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Tag: warren buffett

Berkshire Hathaway and Warren Buffet’s 2009 Annual Shareholder Statement

Warren Buffett has again given us his great knowledge into the future and all things beyond.  His 2009 statement provides his thoughts on the future of the United States, which is positive and his thoughts on the events that have occurred at Berkshire Hathaway for the past year.  He’s positive for the future of the US economy.  He even states that his company Clayton Homes will become more profitable.  His theory is that the amount of ‘housing starts’ has bottomed out.  He shows the amount of homes being built has decreased largely for the 2009 year.  This means the housing inventory is kept stable allowing for the foreclosed homes to be bought.  This stabilizes the housing prices and keeps current home owners from turning off their house.

Since the 50-to-1 split, Berkshire Hathaway has been making a sudden move up.  The price of the stock makes it an easy buy for index funds and mutual funds to add it in their profile.  As the stock improves, it will eventually move into the S&P 500.  This in turn will make S&P funds purchase more of it.  Hence you see the price moving up even with this bad economy.

I’ll be posting another article in the next day of a company that performs similarly to Berkshire Hathaway. They follow the same philosophy and are a pretty ‘unknown’ company to many. It should be a good investment opportunity for people that want a safe investment.

Charlie Munger and the Death of Capitalism

Just like his cohort Warren Buffett, Charlie Munger has stories to tell himself.  There’s been a lot of discussion of the one he recently posted about the ‘Death of American Capitalism.’  To sum it up, he states that America’s time is over.  The global economy will grow and we will finally have to take a step on the sidelines.  He also states that it’s all downhill from here.  He says the ‘financial derivatives of mass destruction’ will continue to spoil ‘Wall Street’ to gamble their money in ‘bucket shops like the 1920s’.  This will have a mass effect giving ‘25% of our GDP’ to the casinos and a profit of 22% to the casinos.

Charlie and Warren Buffett are the biggest capitalist and most powerful ones running the US engine.  They would both like to continue this engine moving forward, but Charlie’s article is made towards gaining an audience and giving a conclusion to a path that we can still solve.  The government might have to step in and prevent some of this ‘free market’ like these derivatives from occurring in the future.  There are already steps in place like separating banks from being brokerages.

His article is mostly to tell a future that he does not want to see but it possibly might happen.  We can do everything to stop it, but there will be gambling.  We will be heading towards a lower status in the global market.  Other countries will finally have their time to prosper.  However, if we can keep pulling through engineers, we can continue to have our time.  We’ve had economic problems every decade.  We’ve always found a way to break through with innovation and creativity.  We just need that magic system again.  It won’t come through manufacturing like it has in the past.  It will be through green energy, advanced technology, something the world needs and something only Americans would think of.

Here’s the article with his story: http://www.slate.com/id/2245328/pagenum/all/
and Marketplace’s interpretation