Anirudh Sethi Report

The children of Berkshire Hathaway’s (BRK-A) (BRK-B) Warren Buffett, were interviewed for National Geographic.

Tony Robbins (yes the big teeth motivational guru) recent issued a caution alert to market participants. He said that something big is coming that will cause this market to plunge once again. He issued a similar alert back in the middle of 2007 which turned out to be very prophetic. Now, Robbins isn’t an economist or guru investor or trader, but he does have clients who are highly respected fund managers. So he is “inside information”, so to speak.

Watch the video and be prepared, whether he turns out right or not this time. Wrong or right, you should be able to profit. I don’t think you should be completely out of the market, because what if he’s wrong? If he’s wrong, most people will be left out and the shorters will be slaughtered. But if he’s right, make sure you’re in the best stocks and you have cash to buy more during bloody times. That way, you win regardless of the outcome. That’s what Warren Buffett loves, winning regardless of the direction of the market! But again, don’t tell the bears; they’re mathematically-challenged.

Click here & see VIDEO

The following video of Berkshire Hathaway’s (BRK-A) Warren Buffett, gives great insight into how he thinks before making an investment, how he created value added for the company, and increased sales substantially. No wonder why he is a billionaire and top trader and investor.

In the video, he discusses his purchase of See’s Candies, which operates over 200 retail shops in the western United States. You will also see Buffett’s sense of humor. If you have never had See’s Candies, you need to try some at your first opportunity. You will love the peanut brittle, my favorite.

If you think there are investment opportunities with other candy companies, here are a couple worth looking at.

Hershey (HSY), founded in 1894, is the largest manufacturer of chocolate in North America and one of the largest chocolate and candy companies in the world. Hershey’s Kisses were invented in 1901 and their chocolate chips were introduced in 1928. The stock has a P/E of 22, a forward PE of 17, with a flavorful yield of 2.8%. It sports a PEG ratio of 2.39.

Tootsie Roll Industries Inc. (TR) is known for its ever famous Tootsie Rolls. It also produces Apple Pops, Charms, Sugar Daddy, Sugar Babies, and Tootsie Roll Pops. The stock has a P/E and forward PE of 26 and sports a yield of 1.3%.

From the wires today:

“OMAHA, Neb. (AP) — Warren Buffett’s company reported a 40 percent drop in second-quarter profit Friday because the improvement at Berkshire Hathaway Inc.’s operating companies couldn’t overcome $1.4 billion in paper losses on derivative contracts. Berkshire’s strong performances from its railroad, insurance and manufacturing businesses was overshadowed by the plummeting value of the Omaha company’s derivatives — many of which are tied to the value of four major stock markets.”

From Buffett himself in 2002:

“The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

From Bloomberg recently:

“Buffett’s well known for his criticism of derivatives. Yet Berkshire in recent years has become a big player, with some $60 billion in derivatives contracts. Under any new derivatives regulation, Berkshire would be likely to have to produce collateral for new derivatives contracts it writes. This would limit the attractiveness of new derivatives deals for Buffett, who has boasted that Berkshire rarely does a deal that calls for it to produce collateral. But that’s not why Buffett has been pushing back against the financial reform bill in the Senate. Instead, Buffett says he’s concerned that the legislation would impose collateral requirements on existing contracts — which he says would be illegal. Sen. Ben Nelson, D-Neb., made the same case this week as he defected from the Democrats backing the financial reform bill. Whatever his logic, pushing back on derivatives reform has the interesting side effect of aligning Buffett, with his sterling reputation, with the widely derided Wall Street banks.”

Buy and hold? Buying strong businesses? Derivatives are weapons of mass destruction? Bailouts of many of the components of BRKA? Does anyone have the cajones to criticize Buffett? There has to be at least one emasculated weenie out there who will come on here and tell me that I can’t criticize America’s wealthiest just because he is rich. Right?

The Buffett myth is just that — a myth. If not for the fall 2008 bailouts, he would be on the senior circuit revising history along with Greenspan. Why my stark view on this lovely sunny morning in beautiful Southern California? Cause no matter how many books populate Amazon, all preaching about how you can become the next Buffett, they are all disingenuous fairy tales.

