Posts Tagged ‘Warren Buffet’

Even the Most Respected Investors in the World Make Mistakes

Wednesday, May 4th, 2011

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(credit: jmv)

You may not have heard yet, but there’s been some interesting drama in the house of the country’s most-worshipped investor – the Oracle of Omaha, Mr. Warren Buffet. One of the top execs at his company (Berkshire Hathaway) seems to have, well, cheated at the game. David Sokol looked like he was next in line to replace Buffet when he eventually retires. But then he pulled a little thing called insider trading.

He bought a bunch of shares in a company, and then convinced Buffet that Berkshire Hathaway should buy that company, which raised the price of the shares and made Sokol a tidy profit. Unfortunately for everyone, that’s illegal. (For the record, Sokol so far denies doing anything wrong.)

There are many ways the company could have handled it – they could have tried to cover it up, or denied the whole thing and given Sokol a big bonus. But to his credit, Berkshire’s famous leader just fessed up. At the company’s annual meeting, where company executives meet with investors, explain their decisions, and take feedback, Buffet basically said that his top aide had done a terrible thing. He also heaped some blame on himself, saying that he wasn’t skeptical enough when Sokol came to him with the proposal.

Now Sokol is out of a job and the company is moving forward. Easy as that. The truth is, bad things happen all the time. But in business as in the rest of life, all it really takes to make things right again is to take responsibility for what happened, fix what you can fix, and move on.

Facebook Founders Pledge To Give Away Most Of Their Assets

Thursday, December 9th, 2010

Why wait until you’re dead to make your mark on the world?

  • Mark Zuckerberg and Facebook co-founder Dustin Moskovitz are the latest billionaires to sign on to “The Giving Pledge.” They’re part of a growing number of wealthy individuals choosing to get involved in philanthropy while they’re still young.
  • The Giving Pledge was thought up by Warren Buffet and Bill Gates, who are on a joint mission to get other billionaires to donate the majority of their wealth to charity before they die.
  • Internet and technology billionaires like Gates and Zuckerberg have a special motivation to give – they’ve already built their wealth by trying to change the world.

Facts & Figures

  • More than 50 billionaires have signed onto the pledge so far
  • In 2008, donations in the U.S. totaled $315 billion; in 2009, that number fell to $303.75 billion
  • Zuckerberg recently pledged $100 million in donations to Newark public schools

Best Quote

“Wealth is an advantage, but it also is frankly a responsibility.” – Nicolas Berggruen, Investor, recently signed on to The Giving Pledge

Indian Billionaires Reluctant To Give

Wednesday, August 18th, 2010

In a country wrought with poverty, giving to the poor becomes a challenge in its own right.

  • Bill Gates and Warren buffet, two of the wealthiest individuals in the world, recently pledged to give half of their net worth to charity.
  • The pledge has been replicated by 38 other American billionaires, but in India – home to two of the richest people in the world – wealthy individuals have not made the same commitment.
  • Those billionaires contacted regarding the challenge evaded commenting on the subject.
  • Experts say that Indian billionaires donate less because the opportunities for giving are fewer and often tainted by corruption.

Facts & Figures

  • Indians collectively donate 0.6% of their country’s GDP to charity. While Canada donates 1.3% and the U.S. 2.2%.
  • Just 10% of charitable giving in India comes from individuals or companies, compared to 75% in the United States.

Best Quote

“Indians just don’t trust the organizations that want money or that they could give to. Often they find themselves in the position that even if they want to give, there is no mechanism available to them by which they could give.” – Emily Harrison, Founder, Innovaid

Philanthropy As A Badge Of Wealth

Monday, August 16th, 2010

Philanthropy becomes a symbol of wealth as more billionaires pledge their fortunes to charity.

  • Warren Buffet and Bill Gate’s philanthropic challenge to the wealthy encourages more wealthy families to give.
  • As a result, philanthropy is rapidly becoming a status symbol.
  • Not only is there a growing expectation for wealthy families to give their money away, they are expected to be actively involved in philanthropy.
  • Some are worried that if philanthropy is seen as a privilege of the wealthy, it will devalue the charity endeavors of regular Americans.

Facts & Figures

  • Individual Americans gave more than $227 billion in 2009.

Best Quote

“Clearly pressure on the elite is high right now to say that they are giving money away and that will make it trendy. People who have enough money to give away but maybe haven’t thought about that… those folks will want to do what Warren Buffett and Bill Gates are doing.” – Stacy Palmer, Editor, The Chronicle of Philanthropy

Gates And Buffett Encourage Fellow Billionaires To Give It Away

Wednesday, June 23rd, 2010

For the past year, Bill Gates and Warren Buffett have been campaigning to get other American billionaires to donate at least half of their fortunes to charity.

