Buffet Calling Troubled Investors – Zacks Tale of the Tape
Source: http://www.zacks.com/stock/news/19782/Buffet+Calling+Troubled+Investors+-+Zacks+Tale+of+the+TapePosted on Sunday, May 3rd, 2009 | In Market Commentary, Stocks to Watch
Will Berkshire Hathaway (BRK.A) devotees hear words of hope and promise from Warren Buffet at the annual meeting in Omaha, Nebraska this weekend? It seems unlikely. Yet, America’s most respected investor is expected to draw an estimated 35,000 investors to the Midwest city for the event.
Shares of Berkshire Hathaway have slumped 40% to their lowest level since Buffet assumed office, and the net worth of the company shrank by 9.6% in 2008. As the world sank deeper into the worst downturn since the Great Depression, Buffet had warned investors that the economy would be in “shambles throughout 2009.”
“Most of the Berkshire businesses whose results are significantly affected by the economy earned below their potential last year, and that will be true in 2009 as well,” Buffett wrote in his annual letter to shareholders on Feb. 28.
Buffet has admitted to making some investment blunders of late. Of the more notable ones would be the move to buy into ConocoPhillips (COP) at a time when gas prices were near their peak, just before energy prices slumped. Such moves not only cost his business empire several billion dollars, but also stripped Berkshire of its triple-A credit rating.
However, Berkshire still has strong credit and plenty of cash. Moreover, with two-thirds of its businesses in utilities and insurance, Berkshire is expected to be more resilient in volatile times. The 78 year-old top boss of the group also played a key role in steadying the economy by injecting $8 billion into Goldman Sachs (GS) and General Electric (GE), calling them “the symbol of American business to the world.”
While everyone has been wondering about who will eventually succeed Buffet, as long as the Oracle of Omaha is still around, investors would value his insight more than ever during these troubled times.
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