Warren BuffettWarren Buffett hat es seinen Kritikern
wieder einmal gezeigt, wie man an der Börse Geld macht. Während ein Großteil der Investoren im Herbst
2008 Nerven und Aktien wegschmissen, gingen der 78-jährige Warren Buffett und Kompagnon Charlie Munger
(85) auf Einkaufstour. Das Credo der alten Herren ist legendär - Buffett im Zitat: „Meine Kaufstrategie
wird von einer einfachen Regel bestimmt: Sei ängstlich, wenn die anderen gierig sind, sei gierig wenn die
anderen ängstlich sind."
Mut zum Risiko wird belohnt
Obgleich die Investmentholding Berkshire Hathaway bereits damals bedeutende Positionen in
Versicherungen und Banktiteln hielt (Wells Fargo, Bank of America, American Express, Moody´s etc.), griff
die Investmentlegende Buffett noch einmal mutig ins fallende Messer und stieg bei der damals übel
beleumdeten Goldman Sachs, BYD (Best You Desire, chinesischer Hersteller von Automobilen und
wiederaufladbaren Batterien) sowie General Electric ein. Zusätzlich riet er im Oktober 2008 in einem
offenen Brief zum Kauf von Aktien - wobei er sicherheitshalber auf die Langfristigkeit von
Aktieninvestments hinwies.
Die meisten seiner damaligen Käufe sind ein paar
Monate später bereits ordentlich im Plus - zum Beispiel Goldman Sachs. Goldene 40 Prozent Buchgewinn
(rund 2 Milliarden US-Dollar) auf die damals gekauften Kaufoptionen (Institutional Money berichtete).
Kursgewinne sind aber noch nicht alles - für die für fünf Milliarden US-Dollar erworbenen Vorzugsaktien
kassiert Berkshire Hathaway zehn Prozent Dividende pro Jahr. Prozentuell gesehen brachte sein Engagement
in BYD aber noch mehr Gewinn.
Best You Desire
Seit
Buffetts Einstieg bei BYD am 27. September 2008 hat sich der Kurs des Unternehmens an der Börse in
Hongkong verfünffacht. Buffett hatte wieder einmal den richtigen Riecher für die großen Trends - sparsame
Automobile (Institutional Money berichtete). Hintergrund: BYD ist nicht nur der siebtgrößte
Autohersteller Chinas, sondern gleichzeitig der größte Produzent von wiederaufladbaren Batterien in
China. Der Verkauf von Fahrzeugen wurde im ersten Halbjahr 2009 verdoppelt. „Buffett setzt in diesem Fall
auf den Jockey", erklärte (laut Bloomberg) Guy Spier, Leiter des New Yorker Hedgefonds Aquamarine Funds
LLC., und meinte den BYD-Vorstandschef Wang Chuanfu.
Berkshire erwarb im
September 2008 über die Tochtergesellschaft MidAmerican Energy Holdings Co. 225 Millionen neue BYD-Aktien
zum Preis von jeweils acht Hongkong-Dollar, was einer Gesamtsumme von 1,8 Milliarden. Hongkong-Dollar
entspricht. Die Beteiligung hat auf Basis des Schlusskurses per Ende Juli 2009 einen Wert von 9,66
Milliarden Hongkong- Dollar (881 Millionen Euro).
Buffett hat die Zeit auf seiner
Seite
Ein noch größeres Rad dreht Buffett über den Terminmarkt. Letzten Herbst
verkaufte Buffett für knapp fünf Milliarden US-Dollar Optionen an Anleger, die sich gegen einen Crash
absichern wollten. Sie bringen für Berkshire Hathaway nur dann einen Verlust, wenn die Märkte in zehn
Jahren und mehr tiefer stehen als heute (Institutional Money berichtete).
Die
vereinnahmten Optionsprämien investierte Buffett in Wertpapiere. Selbst wenn Buffett dieses eine Mal
schief liegen sollte - Schlitzohr Buffett hat die Zeit in mehrfacher Hinsicht auf seiner Seite. Bis zum
Jahr 2027 werden die Kurse wahrscheinlich höher stehen als heute. Und falls nicht - Buffett wäre dann
biblische 97 Jahre alt, Munger sogar 104 Jahre....
