Becky Quick: Warren, thanks for joining us this morning. Appreciate it.Warren Buffett: My pleasure.
Becky: People are always trying to figure out what you're doing with your cash. Why would you look at Wrigley right now? Why this deal right now?
Buffett: Well, I've been conducting a 70-year taste test, Becky, since I was about seven years old, on the products. I've done the same thing with Mars products. And they met the 70-year taste test (laughs.) But to tell you the truth, the Mars people asked me about participating in this, and we are financing. But we are a very, very junior partner, although we will have about 6-1/2 billion dollars in it. But we are a financing partner, in effect, for Mars in this acquisition.
Becky: Six-and-a-half billion dollars, though. That's still a substantial take. What do you look at beyond just the taste test? Do you think that this is the type of a bet that makes a good deal when you're looking at economic hardship times? Is this a recession-proof play?
Buffett: Yeah. Both companies have great brands. When I talk to classes of university students, for a dozen years or more I've used Wrigley as an example ... I haven't known about Mars except that they're a provate company. But there is really nothing that can go wrong with something like the Wrigley or the Mars brands. It's literally true that they have, ah, faced the test of time over decades and decades and people use more and more of their products every day.
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Tuesday, April 29, 2008
Warren Buffett Finances Mars-Wrigley Deal: The Complete CNBC Interview
Monday, April 28, 2008
Mars buying gum maker Wrigley with financing from Buffett
Snickers and M&Ms candy maker Mars Inc. is buying Wm. Wrigley Jr. Co., which makes Juicy Fruit and Doublemint gum and Life Savers, for about $23 billion in cash.The agreement announced Monday has the potential to transform the globe's confectionary industry and could spawn a series of other combinations.
.....Warren Buffett's Berkshire Hathaway Inc. will purchase $2.1 billion minority equity interest in the Wrigley subsidiary once the deal is completed. The Omaha, Neb.-based company also offered $4.4 billion of subordinated debt to fund the deal.
"A good time to buy a really great business is when you can do it," Warren Buffett said on CNBC Monday, adding that he understands Mars and Wrigley better than the balance sheets of most major banks.
Bud Labitan: The "Four Filters" of Warren Buffett and Charlie Munger
How do we improve and optimize our investing decision making?
Friday, April 25, 2008
Richard Pzena: Doubling Down in Financials
When it comes to value investing or buying out-of-favor stocks, patience is a virtue. These days few are more virtuous than Richard Pzena, Chairman of Pzena Investment Management, a $20 billion assets money management company whose New York Stock Exchange listed shares are down more than 38% in the last 12 months.
Pzena, 49, is a contrarian value investor, and, in the third quarter of 2007, he decided that beaten-up banks would provide the best bang for his investors' buck. He bet big on stocks like Citigroup, thinking that the bottom was near and they were ripe for turnarounds. Needless to say, Pzena was early.
Sequoia Fund to Reopen to New Money
The Sequoia Fund, after experiencing selling by investors, is reopening its doors May 1 to new investors for the first time since 1982.
The $3.5 billion value fund is celebrated for outperforming the broader market during much of its 38-year history. For years, it was run by legendary stock picker William Ruane, who followed the same approach as Benjamin Graham and Warren Buffett.
Wednesday, April 23, 2008
Investors fear a massive unwinding of debt will undermine the world’s economies. But the data indicates deleveraging doesn’t equal disaster.
A new fear has permeated conventional investment thinking: the massive leveraging-up of the recent past has gone too far and its unwinding will permanently hobble the global financial system. This view sees Bear Stearns as just one casualty in a gathering wave that has already claimed many U.S. subprime mortgage originators along with several non-U.S. financial institutions and will cause countless others to fail. And it sees the earnings power of those that survive as being permanently impaired.
The obvious question then is, which scenario is more logical: the extreme outlook described above, given the long period of easy credit extended to unqualified individuals? Or the scenario of a typical credit cycle that will work its way out as other post- excess crises have, and without impairing the long-term ROEs of the survivors? We believe the latter. Here’s why:
Buffett, Seeking Acquisitions, to Travel to Europe
Billionaire investor Warren Buffett will visit Europe next month to scout potential acquisitions, said an executive at an Italian refiner who is organizing the tour.``The purpose of the trip is to meet family-owned companies, owners of family companies, the typical European dynasties,'' said Angelo Moratti, vice president of Milan-based Saras SpA, in a telephone interview. ``His idea is that sooner or later one of these great businesses will fall into his hands.''
Scheduled for the third week of May, the tour will take the Berkshire Hathaway chairman to Milan, Madrid and as-yet undetermined cities in Germany and Switzerland, Moratti said. Buffett's assistant, Debbie Bosanek, confirmed the trip.
Buffett, 77, has been looking outside the U.S. to put his company's more than $40 billion in cash to work. Moratti said he is organizing the tour along with Eitan Wertheimer, president of Israel-based Iscar Metalworking Cos., acquired by Berkshire in 2006 in Buffett's first non-U.S. acquisition.
Monday, April 21, 2008
Saturday, April 12, 2008
Great Speech by Shimon Peres
Must watch!
Thank you to Ross Morgan for this link.