• Individuals who cannot master their emotions are ill-suited to profit from the investment process. – View Quote Details on Individuals who cannot master their emotions are ill-suited to profit…
• Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble…to give way to hope, fear and greed. – View Quote Details on Most of the time common stocks are subject to irrational…
• You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right. – View Quote Details on You are neither right nor wrong because the crowd disagrees…
• Warren Buffett, story from Benjamin Graham: A story that was passed down from Ben Graham illustrates the lemminglike behavior of the crowd: “Let me tell you the story of the oil prospector who met St. Peter at the Pearly Gates. When told his occupation, St. Peter said, “Oh, I’m really sorry. You seem to meet all the tests to get into heaven. But we’ve got a terrible problem. See that pen over there? That’s where we keep the oil prospectors waiting to get into heaven. And it’s filled—we haven’t got room for even one more.” The oil prospector thought for a minute and said, “Would you mind if I just said four words to those folks?” “I can’t see any harm in that,” said St. Pete. So the old-timer cupped his hands and yelled out, “Oil discovered in hell!” Immediately, the oil prospectors wrenched the lock off the door of the pen and out they flew, flapping their wings as hard as they could for the lower regions. “You know, that’s a pretty good trick,” St. Pete said. “Move in. The place is yours. You’ve got plenty of room.” The old fellow scratched his head and said, “No. If you don’t mind, I think I’ll go along with the rest of ’em. There may be some truth to that rumor after all.” – View Quote Details on Warren Buffett, story from Benjamin Graham: A story that was…

Here are seven interesting things I learned about Warren Buffett from The Snowball, and some ideas on how they can help your investing:

1. Buffett set goals young. (He really started, really young)

Buffet began obsessing over numbers as a child. He raced marbles with a stopwatch and calculated the lifespan of hymn composers when six-years old. He sold chewing gum at seven and Coca Cola when he was eight: the same year he began wearing a money-changer on his belt.

• His dad was a stockbroker. This gave him an early view of the markets
• At ten he was chalking stock prices at a local broker’s office
• The same year he visited the New York Stock Exchange, and was asked for a tip by senior Goldman Sachs partner Sidney Weinberg – an experience he never forgot
• His favourite childhood book was One Thousand Ways to Make $1,000
• At 11 he announced he was going to be a millionaire at 35, a seemingly crazy goal in 1941 (when a million really was a million)
• He filed his first tax return aged 14, having already made $1,000 (equivalent to around $12,500 in today’s money)

The takeaway: The power of compound interest takes years to work its magic. None of us has a time machine, so the main lesson is not to delay a day when investing for the future.

2. Buffett bought his first stock when he was 12-years old

Warren put everything his schemes had earned him into a stock, Cities Service Preferred, when he was 12. He also enrolled his sister, Doris.

Buffet was already learning how to hold shares through a slump

He paid $114.75 dollars for three shares, and watched the stock price fall from $38.25 to $27 a share. His sister Doris was not happy. When Cities Service went back up to $40, he sold. He made $5 a share profit, and got Doris off his back. After he sold, the stock rose to $202 a share.

Takeaway: We all learn the same lessons. Buffett’s business partner Charlie Munger says that because Warren started thinking about odds, stocks, and goals before he was a teenager, he’s years ahead of the rest of us.

I used to watch share prices rise and fall on the Teletext TV service when I was 11 or 12. At the same age Buffett was learning real-world lessons on holding shares through a slump and selling too soon.

You’ll only discover whether you have the stomach to invest through a bear market or whether you’ll be sucked up by the next property bubble by being an active investor. Start with small sums, sure, but don’t delay that start.

3. Buffet lied, shoplifted, and played truant as a kid

This one was a real surprise. As a teenager Buffett revealed a wild streak. He says:

“We’d steal stuff for which we had no use. We’d steal golf bags and golf clubs. I walked out of the lower level where the sporting goods were, up the stairway to the street, carrying a golf bag and golf clubs, and the club was stolen and so were the bags. I stole hundreds of golf balls.

“I made up this crazy story for my parents – I told them I had this friend, and his father had died. He kept finding more of these golf balls that his father had bought. Who knows what my parents talked about at night.”

Takeaway: Even Buffett had to learn to be Buffett. I don’t know about you, but I found this heartening to read. Together with discovering that Buffett was a shy child who enrolled himself in Dale Carnegie’s public speaking course, it made him seem more human.

It’s easy to feel you haven’t got what it takes to make money. Some are born special, you might conclude. But Buffett’s history shows that even the world’s richest and most admired investor had to iron out his kinks.

Buffett’s history also makes me proud to be an outsider. Many of my college classmates entered the city or became management consultants, and have earned six-figure salaries for a decade. When property prices were booming, I’d sometimes wonder if I’d made the wrong decision by deciding to go it alone – even though I know that working a nine-to-five in an office and answering to some buffoon of a manager would kill me.

Discovering Buffett made being his own boss a top priority puts me in good company. I also suspect the unusual structure of Berkshire Hathaway grew out of Buffett’s non-confirming mentality.