Der Börse honoriert die guten
Managementleistungen mit steigenden Kursen. Zum ersten Mal seit Jahresanfang hat die Aktie Berkshire
Hathaway wieder die Marke von 100.000 Dollar erreicht. Seit ihrem Tief im März legte das teuerste Papier
der Wall Street sogar um rund 40 Prozent zu.
Aug. 8 (Bloomberg) -- Billionaire investor Warren Buffett’s bet on derivatives tied to world equity
markets helped Berkshire Hathaway Inc. return to profitability in the second quarter.
Net
income rose 14 percent to $3.3 billion, or $2,123 a share, from $2.88 billion, or $1,859, in the same
period a year earlier, the Omaha, Nebraska-based company said yesterday in a regulatory filing. The
results halted six straight quarters of declining profit, including a $1.53 billion loss in the first
three months of 2009.
Berkshire benefited as stock markets on three continents rebounded,
while preferred shares and debt in Goldman Sachs Group Inc. and General Electric Co. increased investment
income. Buffett, the firm’s chairman and chief executive officer, has said Berkshire’s energy business is
thriving amid the recession, while jewelry, home-building and airplane units suffered.
“It’s
shocking how much the derivatives really make a difference,” said Michael Yoshikami, chief investment
strategist at Walnut Creek, California-based YCMNet Advisors, which owns Berkshire shares. “If you take
those out of the overall result, it doesn’t change the fact that some of the economically sensitive names
are still hurting.”
Derivatives added $2.36 billion to earnings, compared with $689 million a
year earlier. The firm valued the stock portfolio at its insurance units at $45.8 billion, a 22 percent
increase from March 31.
Goldman Sachs
Buffett scaled back on the purchase of
common stocks in the past year in favor of preferred shares in Goldman Sachs and GE, municipal bonds, and
debt in firms including luxury jeweler Tiffany & Co. and motorcycle maker Harley-Davidson Inc. The shift
boosted investment income 9 percent to $1.87 billion at its insurance and finance operations.
Berkshire’s own shares passed $100,000 for the first time since January this week, recovering from a
six-year low in March. The stock gained $1,150, or 1.1 percent, to $108,100 in New York Stock Exchange
composite trading yesterday before results were released.
Berkshire is the largest
shareholder in American Express Co., whose stock rose 71 percent in the quarter, Wells Fargo & Co., which
increased 70 percent, and Burlington Northern Santa Fe Corp., which advanced 22 percent.
Climbing stock prices helped increase book value to $118.8 billion, an 11 percent increase since March
31. Buffett typically highlights book value, the measure of assets minus liabilities, in the first
sentence of his annual letter to shareholders. The figure includes $4.3 billion for non- controlling
interests.
David Sokol
Buffett, 78, has been shuffling managers at businesses
pressured by the recession, this week appointing David Sokol, chairman of Berkshire’s MidAmerican Energy
Holdings Co., to run NetJets Inc. on a temporary basis after the head of the plane- rental unit stepped
down. The assignment stoked speculation that Sokol may one day succeed Buffett as CEO.
The
NetJets unit, which leases planes to corporate customers and individuals, posted a $253 million pretax
loss, including asset writedowns and “other downsizing costs of $192 million” in the quarter.
“NetJets owns more planes than is required for its present level of operations and further downsizing
will be required unless demand rebounds,” the filing said.
The stock-market rally helped
derivative bets called equity-index puts that had weighed on results over the prior year. Buffett sold
some of the derivatives when the Standard & Poor’s 500 Index and other markets were approaching peaks in
2006 and 2007, with the promise to pay buyers in 2019 or later if the indexes are lower than when the
contracts were arranged.
New Terms
Berkshire said it renegotiated terms on six of
the contracts, shortening their duration by 3.5 to 9.5 years, and reduced the strike price -- the level
at which Berkshire would pay out -- by 29 percent to 39 percent. No funds changed hands between Berkshire
and counterparties as a result, the firm said.
