Friday, August 31, 2007

Giving it 361,156%

Berkshire’s dream is to replicate the success of 2002 when, after the Enron and WorldCom scandals, Buffett jumped into junk bonds, snapping up more than $7bn worth of energy and telecom assets. Many observers thought he had taken leave of his senses; but he was soon to prove them spectacularly wrong.

By the end of 2003, he had pocketed $1.1bn profit on his junk bonds alone. The idea this time around is that he will load up on prime mortgage-backed securities, whose value has been hit by their dodgy sub-prime variants, as well as cheap bonds being offloaded by desperate investment banks.
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Source: Thanks to Sanjeev from MSN BRK board

Thursday, August 30, 2007

Our bouncy market reflects a very moody herd

ECONOMISTS don't like to think about it but, according to conventional theory, events such as the present wild gyrations in financial markets aren't supposed to happen.

That theory says share prices move only when investors quietly incorporate new information about the prospects of their investments, whereas it's clear the markets are swinging between blind panic and the thought that maybe it's just a great buying opportunity. The herd can't decide which way to run. How would you feel if you walked into a shoe shop and the manager rushed up and told you to buy extra shoes because prices had skyrocketed? Or if nervous customers warned you not to buy any socks because sock prices had fallen by half?

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8 Money Secrets From Warren Buffett

We all have someone whom we admire and respect. For me one person on my shortlist is Warren Buffett who is sometimes referred to as the "Sage of Omaha". I first heard about Buffett back in 2001 when I first started getting serious about investing and so I started reading all the titles with his name on it. Off course Buffett hasn't actually written any of them but they were priceless none the less.

If you have never heard of Buffett, Forbes currently ranks him as the third richest man in the world and he is arguably the world's greatest investor. He has amassed his fortune by making astute investment decisions and investing in businesses. Here is what I have learnt from Buffett:

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The World According to Eveillard

"I'm not worried about the global economic boom, except that it's a credit boom. What worries me is that we've had a credit boom for 15 years now, and a credit boom usually ends in a credit bust," Eveillard says. "Already you see problems cropping up like subprime debt. There are also indications that real estate is peaking in Ireland and Spain and England, not just America. And the appetite for risk remains high."
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Source : Thanks to dpatel from MSN Brk Board

How Berkshire Built a Super-Cat Powerhouse

As of 2006, Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) wrote the third-largest amount of net premiums in the reinsurance industry -- an amazing feat for a firm that started out making textiles. One of the key foundations of Berkshire's reinsurance business is its super-catastrophe line, and the company's annual shareholder letters offer an incredibly valuable case study of that segment's success. Let's take a closer look at the integral components of Berkshire's reinsurance division.

Berkshire's success in super-cat reinsurance, which insures very large catastrophic loss events, becomes more impressive in light of the challenges it faced. Capable reinsurers such as RenaissanceRe (NYSE: RNR), XL Capital (NYSE: XL), and Montpelier Re (NYSE: MRH) compete fiercely for market share. In addition, barriers to entry are minimal, with recently formed reinsurers such as Flagstone Re (NYSE: FSR) and Greenlight Re (Nasdaq: GLRE) almost constantly emerging. Lastly, reinsurance is a commodity to some extent.

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Coca-Cola Can't Catch Goizueta With Coke, Tries Lab

Roberto Goizueta, the late, legendary Chief Executive Officer of Coca-Cola Co., fueled a 39- fold surge in the company's stock by relying on its flagship brand: Coke.

Now, after the U.S. market for soft drinks shrank for two years, current CEO Neville Isdell has turned to the lab to try to restore growth and revive the shares by creating new drinks with proven health benefits. Some say it's too little, too late.

"They're doing the right thing with these new drinks, but I still see a problem for them with reliance on soft drinks,'' said Walter Todd, a principal at Greenwood Capital Associates LLC, which held Coca-Cola shares when they peaked. The South Carolina firm is affiliated with WealthTrust LLC, which manages $6 billion.

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Wednesday, August 29, 2007

Billion-Dollar Question:How Will Street Titans Value Their Holdings?

As the third quarter ends for some of Wall Street's brokerages this week, the firms will be tallying their wins and losses as always. But with markets in flux, investors would be wise to note how they count them.

Executives are looking more closely than ever at just how to value their holdings, some of which plummeted during the quarter. They are evaluating whether some of those losses could be viewed as temporary and whether others might be better dealt with as long-term investments that could recover over time.

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Random Gleanings: The Elusiveness of Clarity

There are always uncertainties. If you can’t find things to worry about, you lack imagination and a sense of history. But it’s also important to maintain the proper perspective between what’s unknown and what’s relatively certain. Right now, amid the unwinding of a credit crunch, the unknowns seem to loom larger and be more numerous than usual--but that’s typical of liquidity squeezes. What are today’s primary uncertainties?

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Musician Peter Buffett's Life Lesson from his Father Warren

There are several things that Peter Buffett is and several things he isn't. He's not as melancholy as the intelligent, pensive songs on his new CD, Staring at the Sun, might lead you to believe. And even though Peter Buffett has been making music professionally for more than two decades with 16 albums in his discography, he's not related to the musician Jimmy Buffett. (Jimmy Buffett isn't all that melancholy either.)

Peter Buffett told me in a telephone interview this week that he is a very happy, laid-back guy. And while he's not related to Jimmy, he is the youngest son of that "other" Buffett, Warren.

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Tuesday, August 28, 2007

“Liquidity Crisis”—Turmoil in the Asset-Backed Securities Markets

The ink was barely dry on our July 19 quarterly letter, when a severe liquidity crisis enveloped the credit markets. As a result, the stock market has been very volatile and financial service company stocks have come under heavy selling pressure. Very little of substance has changed in the long-term outlooks for our portfolio companies, but in light of the price declines and scary headlines, we thought shareholders might appreciate a brief update.


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Bill Miller Is Bullish

The current credit crunch is "much more serious" for the U.S. financial system than the 1987 stock market crash was, warns Legg Mason's Bill Miller in a conference call with analysts. "The mortgage market is bigger than the whole U.S. economy, and that market is effectively shut down."


But once the immediate crisis has passed, Miller thinks stocks will head higher. And he predicts that the industry sectors that have led the market in recent years, such as energy and basic materials, will become laggards. "The leadership is likely to change," says Miller, whose Legg Mason Value (symbol LMVTX) beat Standard & Poor's 500-stock index a record 15 straight years until 2006.

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Berkshire Hathaway Raises Railroad Stake

Warren Buffett's company has bought 10.1 million shares of Burlington Northern Santa Fe Corp. since Thursday, increasing the legendary investor's stake in the nation's No. 2 railroad to nearly 14.8 percent.

Berkshire Hathaway Inc. revealed its three latest railroad stock purchases in documents filed with the Securities and Exchange Commission late Monday.


