Books that Warren Buffett Recommends about Himself Part 2

Vlast month, we published a list of books that Warren Buffett recommends about himself.

At last year’s Berkshire Hathaway annual meeting, Buffett actually provided such a list. Here are more books that he recommends about himself.

My Warren Buffett Bible: A Short and Simple Guide to Rational Investing: 284 Quotes from the World’s Most Successful Investor

The Oracle & Omaha, How Warren Buffet and His Hometown Shaped Each Other

Tap Dancing to Work: Warren Buffett on Practically Everything, 1966-2013

Warren Buffett on Business: Principles from the Sage of Omaha

Warren Buffett’s Ground Rules: Words of Wisdom from the Partnership Letters of the World’s Greatest Investor

Warren Buffett Speaks: Wit and Wisdom from the World’s Greatest Investor

Enjoy your summer reading!!!

Books that Warren Buffett Recommends about Himself

Yes, Warren Buffett, head of Berkshire Hathaway (BRKA) (BRKB), actually comes out with a list of books that he recommends, and he even recommends books about himself.

At last year’s Berkshire Hathaway annual meeting, Buffett actually provided such a list. Here are his recommended books about himself.

Berkshire Beyond Buffett: The Enduring Value of Values

Berkshire Hathaway Letters to Shareholders

50 Years of Berkshire Hathaway Wall Print
This is actually a wall print poster.

Buffet: The Making of an American Capitalist

Buffett’s Bites: The Essential Investor’s Guide to Warren Buffett’s Shareholder Letters

The Essays of Warren Buffett: Lessons for Corporate America, Fifth Edition

A Few Lessons for Investors and Managers From Warren Buffett

Happy reading!

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A Quick Summary of Warren Buffett’s Berkshire Hathaway Annual Meeting

by Fred Fuld III

In case you missed watching Warren Buffett’s Berkshire Hathaway (BRK-A) (BRK-B) Annual Meeting, or if you don’t feel like watching the four and a half hour rerun, it may be easier to see a quick Cliff Notes-like list of important points from the meeting.

Here is a quick summary of the meeting that was held online yesterday, May 2, at 4 pm ET, 1 pm PT.

Buffett started out with a PowerPoint presentation about the history of the United States. He was born during the 1930 depression.

The Depression

Warren Buffett was born August 30, 1930. The day before, the Dow Jones Industrial Average was 240.42, which was up 20% from the 1929 low. On September 1o, 1930, the DJUA reached a high of 245. No one realized that the country was in a Depression yet. On July 8, 1932, the DJIA dropped to 41.22. In other words, $1,000 became $170 in less than 2 years.

The FDIC

If we had the FDIC 10 years earlier, it would have been a much different experience. It was tne good thing that came out of Depression, as over 4000 banks failed. The FDIC has not cost the American taxpayer a dime. It is paid for by bank assessments.

Getting Back to Even

It was January 4, 1951 before the stock market got back to 240.85, more than 20 years to get back to even.

In 1954, the Dow went from 280 to 400 at the end of the year

The stock market provided a 100 to 1 return from 1954 (the year he graduated from college) to today.

Berkshire Business Segments

In regards to Berkshire’s business segments, insurance profit margins have improved due to a reduced number of accidents. Railroad and utilities revenues are down.

Buybacks

Buybacks are good, “when conditions are right.” “It’s a way of distributing cash to shareholders.”

Occidental Petroleum

Admitted mistake in buying Occidental Petroleum. “It doesn’t work at $20 a barrel.” “Production is going to go down in the next few years.”

Airline Stocks

Buffett announced that Berkshire sold all airlines in the portfolio and they were sold at a loss.

Splitting the A Shares

A question was asked about the possibility of splitting the A shares because, the questioner gave an example of needing $60,000 for his retirement, having to sell one share for $300,000 with a cost basis of $100,000, and having to pay a huge capital gains. Buffett explained that it is not an issue as A shares can easily be converted to B shares at any time [assuming without tax consequences, but check with your accountant].