Buffett repeated an earlier statement to
shareholders about the effect of the derivatives on quarterly results. The bets, Berkshire said in a
statement yesterday, “will produce extreme volatility in our periodic reported earnings.” Ultimately,
Buffett told shareholders in May, he expects Berkshire to make money on the bets.
Berkshire
also sold credit-default swaps on individual companies, and contracts that require the firm to pay when
credit losses occur at borrowers included in high-yield-bond indexes. The company paid about $825 million
in the second quarter and $350 million in July, bringing the total for the year to $1.85 billion.
Berkshire collected $3.4 billion in premiums on the contracts through the end of 2008.
Job
Cuts
Profit from selling policies at car insurer Geico fell 63 percent to $111 million before
taxes on an increase in claims. The unit added about 166,000 policyholders in the quarter, as growth
slowed from the first quarter when the company gained 430,000 customers.
Revenue was also
pressured at smaller Berkshire businesses that sell jewelry and furniture, and make products used in home
building. Berkshire last year cut jobs at units including Clayton Homes Inc., which builds manufactured
housing, and brickmaker Acme Building Brands.
Each of the manufacturing subsidiaries has
“taken actions to reduce costs, slow production and reduce or delay capital spending until the economy
improves,” Berkshire said yesterday.
Aug. 10 (Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc. is buying corporate debt and
securities issued by governments outside the U.S. as the billionaire investor’s spending on
stocks falls to the lowest in more than five years. Berkshire held about $11.1 billion in
foreign government bonds in its insurance units as of June 30, compared with $9.6 billion three
months earlier, the company said in a regulatory filing Aug. 7 announcing second-quarter results.
Buffett, 78, spent $2.6 billion in fixed-maturity securities in the three months ended June 30
compared with $350 million on stocks. Buffett is increasing fixed-income investments after results slumped at operating units including NetJets Inc., the money-losing plane-rental business,
and companies in Berkshire’s equity portfolio including Wells Fargo & Co. slashed dividends. Omaha, Nebraska-based Berkshire posted its first profit gain since 2007 as payments from
securities issued by Goldman Sachs Group Inc. and General Electric Co. boosted investment income. “Some of the normal places he’s gotten the cash to invest are just getting killed in the
recession,” said Gerald Martin, a finance professor at American University’s Kogod School of Business in Washington. “So he’s locking in these guaranteed returns, moving from the volatility
of stocks to a steady stream of income that, in some cases, is almost at the return you normally get from the stock market.” The $8 billion in investments in preferred shares of Goldman Sachs and GE are paying Berkshire 10 percent annual interest. Combined with the purchase
of similar securities sold by Swiss Reinsurance Co., and Berkshire’s investment in debt in companies including candy manufacturer Mars Inc. and Vulcan Materials Co., the firm’s announced
fixed-income deals since September pay interest of more than $1.8 billion annually.
Iceberg’s Tip
“That’s just the visible part of the iceberg, and it’s pretty massive,” said Mohnish Pabrai, founder of Irvine, California- based Pabrai Investment
Funds, which owns Berkshire shares. “There’s lots of investments we don’t see and may never know about, especially on the debt side.” The latest investments included the purchase of
non- investment grade corporate debt. The amortized cost of the insurance operation’s
high-yield corporate holdings rose 13 percent to $6.02 billion in the three-month period.
Junk-rated debt returned 23 percent in the second quarter, as investors speculated the worst of
the recession was over, according to Merrill Lynch & Co.’s High Yield Master II index.
Government Debt
The amortized cost of the insurance operation’s
foreign government holdings rose 16 percent. The filing doesn’t list the nations that issued
the debt or the companies in which Berkshire invested. Buffett is Berkshire’s chief executive
officer, chairman and head of investing. “It may be that Buffett thinks that inflation in
the U.S. will be worse than elsewhere in the world,” said Martin, who has studied Berkshire’s
investing history. The shift toward fixed-income boosted investment income 9 percent from
the year-earlier period to $1.87 billion at its insurance and finance operations, even as dividend
revenue declined from some of Berkshire’s top stock holdings. Wells Fargo cut its quarterly
payout to shareholders by 85 percent in March, and U.S. Bancorp slashed its payment 88 percent. Berkshire is the largest shareholder in Wells Fargo. The Goldman Sachs and GE investments also
give Buffett the option to buy stock at prices set when the deals were consummated. The Swiss
Re securities are among those that may convert to stock later.
