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You can’t be in the stock world or turn on CNBC without hearing the words “Warren Buffet”.  Ever since I’ve been seriously watching stocks, I’ve have been putting an attentive eye on my close neighbor – the Chairman of Birkshire Hathaway.  Last year, I was in Omaha visiting a friend and heard that the annual shareholders meeting was going on and I kicked myself for not getting a share to attend this event.  Well, another year passes and I almost made the same mistake until an email came from my friend Ann Anhalt asking if I would be interested in going since she had some extra tickets.  I couldn’t have typed yes any faster.

It was amazing.  I had never seen so many people in one place from so many different parts of the world to hear two people answer questions.  The two to speak being Warren Buffet and Charlie Munger (VP). 

I was going to give you a full description of the days events, but Ann did such a great job on her blog post “Omaha Is Buffett Country“ you should just visit her site for our trip info.

Instead I will give you some of the quotes and bits I gathered during the Q & A sections of the day:

• Berkshire Hathaway parent company has plenty of cash
• When speaking about Gambling “If you decide to do activities where the yield are mathematically negative, then there is a world of opportunity for you”
• 35,000 in attendence was recorded
• Buffett: “Wells Fargo is a very large and great bank.  They have some advantages that others do not”
• Buffett: “I don’t need large complicated spreadsheets to find a deal.  The investment should be obvious without doing a lot of  fact checking.  A bird in the hand is worth two in the bush”
• Buffett: “Credit agencies are not the only onesthat were wrong about housing prices”
• Buffett: “You should not buy a company hoping to change it”
• Buffett: “Authority goes with the person not the position”
• Buffett: “1/3 of U.S. houses do not have a mortgage”
• Buffett: “I could have my replacement follow me around and I could say everything I am thinking – but their time is better used where they are”
• Buffett: “I wouldn’t buy a newspaper business at any price.  They havethe potential of undending losses.  The day of one main source of information is gone”
• Buffett: “I feel very good about our GE and GS deals.  I didn’t find anything better at that time”
• Charlie: “When we disagree (with Buffett), I know he will see my way, because he is smart and I am right”

It was great to see products of the Berkshire Hathaway companies.  Here are a couple pictures from that day:

Keep your health and energy Warren – I will see you next year!

Brent TickerNews, Travel Berkshire Hathaway, BRK

Berkshire Hathaway has always been an interest of mine, even since I found the common stock that was worth more than $100,000 a share!  Warren Buffett and his Berkshire Hathaway has always been something people in the investment looked to, especially in a time of a recession.  Talking heads of CNBC can’t say anything bad about him.

However, I do like the guy.  I think he is a brilliant conservative investor – and lives down to Earth still buying girl scout cookies from his community.  That gets a good mark in my book not to mention all the money he has made in the past.

Today was proof that Berkshire has not been immune to the banking atmosphere.  The Wall Street Journal has wrote in today’s paper:

 

Moody’s on Wednesday lowered the long-term issuer rating of Berkshire to AA2 from its top AAA rating. It cited the weakening economy and “severe decline in equity markets.” Berkshire has had big losses in its portfolio, which includes large financial companies such as Wells Fargo & Co. and American Express Co.

Mr. Buffett is weathering one of the toughest markets since he took over Berkshire in 1965. Its shares are down 33% over the past year. Further downgrades could impact borrowing costs, and hurt its ability to charge maximum rates for insurance policies written by its subsidiaries.

One of the companies most affected by the market downturn is Moody’s itself, whose stock has slid about 70% since early 2007.

I have not been a great fan of these rating agencies.  They are usually overlooking major problems in the companies, and are usually too slow to react to a changing market.  I think there is too much of a built in conflict when they are being paid by the same people they are suppose to be watching.  This situation is no different.  Birkshire owns 20% of Moody’s and I want to believe that it doesn’t make a difference in the timing of upgrades/downgrades and how severe they are.

Despite all of that, I was actually hoping to find a good dip the stock today (B shares of course) with the bad news, but with the good news out of Wells Fargo it was actually up today.  I think people are just looking for any good news though, so I think we’ll get the dip yet this month in both WFC & BRK.B.  Although I think Wells Fargo is one of the better bank stocks, I think they are just playing games to make their numbers look better by possibly just reserving less for their loan loss.  The true test will be their next quarter.

Brent TickerNews Berkshire Hathaway, BRK.B, Moody's, Warren Buffet, WFC