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Mobius Buys Stocks, Says Economy Looks `Healthy'

The worst of the credit-market debacle may be over and stocks will likely rise as the global economy expands, said Mark Mobius, who oversees $30 billion at Templeton Asset Management Ltd. in Singapore.


The fund manager said his company has used the market rout in the past month to add to stocks that are attractively priced, including energy producers in Asia and Brazil. South African shares and those in Chinese companies traded in Hong Kong are among the most attractive in emerging markets worldwide, he said.

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Monday, August 27, 2007

In Nature’s Casino

It was Aug. 24, 2005, and New Orleans was still charming. Tropical Depression 12 was spinning from the Bahamas toward Florida, but the chances of an American city’s being destroyed by nature were remote, even for one below sea level. An entire industry of weather bookies — scientists who calculate the likelihood of various natural disasters — had in effect set the odds: a storm that destroys $70 billion of insured property should strike the United States only once every 100 years. New Orleanians had made an art form of ignoring threats far more likely than this; indeed, their carelessness was a big reason they were supposedly more charming than other Americans. And it was true: New Orleanians found pleasure even in oblivion. But in their blindness to certain threats, they could not have been more typically American. From Miami to San Francisco, the nation’s priciest real estate now faced beaches and straddled fault lines; its most vibrant cities occupied its most hazardous land. If, after World War II, you had set out to redistribute wealth to maximize the sums that might be lost to nature, you couldn’t have done much better than Americans had done. And virtually no one — not even the weather bookies — fully understood the true odds.

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Sunday, August 26, 2007

Markel Corp - Risky Niches

Markel Corporation has built itself into a $2.5 billion company by insuring risks for often-obscure activities and groups that no one else is willing to cover.

...If that, too, sounds like Warren Buffet, the so-called sage of Omaha, it's no coincidence. “We have looked at a lot of role models and we read a lot of books,” says Markel. “We copy smart people -- or try to.”...

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Q&A with Starbucks CEO: "I'm just trying to keep it small as we grow"

Jim Donald rarely slows down. Starbucks' chief executive thinks fast, talks fast and moves fast — all good qualities for the person in charge of making sure Seattle's best-known coffee-shop chain opens six or seven new stores a day.

After two years on the job, the former grocery-store executive says Starbucks has a faster pace than his previous companies. He spends nearly half his time traveling, but that doesn't keep him from running and playing basketball and sending tens of thousands of hand-signed notes to employees each year.

In an interview the day after Starbucks' annual meeting last month, Donald, 52, talked about Starbucks' international growth and his role at a company that has gotten negative attention lately.

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Icahn May Boost Biogen Stake, Forecasts Takeover

Billionaire investor Carl C. Icahn may increase his stake in Biogen Idec Inc. because he says the company is undervalued and a takeover candidate, according to a person familiar with Icahn's thinking.

The Federal Trade Commission cleared the New York investor to buy more shares in Biogen, the world's largest maker of drugs for multiple sclerosis, according to a message posted yesterday on the agency's Web site.

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Wednesday, August 22, 2007

A Bounty of Ideas from Berkshire's Portfolio

Investment conglomerate Berkshire Hathaway BRK.B) recently released its second-quarter Form-13F, which discloses the company's equity holdings as of June 30, 2007. Berkshire is one of the companies I closely follow in managing The Morningstar Ultimate Stock-Picker's Portfolio. Not only do I routinely scan the conglomerate's holdings for new ideas, but my model portfolio also has a position in Berkshire's stock.

I think most investors, including me, can learn a lot from the stock picks of Berkshire CEO Warren Buffett and his colleague Lou Simpson, given their focus on buying great businesses at good prices.

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Tuesday, August 21, 2007

Investing Q&A : Riding Out the Storm with Quality Stocks

Like Warren Buffett, Larry Coats of Oak Value Fund sticks with companies that are understood and valued. Top holding: Berkshire Hathaway

BusinessWeek's Karyn McCormack met with Coats in New York on Aug. 14, and they talked about how he's navigating the market storm. Edited excerpts of their conversation follow.

Link to the Interview

Crisis Counsel

Will the subprime lending meltdown and credit crunch send us into a financial free fall? We asked the sharpest minds in business to share their reactions to the downturn, and their insights on the road ahead.

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Monday, August 20, 2007

Caravaggio`s anchor

Investors not only use psychological anchors to price assets but they also overestimate individual capabilities.

During normal decision making, individuals anchor, or overly rely, on specific information or a specific value and then adjust to that value to account for other elements of the circumstance. Usually once the anchor is set, there is a bias towards that value.

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An Interview With Former SAS CEO Jan Carlzon

In 1981, Jan Carlzon became CEO of the problem-ridden Scandinavian Airlines. Well before he left the company in 1994, Carlzon turned the airline around by focusing on what he later called "moments of truth," the various points at which people with the airline came in contact with airline customers. In this edition of Inside Scoop, CRMGuru founder Bob Thompson talks with Carlzon about what those "moments of truth" have in common with the hot topic of Customer Experience Management and what business leaders can take away from Carlzon's experience.

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Saturday, August 18, 2007

Understanding Reinsurance

Reinsurance is insurance for insurance companies. It’s a way of transferring or “ceding” some of the financial risk insurance companies assume in insuring cars, homes and businesses to another insurance company, the reinsurer. Reinsurance, a highly complex global business, accounts for about 7 percent of the U.S. property/casualty insurance industry premiums.

The reinsurance business is evolving, following the trend in the financial services in general as the various components of the business broaden and converge. Traditionally, reinsurance transactions were between two insurance entities: the primary insurer that sold the original insurance policies and the reinsurer. Most still are. Primary insurers and reinsurers can share both the premiums and losses or reinsurers may assume the primary company’s losses above a certain dollar limit in return for a fee.

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When Two Minds Think Alike

Coffee break~~

Simon Baron-Cohen discusses how a powerful new idea may give us valuable insights into the cause of autism.

Over the years I've been struck by a pattern among the parents of children with autism. The mothers often say things like "my child is a lot like my husband—just writ large. My husband has to watch the weather forecasts every night, and my son has to watch them every hour." When I ask about their parents, the mothers comment, "Well, my father was rather similar to my husband—he collected model trains and knew everything there was to know about each one."

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Get Off the Ledge

Unless you're in a highly leveraged hedge fund or running an investment bank, you have no reason to despair the turmoil on Wall Street.

Mortgage lenders are dropping like flies. Hedge funds are blowing up. Central banks are injecting money into financial markets to prevent a meltdown. Little wonder that many investors are fighting the urge to panic.

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Friday, August 17, 2007

Ponzi nation

Low volatility and easy credit are boosting asset prices. But according to the late theorist Hyman Minsky, today's stability may be sowing the seeds of its own demise.