Berkshire’s Past Performance

Buffett said that investing in an S&P ETF is the best way to invest for the long term, and doesn’t recommend buying individual stocks or short term trading. However, one questioner asked why Berkshire has been underperforming the SPY for 15, 10, and 5 years, and even year-to-date. Buffett admitted to the underperformance, and said that no one will work harder than himself and his staff to provide the best performance.

Credit Cards

He said to pay off credit cards; don’t invest until you pay them off. It is the best way to earn 18%. You shouldn’t even be paying 12%.

US Debt Defaults

The US will never default on its debt as long as the debt is issued in US dollars, as it can always print more money.

Government Bailouts

None of the Berkshire businesses have received any government bailouts.

There was a lot more but these were some of the major topics.

If you want to see a list of the Berkshire Hathaway stocks, before the sale of the airline stocks, see the article on What Warren Buffett has Been Selling.

Happy investing.

Disclosure: Author didn’t own any of the above at the time the article was written.

What Warren Buffett has been Selling

by Fred Fuld III & Nkem Iregbulem

As the fourth-wealthiest person in the world, Warren Buffett is widely regarded as an investment guru. His investment philosophy is based on the concept of value investing. He is the chairman, CEO, and largest shareholder of Berkshire Hathaway, the world’s 10th largest company by revenue. As of 2018, Buffett is estimated to be worth about $89 billion. He is not only an investor but also a dedicated philanthropist. In fact, he has promised to give 99% of his fortune to charitable causes.

Due to his success, Buffett’s stock purchases and sales are closely followed by many other investors. Buffett’s Berkshire Hathaway (BRKA) (BRKB) recently sold 13 million shares of Delta Air Lines (DAL) and 2.3 million shares of Southwest Airlines (LUV), lightening the exposure to the airline industry.

If you want to see a list of all of Warren Buffett’s Berkshire Hathaway Holdings, click HERE.

Hopefully, one of the richest men in the world can give you some profitable investment ideas.

Disclosure: Author didn’t own any of the above at the time the article was written.

Warren Buffett Sold 750,000 Shares of Apple, But It’s Still His Largest Holding

by Fred Fuld III

Famous investor and multi-billionaire Warren Buffett has sold over 750,000 shares of Apple (AAPL) during the latest reported quarter, however it is still the largest holding in his Berkshire Hathaway (BRKA) (BRKB) stock portfolio.

As a matter of fact, Apple makes up 26% of the Berkshire portfolio. He probably didn’t want to get too overweighted in the stock. He first started buying Apple shares near the beginning of 2016 at an average cost of about 150 per share.

Buffett also dumped shares of another stock, Wells Fargo (WFC). He liquidated over 31 million shares of the company, so now the stock makes up less than 9% of the Berkshire portfolio.

The Oracle of Omaha made no changes to the second and third largest holdings, Bank of America (BAC), and Coca-Cola (KO). Same with the fifth largest, American Express (AXP).

It is interesting to note that the above five mentioned stocks make up over 65% of the total Berkshire Hathaway stock portfolio.

If you want to see a list of all the stocks in Warren Buffett’s Berkshire Hathaway stock portfolio, you can go to the following link:

Warren Buffett Berkshire Hathaway Stocks

Disclosure: Author owns AAPL, BRKB, BAC, & KO.

What Warren Buffett has been Buying

by Fred Fuld III

Warren Buffett, top investor and one of the richest people in the world, is in charge of Berkshire Hathaway (BRKA) (BRKB) which is up about 50% over the last five years. Even during the last month, BRKA outperformed the S&P 500 by 1.3%. So many look to Buffett to see where he is investing his money.

According to the latest reported filing with the SEC, Berkshire has made the following purchases earlier this year:

Bank of America (BAC) bought 31,081,000 shares

US Bancorp (USB) bought 3,150,787 shares

Amazon (AMZN) bought 54,000 shares

Red hat (RHT) bought 61,419 shares

In regards to what Warren Buffett sold, he liquidated all shares of USG Corp. (USG), and sold 284,102 shares of Charter Communications (CHTR).

