Tag Archives: Warren Buffet

Business, Finance, Occupation & Industry

What Value Does Warren Buffett See in Solar?

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By Travis Hoium, The Motley Fool

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Solar power has a growing presence in the U.S., which can be a contentious topic after a few high-profile failures in the industry. But Warren Buffett, arguably the best investor of our time, had invested billions of dollars in the industry long before most investors started making such bets. Why is he investing in solar when others are questioning it? Here’s a peak into what Buffett sees in solar.

On a quest for yield
Warren Buffett isn’t making just any investment in solar. Berkshire Hathaway‘s subsidiary MidAmerican Energy is buying huge solar projects with long-term power purchase agreements. As these projects generate electricity the contracted utility pays a set rate per kilowatt hour, which is negotiated long before a project is ever built. Since the cost of the project is fixed when Buffett buys it and the cash flows are easily predictable, in essence, Buffett is buying an asset similar to a bond, something he is very comfortable with.

The size of the investments Buffett is making is what makes his fascination with solar astounding. He owns two projects built by First Solar , including 49% of Agua Caliente, which he co-owns with NRG Energy , and a third project called Antelope Valley, the largest solar power plant in the world, which is currently under construction by SunPower .

 

Builder

Project Size

Cost

Ownership

Agua Caliente 

First Solar

290 MW

$1.8 billion

49%

Topaz 

First Solar

550 MW

$2 billion

100%

Antelope Valley 

SunPower

579 MW

$2.5 billion

100%

An investor as conservative as Warren Buffet wouldn’t make $5.4 billion in total investments in solar if he couldn’t reasonably predict the costs and revenue associated with such projects. That’s the big development in solar over the past half-decade, the industry can now build predictable models for projects all around the world, making it an investment even Warren Buffett could love.

Tax benefits
Another thing Buffett likes about solar is the tax benefits that come with it. Once these solar projects are completed Berkshire Hathaway will be eligible for a 30% investment tax credit, which he can write off against profits elsewhere in the business.

Solar projects are also eligible to be written off more quickly than most capital investments. Under federal law, Berkshire Hathaway can depreciate these projects over just five years with what’s called the Modified Accelerated Cost-Recovery System. This means that Buffett will save money on taxes in the first five years that the projects are on the books and, in turn, pay more in taxes later in the project’s life. The amount of taxes paid won’t change (assuming there is no change in policy), but for a business paying taxes later is always better than paying taxes earlier.  

Investments only Warren Buffett can make
The other big benefit Warren Buffett has over you and me is his ability to borrow

From: http://www.dailyfinance.com/2013/04/17/what-value-does-warren-buffett-see-in-solar/

Business, Finance, Occupation & Industry

Why Bank of America Is Down So Big This Week

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By John Grgurich, The Motley Fool

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The big banks took a pounding this week, and Bank of America was no exception: down 2.30% on the week. With no breaking bad news for B of A, what’s to explain the superbank’s severe downturn?

The tale of the tickers
Before we dig into that, here’s a quick overview of how B of A’s peers and the markets performed this week:

  • Citigroup was down a massive 3.94%.
  • JPMorgan Chase was down a much less massive, but significant, 0.82%.
  • Wells Fargo held up the best by far of the big four, down just 0.62%.

The markets were all in the red, as well; with the Dow Jones Industrial Average down 0.51%, the S&P 500 down 1.37%, and the Nasdaq the worst performer by far, down 2.36%.

Foolish bottom line
A 2.30% share-price drop is nothing to sneeze at. Usually, it takes some big piece of bad news to move a single stock by that much. But again, there just wasn’t much cracking on the B of A home front this week.

Foolish colleague John Maxfield reported on poor B of A performance on the customer service front, per information released by the Consumer Financial Protection Bureau, but it’s unlikely investors would care too much about that.

But there was something unusual that happened in the markets on Wednesday. B of A, Citi, and JPMorgan all dropped off a cliff. Citi lost more than 3% that day alone, while JPMorgan and B of A both lost more than 2%. Wells Fargo held up the best on Black Banking Wednesday, losing only 0.22% off its share price. Warren Buffet‘s favorite bank also recovered very strongly on Thursday — again unlike its peers — only to start today down again.