4. Buffett is a businessman first, investor second Read more…

Greg Simmons having fun at the reality of Warren’s numbers. 5th largest TARP recipient? Not too shabby Warren. Bailout makes it easy!

Warren Buffett’s lunch auction rose to a record of $2.63 million in the 11th annual charity fundraiser.

That’s about 24 percent higher than the previous record, set in 2008 when hedge-fund manager Zhao Danyang of Hong Kong paid $2.11 million. The chance to have lunch with the celebrated billionaire investor drew nine bidders and 77 bids, according to EBay Inc. The online auction started June 6 and ended at 10:30 p.m. New York time yesterday.

The winning bidder wishes to remain anonymous, according to Denise Lamott, a spokeswoman for the auction beneficiary, the Glide Foundation in San Francisco.

Buffett, the 79-year-old investor who is chairman and chief executive officer of Berkshire Hathaway Inc., has raised about $8.56 million with the auctions to help the Glide Foundation, which serves meals to the needy. A group led by Courtenay Wolfe of Salida Capital won last year with a bid of $1.68 million.

“It’s actually a remarkable calibration of his value,” said Jeff Matthews, author of “Pilgrimage to Warren Buffett’s Omaha” and founder of hedge fund Ram Partners LP. “It measures what people think his worth to them is.”

Buffett’s insights on markets attract the attention of those looking for clues on his investment strategy. Past auction winners have said topics of discussion also included corporate governance and philanthropy. The top bidder gets to bring seven guests for lunch at Smith & Wollensky, the New York steakhouse.

Buffett’s stock picks and takeovers turned Omaha, Nebraska- based Berkshire from a failing textile mill to a $180 billion seller of bricks, power and insurance. Tens of thousands of people gather in Omaha each year at Berkshire’s annual meeting to hear Buffett expound on the economy and public policy. Read more…

An eBay auction is currently running this week, which is offering the winning bidder lunch with famed billionaire and investor Warren Buffett, one of the top three wealthiest people in the world.

All proceeds of the auction will be donated to the Glide Foundation in San Francisco, which provides help for the homeless and poor.

The current bid on the auction is $25,000, and if no one else bids, it wall be a bargain, as last year, the Canadian firm Salida Capital Corp. paid $1,680,300 for the lunch, and two yours ago, Zhao Danyang paid $2,110,100. The auction ends Jun 11, 2010 at 7:30 pm PDT or 10:30 Eastern time.

“Before you invest, investigate.” William Arthur Ward (1921-1994) author, educator.

“With an evening coat and a white tie, anybody, even a stock broker, can gain a reputation for being civilized.” Oscar Wilde (1854-1900) Poet & playwright

“Never invest in anything that eats or needs repainting.” Billy Rose (1899-1966) Composer and entrepreneur

“Emotions are your worst enemy in the stock market.” Don Hays, stock market commentator

“I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.” Warren Buffett (1930- ) businessman and investor

“Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.” Peter Lynch (1944- ) money manager

“Gentlemen prefer bonds.” Andrew Mellon, Businessman & financier (1855-1937)

“Anyone who thinks there’s safety in numbers hasn’t looked at the stock market pages” Irene Peter

“The stock market has forecast nine of the last five recessions” Paul A. Samuelson

“The arts are an even better barometer of what is happening in our world than the stock market or the debates in congress.” Hendrik Willem Van Loon

“If stock market experts were so expert, they would be buying stock, not selling advice.” Norman R. Augustine

“Now is always the most difficult time to invest.” Anonymous

“I can’t figure the stock market out. I think it’s wacky. I have done well with a long-term strategy and will continue being a long-term investor.” Scott McNealy

“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.” William Feather

It’s easy to grin when your ships come in and you’ve got the stock market beat, but the man worth while is the man who can smile when his pants are too tight in the seat” Anonymous

“My job is to make people money. If I don’t include every factor that moves a stock, market psychology included, then I’m not doing my job.” Thomas Kurlak

The most valuable things in life are not measured in monetary terms. The really important things are not houses and lands, stocks and bonds, automobiles and real state, but friendships, trust, confidence, empathy, mercy, love and faith.” Bertrand Russell, Philosopher (1872-1970)

“Stock prices have reached what looks like a permanently high plateau” Irving Fisher, Economist, (1867-1947)

“A stockbroker urged me to buy a stock that would triple its value every year. I told him, ‘At my age, I don’t even buy green bananas.’” Claude Pepper

“If you hear that everybody is buying a certain stock, ask who is selling.” James Dines, Investment newsletter writer (1935- )