Disclosure: Author owns AMZN & BAC.

Here’s How You Can Have Lunch With Warren Buffett

by Fred Fuld III

All Warren Buffett fans would like to have lunch with one of the greatest investors in the world. Would you like to have lunch with Buffett? Besides eating with Buffett, the head of Berkshire Hathaway (BRKA) (BRKB), you get to ask him lots of questions and get his advice.

The catch is to be the successful bidder for the eBay (EBAY) auction of the Power Lunch with Warren Buffett to Benefit GLIDE. The current bid at the time this article was written is $3,500,100.00. There have been 13 bids so far and the starting bid was $25,000.

Buffett will have a meal with the winning bidder and up to seven friends at Smith & Wollensky in New York City on a mutually agreed upon date.

All of proceeds from the winning bid will benefit GLIDE, one of the leading social service institutions working to alleviate human suffering and poverty in the San Francisco Bay Area.

You have two days left to bid, as the auction closes on Friday, May 30, 2019 at 7:30 pm PT. You must be prequalified to bid.

Don’t forget to read:

How to Plan for Warren Buffett’s Berkshire Hathaway Annual Shareholders Meeting

by Fred Fuld III

It was just a couple weeks ago when Warren Buffett held his Berkshire Hathaway (BRKA) (BRKB) Annual Shareholders Meeting in Omaha, Nebraska. The attendance was huge. I understand that they expected around 30,000 attendees, but according to the local press, there were over 40,000! It was like a rock concert festival for investors.

The event was held at the CHI Health Center Omaha Convention Center and Arena. The arena part of the center, which normally hosts basketball and hockey games, was where the meeting was held and the the convention center held the exhibiters of many of the companies that Berkshire Hathaway owns.

It was a three day event starting with the Shareholder Shopping Day and Borsheims Cocktail Reception on Friday, May 3.

Then on Saturday was the all-day annual meeting, starting with a movie about some of the products and services offered by Berkshire companies. After the movie was a question and answer session with Warren Buffett and Charlie Munger, which lasted all day long, other than a one hour lunch break. I don’t know how Warren and Charlie had the stamina. By two o’clock in the afternoon, I felt like taking a nap (but I didn’t).

After the Q&A, the formal meeting began and lasted about two minutes. Finally, during the evening was the Nebraska Furniture Mart’s Berkshire Picnic.

Sunday was the Berkshire Hathaway “Invest in Yourself” 5K Walk, Jog, and Run. Then the Borsheims Shopping Day took place where an entire indoor shopping center was taken over for the day and opened exclusively to Berkshire shareholders. In addition to the free food, you could watch bridge champions, a table tennis champion, a magician, and music entertainment. Finally, the dinner at Gorat’s Steakhouse.

Berkshire Boat — You could have bought this boat. Price: $165,000. Show special: $125,000

In regards to the exhibits in the convention center, attendees could visit the following:

Borsheims Fine Jewely
BNSF Railway (with a toy train moving around the exhibit) Train
Coca-Cola (KO)
Dairy Queen (lots of inexpensive ice cream)
FlightSafety International (which allowed attendees to try out the company’s flight simulation machines)
GEICO (a giant GEICO gecko was there)
Kraft Heinz (KHC)
NetJets (you could walk through the interior of a jet)
See’s Candies (probably the most popular exhibit)
and many, many more exhibitors

For those of you that want to attend next year, here are some things to keep in mind:

Next year’s meeting is May 2, 2020
If you don’t own shares of Berkshire, make sure you buy your shares far enough ahead of time to be on the corporate records so that you will be entitled to attend
Make your reservation for a hotel room NOW. I made my reservation about a couple months before the event, and the closest hotel I could get was over half an hour away from the convention center.
If you plan on taking Lyft (LYFT) or Uber (UBER) at the airport when you first arrive, plan on not getting a car for a long, long time. I suggest that you immediately stand in the taxi line, and call Lyft or Uber right after you get in line (which may take at least half an hour to get to the front for a taxi). You may be lucky and your ride hailing car may show up before you get to the front of the taxi line. Expect to pay a lot for a taxi ride, far more than Uber or Lyft.
If you want to get a good seat at the meeting, plan on getting there very, very early in the morning. I arrived at 7:45 am and it was already standing room only. (Remember, this is an arena.) I finally got a seat in the afternoon up in the nosebleed section. I was talking to the guy who was sitting behind me and he said he got there at 6:15 and it was the best seat he could get. He told me that people started arriving at 3:30 and 4:00 in the morning in order to get a decent seat.
Expect to got through extensive security to get in. I saw a police officer with an assault rifle.
If you want to attend the Gorat’s Steakhouse dinner, make your reservation now.
You will receive a form from Berkshire asking if you are planning to attend the meeting. Fill out the form and send it in immediately. (Tip: You can save a couple days by downloading the form instead of waiting for it to arrive in the mail.)
Plan on meeting a lot of people from around the world and have fun.

Disclosure: Author owns BRKB.

Warren Buffett’s Berkshire Hathaway’s Recent Investments

by Nkem Iregbulem

As the third-wealthiest person in the world, Warren Buffett is widely regarded as an investment guru. His investment philosophy is based on the concept of value investing. He is the chairman, CEO, and largest shareholder of Berkshire Hathaway, the world’s 10th largest company by revenue. As of 2018, Buffett is estimated to be worth over $80 billion. He is not only an investor but also a dedicated philanthropist. In fact, he has promised to give 99% of his fortune to charitable causes.

Due to his success, Buffett’s stock purchases are closely followed by many other investors. Buffett’s Berkshire Hathaway recently purchased the stocks of JP Morgan Chase (JPM), Oracle (ORCL), PNC Financial Services Group (PNC), and Travelers Companies (TRV). His company also added to its position in Bank of America (BAC) and Apple (AAPL). These stocks can all be found on the New York Stock Exchange, except for AAPL, which is traded on the NASDAQ exchange.

With more than $2.5 trillion in assets, JP Morgan Chase is one of the largest financial institutions in the United States. The company is segmented into consumer and community banking, commercial banking, corporate and investment banking, and asset and wealth management. The company was founded in 1871 and is headquartered in New York, but it operates both within and outside of the United States. JP Morgan Chase has a market cap of $360.6B and pays a dividend yield of 2.89%. It trades at 13.70 times trailing earnings and at 11.07 times forward earnings. The stock has a price-to-sales ratio of 3.60, putting it into the overpriced range. It also has price-to-book ratio of 1.59. With its revenue growing each fiscal year since 2015, the company enjoys a 3-year revenue growth rate of 1.56% and a 5-year revenue growth rate of 0.53%.

Founded in 1977 and based in California, Oracle is a computer technology company that sells databases, middleware, applications, hardware, and other enterprise IT solutions. Most of the its revenue comes from software licenses, support, and maintenance, but the company has recently started to shift towards cloud-based subscriptions. Oracle has a market cap of $183.1B and pays a dividend yield of 1.57%. It trades at 49.21 times trailing earnings and at 14.33 times forward earnings. The stock has a price-to-sales ratio of 5.04, so it is considered overpriced. It also has a price-to-book ratio of 4.81. Oracle has a 3-year revenue growth rate of 1.38% and a 5-year revenue growth rate of 1.39% and has seen its revenue increase each fiscal year since 2016.

PNC is a financial services company involved in retail banking, corporate and institutional banking, residential mortgage banking, and asset management. With nearly 2,600 branches in 19 states and D.C., the company stands as the eight-largest bank in the United States — measured by assets. The company was founded in 1845 and is based in Pennsylvania. PNC Financial Services Group has a market cap of $61.4B and pays a dividend yield of 2.86%. The company’s stock trades at 11.17 times trailing earnings and at 11.56 times forward earnings.