There’s no apparent reason for this banking sector hammering, either. Wednesday did see a ADP, the payroll-processing giant, report less than expected private-sector job growth, but if you’re looking for a singular reason for Black Banking Wednesday, that’s a stretch. (And if markets didn’t like the ADP report, wait till they get a hold of today’s truly terrible jobs numbers.)

The bottom line is, sometimes the markets move down — and up — for no apparent reason. But as Foolish investors — buy-and-hold types who are in it for the long haul — remember not pay too much attention to the day-to-day, week-to-week, or even month-to-month gyrations of the markets. Markets are made up of people, and people can be fickle.

So long as the companies you hold stock in have sound fundamentals, you believe in the corporate mission, and you understand how they make money, have faith that your investing dollars are in the right place. Get rich slowly, Fools. 

Looking for unequalled in-depth analysis on Bank of America?
Look no farther than this Motley Fool premium report — expertly researched and written by top Foolish banking analysts Anand Chokkavelu and Matt Koppenheffer. They’ll help you lift the veil on the bank’s operations, and give …read more

Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Swiss Re settles dispute with Berkshire Hathaway

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Swiss Re Ltd., the world’s second-biggest reinsurer, says it has settled a dispute with Warren Buffet‘s firm Berkshire Hathaway, in a deal that will boost the Swiss company’s profits in the first quarter.

The Zurich-based group, says Berkshire Hathaway has agreed to pay $610 million so Swiss Re will take back some risks under a 2010 deal. Reinsurance involves one company agreeing to share a large insurance risk with another company and to pay part of any loss.

Swiss Re said Thursday the payment involving the group of renewable term-life policies sold in the U.S. before 2004 and several other factors would pad its first-quarter profits by about $100 million.

…read more
Source: FULL ARTICLE at Fox World News

Business, Finance, Occupation & Industry

Warren Buffett's Top 5 Bank Stocks

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By John Grgurich, The Motley Fool

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The catchphrase used to be, “When E.F. Hutton talks, people listen.” Now when it comes to financial advice, you could easily insert the name Warren Buffet.

Does the Sage of Omaha need an introduction? Just in case, according to Forbes Buffet is the fourth-richest man in the world. As a general rule, he got that way by investing in companies he can easily get his head around, have powerful brands, have wide moats, and are undervalued.

Through his company, Berkshire Hathaway , Buffet invests in a little bit of everything, including bank stocks. Here are Berkshire’s top five bank holdings, along with a quick explanation of why Buffet and his team might like them:

5. M&T Bank
At around $551 million, M&T is Berkshire’s smallest bank holding. It’s a regional bank assets of about $81 billion. Not big by JPMorgan Chase standards, but big enough to do serious business and potentially exhibit serious growth, which it’s already done.

In the past year, M&T’s share price has increased by 18.68%. The bank also has a price-to-book ratio of 1.41: indicating it’s not a screaming value, but also that the bank certainly isn’t overvalued.

Small enough to get your head around, but big enough to make things happen, all at a reasonable valuation: From a Buffet perspective, what’s not to like?

4. Bank of New York Mellon
At around $555 million — just slightly more than M&T — BNY Mellon is Berkshire’s next biggest bank holding. But BNY is a big bank, the country’s eighth largest. It has nearly $360 billion in assets on its balance sheet. 

That said, it’s run rather conservatively. Most of the business it does is with other banks, all of which is conducted in a straightforward manner. Ever read about BNY in the news, getting fined left and right by regulators? Or being sued by angry investors?

No, BNY is a throwback to the days when banks were beautifully boring, yet profitable. BNY has returned 14.64% to investors in the past year, and the P/B of is 0.93: all right up Buffet’s alley.

3. U.S. Bancorp
At a little over $2 billion, U.S. Bancorp is Buffet’s next biggest bank holding. Like BNY Mellon, it’s a big bank, with assets of around $353 billion. 

Also like BNY Mellon, U.S. Bancorp is another bank that — for all its immensity — also operates relatively under-the-radar. And while its P/B is little high — 1.83 — its return on equity is a fabulous 14.59%, which means it’s out there making good on Buffet’s investing dollars.

