By Mark Pason, at 2:47 pm on February 27th, 2009
Tomorrow, it’s Christmas morning for the Value Investing community, because the Berkshire Hathaway Annual Report is due to hit their corporate website. More importantly, this means a chance to read what Buffett has to say about corporate America, the current economic crisis and investing in general. We’d also like to know what the heck he saw in General Electric.
Buffett has been surprisingly quiet since his October 2008 New York Times Op-Ed piece. He’s had a rough year picking stocks, even with sweetheart deals on his Goldman Sachs and General Electric purchases. Wells Fargo, Bank of America, Coca-Cola and American Express did not fare so well either. A quick glance at Berkshire Hathway’s latest 13F filing will show that 2008 was not one of the Oracle of Omaha’s best years.
Even with Berkshire Hathaway’s stock at 2003 levels, it would be wise to listen closely to what Buffett has to say about the shape of our economy. CNBC is filled with empty suits, grand standing politicians and lots of noisy advice. What America needs right now is for someone like Buffett to tell us what we need to do to get out of this mess. Hopefully, tomorrow’s letter will let his followers know why he’s been so quiet recently.
By Mark Pason, at 11:16 am on February 27th, 2009
To make things even more uncomfortable for the likes of Citigroup Inc. and Bank of America, the FDIC reportedly needs to collect more money from the banks to ensure there are enough reserves for future failures.
The New York Times is reporting that the FDIC needs $27 Billion for 2009, as opposed to the $3 Billion they needed ast year. With less banks and less money out there, it will be interesting to see how the FDIC expects to get this money. Expect everyone to run to bathroom before this check shows up at the table.
On a positive note, in a brilliant move, the FDIC is using Suze Orman as a spokeswoman. She might be the only person left to trust these days, with her simple yet sound advice. Maybe what this country needs are less former Goldman Sachs people making decisions and more Suze Ormans doling out strategy.
By Robert Perrego, at 11:16 am on February 27th, 2009
A survey, or maybe it was a dart throwing contest, just released shows Rite Aid (NYSE: RAD) in the number 2 position as far as ‘HOT’ retailers go. On the list of the top 20 finishers Rite Aid not only has the largest loss by far but RAD is sporting a very healthy 24 cents a share stock price.
To put this in perspective, two shares of Sirius Satellite Radio (NSDQ: SIRI) is worth more than one share of Rite Aid. I think maybe the billion dollar loss for 2007 and the share price that costs less than a cheap video game puts Rite Aid on the First Aid Top 20, or maybe retail is in far worse shape than we all thought.
By Robert Perrego, at 10:57 am on February 27th, 2009
Microsoft has received a mountain of criticism since rolling out Windows Vista with many users paying software installers $100 more NOT to have Vista but to keep good old XP.
Silicon Alley Insider is reporting that Vista won the ‘Fiasco Award’ in Barceleona last night and it seems Microsoft knew it had problems as Windows 7 is coming as soon as September. Usually Microsoft likes to let their new platform season out on the market for awhile so they can sell the maximum amount. It seems no sooner was Vista out for that upgrade cycle and roundly criticized that another ‘newer’ version all of a sudden got announced. This seems to be a shorter time than usual and could be interpreted as tantamount to an admission of their mistake.
By Robert Perrego, at 10:45 am on February 27th, 2009
In a shocking bit of news the University of Michigan said its proprietary consumer sentiment index fell to 56.3 in February from 61.2 in January. Analysts expected a drop to 56.2 so it hit just about where expected – in the ‘pretty crappy’ zone.
In a completely unrelated and just slightly less surprising story – water is wet and consumer sentiment dropped this month.