Credit has grown rapidly in recent years. This expansion has come in many forms, from home mortgages to newfangled structured products created by clever financial engineers. There are, broadly speaking, two views about these developments. The conventional wisdom -- held by most economists and denizens of Wall Street -- is optimistic. Higher rates of credit growth and increasing levels of leverage, they maintain, are reasonable in light of increasing economic stability.

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Source: Thanks to NNejad from MSN BRK Board for the original reference

Warren Buffett Sees Potential for Opportunities: The Complete CNBC Exclusive Interview

Warren Buffett tells CNBC's Becky Quick in an exclusive interview that market chaos often creates opportunities due to mispricing.

Well, I like it better, in a sense, I mean, I'm like the people in the media. You know, you get more excited when there's a lot going on. You can't help it. And frankly, it will probably present more opportunity to us, because when dislocations occur, things get more mispriced and certain things. So, it can be a time of opportunity ... it won't be for sure, but generally speaking when there's a certain amount of chaos in certain sections, the fallout, and its unpredictable where the fallout will be, but the fallout sometimes offers some real opportunities.

The Link

Thursday, August 16, 2007

Investment, Speculation, and Gambling

"An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative."Graham and Dodd's Security Analysis (original 1934 edition)


"Games of chance must be distinguished from games in which skill makes a difference. The principles that work in roulette, dice, and slot machines are identical, but they explain only part of what is involved in poker, betting on the horses, and backgammon. With one group of games the outcome is determined by fate; with the other group, choice comes into play. The odds--the probability of winning--are all you need to know for betting in a game of chance, but you need far more information to predict who will win and who will lose when the outcome depends on skill as well as luck. There are cardplayers and racetrack bettors who are genuine professionals, but no one makes a successful profession out of Craps. Many observes consider the stock market itself little more than a gambling casino . . . Cards, coins, dice, and roulette wheels have no memory."Peter Bernstein in Against the Gods

"A prospect that has a zero risk premium is called a fair game. Investors that are risk-averse reject investment portfolios that are fair games or worse."Zvi Bodie, Alex Kane, and Alan J. Marcus in Investments


Here's an article on the 3 terms

`Godfather' Helps Explain Asia's Economic Plight: William Pesek

The dominance of obscenely wealthy businessmen in Hong Kong, Indonesia, Malaysia, the Philippines, Singapore and Thailand helps explain why Asia isn't enjoying more entrepreneurship, the benefits of growth aren't trickling down enough and long-term equity returns often aren't what they could be. As the business barons hold down local rivals, they undermine growth.

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Wednesday, August 15, 2007

America’s Day of Reckoning

The pessimists who have long forecasted that America’s economy was in for trouble finally seem to be coming into their own. Of course, there is no glee in seeing stock prices tumble as a result of soaring mortgage defaults. But it was largely predictable, as are the likely consequences for both the millions of Americans who will be facing financial distress and the global economy.

The story goes back to the recession of 2001. With the support of Federal Reserve Chairman Alan Greenspan, President George W. Bush pushed through a tax cut designed to benefit the richest Americans but not to lift the economy out of the recession that followed the collapse of the Internet bubble...

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Remembering a Classic Investing Theory

More than 70 years ago, two Columbia professors named Benjamin Graham and David L. Dodd came up with a simple investing idea that remains more influential than perhaps any other. In the wake of the stock market crash in 1929, they urged investors to focus on hard facts — like a company’s past earnings and the value of its assets — rather than trying to guess what the future would bring. A company with strong profits and a relatively low stock price was probably undervalued, they said.

Their classic 1934 textbook, “Security Analysis,” became the bible for what is now known as value investing. Warren E. Buffett took Mr. Graham’s course at Columbia Business School in the 1950s and, after working briefly for Mr. Graham’s investment firm, set out on his own to put the theories into practice. Mr. Buffett’s billions are just one part of the professors’ giant legacy.

Yet somehow, one of their big ideas about how to analyze stock prices has been almost entirely forgotten. The idea essentially reminds investors to focus on long-term trends and not to get caught up in the moment. Unfortunately, when you apply it to today’s stock market, you get even more nervous about what’s going on.

Most Wall Street analysts, of course, say there is nothing to be worried about, at least not beyond the mortgage market. In an effort to calm investors after the recent volatility, analysts have been arguing that stocks are not very expensive right now. The basis for this argument is the standard measure of the market: the price-to-earnings ratio.

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Tuesday, August 14, 2007

Business unusual for billionaire founder of SA’s biggest conglomerate, Bidvest

Bidvest is not your average company. But, then, Brian Joffe is not your average entrepreneur. When imagining an entrepreneur many stereotypes spring to mind – someone brash and loud, a salesperson with a golden tongue, a tough kid with big dreams and endless reserves of energy.

Applying these stereotypes to Bidvest executive chairman Brian Joffe would be a mistake. Joffe is not a flamboyant man. He is precise and professional.

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Below is a link to the interview with Brian Joffe : Chairman, Bidvest.

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Behind the Miracle: India's Mighty Movers

As India approaches its 60th year of independence on Aug. 15, the world marvels at the country's rapid economic ascendancy. The emergence of India's globally ambitious business outsourcing companies such as Infosys (INFY) and Wipro (WIT) and high-profile cross-border mergers such as Tata Steel's $11.3 billion deal to buy British steelmaker Corus continue to make the country a fascinating business story.

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The Bill Lands on Wall Street's Desk

There aren't many companies like Berkshire and Loews that are rich in cash and willing to make opportunistic investments. Others include Leucadia National (LUK), Alleghany (Y) and American Real Estate Partners (ACP), which is controlled and run by Carl Icahn. Companies that build cash often find themselves targets of activist investors seeking to prod managements to buy back stock, pay large dividends or go private.

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Monday, August 13, 2007

How Speculators Exploit Market Fears

Here's a fact: The speculators and hedge fund managers who run today's stock market need market volatility in order to make money.

They can't make enough money if the market stays flat or moves only a bit, so they like extreme and unexpected price movements. They especially like sudden, surprise movements down, when they can make money off stocks they borrow and sell -- or, as they say, "sell short."

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Simplicity and Focusing on the Big Picture

Einstein listed the five ascending levels of intellect as: “Smart, Intelligent, Brilliant, Genius, Simple." Investors are detailed oriented and most never get to simple. Analysts have hundred page spreadsheets and focus intently on miniscule details, which are irrelevant over three to five year periods. Most investors miss the big picture due to their overly analytical minds.

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Morningstar Illuminates Investors, Especially In Volatile Markets

"When we're in a volatile market or bear market, people are more dependant on advice," said Elliott Schlang, managing director of the Great Lakes Review, who owns some Morningstar shares. "In a bull market everybody is a genius."

Joe Mansueto, Morningstar chairman and chief executive, says his company has succeeded by sticking to what it knows: helping investors make sense of the market.

