A Conversation with Charlie Munger at University of Michigan

Well worth the two hour commitment with the wise, humorous, thoughtful, sarcastic, opinionated, entertaining, reflective, brilliant manager of Berkshire Hathaway, Charlie Munger.

Hat tip to Reflections on Value Investing

Stocks Gap Up and Hold, Buffett Sees No Double Dip

Stocks gap up 1%, trade sideways to close where they opened

All the fun in the market today was accomplished before the open with stocks gapping up 1%. The market spent the trading session in consolidation mode trading up, then down, then back up into the close for a relatively uneventful day. Doctor Copper jumped over 2% confirming the move in equity markets. Treasuries saw some support to halt the decline but there doesn't look to be a substantial reversal yet.

Microsoft (MSFT) investors were excited at the end of the day with a report that the company plans to sell debt to pay dividends or buy back shares. With $37 billion in cash it seems strange MSFT would see the need to raise debt but I suppose they find the extraordinarily low cost of debt to attractive to ignore. MSFT closed up over 5% on the day.

I sold my second half of Amazon (AMZN) today from my original buys two weeks ago. The 16% move from my buy at $125 in just two weeks was too much not to take the trade off. While AMZN is an exciting company with a large presence is the rapidly-expanding cloud space, I have a hard time seeing the logic of a 40x forward PE. Without the fundamental logic, I have to play the stock as nothing more than a momentum play so I'm happy to jump off the bandwagon after grabbing a nice chunk in the market's latest move. When contrasted with Apple (AAPL) trading at 15x forward earnings, the relative valuation appears expensive and I'd prefer working my way into a larger AAPL position. Though, I realize the "expensive" valuation has long been the case in AMZN's history.

Buffett sees no double-dip

Warren Buffett said the prospects of a double-dip recession are off the table based on what he's seeing in Berkshire Hathaway's (BRK.A) numerous businesses. "I am a huge bull on this country. We will not have a double-dip recession at all. I see our businesses coming back almost across the board." (Bloomberg)

Few have their hands on the pulse of so many varied companies across the United States as Buffett does. I certainly give his opinions much greater weight than economists and academics espousing their claims of major economic weakness. Buffett said further "I’ve seen sentiment turn sour in the last three months or so, generally in the media. I don’t see that in our businesses. I see we’re employing more people than a month ago, two months ago." I have my bets placed in line with Buffett. I see the sentiment shifting in equity markets and the economic dialogue improving in just the last two weeks.


Brandon R. Rowley
"Chance favors the prepared mind."

*DISCLOSURE: Long SPY, AAPL. Flat AMZN.

Markets Optimistic Headed Into Easter

Tokyo ended 1.4% higher with the Nikkei now trading comfortably back above 11,000. Optimism spread to London closing up 0.8% and New York opened up over 70 points on the Dow. Participants are awaiting tomorrow's monthly jobs report. With US equity markets closed for Good Friday, we'll only see the initial reaction in futures markets and will have the weekend to digest the number.

Bloomberg reported yesterday that a plane ticket from New York to Omaha costs $1,433 for the weekend of Berkshire Hathaway's annual meeting while a flight to Paris on the same weekend only costs $1,142. A record 35,000 people attended last year's "Woodstock for Capitalists" and this year is likely the same. The snippets of wisdom spoken from the man himself are often lessons for a lifetime.

Spelling my site with Flickr:

Berkshire Hathaway's Top 15 Holdings

Warren Buffett has a cult-like following after decades of successfully investing capital under the legendary Benjamin Graham's value investing philosophy. I, for one, am a big believer in the style and keep a close eye of Buffett's moves to study his company choices. Below are Berkshire Hathaway's top 15 stock holdings. This list excludes the multitude of fully-owned companies under the empire.

Company	Holding Value	Stake in Company
Coca-Cola	$11.06 billion	8.68%
Well Fargo	$8.81 billion	6.18%
American Express	$6.25 billion	12.72%
Procter & Gamble	$5.48 billion	3.01%
Kraft Foods	$3.97 billion	9.37%
Wal-Mart	$2.04 billion	0.98%
Wesco Financial Corp	$2.04 billion	80.1%
ConocoPhillips	$1.85 billion	3.87%
Johnson & Johnson	$1.74 billion	0.98%
US Bancorp	$1.64 billion	3.61%
Moody's	$862.96 million	13.43%
Washington Post	$717.2 million	18.38%
M&T Bank Corp	$500.34 million	5.68%
Nike	$492 million	1.55%
Costco Wholesale	$321.18 million	1.2%

See-Saw Week Ends Marginally Higher

Stocks rebounded from lows of down over 160 points to close with only a 45-point drop (-0.44%) in today's action. The Dow ended the week with an 86-point gain (0.87%) after seeing see-saw action nearly everyday causing active traders to pull their hair out.

I was quoted again in the International Business Times about the China's move to tighten credit today. My quote was not quite as distinguished as my first one but I'll take it.

The Winter Olympics are underway but the death of a Georgian luger who died in a training run today has cast a pall over the opening ceremonies.

Berkshire Hathaway B-Shares were added to the Standard & Poor's 500 today and saw a late-day surge into positive territory. The B-shares are up 10.65% since Buffett split the shares after the Burlington Northern acquisition to accommodate investors in the takeover versus a -5.49% return for the S&P 500.