It falls into the overpriced range with a price-to-sales ratio of 3.70. The stock also has a price-to-book ratio of 1.30. The company boasts a 3-year revenue growth rate of 2.03% and a 5-year revenue growth rate of 1.03%.

The Travelers Companies is an insurance company that was founded in 1853 and is headquartered in New York. The company segments its business into commercial and personal insurance lines. Under its commercial operations, it provides coverage for primarily midsize businesses. Under its personal line, the company mostly serves car and homeowners. The Travelers Companies has a market cap of $33.8B and pays a dividend yield of 2.40%. It trades at 14.33 times trailing earnings and at 11.26 times forward earnings. The company’s stock has a normal price-to-sales ratio of 1.17 and a price-to-book ratio of 1.51. The company enjoys a 3-year revenue growth rate of 2.08% and a slightly better 5-year revenue growth rate of 2.34% as its revenue has been increasing each fiscal year since 2015.

With over $2 trillion in assets, Bank of America is one of the largest and most well-known financial institutions in the United States. The company’s business operations can be segmented into consumer banking, global wealth and investment management, global markets, and global banking. Its lines of business include home mortgage lending, credit and debit cards, investment banking, brokerage services, small-business services, and many others. Headquartered in North Carolina and founded in 1998, Bank of America has a market cap of $267.5B and pays a dividend yield of 2.19%. The stock trades at 12.98 times trailing earnings and at 9.51 times forward earnings. It has a price-to-sales ratio of 3.20, so the stock falls into the overpriced category. It also has a price-to-book ratio of 1.12. The company has a 3-year revenue growth rate of 0.56% and a 5-year revenue growth rate of 1.46%. Its revenue has been increasing each fiscal year since 2015.

Apple is a large and familiar technology company that was founded in 1976 and is headquartered in California. It designs and sells computer software, online services, and consumer electronics. Its product line of electronics include smartphones, tablets, computers, and smartwatches. The company also provides services such as Apple Music, a music streaming service, and Apple Pay, a mobile payment service. Apple has a market cap of $741.37B and pays a dividend yield of 1.87%. The stock trades at 13.12 times trailing earnings and 11.96 times forward earnings. It has a price-to-sales ratio of 2.94, making it slightly overpriced. The company’s stock also has a price-to-book ratio of 6.92. With its revenue increasing each year over the past few years, the company boasts a 3-year revenue growth rate of 4.35% and an even higher 5-year revenue growth rate of 9.22%. Most of this revenue comes from Apple’s iPhone sales.

Hopefully, one of the richest men in the world can give you some profitable investment ideas.

Disclosure: Author didn’t own any of the above at the time the article was written.

Can You Guess Warren Buffett’s Largest Stock Holding?

by Fred Fuld III

Warren Buffett, the head of Berkshire Hathaway (BRKA) (BRKB), is considered to be one of the top investors, and is probably the most well known investor in the world. In addition, Buffett is a very interesting character.

Many investors like to copy Buffett’s investments, in order to match his superior returns.

So the first thing a copycat investor would do is to check and see what stock he owns more of than any other investment. Can you guess what that stock is?

It is Apple Inc. (AAPL), the iPhone, iPad, Mac, and Apple Watch company. According the Berkshire Hathaway’s latest report to the SEC, Apple makes up 21.27% of the Berkshire Hathaway portfolio, a fairly large commitment. Buffett has 239 million shares worth over $40 billion.

The second largest shareholding is Wells Fargo (WFC), making up 12.66% of the Berkshire portfolio. In third place is Bank of America (BAC) at 10.78%.

Rounding out the top five shareholdings is Kraft Heinz (KHC) representing 10.74% of the portfolio and Coca-Cola (KO) at 9.19%.

To see all the stocks owned by Warren Buffett’s Berkshire Hathaway, so to the Buffett Stock List.

Hopefully you can ride on Buffett’s coattails to investment success.

Disclosure: Author owns AAPL, BRKB, and BAC.