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Sunday, August 12, 2007

Your Hedge Fund Questions, Answered

One thing that surprised me, however, is that nobody asked Barsky, a former Wall Street Journal reporter, what he thinks about Rupert Murdoch’s purchase of the Journal (and the rest of Dow Jones). This is probably a good indicator that journalists care a lot about the business of journalism — look at the thousands of column inches the Times and the Journal itself have devoted to the deal — but that nobody else really does.

Anyway, since I cared, I asked Barsky, and you’ll find his reply at the end of this hedge-fund Q&A.
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Virtual Exchanges Get Real

A virtual heist in Second Life spurs some community members to call for oversight and regulation—maybe even the real world kind—of virtual stock markets.

It's here where the virtual begins to blur with the real: Linden Dollars can be swapped on virtual currency exchanges for real U.S. dollars. Though the stolen amount only translates to roughly $40 in real money at recent exchange rates, the heist has spurred many Second Lifers to debate whether these exchanges are just a game or serious business.

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Saturday, August 11, 2007

Will Dell Be A Comeback Kid?

After pushing out Kevin Rollins as CEO and grabbing the reins of Dell Inc. himself, Michael Dell has set about reviving the fortunes of the company he founded. He hired former AMR (AMR ) CEO Don Carty as CFO, and he has now brought in Solectron CEO Michael Cannon as president of global operations. Will Dell be a comeback kid?

You are taking back the company as CEO. How does it feel?

It's very exciting. I am 41 years old...and I believe there is a whole lot we can do. I have outlined some near-term priorities. We are looking to expand services. We are likely to do more internationally. We are looking at the next billion PC users [in emerging markets]. In about five or six weeks, I'll be in China to launch a special new product that appeals to the inexperienced PC user.
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Interview with Sir Richard Branson, Virgin Group

Sir Richard Branson, a British Entrepreneur, is the founder of The Virgin Group. Anita Gabriel interviews him in this Part 1 on his long term friendship with Datuk Tony Fernandes as well as his move to buy stake in Malaysia's first long haul budget airline, Air Asia X.

Interview with Sir Richard Branson Part 1

Anita Gabriel interviews him in this Part 2 on his famous David vs Goliath startegy, and about the open sky policy and protectionsms.

Inteview with Sir Richard Branson Part 2

On this Part 3, Anita Gabriel gets up and personal with Richard on his business aspects and life policies.

Interview with Sir Richard Branson Part 3

50 Checkpoints of Warren Buffett's Carreer

0. Selling paper and cherry coke -Buffett breathed business since he was a young boy. By the time he was 20 years old in 1950, he had saved $9,800 by selling newspaper and cherry coke.

1. College years - From 1950 to 1956, Buffett perfects his investment style by practicing it again and again; by 1956 he has $140,000. - page 58

2. First partnership - In 1956 Buffett forms his first partnership with seven people - his sister Doris, her husband, Aunt Alice, Dr. Thompson, his ex roommate Chuck Peterson, his mother and Dan Moren his lawyer. They altogether put $105K, of which Buffett contributes a whopping $100. Yeah, I did not miss any zeros; it is indeed one with two zeros. - page 58.

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Mark Sellers: Tend to overanalyse stocks? Bring out the dart-wielding monkey

Should you spend countless hours researching a stock before buying it, or just a few hours? The common wisdom is that the more time you spend on research, the better your investment results will be. But is this correct?

Not according to studies on the subject. At least two I have seen came to the conclusion that anything more than a cursory review of a company’s prospects is a waste of time.

Full Article


Original reference: www.vinvesting.com

Sometimes Merger Math Just Doesn't Add Up

For six years private equity firm Thomas H. Lee Partners tapped the credit markets to buy one consumer-products brand after another and roll them all up into United Industries Corp. But even though United's total debt jumped from $375 million to $860 million by 2005, its leverage—one measure of a deal's riskiness—didn't move much.

How could that be?

Full Article

Gurus On Board: Ask Bill Nygren -- The Answers

Bill Nygren is the portfolio manager of the $5.8 billion Oakmark Fund (10–year average 7.26% ) and more concentrated $5.9 billion Oakmark Select Fund (10-year average 15.16%). Recently our readers got an opportunity to ask him questions, and today we got his answers back.

#1. Bill, I understand that you sell when the price of the stock reaches 90% of your estimate of its intrinsic value. Have there been any exceptions? On average, have you found this to be an optimal sell strategy?

Bill Nygren: Four exceptions:

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Friday, August 10, 2007

A World of Winners, Warren's Way

S&P's latest screen tracking the Sage of Omaha's investing criteria finds 55 attractive names from around the globe.

With investments in industries as various as railroads, retailers, insurers, and ice-cream stands, Warren Buffett has made his reputation as the "world's greatest investor" by taking the longer view—buying quality stocks with good earnings power and hanging on through bull and bear markets.

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A New Kind of Bank Run Tests Old Safeguards

A few generations ago, savers responded to financial panics with runs on banks, and even healthy institutions could fail if they could not raise enough cash quickly enough.

For a long time, that all seemed to be safely relegated to the past. But now the runs are back — and this time the targets are not banks but the securities that have replaced them as the prime generators of credit in the new financial system.

Full Article

View from the top: Mortimer Zuckerman, chairman of Boston Properties

Mortimer Zuckerman, 70, is a Canadian- born real estate billionaire whose media interests include ownership of the New York Daily News and US News and World Report, the weekly magazine.

After deciding the law was not interesting enough (he has two law degrees), he joined a Boston commercial real estate company in the 1960s. He later set up his own and has made his fortune through Boston Properties.

Q&A I
Q&A II

Q&A with Tom Brown : Rounding the Second Curve

Question: I read some statistics on how you turned some initial capital from your father into a large sum. Can you provide me with details?

Tom Brown: My father got a lump sum contribution in 1984 of $130,000, which subsequently became $18 million by the early 2000s by investing only in financial stocks.

Brown calculated the annual average rate of return at roughly 40%.


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Source : Thanks to David for the original reference.

Thursday, August 9, 2007

Exclusive Interview With Wal-Mart CEO Lee Scott

NEIL CAVUTO, HOST: Well, Wal-Mart (WMT) shoppers love it, unions hate it, presidential candidates yammer on and on and on about it, but few can ignore the enormous impact this company has on America, indeed, the world. And in a rare and exclusive interview, Wal-Mart speaks -- not company, the guy who runs it, the big cheese, Lee Scott. Good to have you, Lee, thanks for coming.

LEE SCOTT, PRES. & CEO, WAL-MART STORES: Neil, thank you.

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A great investor with a centuries-long horizon

When he took over the endowment in 1985, it was worth slightly more than $1bn. By June 30 of last year, it had reached $18bn. The best performing US endowment in that time, it has easily beaten the S&P 500 over that period, with staggeringly low volatility.