In the past year, it’s only returned 4.86% of positive share-price growth, but Buffet doesn’t necessarily go for high-flyers. He’ll typically take steady, low-drama growth any day of the week.

2. American Express
This is a bit of cheat. AMEX isn’t a bank, but it’s a big financial services company that Buffet likes enough to hold more than $10 billion of.

AMEX is a classic American company that’s …read more
Source: FULL ARTICLE at DailyFinance

Articles of Interest

Obama A Free Market Guy In Drag? Or When It Suits Him?

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By Fred Weinberg

Obama Free Market SC Obama A Free Market Guy In Drag? Or When It Suits Him?

I rarely end up agreeing with the Obama Administration on much of anything, but we seem to have some common ground on the issue of copyright law as it affects the nation’s telecommunications policy.

Now I know that sounds eye-glazingly long and ominous.

So, let’s put it a different way.

Do you know what those morons in Congress have brought about?

Imagine that you bought an iPhone 4 from Verizon, paid them well over $100 a month for the two year contract, and the contract has expired.  Let’s say you’ve paid $1,500 or so.

Sprint offers you a better deal.  But the phone is “locked” on Verizon.  So you buy an inexpensive piece of software on eBay which will unlock the phone.

Because of an obscure law passed by the same clowns who can’t cut the budget (or, in the case of the Senate, even pass a budget) and an even more obscure decision made by the Librarian of Congress, you could be fined $50,000 and go to prison for five years.

That’s right.  Eric Holder—despite his boss’ agreement with me that this is nonsense—can come thundering after you and your unlocked iPhone on behalf of a cellular carrier and put you in Gitmo.  (OK, probably not Gitmo, but you never know.)

Now it might be one thing if you stole the phone.

But this is a phone that you not only paid for but honored the contract on with your original carrier.

What the hell kind of public policy is that?

I’ll tell you what it is.  It is the same kind of public policy that was written by a consortium of Apple, Nokia, AT&T, and Verizon. And handed to Congressional staffers by K-Street lobbyists.  And inserted in a bill without ever having been read by an elected official.  Just like Obamacare.

If you ever wanted to know about the corrosive effects of allowing the foxes to guard the henhouse, this is it.  Business executives lobbying for laws to enrich them and screw everyone else.

I hasten to add that I am not picking on just these companies.  It is the nature of most competitive businesses that if they can use a law to enrich their own positions, they will.  That’s why the government should just keep its nose out of business and avoid doing anything that has the effect of picking winners and losers.

While the public spirited Warren Buffet will suggest that it is improper for him to pay a lower tax rate than his secretary, he will also have one of his companies fight a tax increase until there’s blood all over the floor.

Steve Wynn will excoriate the President on job creation and overregulation while he uses the Clark County District Attorney’s office to collect gambling debts at his casinos in the criminal courts.

The law—and its use—creates hypocrites of us all.

But those businesses that stand to benefit from these ridiculous laws are both willing to take the chance of being called a …read more
Source: FULL ARTICLE at Western Journalism

Business, Finance, Occupation & Industry

Gordon Baird, CEO of Independence Bancshares, Inc., to Speak at Innovation Project 2013 at Harvard U

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By Business Wirevia The Motley Fool

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Gordon Baird, CEO of Independence Bancshares, Inc., to Speak at Innovation Project 2013 at Harvard University

Conference to Focus on Successfully Transforming the Commerce Ecosystem Through Innovation

NEW YORK–(BUSINESS WIRE)– Gordon Baird, CEO of Independence Bancshares, Inc., will join Warren Buffet, Al Gore, Larry Summers, Raj Date and other industry leaders to talk about innovation and financial services at The 2013 Innovation Project conference, March 20th and 21st at Harvard University.

As a former executive of State Street Bank and Trust Company and Citigroup Global Markets, Inc., and founder of multiple financial services companies, Baird has deep experience in banking and the transformational impact of mobility and digital connectivity on financial services, regulation and mobile banking. He will provide his cross-platform, cross-industry perspective on the innovation taking place in financial services, the opportunities and constraints facing larger financial services companies, emerging enabling technologies and the regulatory frameworks that will shape developments in this space.

