PBS, June 26, 2017, Here is Warren Buffett’s first tax return, filed at age 14
For anyone who bought a $150,000 beach house that is on sale for $11 million now could be consider a good investment. (Have a look of this video of the inside of Buffett’s beach house.) But for fame investor Warren Buffett, well, thats different. To Buffett, the same $150,000 in 1971 could become quite a different beast in 2017 over 46 later. In “The Oracle of Omaha is selling. This time it’s real estate” CNBC news reported in March 2017 (emphasis added),
“He [Warren Buffett] paid $150,000 for the property back in 1971, which is about $900,000 in today’s dollars.
“When I bought it for $150,000, I borrowed some money from Great Western Savings and Loans. So I probably only had $30,000 of equity in it or something like that – it’s the only mortgage I’ve had for fifty years,” Buffett said.
He added, “I thought I could probably do better with the money than have it be an all equity purchase of the house.”
And indeed he did.
“That $110 or $120 thousand I borrowed, I was buying Berkshire then,” says Buffett.
The businessman says he was constantly buying Berkshire in the early ’70s, when the stock was around $40 a share.
“I might have bought 3,000 shares of Berkshire or something like that from the proceeds of the loan — so that’s [worth] $750 million [today].”“
Yes, the 750 million dollars is a mind boggling number as Buffett earned that with the $120,000 he borrowed. In a sense, the $30,000 that he didn’t borrow could have meant $187.5 million if he bought BRK shares instead which is way more than the house list price of $11 million.
At the end of the day, Buffett, his first wife and family plus friends got a lot of enjoyment from the house over the years and that is more than mere “investment” and monetary return.
I remember reading Buffett gifting his three children some BRK shares (not a ton) through grandpa Howard. Warren’s three children could have been “rich” if they had kept onto their shares. BUT that would have been the wrong way to live lives as they have to experience their lives in their own ways instead of holding to “mere money” as none of us can take money away from this earth when we pass on.
From CNN Money, “Warren Buffett should answer these 6 key questions”
“Are you ready for the so-called Woodstock of Capitalism? Warren Buffett will address tens of thousands of Berkshire Hathaway shareholders at the company’s annual meeting in Omaha on Saturday.
And many more will be watching the festivities on their phones, computers or tablets thanks to a livestream of the event by Yahoo Finance. This is the second straight year that Yahoo will simulcast the event.“
May 10, 2017 update:
May 6th, 2017 Market Watch “Warren Buffett live blog recap: Berkshire Hathaway annual meeting”
May 6th, 2017 FT, “Buffett at Berkshire’s annual meeting 2017 – as it happened”
Morningstar, “2017 Berkshire Hathaway Annual Meeting Live Blog“
Billionaire investor Warren Buffett‘s Berkshire Hathaway Inc. is reportedly the largest single shareholder of United Airlines parent’s United Continental Holdings (UAL) with a stake of 28.95 million shares, or 9.2% of the shares outstanding (according to latest SEC filings).
So far Buffett has not spoken about this United self-inflicted mess (United Express Flight 3411 incident wiki page) yet but we may learn something from history. You see, Buffett biography The Snowball‘s author Alice Schroeder reported Buffett (an American Express investor) wrote the following during the 1963 Salad Oil Scandal (or “Soybean Scandal”) [with emphasis added],
“It is our feeling that three or four years from now, this problem may well have added to the stature of the company [American Express] in establishing standards for financial integrity and responsibility which are far beyond those of the normal commercial enterprise.“
“Buffett wrote that two paths lay before the company, and that an American Express that took responsibility and paid the $60 million [note: remember, this is 1963!] to the banks would be worth very substantially more than American Express disclaiming responsibility for its subsidiary’s acts.” He described the $60 million payment as inconsequential in the long run, like a dividend check that got “lost in the mail”.“
Using history as guidance, what would Warren Buffett tell United Airlines to do?
My guess is Buffett would advice United CEO Oscar Muñoz (or whoever replaces him) to take responsibility and pay a reasonable amount to settle the pending lawsuit as a United that take responsibility “would be worth very substantially more than United disclaiming responsibility“.
And in an imaginary world that Muñoz (or whoever replaces him) doing the RIGHT THING, “this problem may well have added to the stature of the company [United] in establishing standards for integrity and responsibility which are far beyond those of the normal commercial airlines.” Yes, things need to be done RIGHT now, and United need to lead in “establishing standards for integrity and responsibility which are far beyond those of the normal commercial airlines.”
We will see what will happen in time. With Berkshire’s $2 billion (April 13 closing price of $68.07 multiply by 28.95 million shares) investment holding in United, I won’t be surprised reporters will want to ask what Buffett thinks about this mess next time he is interviewed on CNBC or other news media. We will see if I’m right or wrong.
