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  • Buffett's bet against hedge funds

    Posted Jun 10 2008, 01:02 PM by Matt Koppenheffer
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    For those familiar with Berkshire Hathaway's Warren Buffett, it probably doesn't come as a shock that he's not keen on the idea of modern hedge funds and funds of hedge funds. In fact, if we flip back to Buffett's 2006 letter to Berkshire shareholders, we can read an amusing story that illustrates why investors are best off avoiding high fee money managers like the plague.

    Now Buffett is putting his money where his mouth is -- literally. Fortune's Carol Loomis recently revealed a wager that Buffett has set up with funds of hedge funds manager Protégé Partners that pits the S&P 500 index against funds of hedge funds. Specifically, the bet, which is being managed by Long Bets, reads "Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses."   Read More...

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  • Classic Buffett

    Posted Apr 28 2008, 01:00 PM by Matt Koppenheffer
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    "Classic Buffett." Those were the words that The Wall Street Journal's Deal Journal tagged onto the $23 billion deal for William Wrigley Jr. Candy maker Mars is buying the bulk of the company, but Berkshire Hathaway is taking a $2.1 billion minority interest in the deal and has also offered $4.4 billion in subordinated debt financing.

    The beautiful thing about this deal, though, is that it shows once again what makes Buffett, well, Buffett. It's a crazy market out there right now and there have been any number of rumors swirling as to where The Oracle of Omaha might throw some of his Berkshire billions. Certainly it wouldn't be something outside of his circle of competence like solar cells or software. He's not known for chasing after the hottest sectors either, so it's not surprising he hasn't been buying into mining or potash. And every rumor so far of him backing up one of the struggling financials has fallen flat.   Read More...

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  • Buffett bags Marmon

    Posted Dec 27 2007, 01:08 PM by Matt Koppenheffer
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    With so much speculation over what would be the next big move from Berkshire Hathaway's Warren Buffett, his announced purchase of a 60% stake in Marmon may have been a bit of a letdown for public market investors. After all, rumors this year included him taking big positions in Countrywide Financial and Bear Stearns -- both of which might've made investors reconsider the state of financial services stocks.

    As it is, the purchase is being seen as a vote of confidence for America in general from Buffett. And what of nobody seeing this one coming? Let's be serious here, Buffett's original thinking and great secrecy ahead of his investments have led to his great success -- if every Tom, Dick, and Harry had real insight into what he was planning to do, Warren might be in trouble   Read More...

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