During the bear market of 2001-2002, reports Peter Bernstein in his recently published book Capital Ideas Evolving, Yale rose by 10 per cent while the S&P dropped 30 per cent.

Full Article

The amazing Infosys story

Infosys Technologies is one of the few Indian companies that has changed the way the world looks at India.

No longer is India a land of snake charmers and beggars. It is now perceived as an economic giant to reckon with, bursting with brilliant software engineers and ambitious entrepreneurs. And Infosys is an symbol of India's information technology glory.

Infosys has many firsts to its name: The first Indian firm to list on Nasdaq; the first to offer stock options to its employees. . . The company crossed $1 billion in revenues for the first time in 2004. TCS, however, was the first Indian IT firm to top $1-bn in revenues.

Full Article

Transcript: Thomas Russo interview

Gillian Tett: Obviously one of the hot topics at Davos this week is the issue of financial market regulation, and competition between financial centres, and I had wondered if you could tell us how you see the competition developing between New York and other centres like London at the moment?

Thomas Russo: Well, the competition is certainly fierce, if you look at just some of the literature from for example London Stock Exchange they make much of the fact of the difference in the regulation and the litigation in the United States, and it's been quite effective...

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Sizzlin' With Sardar Biglari

Emil Lee: Please tell me about your hedge fund.

Sardar Biglari: I started Biglari Capital right after I graduated from Trinity University. Biglari Capital is the general partner to The Lion Fund, L.P., a private investment partnership. I am a value investor, and I apply the same principles in running Western Sizzlin as I do in operating The Lion Fund. I focus intensely on evaluating an array of situations, searching for pockets of opportunity that are within my sphere of competence.

This maneuver leads me to be risk-averse, concentrated, and conservative with our capital. The right occasions for investment arise when there is general misunderstanding -- and therefore mispricing -- of the worth of an asset. In other words, our plan does not revolve around using common sense -- the logic of the lemmings can be flawed -- but, rather, around good sense, which can be uncommon.

Full Article

Wednesday, August 8, 2007

Transcript: Interview with Bob Iger

Chrystia Freeland, FT US Managing Editor, and Matthew Garrahan, Los Angeles Correspondent, interviewed Robert A. Iger, President and CEO of Walt Disney, in LA on January 30.

FT: Thank you very much for joining us, Mr. Iger.
Iger: Pleasure.

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The 'Punk Rocker' of Hedge Funds

Daniel Loeb, the activist hedge fund manager, isn't known for his soft touch. He's made a name for himself by publicly dressing down what he believes are "bungling" and "incompetent" chief executives.

The sharp-tongued yoga-warrior apparently has no worries that shareholders might one day lob similar verbal grenades at him.

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Q & A with James Surowiecki : The Wisdom of Crowds

How did you discover the wisdom of crowds?

The idea really came out of my writing on how markets work. Markets are made up of diverse people with different levels of information and intelligence, and yet when you put all those people together and they start buying and selling, they come up with generally intelligent decisions. Sometimes, though, they come up with remarkably stupid decisions—as they did during the stock-market bubble in the late 1990s. I was interested in what explained the successes and the failures of markets, and as I got further into it I realized that it wasn't just markets that were smart. In fact, crowds of all sorts were often remarkably wise.

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Joy ride with a genius

Coffee break~~

Everyone has a dream: Inventing the next great vice. Running a corporation. Traveling into space. Me? I'm searching for a new one, having just had mine fulfilled: driving with Michael Schumacher.

There has never been another race driver, living or dead, to win as many Formula 1 world championships (7), Grand Prix (91 out of the 250 he competed in), or podium finishes (he's placed third or better in 154 races). Schumacher is up there with Tiger Woods and Michael Jordan in terms of financial wins too, making him one of the highest-paid athletes of all time.

Link to the Article

Legg Mason's Miller says unfazed by housing slump

Legg Mason's (LM.N: Quote, Profile, Research) star stock investor, Bill Miller, admits his fund's poor recent performance reflects investments in the battered housing sector and a failure to own surging energy stocks -- but he is unfazed by the U.S. housing slump.

As of Friday, Miller's Value Trust fund (LMVTX.O: Quote, Profile, Research) was down 2.73 percent year-to-date, putting it at the very bottom of similar funds, according to Lipper Inc., a unit of Reuters Group Plc.

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LMVT's 2nd Quarter Comment

Drywall Maker in Pain as Housing Suffers

Plenty of companies — the mortgage lender Countrywide Financial, the hardware giant Home Depot and the insulation maker Owens Corning among them — are absorbing the ill effects of the yearlong slump in housing construction and sales.
But few have felt it as forcefully or as suddenly as the USG Corporation, the nation’s largest maker of drywall, the paper-wrapped plaster boards used to build walls in homes and offices.

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Tuesday, August 7, 2007

Q&A: Paul Desmond of Lowry's Reports

Paul Desmond, president of Lowry's Reports, is known as a "technician's technician." In 2002 he won the Charles H. Dow Award for excellence in the field of technical analysis for his studies on how market bottoms are formed.

More recently, he's been looking in the other direction, studying how market tops are formed. It has been a long time coming: Many years ago, Desmond's firm bought microfiche of The Wall Street Journal for 1920-1933. They laboriously converted the printed stock tables into digital form -- that's all market activity for every operating company stock listed in the stock tables, including the opening and closing prices and high and low volumes. From this unique data source, Desmond analyzed the 14 major market tops from 1929 to 2000, trying to identify similarities. His findings are startling and impressive.
Link to Article I
Link to Article II


Source: Thanks to Viking from MSN BRK messageboard for the original reference.

Interview transcript: Meg Whitman, Ebay

Question: How is ecommerce changing? People often say is it’s becoming mature, and that is why we see all these overlaps, with companies moving onto each other’s turf.

Meg Whitman: One perspective I would give you is that after the stock market bust, when all the Internet market caps collapsed, people did, in fact, write off the Internet to some extent. But if you actually look at the fundamental, underlying metrics throughout that period, they were very strong.

Full Article

Full text: Paul Otellini interview

The FT’s Chris Nuttall interviewed Paul Otellini, chief executive of Intel, at the company’s headquarters in Santa Clara, California. Mr Otellini spoke about his 33-year career with the world’s largest chipmaker and the challenges the company faces as it tries to find new growth areas. Here is an edited transcript of his remarks.
FT: Originally, you had a choice after business school of either Intel or Advanced Micro Devices, which is kind of ironic now you are such rivals?

Link to the Interview

Q&A with Second Life's founder : Brave New World

In a few short years, Second Life has grown from an experiment to the world's largest virtual universe. Inside the mind of its founder.