‘Major Mistake’
The $350 million that Berkshire spent on equities in the second
quarter is the least since at least 2005, according to regulatory filings. It broke the mark set in
the first quarter, when the firm spent $624 million on equities including Wells Fargo.
The firm sold more common stock that it bought this year, after Buffett confessed to a “major
mistake” of purchasing shares of oil-producer ConocoPhillips with prices of the commodity near
a peak. A writedown on the stake contributed to a first-quarter loss, Berkshire’s first unprofitable
quarter since 2001. Buffett is expected to list U.S. stock holdings as of June 30 in a separate
filing this month. Berkshire’s own shares passed $100,000 in New York Stock Exchange
composite trading last week for the first time since January, recovering from a six-year low in
March. The stock, which closed at $108,100 before results were released on Aug. 7, is now up 12
percent this year. Berkshire’s second-quarter net income rose 14 percent from a year
earlier to $3.3 billion, as Buffett’s bet on derivatives tied to world equity markets gained in
value.
Operating Profit Declines
Operating profit, which
excludes some investment results, fell 22 percent to $1.78 billion as NetJets posted a $253 million pretax loss and revenue was pressured at Berkshire businesses that sell jewelry and
furniture, and make products used in home building. “He’s gotten himself into many small
businesses that are not going well,” said Charles Ortel, managing director of New York-based
Newport Value Partners, who advises clients to bet against Berkshire shares. “You are seeing revenue
contracting and profits shrinking at alarming rates.” Manufacturing subsidiaries have
“taken actions to reduce costs, slow production and reduce or delay capital spending until the
economy improves,” Berkshire said.
Aug. 11 (Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc. had to increase payouts on credit
derivatives backing junk debt as the recession forced more companies into default. Berkshire
paid about $825 million on the contracts in the second quarter and $350 million in July, compared
with $675 million in the three months ended March 31, the company said in a regulatory filing
last week. Buffett has paid out more than half of the $3.4 billion in upfront fees his Omaha,
Nebraska- based firm got on the contracts through the end of 2008. The 78-year-old
billionaire’s bet that he could outwit traders he once derided as “geeks bearing formulas” may be foiled by the biggest surge in corporate failures since at least 1970 and a plunge in the amount
investors recover after default. Buffett has said Berkshire may lose money on the derivatives tied to high-yield, high risk debt, which typically last about five years. “We
effectively had a near-collapse of the system and default rates spiked and recoveries were extremely
low” after the failure of Lehman Brothers Holdings Inc. last September, said Mikhail Foux, a
credit strategist at Citigroup Inc. in New York. “That effectively killed this strategy” used by
Buffett. Buffett agreed in some trades to take the first losses if companies in high-yield
indexes default, betting that upfront fees would exceed payments he had to make. He said in letters
to shareholders that traders relied on models that created “wildly mispriced” trades. Buffett
manages the trades personally, he said in the 2006 annual report, and Berkshire may also profit from investing the premiums.
Five-Year Contracts
Buffett didn’t respond to requests for comment left with assistant Carrie Kizer. He disclosed the
latest figures on the swaps in an Aug. 7 filing in which Berkshire said that second- quarter
net income gained 14 percent to $3.3 billion on separate derivatives tied to equity markets.
Berkshire typically guaranteed the debt of groups of 100 companies for five-year periods. The first
swap expires Sept. 20 and the last one matures in December 2013, Buffett said in his most
recent annual letter. In a worst-case scenario, Berkshire would face a maximum of about $6.4 billion
in additional payments, according to the Aug. 7 filing. At one point in 2005, Berkshire had
been paid an average of 75 percent of the maximum loss upfront to take on such risk, according
to Janet Tavakoli, founder of Tavakoli Structured Finance Inc. in Chicago, who wrote about Buffett’s
credit swaps trades in her 2009 book “Dear Mr. Buffett: What an Investor Learns 1,269 Miles
from Wall Street.”
