Value Investing News

Buffett finds that his "Sainted Seven" (his wholly owned businesses) returned 57% on equity capital.

All told, I must say that I was disappointed with eBay’s capital allocation and stock compensation expense for the quarter. I had hoped that a $10 share would have tempted management to greedily repurchase buckets of shares; however they bought none.

In 1988, Buffett reveals the secrets to Borsheim's success, his approach to merger arbitrage, and his criticisms of efficient market theory.

Ostensibly, Malcolm Gladwell’s 'Blink: The Power of Thinking without Thinking' is not a book about investing. Being interested in the human mind making judgments, Gladwell highlights situations in which rational, well-considered judgments are more inaccurate than reactive, non-reflective judgments.

In 1989, Buffett assesses his growing portfolio of business, and opines on taxes, preferred stock investments, zero coupon bonds, and leverage. For one, Buffett observes that the structure of capital gains taxes allows the investor to receive interest-free investing funds.

Following Buffett’s advice, one should concentrate her investing dollars within her circle of competence. But when the opportunity arises, how and where should the circle expand? One useful place to begin are those industries with high returns on capital.

In reading through Warren Buffett’s letter to Berkshire shareholders from 1985, he makes the bold claim that “ [the management of Capital Cities] is the best of any publicly-owned company in the country.” In Buffett’s mind are Tom Murphy and Dan Burke, and in Murphy’s case, his tenure returned $10000 to owners for every $1 originally invested; can one even imagine a 10,000 bagger today?

With recent stock market declines, I had hoped to use this opportunity to filter out those management teams who buy high and pause repurchases when prices fall. But few management teams have taken advantage of the recent declines. And perhaps even more interesting, April saw insiders’ stock sales outnumber purchases by more than 8 to 1!

Berkshire’s stock may now be overvalued; book value may overstate liquidation value; stock option compensation too often rewards earnings growth without discounting for the growth in incremental capital.

Discusses share repurchases; explores the efficiency at Nebraska Furniture Mart and the great business economics at the Buffalo Evening News; concludes by analyzing Washington Public Power bonds by the same metrics as he would a business.

Buffett discusses using increases in book value rather than return on equity for assessing Berkshire. He lauds Mrs. B, his new business partner, over at Nebraska Furniture Mart. And he makes a few observations about the Buffalo Evening News and See's Candies.

At these prices, I find FNET a compelling value, whose price and upcoming special dividend offers a substantial margin of safety, particularly if the cash distribution is received in a tax-advantaged account.

Buffett discusses return on equity for evaluating businesses, the insurance industry, and using stock for acquisitions.

eBay's management looks to be stirring the pot. Skype’s founders want to buy their creation back, though eBay denies that they’re close to a deal. StumbleUpon’s founders disclosed that they had brought their baby back home, which they had sold to eBay for $75 million two years ago. And lastly, eBay appears close to purchasing a 34% stake in Korean online auction operator Gmarket.

Buffett compares buying controlled v. non-controlled businesses, and the relative attractiveness of American stocks v. bonds, after accounting for taxes.