Warren Buffett

Bishadi · Aug 15, 2011

i didnt know there was another thread on this issue...

Ooooops!

Warrent Buffett ................ for president!

waltky · Aug 25, 2011

Granny says he got more money den God...

Has Warren Buffett just called the bank bottom?
August 25, 2011: Berkshire Hathway's Warren Buffett has made a big investment in Bank of America. But is the worst really over for the stock?

Bank of America CEO Brian Moynihan has a new BFF. His name is Warren Buffett. Heard of him? Shares of the bewitched, bothered and bewildered bank were up 9% in early afternoon trading Thursday after Buffett's Berkshire Hathaway announced it was investing $5 billion in preferred shares of Bank of America. The news helped lift shares of other bruised financials as well. Shares of Citigroup and Morgan Stanley each rose more than 3%. But BofA's stock is still down more than 40% year-to-date. And the initial Buffett bump was much bigger and faded quickly. BofA was up as much as 26% shortly after the market opened Thursday.

So is the Berkshire investment -- an Omaha stake if you will -- in BofA really the bottom for the stock and the rest of the banking sector? Probably not. Buffett is not making a call on the near-term for BofA or other big banks. What's clear from this investment -- which is similar to ones Berkshire made in Goldman Sachs (GS, Fortune 500) and General Electric during the 2008 financial crisis -- is that he thinks the bank will eventually recover. And he's happy to get paid handsomely to wait while it happens. Berkshire is buying preferred stock that pays a 6% annual dividend. The common shares that average schlubs like you and I are more likely to own pays a paltry penny per quarter share dividend. That works out to a yield of 0.5%.

"BofA may be a good value here but that doesn't mean it's a great stock for average investors," said Keith Springer, president of Springer Financial Advisors in Sacramento, Calif. "Buffett knows that the government is not going to let BofA fail. So he's got a quasi-government insured CD with a 6% yield and upside potential," Springer added. Other money managers said they also wouldn't rush back into BofA just yet simply because of Berkshire's blessing. While BofA now has $5 billion it didn't have before, it still has legal risks tied to bad mortgage assets that not even Buffett can magically wipe away. "This move by Buffett does show a lot of confidence in BofA. He's drawing a line in the sand on the stock. But at the same time, I still feel uncomfortable with bank stocks," said Craig Hodges, president of Hodges Capital on Dallas.

"I just don't know what the banks have on their balance sheets." Hodges added. His firm sold shares of BofA earlier this year and Hodges said he's still wary of most major banks. Even fund managers who still own shares of BofA said that investors need to be cautious. The problems facing BofA may be surmountable, but that doesn't mean they will be solved quickly. BofA will likely be a slow-growth stock for a long time. "Buffett sees value for three to five years, not three to five weeks or months," said Dan Genter, CEO of RNC Genter Capital, a Los Angeles-based investment firm that does own BofA shares. "BofA is not back on a solid track for double-digit earnings increases."

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Bank deposits hit record high of nearly $10 trillion
August 25, 2011: Americans have more money saved up in bank accounts than ever before.

Deposits in FDIC-insured banks climbed $343 billion in the first half of the year to an all-time high of $9.8 trillion, according to Market Rates Insight, which tracks bank pricing. Despite meager interest rates "consumers are very fearful about the economy, and are fleeing to the safety and security of insured and liquid deposits," said Dan Geller, executive vice president at Market Rates Insight.

The research firm found that consumers pulled their money out of financial products like CDs and stashed it in checking, savings and money market accounts where their money would be more readily accessible. Funds stored in CDs, which holders don't have access to until a specific date, fell $94 billion to $1.9 trillion in the six months ended June. Meanwhile, balances of liquid accounts, like money markets and savings accounts, jumped by $446 billion to $6.3 trillion.

More businesses have also been shifting to retail consumer deposit accounts, with consumer balances making up 90.1% of total deposits as of June, Market Insights reported. While retail consumer deposits rose by $382 billion in the first half of the year, business deposit balances slipped $29 billion.