More information about Mr. Baird’s panel and the Innovation Project can be found here: http://theinnovationproject2013.com

About Independence Bancshares, Inc. and Independence National Bank

Independence Bancshares, Inc. is a bank holding company headquartered in Greenville, South Carolina, providing a complete line of retail banking, consumer finance and business banking services.

Media:
RLM Finsbury
David Millar, 646-805-2009
Dave.millar@rlmfinsbury.com
or
The Byrum Innovation Group
Reed B. Byrum, 864-567-7468
Reedbyrum@byruminnovation.com

KEYWORDS:   United States  North America  Massachusetts  New York

INDUSTRY KEYWORDS:

The article Gordon Baird, CEO of Independence Bancshares, Inc., to Speak at Innovation Project 2013 at Harvard University originally appeared on Fool.com.

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News, Politics, Government

Mexican Drug Kingpin El Chapo Out Of Billionaire Ranks

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By Dolia Estevez, Contributor

Mexican telecommunications tycoon Carlos Slim,  for the fourth consecutive year, leads the 2013 Forbes world billionaires list. His net wealth increased by $4 billion, reaching a total of $73 billion, well above Bill Gates’ $67 billion and Spanish retailer Amancio Ortega’s $57 billion. Ortega displaced Warren Buffet from the No. 3 slot in this year’s list. …read more
Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

Zuckerberg Buys More of His Own Company (As He Should)

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By Karsten Strauss, Forbes Staff

It’s important for a CEO to have confidence in his company, no doubt, and that confidence can’t be communicated to employees or investors in mere analyst calls, news interviews or semi-scripted pep talks over smoothies in a conference room at the office. You’ve got to show that your skin is in the game, to use the old Warren Buffet phrase. …read more
Source: FULL ARTICLE at Forbes Latest

News, Politics, Government

What’s On Your Mind • This solves serious problems–by Warren Buffet

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By Frank Jenkins Warren Buffett, in a recent interview with CNBC, offers one of the best quotes about the debt ceiling:

“I could end the deficit in 5 minutes,” he told CNBC. “You just
pass a law that says that anytime there is a deficit of more
than 3% of GDP, all sitting members of Congress are ineligible
for re-election.

The 26th amendment (granting the right to vote for 18 year-olds)
took only 3 months & 8 days to be ratified! Why? Simple!
The people demanded it. That was in 1971 – before computers, e-mail,
cell phones, etc.

Of the 27 amendments to the Constitution, seven (7) took one (1) year
or less to become the law of the land – all because of public pressure.

Warren Buffet is asking each addressee to forward this email to
a minimum of twenty people on their address list; in turn ask
each of those to do likewise.

In three days, most people in The United States of America will
have the message. This is one idea that really should be passed
around.

Congressional Reform Act of 2012

1. No Tenure / No Pension.

A Congressman/woman collects a salary while in office and receives no
pay when they’re out of office.

2. Congress (past, present & future) participates in Social
Security.

All funds in the Congressional retirement fund move to the
Social Security system immediately. All future funds flow into
the Social Security system, and Congress participates with the
American people. It may not be used for any other purpose.

3. Congress can purchase their own retirement plan, just as all
Americans do.

4. Congress will no longer vote themselves a pay raise.
Congressional pay will rise by the lower of CPI or 3%.

5. Congress loses their current health care system and
participates in the same health care system as the American people.

6. Congress must equally abide by all laws they impose on the
American people.

7. All contracts with past and present Congressmen/women are void
effective 12/1/12. The American people did not make this
contract with Congressmen/women.

Congress made all these contracts for themselves. Serving in
Congress is an honor, not a career. The Founding Fathers
envisioned citizen legislators, so ours should serve their
term(s), then go home and back to work.

If each person contacts a minimum of twenty people then it will
only take three days for most people (in the U.S. ) to receive
the message. Don’t you think it’s time?

THIS IS HOW YOU FIX CONGRESS!

Statistics: Posted by Frank Jenkins — Wed Jan 23, 2013 11:13 pm

Source: FULL ARTICLE at gov.summit.net