Tag Archives: BRK.A

Wall Street Breakfast: Must-Know News

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Japanese economy grows, but capex is weak. The Japanese economy grew 3.5% (annualized) in Q1 as rising stock prices made consumers more willing to spend, a partial confirmation of the effectiveness of Prime Minister Shinzo Abe’s economic policies. On the other hand, capex fell 0.7% Q/Q on expectations of a 0.7% increase, proof the corporate sector is still skeptical regarding fiscal and monetary authorities’ ability to wrest the country from the grip of deflation. The weak read on business investment weighed on Japanese stocks as the Nikkei fell 0.39% — the index did hold the 15,000 level.

IRS chief’s resignation demanded, received, accepted. Acting IRS chief Steven Miller resigned Wednesday in the wake of the agency’s admission it unfairly screened Tea Party groups seeking tax exempt status from 2010 onward. President Obama called the screening "inexcusable" and emphasized that the IRS was the very last


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Wall Street Breakfast: Must-Know News

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Bain, Golden Gate close in on $6.5B BMC deal. Private-equity firms Bain and Golden Gate could reportedly announce a deal today to acquire BMC Software (BMC) for over $6.5B, with the $46-share-offer above the latter’s close of $45.42 on Friday. The proposed deal would follow pressure from activist investor Paul Singer for BMC to sell itself. Singer, who holds 9.7% in BMC, has criticized the company for failing to realize the opportunity in Internet-based business software.

P-E firms mull $8B Neiman Marcus exit. Neiman Marcus owners TPG Capital and Warburg Pincus are reportedly considering a sale or an IPO of the luxury retailer, with the private-equity firms believing that they can pull in $8B for the department-store chain after buying it for $5.1B in 2005. If a deal is struck, the valuation could be of interest to investors of mall rivals Saks (SKS) and Nordstrom (JWN).


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If I Could Buy Just One Stock, It Would Be This One

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ByMartin Vlcek:

In today’s modern world of investing, every investor can check their portfolio online and make instant online or mobile trades and choose from so many trading vehicles, that it is hard to even make a decision. There are usually a multitude of ways in which investors can realize their desired investing strategies. The emergence of ETFs based on virtually any asset class, region and risk appetite definitely has helped broaden the selection of options available to average investors. We may take this affluence for granted. However, investing has not always been so easy and flexible. Let’s step back into history for a while and imagine for a moment a scenario, although a bit extreme, that we could only choose one stock to buy and hold just that one ticker in our portfolio. Which stock would you choose?

My selection is simple and I didn’t have to hesitate even for a


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IBM: A Disaster In The Making

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By Arne Alsin:

IBM (IBM) is going to cost Berkshire Hathaway [(BRK.A) (BRK.B)] a lot more than the $1.3 billion of paper profit that has vanished since last Friday. With a cost basis near $170 per share, it’s unlikely Warren Buffett can sell 68 million shares of IBM without driving the price below $170, but that’s what he should do: Sell IBM.

The problem for IBM: Its operating model is built around selling on-premise computing – including so-called “private clouds” – but the $3.6 trillion IT industry is moving at an accelerating pace in an entirely different direction, to the public cloud, which is a low-margin utility model.

As Adrian Cockcroft, CTO of Netflix (NFLX) said, “there is zero revenue for traditional IT" in the public cloud. Users pay low variable expense (prices have been dropping from cheap to super-cheap) with no capex. Question: How can IBM compete with cheap "rented" computing


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Bakken: The Rail Revolution – Everything Investors Need To Know

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ByRichard Zeits:

A Big Year Ahead For Bakken

(click to enlarge)
(Source: ND Pipeline Authority; Zeits Energy Analytics)

2013 is shaping up as a strong year for the Bakken, in contrast to 2012 when the play was hurting from skyrocketing drilling and operating costs, severe infrastructure bottlenecks, exploding basis differentials, and disappointing economics, forcing some operators to scale back their drilling plans. Looking forward, several positive factors are at work that should filter through to favorable year-on-year financial comparisons and contribute to a brighter outlook for the play in general:

  • Crude oil takeaway issues have been largely resolved, with ample rail availability and major pipeline capacity additions expected in 2014-2016.
  • Natural gas and NGLs should become increasingly bigger contributors to operators’ bottom lines as the build-out of processing and pipeline infrastructure is beginning to bear fruit and should catch up with production within next two years.
  • Deeper Three Forks exploration is gaining


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What You Can Learn From Charlie Munger’s Exit Plan At Berkshire Hathaway

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author name submits:

When I was in college at Washington & Lee, I had an English professor that often said that we don’t really begin the writing process until we begin our first revision. In a similar way, as I’ve spent the past couple weeks re-reading the Charlie Munger biography Damn Right!: Behind The Scenes with Berkshire Hathaway Billionaire Charlie Munger, I have found a renewed appreciation for the different portfolio allocation decisions that have guided the Vice Chairman of Berkshire Hathaway (BRK.B) over the years. I felt as if I were reading about many of Munger’s personal allocation decisions for the first time.

Here’s one of the most useful things I’ve recently learned about Munger’s approach to capital preservation: for every meaningful investment that he’s ever made, he’s always had an exit plan. The best example of this came in 1977 when he possibly considered scaling back his financial commitments within


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Wall Street Breakfast: Must-Know News

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Wall Street Breakfast Editors submit:

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Samsung set to introduce new flagship smartphone. Samsung (SSNLF.PK) is due to unveil the Galaxy 4S today following a marketing blitz that analysts fear may have over-hyped the device. Still, sales of 10M units are expected in the first month alone. The company is thought to have worked hard to avoid the supply problems that cost it 2M units of lost sales in just one month last year after it launched the Galaxy S III in May.

S&P eyes record high. U.S. stock futures were higher premarket, setting the S&P 500 up to make a fresh challenge on its all-time high today after it closed just 11 points shy of the mark yesterday, and for the Dow Jones to continue its record run. Asian stocks rose and Europe was in the green at midday on the continent, helped by better-than-expected retail sales in the U.S. (See


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