuffett, Zuckerberg Lead Guest List For Sun Valley Event (Bloomberg)
Billionaires Warren Buffett, Bill Gates and Mark Zuckerberg lead the roster of executives invited to Allen & Co.’s annual media conference in Sun Valley, Idaho, next week, according to a guest list obtained by Bloomberg News. Google Inc. (GOOG) Chairman Eric Schmidt, Amazon.com Inc. (AMZN) Chief Executive Officer Jeff Bezos and Apple Inc. (AAPL) CEO Tim Cook are also invited, according to the document, as is News Corp. (NWSA) Chairman and CEO Rupert Murdoch.

Berkshire Buys GM Before Plunge As Backups Pick Stocks (Bloomberg)
Warren Buffett’s Berkshire Hathaway Inc. (BRK/A) acquired its largest stake in General Motors Co. (GM) before the automaker slumped 16 percent, as the billionaire chairman hands more responsibility to deputy stock pickers. Berkshire accumulated about 8.47 million shares of GM through Feb. 3 at an average price of $24.35, according to National Association of Insurance Commissioners data compiled by Bloomberg. The automaker closed at $20.54 yesterday in New York. Omaha, Nebraska-based Berkshire’s full stake was reported in a separate regulatory filing in May that didn’t disclose the purchase price or date.

Guru strategy portfolio on course (TheGlobeAndMail)
In January, we ran a screen combining the methods of legendary stock pickers Warren Buffett and Peter Lynch. Our thinking was that, given the success they achieved on their own, putting their brains together would produce some stellar results. Let’s check in on the portfolio to see whether we were right. …Specifically, we searched for stocks that met the criteria of both the “P/E Growth Investor” screen, which is based on Mr. Lynch’s strategy, and the “Patient Investor” screen, which seeks to emulate the stock-picking methods of Mr. Buffett.

Railroads Appeal Class Certification In Price-Fixing Suit (Bloomberg)
Four U.S. railroad companies appealed a ruling that turned a price-fixing lawsuit against them into a class action of as many as 30,000 shippers, arguing it could unfairly push them into settlements. Union Pacific Corp. (UNP), the largest U.S. carrier, CSX Corp. (CSX); the third largest, Norfolk Southern Corp. (NSC); and Burlington Northern Santa Fe, a unit of Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), today asked the U.S. Court of Appeals in Washington to reverse the June 21 ruling, saying it exposes the companies to $10 billion or more in potential damages.

Why Warren Buffett Keeps Adding To His Wells Fargo Investment (BusinessInsider)
In its annual report for 2011, Berkshire Hathaway (BRK.A) (BRK.B) reported common stock investments in eleven companies that each had a market value exceeding $1 billion. However, there has been only one of these companies that Warren Buffett has been adding to every year since 2005. That company is Wells Fargo (WFC). Berkshire further added to its stake in Wells Fargo during the first quarter of 2012.

Senator Durbin asked Warren Buffett if he used offshore bank accounts (DemocraticUnderground)
“I asked Warren Buffet in a meeting we had recently, ‘Have you ever had a Swiss bank account?’ He said, ‘No, there are plenty of good banks in the United States,’” Durbin said. “So I started asking people: ‘Why do you have Swiss bank account?’ One, you believe the Swiss Franc is a stronger currency than the United States dollar. And that is apparently the decision the Romney family made during the Bush presidency. And secondly, you want to conceal something. You want to hide something. Why would you have a Swiss bank account instead of one in the United States? I would like to … ask the press to really press some of these questions, the obvious questions. When is the last time a presidential candidate for the United States had a Swiss bank account? I think the answer is never.”

Stocks for the Long Run: PPG Industries vs. the S&P 500 (DailyFinance)
Investing isn’t easy. Even Warren Buffett counsels that most investors should invest in a low-cost index like the S&P 500. That way, “you’ll be buying into a wonderful industry, which in effect is all of American industry,” he says. But there are, of course, companies whose long-term fortunes differ substantially from the index. In this series, we look at how members of the S&P 500 have performed compared with the index itself.

3 Analyst-Backed Defense Companies With +25% Long-Term Growth (SeekingAlpha)
One of my favorite Warren Buffett quotes is “the investor of today does not profit from yesterday’s growth.” While there’s plenty of money to be made on companies with long and storied histories, those with strong growth prospects in the coming years are more likely to provide investors with truly exceptional returns. One way to analyze a company’s future is through its Forward EPS Long Term Growth, which is essentially a consensus estimate of the company’s expected annual growth rate over the next three to five years.

It’s time to short newspaper stocks (MSN)
Last week I had lunch with a fellow who’s been a journalist for a very long time. He knows the business, he knows everyone in the business and he knows the dirty secrets of the business. He thinks Warren Buffett was crazy to buy Media General (MEG 0.00%). He also thinks, as I do, that newspapers are toast and you’d be crazy to be buying those stocks right now. He believes two primary factors are behind plummeting circulation. The first is the plethora of news offered for free all over the Internet — newspapers don’t offer anything unique or original. If you want news, you pull up Google (GOOG 0.00%) News, and you get the same content. There are no great writers at the newspapers anymore, so why bother? Substantive analysis is in the blogosphere now.

Pulse Seismic: A Protected Play On Natural Gas (SeekingAlpha)
As investors develop throughout their careers, they invariably develop a certain investing style; certain characteristics they look for in companies before they invest. Warren Buffett prefers companies with strong free cash flow, low debt and simple business models. Bill Ackman prefers to invest in companies where he can accumulate a large block of shares and through doing so influence company management. It pays to have a certain style due to the avalanche of information currently available in the stock market; by developing an investment style and staying within your circle of competence, the average investor is able to filter out much of the noise of Wall Street and find successful investment opportunities.

Big Coal’s Hard Road to China (BusinessWeek)
Mike Seely, a third-generation mint farmer in the Pacific Northwest, says the fear of coal dust wakes him up in the middle of the night. Coal companies, which are suffering from a steep drop in demand in the U.S., see their salvation in China. To ship coal from the mines of Wyoming’s Powder River Basin to Asia, the mining companies are backing a half-dozen proposed coal ports in Washington state and Oregon. Among their allies are BNSF Railway, owned by Warren Buffett’s Berkshire Hathaway (BRK/A), and Goldman Sachs (GS), which is an investor in a company building one of the ports. If all the ports were built, analysts estimate that the mining companies could sell 146 million tons worth at least $1.3 billion annually to the Chinese.

Bombardier’s true test will be in commercial aviation (CanadianBusiness)
Squint your eyes and you can almost see things looking up for Bombardier. As the chief beneficiary of the largest private order of business jets in history, the Montreal-based transportation giant and perennial stock market underperformer earned a much-needed lift. Placed in June by NetJets, which is owned by Warren Buffett’s Berkshire Hathaway, the order for 425 jets from Bombardier and competitor Cessna could mean an extra $9.6-billion in revenue for Bombardier alone over the life of the contract.

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