Back in 1998, when San Francisco software developer Philip Rosedale dreamed up the idea, he never imagined that his virtual world might have such an impact on the world at large. In an e-mail interview with NEWSWEEK's Jessica Bennett, Rosedale described Second Life's evolution, and how it's changing the way we interact.
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The U.S.'s Hidden Asset: Global Capitalism

For the past seven years our political leaders have been trumpeting the spread of U.S.-style democracy, with decidedly mixed results. Developing countries aren't eager for the U.S. to impose its form of democracy on their fledgling—and often fragile—governments. In fact, many of them resent our government's attempt to tell them how to run their countries, especially when threats of "regime change" are not so subtly mentioned. It is U.S.-style capitalism, not democracy, that is spreading like wildfire around the globe.

Full Article

Can the Washington Post survive?

Newspapers are dying. At the Washington Post Co., CEO Donald Graham is banking on the Internet to save serious journalism. If he can't figure this out, nobody can. Fortune's Marc Gunther reports.

No less a sage than Warren Buffett, a lifelong newspaper aficionado, the owner of the Buffalo News, and a director of the Washington Post Co. (Charts) for most of the past 35 years, told Fortune, "The present model - meaning print - isn't going to work."

Full Story

Nandan Nilekani chats up with Indra Nooyi, CEO of PepsiCo

NANDAN: I tried to see how we could structure this conversation and I thought there are, broadly, three areas we could talk about. One is about the business. The other about India and different aspects of India, your plans for India and so forth. And the third is more on the personal side.

INDRA NOOYI: Yes, as long as we stay out of politics.

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Interview with Alibaba.com's CEO, Jack Ma

Bulletin: Why do you think Alibaba has succeeded when so many other Internet companies have failed?

Jack Ma: I think the most important thing is that we believed in our dream from day one, to today and tomorrow. I remember when I talked about my story for B2B and e-commerce in 2000. Everybody thought that I was crazy. Of course we made so many mistakes, like any company, but we never gave up the hope of making sure our dream came true.

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Monday, August 6, 2007

Tata Unbound

A talk with Ratan N. Tata reveals his take on everything from Tata Group's expansion plans, to being overstretched, to choosing a successor.

For the past four years, Ratan N. Tata has been racing to seize opportunities to establish the Tata Group, one of India's oldest and biggest conglomerates, as a major global player in everything...

Link to the Article

Q&A: Oracle's President Charles Phillips

From acquisitions to Web 2.0, Phillips shares his vision for Oracle's strategy. And he's not shy about sharing his thoughts on the competition.

One of the most influential people in the software industry these days, Phillips is a hard man to pin down, due to the demands of a hectic travel schedule meeting with customers, startups, and potential acquisition candidates. Editor-at-large Mary Hayes Weier got him to sit still long enough to answer an e-mail enquiry on several facets of Oracle's acquisition strategy, the company's upcoming Fusion technology, its Web 2.0 push, and its competition with archrival.

The Link

Leadership Q&A with Jeff Diermeier, CFA

In this first part of a two-part interview, The Financial Journalist asks Mr. Diermeier to share his thoughts about the professional experiences that led him to CFA Institute, what the CFA designation means to him, and the challenges of increasing the organization's global role. In the next issue, Mr. Diermeier will discuss regulatory issues, such as those involving hedge funds and soft dollars, and other topics that he would like to see financial journalists covering in greater depth.

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THE MONDAY INTERVIEW: MICHAEL LEE CHIN - Man on a mission

AIC CHAIRMAN Michael Lee Chin was a major player in the world of business and finance long before he inked the deal to purchase majority shares in the National Commercial Bank (NCB). But the eldest son of the founder of the Super Plus supermarket chain has burst on to the Jamaican scene like a breath of fresh air in his own unique style.

Full Article

Global guru

The head of Harvard's $30 billion endowment talks about investing, the market, and the global economy.

When you first meet Mohamed El-Erian, 48, who heads up Harvard University's $30 billion endowment, two things immediately strike you: First, he's incredibly sharp, particularly when it comes to highbrow things like geo-political economics; second, despite being one of the world's most respected money managers, he's the antithesis of a hubristic hedgie or swaggering Wall Streeter: the Oxford and Cambridge-educated Egyptian is enormously polite and charming.

Full Article

The spreading fear of finance

Fear of finance is on the march. Distrust of people with high salaries who work behind computer screens doing something that doesn't look like productive work is everywhere. Paper shufflers are doing better than producers; speculators are doing better than managers; traders are doing better than entrepreneurs; arbitrageurs are doing better than accumulators; the clever are doing better than the solid; and behind all of it, the financial market is more powerful than the state.

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Yale's Money Guru Shares Wisdom with Masses

Yale University recently announced a 23 percent return on its investments, swelling its endowment to a whopping $18 billion. The man behind that investment success is David Swensen, one of the most gifted investors in the world. He's made an average 16 percent annual return over 21 years -- better than any portfolio manager at any other university.

Link to the Article

Mahesh Chokhani's tips to be a great investor

Director of Enam, Mahesh Chokhani brings the benefit of his expertise over long years of trading in the market. So in his time, he has seen it all -- the mood swings of the market. He gives away a few of his secrets, so that a lay investor can benefit.

Full Article

Saturday, August 4, 2007

An Interview with Lee Kuan Yew : The Helmsman's Vision

Coffee Break~~

Regional engagement, new leadership, globalization, Confucian values, destiny... there's a lot on the mind of Singapore's senior statesmen Lee Kuan Yew, as he reveals in this exclusive interview.

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Exclusive interview with Lakshmi Mittal

The morning-after feeling started late in the afternoon for steel tycoon Lakshmi Mittal and all his staff working out of two floors in the swish, if impersonal, rented offices of his company in Berkeley Square, Mayfair.

At lunchtime on Friday, they received word from Luxembourg that European steel champion Arcelor's shareholders had voted by an overwhelming majority to reject the proposed merger with Russian oligarch Alexei Mordashov's Severstal.

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The success story of Sashi Chimala

Sashi Chimala is no ordinary entrepreneur. He is not only the 'Jack of all trades,' but -- strangely enough -- even master of all. Even as a young boy Chimala dreamt of becoming an entrepreneur. And become he did. Chimala founded not one, not two, but many companies, and they are in diverse fields like software to coffee to cricket to gaming.

Full Article

An interview with Mexico's Carlos Slim

By age 12, he had moved on to trading stocks and bonds. Before turning 30, he owned a soft-drink company and a stock brokerage. Now, at 67, Slim is the world's second-richest man and is closing quickly on Bill Gates, according to Forbes magazine's most recent rankings. Slim's business empire stretches from Mexico to the United States - it includes major stakes in companies such as CompUSA and Saks Fifth Avenue - yet most Americans have never heard of him.
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Q&A with John W. Henry : From Futures to Fenway

John W. Henry, today the owner of the Boston Red Sox and of Boston’s famed Fenway Park, is on the very short short list of the most successful futures traders ever. An avowed trend-follower and chairman of one of the largest managed futures advisors, this is one market celeb who claims he can’t predict anything. Dull cocktail party conversation? Perhaps. But, the results of his funds likely have been the buzz in the right circles because of their stunning performance over the long haul. In most cases they have beaten the performance of the S&P, in some cases handily, even as Henry openly admits that he doesn’t know offhand where the markets are going.