April 13, 2017 Update:
Sen. Franken (April 11, 2017), “Sen. Franken Presses United Airlines to Explain Forcible Removal of Passenger on Weekend Flight” [emphasis added]
“– A federal cap exists on the amount of money a commercial airline may compensate a passenger for being involuntarily denied boarding or rescheduled for a flight. Why was the full amount of $1,350 not offered to passengers aboard Flight 3411 before the passengers were involuntarily denied boarding and forcibly removed? Does the $1,350 cap serve any benefit to consumers?
– Was the Louisville-bound flight oversold prior to including the four United Airlines personnel reported to have been granted seats to enable them to reposition from Chicago to Louisville? If so, were there alternative flight or ground transportation options for these four crew members that could have ensured they arrived in Louisville with sufficient time to board their next flight? Did United Airlines have the ability to assign other crew members to that flight departing from Louisville?
– Does United Airlines limit the number of airline tickets that may be oversold on each flight?“
LA Times Op-Ed. “Let Richard Branson kill United Airlines”
CNN Money (Nov 11, 2016): One-on-one with Warren Buffett after the 2016 election
Forty-two months! Thats how long I’ve been eagerly awaiting for Carol Loomis‘ new book “Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2012: A Fortune Magazine Book” (368 pages, on sale Nov 26th and online amazon.com & indigo.ca). Carol is Fortune magazine senior editor-at-large and a long time (40+ years) close friend of Warren Buffett! I am thrilled to see Carol’s book published and in my hands as it feels like having an insightful person who knows Warren really well to guide me through some important and insightful articles. It will take me some time to read & review the book, please stay tune for my detailed review. Until then, my first impression of the book is it looks awesome!
Long time readers of Warren‘s news and insights will be familiar with some of key articles in this collection and also see many (for me) new articles that are important but less well known. Carol has added many insightful commentaries before the articles to give us context and share with us her views. For example, the article “The Inside Story of Warren Buffet” (April 11, 1988) is Fortune’s first profile of Warren and Carol’s preamble explains what lead her to finally wrote the first profile about Warren after knowing him for 20+ years at that point! And then the afterword for articles like “Buffett Hits $200 million Downdraft” (Nov 17, 1994) reminds readers that Warren actually made money on the USAir investment (which many people may have an impression of it being a money losing investment).
P.S. Now, let me explain my wait of almost forty-two months in this postscript. You see, in April 2009, shareholders of Warren Buffett‘s Berkshire Hathaway NOT physically presented at the annual shareholders’ meeting in Omaha were given opportunities to ask Warren & Charlie remotely in advance via email for the first time. And I jumped at the chance by emailing my question to Carol! Along with my question, I told Carol that,
“I am a big fan of your Fortune articles about Warren and BRK. (I have taken the time to look up some of your older articles and really enjoy reading them.)”
In Carol’s email reply was where I first read of the mention of a possible book (the book that I am finally holding in my hands)! So, yes, I’ve been eagerly awaiting the book since Apr 2009, and that is about forty-two months! :)
P.P.S. Sharp-eyed readers may have noticed there is a stack of five books in the above picture. Can you guess the titles of the Warren related books in the stack? Find out how many you guess correctly by clicking here to see this picture.
P.P.P.S. If you have read this far, you might as well check out my review of Warren’s biography “Snowball” by Alice.
note: this article is cross-posted by me at examiner.com
May 16, 2016 Update: (with video) “Buffett’s editor Carol Loomis: Pen, paper, Fed-Ex & email but never the telephone“. Via Yahoo, click here to view a full replay of the 2016 Berkshire Hathaway annual shareholder meeting
Keywords: Trade Enforcement Unit, Reemployment system, community career centers, clean energy, natural gas, wind, solar, battery industry, , , ,
Some excerpt from Obama’s State of the Union address: Full text [HT CBS]
Trade Enforcement Unit
“I will go anywhere in the world to open new markets for American products. And I will not stand by when our competitors don’t play by the rules. We’ve brought trade cases against China at nearly twice the rate as the last administration – and it’s made a difference. Over a thousand Americans are working today because we stopped a surge in Chinese tires. But we need to do more. It’s not right when another country lets our movies, music, and software be pirated. It’s not fair when foreign manufacturers have a leg up on ours only because they’re heavily subsidized.
Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China. There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders. And this Congress should make sure that no foreign company has an advantage over American manufacturing when it comes to accessing finance or new markets like Russia.”
“Jackie Bray is a single mom from North Carolina who was laid off from her job as a mechanic. Then Siemens opened a gas turbine factory in Charlotte, and formed a partnership with Central Piedmont Community College. The company helped the college design courses in laser and robotics training. It paid Jackie’s tuition, then hired her to help operate their plant. Read the rest of this entry »