Why Warren Buffett May Be Wrong About Airlines (Fool)
Warren Buffett is known for having a long-held aversion to airline stocks. While he owned shares of what is now US Airways Group, Inc. (NYSE:LCC) back in the 1990s, Buffett famously blamed this investment on “temporary insanity.” Buffett has on numerous occasions stated that airlines have all the hallmarks of a terrible business: “one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money.” Airline bulls have shot back that today’s airline industry is “different” and have recently pointed to the industry’s strong stock performance in late 2012 and the first quarter of 2013. On the other hand, bears like my colleague Brendan Byrnes have argued that nothing has really changed for the airline industry. However, the truth may be somewhere in between. The airline industry seems to be moving toward a bifurcation where some airlines are following questionable strategies from the past, while others are becoming more nimble. Airlines in the first category may run into trouble again, while those in the second category seem more likely to provide strong returns for investors.
Warren Buffett Speech to University of Georgia Students (Nasdaq)
Well, good morning and welcome. You’re a nice crowd, you certainly got quiet quickly. That surprised me. Can you hear me all right? There in the back? Well, for business school, you know it doesn’t get much better than this. Having the world’s greatest investor come to your campus is quite an honor. Warren Buffett is Chairman of Berkshire Hathaway Inc. (NYSE:BRK.A), a holding company whose investments range from GEICO Insurance, to American Express Company (NYSE:AXP) and The Coca-Cola Company (NYSE:KO), to Borsheims jewelry store in his hometown of Omaha, Nebraska. Mr. Buffett has been described as ‘the god of value investors’ and ‘the Michael Jordon of the investing game.’ He began his first investment partnership in the mid-1950s with $100 of his own money.
Oracle from Canada offers advice (Telegram)
While many have heard of Warren Buffett, few are familiar with Prem Watsa, CEO of Canada’s Fairfax Financial Holdings Ltd (PINK:FRFHF), a company somewhat like Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.A), dealing in insurance and a variety of other businesses. Fairfax’s book value has grown by a compounded annual rate of 25 percent over a 25-year period. Like Buffett, Watsa has offered some valuable investing lessons. For example: “Why do Roman bridges historically last for a long, long time? … The people who designed the bridges had to stand underneath it before the traffic went on. So they made sure there was a massive margin of safety.”
2013 Berkshire meeting may draw more shareholders (Omaha)
A few more people may attend this year’s meeting of Berkshire Hathaway Inc. (NYSE:BRK.A) shareholders than last year, based on the number of requests for meeting credentials. Chairman and CEO Warren Buffett’s office said requests were “up marginally” this year over last year, when about 35,000 people came to the meeting. Attendance has plateaued at about that level since 2009. Shareholders receive coupons in their annual Berkshire reports allowing each of them to request four credentials — 3-by-5-inch plastic cards that attach to lanyards they will wear around their necks while at the CenturyLink Center in downtown Omaha on May 4.