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The Other Buffett

The godlike buffetts...

Warren Buffett doesn't give handouts. But you might try his sister Doris. Sally Beatty on the charity and frugality that run in the family.

Warren Buffett, chairman and chief executive of Berkshire Hathaway Inc., says his sister "is far more philanthropic than I am. She identifies with the underdog. I do it in a wholesale way, but not on a one-on-one basis. She really wants to know their stories."

Full Story

Hedge Funds Pluck Money From Air in $19 Billion Weather Gamble

This might be a sign of too many hedge funds chasing for too few opportunities. Maybe Berkshire should be in the game too.

Credit Suisse Group trader Patrick Ayash rarely reads earnings estimates and just skims news about inflation. One thing he never misses: the daily weather report.

Ayash, 31, is part of an army of mathematicians, hedge-fund whizzes and programmers pouring into the $19 billion market for weather futures, financial instruments tied to everything from storms over Kansas, an early frost in the Netherlands, or a frigid spring in New York.

Full Article

Berkshire Hathaway's profit soars 33%

Wonderful quarter...

Warren Buffett's insurance and investment company says earnings were lifted by higher insurance underwriting profit, investment income.

Warren Buffett's Berkshire Hathaway Inc said Friday second-quarter earnings rose 33 percent as higher insurance and utility profits offset pressure on housing-related businesses from the slowing U.S. real estate market.

Net income for the Omaha, Nebraska-based insurance and investment company rose to $3.12 billion, or $2,018 per Class A share, from $2.35 billion, or $1,522, a year earlier.

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The Insurance Hoax

Property insurers use secret tactics to cheat customers out of payments--as profits break records.

Julie Tunnell remembers standing in her debris-strewn driveway when the tall man in blue jeans approached. Her northern San Diego tudor-style home had been incinerated a week earlier in the largest wildfire in California history. The blaze in October and November 2003 swept across an area 19 times the size of Manhattan, destroying 2,232 homes and killing 15 people. Now came another blow.

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Friday, August 3, 2007

U.S. Housing Is Among `Biggest Bubbles,' Rogers Says

The U.S. subprime-market rout that wiped out $2.1 trillion from global share values last week has got a long way to go,'' said Jim Rogers, who predicted the start of the commodities rally in 1999.

This week's rebound in equity markets hasn't persuaded Rogers, 64, to pull out of bets that U.S. investment banks and homebuilders are heading for further declines.

Link to the News

Chinese Banks May Take Losses On Subprime

One sharp-eyed set of analysts believes Asian financial banks will be little-affected by the U.S. subprime mortgage crisis, but another sees dangers in China.

Ratings agency Moody’s said Friday that a preliminary survey turned up little exposure among Asian financial institutions to the U.S. subprime market relative to their overall positions.

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The Liquidity Puzzle

We increasingly hear that “the world is awash with liquidity,” and that this justifies expecting asset prices to continue rising. But what does such liquidity mean, and is there really reason to expect that it will sustain further increases in stock and real estate prices?


Liquid assets are assets that resemble cash, because they can easily be converted into cash and used to buy other assets. The idea seems to be that there are a lot of liquid assets lying around, and that they are being used to get money to bid up the prices of stocks, housing, land, art, etc.

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Minds for Modern Times

In an excerpt from his book, Five Minds for the Future, Harvard Professor Howard Gardner discusses the kinds of minds that people will need if they—if we—are to thrive in the world to come.

For several decades, I've studied how the mind develops, how it is organized, what it's like in its fullest expanse. In Five Minds for the Future, I concern myself with the kinds of minds that people will need if they—if we—are to thrive in the world to come.

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China and the U.S.: The Ties That Bind

Boston Consulting Group's David Michael thinks the U.S. and China have much to lose from a trade war—and much to gain from cooperation.

Before the U.S. plunges into a trade war with China, policymakers and political leaders should look beyond the trade deficit numbers and consider the complex and changing nature of the U.S.-China economic relationship.

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Spiegel Interview With The Co-founders of MySpace

The New Economy is back again -- and the virtual playground MySpace paved the way. More than 140 million people across the globe are members of the virtual community. In an interview, MySpace's founders explain how the Web site killed television and changed the world.

SPIEGEL: Mr. Anderson and Mr. DeWolfe, how many friends do you have?

Anderson: I think there are about 140 million right now on my MySpace profile.

Louis Vuitton's Life of Luxury

Chairman and Chief Executive Yves Carcelle gives insight into LVMH's culture, and how to market the global growth of a prestige brand.

How does a brand that is synonymous with luxury—and exclusivity—grow, while retaining its cachet? It's a question that occupies the powers that be at LVMH Moët Hennessy Louis Vuitton (LVMH ), which saw total sales for 2006 increase nearly 10% from the previous year, to $20 billion. First-half revenue earnings for the group, announced July 26, were €7.4 billion (about $10.2 billion), a growth of 12%.

Don't Stop Here

Q&A with Google's VP of Marketing

David Lawee explains why using the customer as "true north" makes the Google brand one of the easiest in the business to manage.

David Lawee , vice-president of marketing for Google (GOOG ), admits he has the easiest job in marketing. It's not that he doesn't have to do any work, but Google's brand has taken on such an aura that he says he doesn't have to do much of the usual care, feeding, and policing of the brand—let alone run any television or print ads. Even so, its brand equity rose 44% in Interbrand 's latest ranking, the highest growth of the top 100 companies.

This way

The most overpaid CEOs in America

Executive compensation continues to soar, even for many CEOs whose job performance has been terrible. These five companies paid the most to CEOS while their stocks did little for shareholders.

I have a friend living in Harlem who works at a clothing shop in midtown Manhattan several days a week to help pay her way through college. When she hustles on the job, has a little luck and "makes her numbers" for the month, she'll get an extra $100 bonus on top of the $850 she earns in the $8.50-an-hour job. If not, she has trouble paying her bills.

Full Article

Temasek warns of rising protectionism

Temasek, the fifth-largest sovereign wealth fund, said the investment climate could become tougher in the next few years as a result of rising protectionism in the US and Europe against state-owned funds.

The Singapore state investment company warned that it was adopting a cautious investment outlook for the next few years because of “medium-term geo-economic risks and signs of bubbly market conditions”.

Webbit

Thursday, August 2, 2007

The Secrets of Hitler's Last Living Aide

Away from business and finance for a minute...