Recovery Rates
Holders of debt
issued by non-financial companies recovered an average of 45 percent during the past two
recessions, according to Moody’s Investors Service. That means Buffett in 2005 was getting paid
an average 75 cents on the dollar to back bonds that, if they defaulted, typically lost 55 cents on
the dollar during the last two slumps. “People say he doesn’t understand derivatives,”
Tavakoli said in an interview before the second-quarter results were announced. “He very much
does know what he’s doing, but you have to be aware in any investment, the best you can do is
build in a margin of safety.” Historical assumptions failed in the crisis that toppled Lehman, pushed insurer American International Group Inc. to the brink of bankruptcy and sunk the
global economy into the worst recession since the 1930s. Swaps sellers had to pay an average of
83.4 cents on the dollar to settle contracts on 26 companies this year, according to data from
Markit Group Ltd. and Creditex Group Inc., which administer the auctions in which dealers set the payout levels. That means the recovery averaged 16.6 cents.
Smurfit-Stone
In January, six of the companies whose debt Berkshire had guaranteed
defaulted, the company said in a filing, without naming the issuers. BH Finance LLC, a Berkshire
unit, signed up for auctions in January allowing it to settle swaps linked to six borrowers
including packaging-maker Smurfit-Stone Container Corp. and telephone-equipment company Nortel
Networks Corp. Sellers of swaps on Chicago-based Smurfit that signed up for the auction had
to pay more than 91 cents on the dollar to settle the contracts. The payout on Nortel was 88 cents
per dollar. During an auction to settle contracts on Lyondell Chemical Co., which BH Finance
also signed up for, the payout was set at 84.5 cents. Berkshire paid $97 million on its
high-yield swap contracts in 2008, when Buffett was more optimistic about his bet. “I told
you a year ago that I thought we would make money on those, but we have run into far more
bankruptcies in the past year,” Buffett said in Omaha at Berkshire’s annual shareholder meeting
in May. “I would expect those contracts to show a loss before investment income, and perhaps
after.”
‘Mass Destruction’
Berkshire posted a $391
million second-quarter gain on all of its credit-default swaps trades, as the market value of the underlying debt improved. The figure may includes bets on investment-grade corporate bonds and
states and municipalities, in addition to junk borrowers. In the first quarter, the swaps reduced earnings by about $1.3 billion. Projecting Buffett’s future losses is difficult
because he doesn’t name the companies on which he placed bets, disclose terms of his trades or
say whether he has hedged against any losses, Foux said. Buffett may have fared better than
investors that made similar trades using benchmark indexes that are created by the banks that
dominated trading in the credit-default swaps market. A trader that bought the riskiest piece of the
Markit CDX North America Investment Grade Index Series 9, for example, already would have been
wiped out, Foux said. Junk, or high-yield, high-risk, bonds are those rated below Baa3 by
Moody’s Investors Service and BBB- by Standard & Poor’s.
Aug. 17 (Bloomberg) -- Billionaire investor Warren
Buffett’s Berkshire Hathaway Inc. took a stake in Becton Dickinson & Co., the seller of catheters and
laboratory equipment, in a bet on rising demand for medical supplies.
Berkshire ended the
second quarter with 1.2 million shares of Becton, which has operations in about 50 countries, and
increased its holdings of Johnson & Johnson, the world’s largest maker of health-care products, by 14
percent to 36.9 million shares. Buffett’s Omaha, Nebraska-based firm disclosed its holdings in a
regulatory filing Aug. 14.
Berkshire’s investments in the two firms comes as countries
including China increase spending on public health, and the U.S. Congress debates changes in the
health-care system that may provide coverage to more Americans. Buffett, who cautions investors against
assuming all moves in Berkshire’s portfolio are his, says he picks companies with unassailable advantages
and an eye toward long-term trends.