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waltky · Sep 25, 2011

Granny says ol' Warren is right...

Man Behind Obamas 'Buffett Rule' Calls For Tax Fairness
September 23, 2011 - One of the most controversial pieces of President Barack Obamas economic plan is named for one of the richest men in the world. The president calls his proposal to raise taxes on wealthy individuals and corporations The Buffett Rule. Some Republicans are calling it class warfare.

Warren Buffett says he paid almost $7 million in taxes last year. He says that is not enough. I think people at the high end, people like myself, should be paying a lot more in taxes," said Buffett. The billionaire investor wrote an opinion article in the New York Times in August, claiming that all 20 employees in his office pay a higher percentage of their incomes in taxes than he does. Buffett suggested increasing taxes on millionaires and billionaires. He wrote, My friends and I have been coddled long enough by a billionaire-friendly Congress. It is time for our government to get serious about shared sacrifice.

President Obama is incorporating Buffetts proposal into his plan to reduce the federal deficit. Middle-class families should not pay higher taxes than millionaires and billionaires," said President Obama. "That is pretty straightforward. It is hard to argue against that. Warren Buffetts secretary should not pay a higher tax rate than Warren Buffett. The president announced his deficit-cutting plan on Monday, and said it would include a provision he called the Buffett Rule.

The rule states that No household making over $1 million annually should pay a smaller share of its income in taxes than middle-class families pay. Administration officials have not given details on how the plan would be put into effect. Some reports have shown that most of the richest Americans already pay a higher percentage of their income in taxes than lower- or middle-income taxpayers. Meanwhile, some Republicans call the proposal class warfare. Senate Majority Leader Mitch McConnell says it would stifle job creation. If he is feeling guilty about it, I think he should send in a check," said McConnell. "But we do not want to stagnate this economy by raising taxes.

Obama said Thursday the purpose of his plan is basic fairness. If asking a billionaire to pay their fair share of taxes, to pay the same tax rate as a plumber or a teacher, is class warfare, then, you know what? I am a warrior for the middle class," he said. "I am happy to fight for the middle class. I am happy to fight for working people. Public opinion polls show that most Americans agree with Warren Buffett that the richest citizens should pay more in taxes.

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trucker · Sep 25, 2011

Bishadi said: ↑

i didnt know there was another thread on this issue...

Ooooops!

Warrent Buffett ................ for president!
Click to expand...

dont trust the bankers
http://en.wikipedia.org/wiki/Warren_Buffett

Berkshire Hathaway acquired 10% perpetual preferred stock of Goldman Sachs.[37]
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Clint Torres · Sep 26, 2011

waltky said: ↑

Granny says he got more money den God...

Has Warren Buffett just called the bank bottom?
August 25, 2011: Berkshire Hathway's Warren Buffett has made a big investment in Bank of America. But is the worst really over for the stock?

See also:

Bank deposits hit record high of nearly $10 trillion
August 25, 2011: Americans have more money saved up in bank accounts than ever before.
Click to expand...

Buffet is no fool investor, He kinows, that most of the EU and all of the USA will be in mega debt now and for many years to come. As a result Buffet is buying BOA or BAC (symbol) low now when the stock is near rock bottom. Why, because if it fails he only loses $2.25, if it goes up, it will be $35-$60, Can you do simple math?

If Citi or (C) (Tim Githner's company) did not do a 20x reverse split in March 2011, you can bet Buffet would have bought them out at $2.50 a share. Today, Citi's $40 stock would have been about $3 a share in todays market.

Also, with corporations sucking off governments and taxpayers, more and more, every State in the Union will be further in debt. And guess where those US States will turn to for money to fund their over sized public school districts? You bet ya. Also, the States will be selling off massive amounts of Muni Bonds to cover their debt, and guess where they will turn to?
You may be catching on. But then again if you don't understand how simple this is, I ill not waist my time tring to explain any further.

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Warren Buffett

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