Rochus Misch, Hitler's bodyguard and telephone operator, is the last surviving member of Hitler's entourage. He has just turned 90 and is publishing a book about his time with the Führer.

The strangest thing was the sight of the two guitar players at the "Kaiserhof" subway station in Berlin. "I come out of this bunker of death, all that drama, and someone's playing music," recalls Rochus Misch. "They played Hawaiian music!" It was May 2, 1945, at six o'clock in the morning.


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Enter the Dragon: China's Investments

The issue is straightforward enough, even if few countries have ever had to deal with it on this scale before: thanks primarily to its thriving export industries, China has $1.4 trillion (and counting) in its pocket, and has to put it somewhere. For years, the investment of choice has been the drab solidity of U.S. Treasury bonds. But as the dollar drops, and higher returns can be gained elsewhere, China has begun to eye more alluring places to stash some of its cash.

Full Article

George Soros’s Right-Wing Twin

Multibillionaire commodities king Bruce Kovner is the patron saint of the neoconservatives, the new Lincoln Center’s crucial Medici, owner of a vast Fifth Avenue mansion—and the most powerful New Yorker you’ve never heard of.

If no one knows anything about Bruce Kovner, it is because he likes it that way. Yet the unassuming manner is camouflage for one of the most powerful people in the country, culturally, financially, and politically. Kovner, 60 years old and divorced, manages the largest hedge fund in the world...Try Me

The REAL reason the Bancrofts lost Dow Jones

If you care about business news, you know by now that Rupert Murdoch has won control of the Wall Street Journal.

What you probably don't know is that even though the Journal had been thought of as a great family-controlled paper, along with the Sulzbergers' New York Times and the Grahams' Washington Post, the Bancrofts had largely checked out long ago.

Here's the deal. In 1986, Dow Jones & Co., the Journal's owner, issued a new class of stock designed to give the Bancrofts permanent control. You can argue about whether that's a good thing, though I like it when it comes to journalism companies. (In fact, my biggest single-company investment is the Washington Post Co., my employer until I joined Fortune.)

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Tudor Raptor Fell 9% in July; Caxton's Global Lost 3%

Tudor Investment Corp.'s Raptor Fund lost 9 percent in July as stock prices fell worldwide, investors said. Caxton Associates LLC's flagship hedge fund dropped about 3 percent.

The loss by Raptor, managed by James Pallotta in Boston, left the $8.9 billion stock pool down about 2.9 percent for the year through July 27. Bruce Kovner's Caxton Global Investments, an $11 billion fund, held on to a 3.5 percent gain for the year through July.

Link to the article

Grantham Sees Huge Opportunity in "Anti-Risk"

Jeremy Grantham says he's spotted the third great investing opportunity of his career. The first was small caps in the 1970s. The second was real estate, Treasury Inflation-Protected Securities, and value stocks during the tech bubble in 2000. Before you get too excited, I should make clear that the main opportunity today, in Grantham's view, is getting out of the way and watching the markets plummet in what he calls a slow-motion train wreck. Grantham made this call in a report published July 25--a day before the Dow got 300 points sliced off the top (talk about instant gratification!).

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Arne Alsin: Short-sighted bargain-hunters overlook deals

A very interesting article on how to maximize return in this "Inefficient" Market.

When investing in the market, it is smart to consider stocks tainted by negativity. Most investors, however, are uncomfortable investing in negativity. It is easy to understand why. Targeting the stocks of problem-plagued companies runs counter to the natural instincts of an investor. It is counter-intuitive to seek out and embrace negativity.

Why, then, should investors target stocks enveloped by negativity? The short answer is simple: because that is where the bargains are.


Link to Full Article

Billionaire Inventors

"To invent, you need a good imagination and a pile of junk." So said Thomas Edison, inventor of so many things we take for granted today and the archetypical American entrepreneur-inventor.
Edison became a rich man thanks to his imagination's ability to transform "piles of junk" into products and businesses that didn't previously exist. Today's more knowledge-based world may demand less physical junk and more service ideas as invention's starting point, but these 10 billionaire inventors are worthy heirs to Edison's tradition.

Full Article

Wednesday, August 1, 2007

An 'Informational Edge' on Global Stocks

Chris Semenuk's mission is stockpicking, and he travels the world to do it. The portfolio manager of TIAA-CREF's International Equity Fund (TIERX) looks for companies with performance-driven management that generate free cash flow. The 100 or so stocks in his fund must trade at a reasonable price compared with peers around the globe. Plus, he wants to have an "informational edge," which could mean easy access to top executives or knowing something about the company that's not being widely recognized or appreciated in the market.
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The New Rich Are Building Bigger

In 1998, industrialist Ira Rennert decided to build a 29-bedroom mansion on 110,000 square feet of Long Island waterfront and ended up in the middle of a lawsuit.

A compound of this proportion was surely meant to be a hotel or a religious retreat, which would create traffic, destroy the environment, and block the ocean view, Rennert's neighbors alleged...Follow me

A quiet revolution in China’s capital markets

When China first began privatizing its state-owned enterprises in the 1990s, the intent resembled that of other privatization programs around the world: to use capital market pressures to improve the performance of a large number of state-owned companies, many of which had weak balance sheets and were not as commercially focused as publicly held companies elsewhere. However, the government wanted to retain substantial shareholdings in and influence over these companies, which precluded the full privatization of state assets. To allow such companies to raise capital in that context, a two-tier ownership structure was put in place. Essentially, the original equity remained legally distinct from the new equity and formed a separate class of shares held by the existing state-linked owners. Although both classes had the same theoretical rights to profits and votes, the nontradable shares could not be sold on the public markets

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Bruce Berkowitz : Berkshire Hathaway remains our largest single investment, and for good reason

Since inception, $10,000 invested in The Fairholme Fund with dividends reinvested has grown to $35,206 while $10,000 invested in the S&P 500 Index with dividends reinvested has grown to $11,613. In other words, the Fund has appreciated roughly 18.26% per annum compared to a gain of 2.01% per annum for the S&P 500.

The Fund continues to own a stable of terrific businesses with some of the most competent and honorable business jockeys in the world.

Complete Report

Grantham Says Hedge Funds, LBO Funds to Collapse

Generally I agree with Mr. Grantham's take, but how will the whole thing play out? Nobody knows...

Jeremy Grantham, the money manager who oversees $150 billion as chairman of Grantham, Mayo, Van Otterloo & Co. LLC, said credit-market declines may force as many as half of all hedge funds to close in the next five years.

The loss of investors' appetite for risk also may cause at least one global bank and ``one or two'' of the largest private- equity firms to go out of business, Grantham, known for his pessimistic outlook, said yesterday. The 68-year-old investor said he's still bullish on emerging-markets stocks. Read More
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