Is this what differentiates between a pro and a jinx?
<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>September 20, 2008, 12.55 pm (Singapore time)
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Buffett may have US$3.5b 2-day financials profit
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NEW YORK - Warren Buffett's Berkshire Hathaway, which has avoided major acquisitions in the financial sector in recent months, may have had a US$3.5 billion two-day paper profit on six major banking and financial services investments.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Mr Buffett has long favoured investments in undervalued businesses with strong earnings and management</TD></TR></TBODY></TABLE>The two-day rally in financial shares, which drove the broad S&P Financials Index 24 per cent, came as the government announced sweeping measures to rescue the financial system and restore confidence in shaky markets.
Shares of Wells Fargo & Co, the fifth-largest US bank and Berkshire's second-largest investment as of June 30, rose 19 per cent over the last two days and touched a record high. That would have given Berkshire a US$1.85 billion paper profit on its reported 290.7 million share stake.
Berkshire would also have had a US$1.12 billion profit on its reported 151.6 million share stake in American Express Co, the credit card and travel services company. Stakes in Bank of America Corp, M&T Bank Corp, SunTrust Banks and US Bancorp also gained value.
Mr Buffett has long favoured investments in undervalued businesses with strong earnings and management. That has helped him transform Berkshire since 1965 from a failing textile maker into a conglomerate with at least 76 companies.
'He's always felt Wells was very well-managed,' said Frank Betz, who oversees more than US$800 million at Carret/Zane Capital Management LLP in Warren, New Jersey. 'Why does he like banks? Like Willie Sutton said, it's where the money is.'
Banks and financial services companies accounted for about one-third of Berkshire's US$57.9 billion of US-listed equity holdings as of June 30. Berkshire generally discloses these holdings only in the middle of each calendar quarter.
At Berkshire's annual shareholder meeting on May 3 in Omaha, Nebraska, Mr Buffett said that in banking, 'you need someone at the top whose DNA is very very much programmed against risk'.
He didn't agree this week to help bail out the insurer American International Group (AIG), which agreed to an US$85 billion government rescue after being felled by exposure to complex debt known as credit default swaps. Mr Buffett has called derivatives 'financial weapons of mass destruction'.
Diversification
Berkshire generates about half its business from insurance, but is diversifying through acquisitions in other sectors.
On Thursday, it announced a tentative agreement for its MidAmerican Energy Holdings Co affiliate to buy Constellation Energy Group for US$4.7 billion in cash, after worries about trading bets caused the power supplier's shares to fall by more than half this week.
Earlier this year, it paid Chicago's Pritzker family US$4.5 billion for 60 per cent of Marmon Holdings, which makes such things as railroad tank cars, pipes, fasteners and wiring.
Berkshire also committed US$6.5 billion to help Mars buy chewing gum maker Wm Wrigley Jr Co, and agreed to invest US$3 billion as part of Dow Chemical Co's purchase of specialty chemicals maker Rohm and Haas Co.
Forbes magazine this week said Mr Buffett is worth US$50 billion, making him the second-richest American, trailing Microsoft Corp co-founder Bill Gates.
Berkshire Class A shares rose more than 8 per cent on Friday on the New York Stock Exchange, until a late trade boosted the gain to 14.8 per cent, or US$18,990, for a close at US$147,000. The Class B shares closed up US$345 at US$4,595.
A Big Board spokesman did not immediately return a call seeking comment. -- REUTERS
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<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>September 20, 2008, 12.55 pm (Singapore time)
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Buffett may have US$3.5b 2-day financials profit
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>NEW YORK - Warren Buffett's Berkshire Hathaway, which has avoided major acquisitions in the financial sector in recent months, may have had a US$3.5 billion two-day paper profit on six major banking and financial services investments.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Mr Buffett has long favoured investments in undervalued businesses with strong earnings and management</TD></TR></TBODY></TABLE>The two-day rally in financial shares, which drove the broad S&P Financials Index 24 per cent, came as the government announced sweeping measures to rescue the financial system and restore confidence in shaky markets. Shares of Wells Fargo & Co, the fifth-largest US bank and Berkshire's second-largest investment as of June 30, rose 19 per cent over the last two days and touched a record high. That would have given Berkshire a US$1.85 billion paper profit on its reported 290.7 million share stake.
Berkshire would also have had a US$1.12 billion profit on its reported 151.6 million share stake in American Express Co, the credit card and travel services company. Stakes in Bank of America Corp, M&T Bank Corp, SunTrust Banks and US Bancorp also gained value.
Mr Buffett has long favoured investments in undervalued businesses with strong earnings and management. That has helped him transform Berkshire since 1965 from a failing textile maker into a conglomerate with at least 76 companies.
'He's always felt Wells was very well-managed,' said Frank Betz, who oversees more than US$800 million at Carret/Zane Capital Management LLP in Warren, New Jersey. 'Why does he like banks? Like Willie Sutton said, it's where the money is.'
Banks and financial services companies accounted for about one-third of Berkshire's US$57.9 billion of US-listed equity holdings as of June 30. Berkshire generally discloses these holdings only in the middle of each calendar quarter.
At Berkshire's annual shareholder meeting on May 3 in Omaha, Nebraska, Mr Buffett said that in banking, 'you need someone at the top whose DNA is very very much programmed against risk'.
He didn't agree this week to help bail out the insurer American International Group (AIG), which agreed to an US$85 billion government rescue after being felled by exposure to complex debt known as credit default swaps. Mr Buffett has called derivatives 'financial weapons of mass destruction'.
Diversification
Berkshire generates about half its business from insurance, but is diversifying through acquisitions in other sectors.
On Thursday, it announced a tentative agreement for its MidAmerican Energy Holdings Co affiliate to buy Constellation Energy Group for US$4.7 billion in cash, after worries about trading bets caused the power supplier's shares to fall by more than half this week.
Earlier this year, it paid Chicago's Pritzker family US$4.5 billion for 60 per cent of Marmon Holdings, which makes such things as railroad tank cars, pipes, fasteners and wiring.
Berkshire also committed US$6.5 billion to help Mars buy chewing gum maker Wm Wrigley Jr Co, and agreed to invest US$3 billion as part of Dow Chemical Co's purchase of specialty chemicals maker Rohm and Haas Co.
Forbes magazine this week said Mr Buffett is worth US$50 billion, making him the second-richest American, trailing Microsoft Corp co-founder Bill Gates.
Berkshire Class A shares rose more than 8 per cent on Friday on the New York Stock Exchange, until a late trade boosted the gain to 14.8 per cent, or US$18,990, for a close at US$147,000. The Class B shares closed up US$345 at US$4,595.
A Big Board spokesman did not immediately return a call seeking comment. -- REUTERS
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