“Both companies are well-positioned for long-term global
economic growth,” said Les Funtleyder, the author of “Health- Care Investing” and an analyst with Miller
Tabak & Co. “In an emerging market, one of the first things people increase their spending on is health
care. If growth in China is 8 percent, health care spending could be growing at 20 percent.”
Becton manufactures products including needles and syringes, surgical blades and scalpels and
critical-care monitoring devices, according to the Franklin Lakes, New Jersey- based company’s Web site.
Becton says its first sale was likely an all-glass syringe in 1897.
‘Solid Executors’
Becton closed as low as $60.48 in the second quarter, within 22 cents of its worst close in almost
three years. The shares rose 61 cents, or 0.9 percent, to $67 at 9:53 a.m. in New York Stock Exchange
composite trading, making Becton one of 17 companies in the Standard & Poor’s 500 Index to advance. Liz
Ryan Sax, a spokeswoman for Becton, had no comment.
Berkshire’s purchase of Becton stock fits
with Buffett’s “long-term vision of taking solid companies when they’re beaten up,” said Peter Lawson, an
analyst with Thomas Weisel Partners LLC in New York. “To me it’s one of the most consistent companies out
there, solid executors. They’re making products that you need as opposed to products that you want.”
The Aug. 14 document said it omits some information about Berkshire’s portfolio because Buffett
was granted confidential treatment. Companies may ask regulators to temporarily withhold some information
from the public to prevent copycat investing as they build or cut a holding.
Johnson &
Johnson
The purchase of Johnson & Johnson shares marks the second straight increase in the
size of Berkshire’s stake. Buffett said in February he reluctantly sold J&J shares near the end of 2008
to help fund the purchase of $8 billion of preferred shares and warrants of General Electric Co. and
Goldman Sachs Group Inc.
Berkshire also lowered holdings of two U.S. health-care insurers. The
firm cut its holdings of WellPoint Inc. by 27 percent to 3.5 million shares and sold 24 percent of its
UnitedHealth Group Inc. stock, lowering its total to 3.4 million shares.
“If the government is
going to open health care to more people, demand for health care supplies would increase,” said Gerald
Martin, a finance professor at American University’s Kogod School of Business in Washington. “The plan
that’s going through Congress could be a real negative to the health insurers, but the people who provide
the supplies could really benefit.”
Buffett, 78, built a stock portfolio valued at more than
$48 billion by betting on companies including soft-drink maker Coca-Cola Co. that he believes have
competitive advantages and enduring brand popularity. Berkshire shares fell $3,123, or 3.1 percent, to
$98,777.
Copying Buffett
Mutual funds and individual investors mimic the firm’s
stock picks to duplicate Buffett’s investing success, and an academic study co-written by Martin in 2007
found that using this strategy for 31 years would have delivered annualized returns of about 25 percent,
double the return of the Standard & Poor’s 500 Index.
Buffett, known as the “Oracle of Omaha,”
makes most of the investment decisions at Berkshire, while Lou Simpson, 72, manages the portfolio for car
insurance unit Geico Corp.
Berkshire also slashed holdings in Eaton Corp., the Cleveland-based
maker of circuit-breakers and fuel pumps, by 38 percent to 2 million shares in the second quarter.
Berkshire first disclosed the Eaton stake last year.
The firm also cut its stake in used-car
dealer Carmax Inc. by 25 percent to 9 million shares, and reduced holdings of Home Depot Inc. by 25
percent to 2.76 million shares.
Wells Fargo
The biggest holdings listed in
Berkshire’s filing all gained in value in the second quarter. American Express Co. rose 71 percent in the
period. Wells Fargo & Co. increased 70 percent, while Burlington Northern Santa Fe Corp. advanced 22
percent. The firm’s single largest holding, Coca-Cola, rose 9.2 percent in the quarter.
Last
week’s filing lists equities traded on U.S. exchanges. Buffett discloses other holdings in annual reports
and filings with non-U.S. regulators.
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Warren Buffett(3290)
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