  • People are asked to donate their money either during their lifetime or after death.
  • Most of the money raised by charities comes from normal people donating $5-$50 at a time.
  • Gates and Buffett encourage large donors to publicly pledge and explain their decision.

Facts and Figures

  • Buffett donated 99% of his $46 billion fortune to charity in 2006.
  • Gates and Buffett believe they can generate $600 billion through these pledges.
  • American philanthropies received $300 billion in donations in 2009.
  • Only 17 people on the Forbes’s 400 wealthiest people in America are also on the Chronicle of Philanthropy’s list of the most generous American donors.

Best Quote

“The pledge is a moral commitment to give, not a legal contract. It does not involve pooling money or supporting a particular set of causes or organizations.” – A written statement by Bill Gates, Co-Founder of Microsoft Corporation and Warren Buffett, chairmenn and CEO of Berkshire Hathaway Inc.

Goldman Takes One For The Team, Offers $500,000,000 Olive Branch

Thursday, November 19th, 2009

In an unusual display of corporate responsibility, Goldman Sachs admits its part in the financial crisis and tries to make nice with the small business community.

  • Goldman CEO Lloyd Blankfein made a statement acknowledging his company’s role in the global meltdown and offering an apology for its actions.
  • Attached to the apology is a $500 million donation to go toward supporting small businesses, which will be administered by rock star investor and Berkshire Hathaway CEO Warren Buffet.
  • The company has recently been the object of public outrage for issuing record executive bonuses after accepting bailout funds funded with taxpayer money (which it has since repaid).

Facts & Figures

  • Goldman’s compensation and bonuses this year already total $17 billion and could reach $23 billion by the end of the year.
  • The $500 million pledge represents approximately 2% of compensation funds set aside for 2009.
  • In the third quarter of 2009, Goldman Sachs earned more than $100 million on 36 different trading days.

Best Quote

“We participated in things that were clearly wrong and have reason to regret. We apologize.” – Lloyd Blankfein, CEO of Goldman Sachs

Buffet Invests In American Economy

Monday, November 9th, 2009

Warren Buffet, America’s most well-known investor, has purchased the Burlington Northern Santa Fe Corporation in hopes that railroad traffic will increase in the future.

  • Burlington Northern Santa Fe is a railroad company that ships products by train all over the country.
  • Buffet believes that railroads will become increasingly popular for shipping and transportation as oil becomes more expensive.
  • Buffet’s company, Berkshire Hathaway, followed his rules of investing in this particular deal: invest in companies that people can understand, and buy quality products at discount prices.

Facts & Figures

  • Buffet will pay roughly $26 billion for the 77.4% of Burlington Northern Santa Fe that he does not already own (at $100/ share).
  • Buffet is splitting Berkshire Hathaway’s B Class stock 50 to 1 (meaning that if you owned 1 share of stock before the split, you know own 50!) in order to pay for the acquisition.
  • In an investor owned $1,000 worth of Berkshire stock in 1965, that same investor’s stock would be worth millions of dollars today!

Best Quote

“This all happened because my father didn’t buy me a train set as a kid.” – Warren Buffet, CEO and Chairman of Berkshire Hathaway

Who is Warren Buffet?

Tuesday, October 20th, 2009

Warren Buffet, a.k.a. the “Oracle of Omaha,” has become famous and extremely rich by making very successful investments through his company Berkshire Hathaway, which was a textile firm when he took it over in 1965. Today he owns controlling stakes in insurance companies like GEICO and General Re, utilities like MidAmerican Energy (MDPWK.PK), and food companies like Dairy Queen and See’s Candies, in addition to large stakes in Coca-Cola (KO), Wells Fargo (WFC) and various other companies. In 2008, he was listed as the world’s richest man with more than $60 billion. Berkshire Hathaway’s stock (BRK-A), has the most expensive share price in the world at around $100,000 a share, but lost a bunch of value since 2008, depleting Warren Buffet’s fortune by an astounding $25 billion in just a year. Poor guy only has about $37 billion left with which to scrape by!

Recently however, the famous investor is also a world-class philanthropist, dedicating 85% of his fortune to charity. Most of the money will be going to the Bill and Melinda Gates Foundation, which Bill Gates runs full time having left his job at Microsoft to devote himself to philanthropy. The rest will go to foundations headed by his three kids. He has said that whatever is left of his fortune will go to philanthropy when he dies, if not before. Even if his fortune weren’t to increase in value at all before that time, those $37 billion dollars would be the largest philanthropic contribution in history. Warren Buffet and Bill Gates provide outstanding examples of all the good that can be accomplished when accomplished people dedicate their time and resources to helping others.