Tuesday, March 31, 2009
Final Day: Submit Questions for the Buffett Top Ten List!
As John Lennon might have written, Warren Buffett was in the news today, oh boy.
Two weeks ago came the first ratings downgrade in Berkshire’s modern era, with Fitch unceremoniously replacing Buffett’s cherished Triple-A with a mere Double-A.
Buffett’s fans immediately came to The Oracle’s defense, naturally, pointing out that it was Fitch doing the downgrading, as opposed to Moody’s and S&P—you know, the geniuses who gave us all those Triple-A CDOs still smoldering beneath the wreckage of our financial house.
Still, the bad news didn’t end with the ratings downgrade.
Ever since the automakers were crucified for flying private jets to Washington to beg for a public bailout, America’s CEOs have been under enormous pressure to make like Regular Joes.
So much so that this morning’s Wall Street Journal carries a rather sad full page ad from NetJets, the Berkshire-owned jet timeshare business that must certainly be one of the worst-performing assets in the Berkshire pantheon—Shaw’s carpets and Acme bricks included—at the moment.
“Recently,” the ad begins, “much has been made of corporations and their private jet fleets,” as if we didn’t know. The copy then argues plaintively that private jets are “an important business tool,” and then pulls out all the stops: Buffett himself not only called NetJets “indispensable,” but he actually “bought the whole company.”
Not only does the ad come at the worst possible time in the relatively brief history of the private jet business, it happens to be in the same section of the Wall Street Journal that carries the story of Rick Wagoner’s unceremonious dumping from his CEO perch at GM—which story notes that Wagoner no longer flies in and out of GM’s own private jet terminal at the Detroit airport: he flies Northwest (first class, but, still, Northwest).
As full page ads go it’s probably the worst money Berkshire—and Buffett—ever spent, from a return-on-investment point of view.
Finally, even Buffett’s 9%-owned Coca-Cola is suffering the slings and arrows of outrageous economies today, with the same Journal reporting “Soda-Pop Sales Fall at Faster Rate” in a brief article in the B-Section, which notes that Coke is trying to arrest the slide with “new advertising and new packaging”—like that’s never been tried before.
Regardless of the bleak current news flow, Berkshire investors around the world are looking forward to the approach of the Berkshire shareholder meeting, the first weekend in May.
Approaching even faster is the April 1st deadline of our “Ten Questions for Warren Buffett” competition, in which we’ve asked readers to submit questions they’d like to see Buffett asked at the meeting.
And if our virtual mail is any indication, Buffett is going get some doozies—provided, of course, the Top Ten Questions that we submit to Andrew Ross Sorkin at the New York Times, who will be one of three reporters asking questions of The Oracle—make that reporter’s own high standards and get asked at the meeting.
The most popular topic by far has, thus far, been Buffett’s eyebrow-singing sale of index puts at market peaks. Other topics include:
1. That dreadful Conoco investment Buffett himself bemoaned in his recent letter;
2. Obama and the new administration’s economic and fiscal policies;
3. Whether owning Wells Fargo or any other large, opaque financial can be considered within one’s “circle of competence.”
Missing almost entirely—a surprise, we think—are questions about General Re’s dealings with AIG, and questions about Berkshire’s non-insurance businesses.
So take another look at the annual report that just hit your mailboxes last week, and submit your questions by tomorrow.
I Am Not Making This Up
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Posted by Jeff Matthews at 11:27 AM