This week Consuelo Mack WealthTrack is joined by Bruce Berkowitz, founder and co-manager of the Fairholme Fund. The fund is given five stars by Morningstar for its top performing long-term record - an average annualized return of 13.0% since its inception in 1999, trouncing the market and most of the competition in the process. Bruce follows an unusual investment strategy which involves a highly concentrated portfolio and focus on cash. He also explains why he has brought Berkshire Hathaway back to the portfolio after selling it a couple of years ago.

Note: The transcript of this interview is not available yet, but will be posted here as soon as it arrives.

Source: Wealthtrack, November 13, 2009.

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• Home Depot (NYSE:HD) topped estimates by a nickel as earnings for the third quarter reached 41 cents, on inline revenues of $16.36 billion, down 8%. Comparable sales fell 6.9%. The company issued 2010 guidance of $1.55, slightly ahead of $1.53 projections. According to the firm, "There is still a great deal of pressure in the housing and home improvement markets, though there are some positive signs of stabilization."

• ExxonMobil (NYSE:XOM) shares were upgraded to "overweight" at Barclays Capital (NYSE:BCS)

• A regulatory filing showed Berkshire Hathaway (NYSE:BRK.A) nearly doubled its Wal-Mart (NYSE:WMT) holdings; added almost 112 million Wells Fargo (NYSE:WFC) shares; the filing showed a 1.28 million holding of ExxonMobil (NYSE:XOM) shares; and 3.2 million shares of SunTrust Banks (NYSE:STI)

• UBS (NYSE:UBS) CEO Grubel outlined an ambitious goal of annual pre-tax profits of $14.89 billion over the next 3-5 years

• Dillard's (NYSE:DDS) reported a smaller than expected third quarter loss,

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• Priceline.com (NASDAQ:PCLN) reported adjusted third quarter earnings of $3.45 a share, 55 cents above consensus estimates, on better-than-expected revenues of $730.7 million, ahead of estimates of $$693.97 million on strong summer season travel. The firm provided fourth quarter guidance at about $1.06-$1.16

• Electronic Arts (NASDAQ:ERTS) said it plans to cut 1500 additional jobs. The firm reported second quarter adjusted earnings of 6 cents, a one penny miss, on revenues of $1.15 billion, which slightly topped Street projections of $1.12 billion. The firm forecast 2010 earnings of $0.70-$1.00, topping estimates of 89 cents on revenues of $4.2-$4.4 billion versus estimates of $4.26 billion

• Cadbury (NYSE:CBY) rejected the latest Kraft (NYSE:KFT) bid calling it "derisory"

• Moody's (NYSE:MCO) commented that AIG (NYSE:AIG) will be able to repay its Federal loans

• Wells Fargo (NYSE:WFC) lifted its growth expectations for the semiconductor group following release of third quarter numbers. Intel (NASDAQ:INTC) remained its first

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U.S. stocks wobbled Tuesday and ended the day mixed even as automakers reported improved auto sales and Warren Buffet’s Berkshire Hathaway said it would buy Burlington Northern Santa Fe Corp.  Traders were reluctant to place big bets as they awaited the outcome of a two-day FOMC meeting which got underway Tuesday and Friday's monthly jobs report.  Although expectations are the Fed would keep interest rates in the 0-0.25% range, Wall Street has been speculating if there would be a change of tone in the policy statement. 

On Tuesday, the 30-stock Dow Jones industrial average closed down 17.53 points, or 0.18%, to 9,771.91.  The broad Standard & Poor's 500-stock index added 2.53 points, or 0.24%, to 1,045.41 and the tech-heavy Nasdaq advanced 8.12 points, or 0.40%, to 2,057.32.  On the NYSE, volume slowed to 1.38 billion shares.  

The news of a sale of 200 tons of gold to India sent

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Warren Buffett's Berkshire Hathaway (BRK.A) said on Tuesday that it is acquiring Burlington Northern Santa Fe Corp (BNI) for $44 billion. This is the biggest acquisition ever for Berkshire Hathaway. With this acquisition, Berkshire Hathaway is adding the railroad transportation business to its already diverse range of businesses including retail sales, insurance and financials, newspaper publishing, manufacturing, business services and several regional electric and gas utilities. Berkshire Hathaway, which already owns 22.0% stake in Burlington Northern, has offered $100 per share in cash and stock for the remaining portion of the holding. The transaction which is contingent on approval by two-thirds of Burlington’s outstanding shareholders is expected to close by first quarter of 2010. Burlington Northern will continue operating from its Fort Worth, TX headquarters. Berkshire Hathaway also announced that its Class B common share (BRK.B) will be split off into 50 ...

What If Jeremy Grantham is Right?

by Alexander Green, Chief Investment Strategist

Jeremy Grantham, president of investment management firm GMO LLC, has been getting a lot of press lately.

At the market’s top, he warned of an impending bear market. At the bottom in March, he forecast a historic rally. Today, he says the market is 25% overvalued.

Should you be worried? Perhaps not.

Let’s start with Grantham’s track record. He’s made a couple of good calls lately. But does he get it right all the time? Of course not. No one does.

But even if he’s right, it wouldn’t necessarily be negative. It all depends on your time horizon. Here’s why…

How Long-Term Investors Can Benefit From A Bear Market

If you own stocks on margin, call options, or LEAP options, a market downturn could be devastating. A 50%

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Encouraging economic data and Federal Reserve Chairman Ben Bernanke’s view that the recession was “very likely over" sent stocks higher for a second straight day.  A better-than-expected rise in retail sales, helped in part by the government’s cash-for-clunkers program and higher gasoline prices, eased concerns that consumers were spending with restraint. 

Speaking at a Brookings Institution conference, Bernanke, however, added a note of caution, saying, “Even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time."

This morning’s stock futures indicate Wall Street would open with gains, helped by increased M&A activity, optimistic guidance from companies, and words from Warren Buffett that Berkshire Hathaway (NYSE:BRK.A) is "buying stocks right as we speak."

Yesterday, the 30-stock Dow Jones industrial average gained 57 points, or 0.6%, to 9,683.41, its highest point since October 6. 

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It’s official: You can reduce your investment risk simply by chucking darts at a list of stocks, then buying them.

That’s if you believe a Nobel economist, of course. His crude “experiment” was the start of “modern portfolio theory” decades ago. The downside, however, was that with a reduction of risk came a dampening of profits. So scratch that idea.

How about this? A startling study in the late 1970s showed that owning a portfolio of large U.S. companies with international divisions drops your risk 10% below a domestic stock portfolio. Much better. But that wasn’t the eye-popper…

The study also found that owning stocks in international companies cuts your risk in half…

Take that, “efficiency” theorists! Yet the stuffy professors still tried to refute these results. It was a losing battle, though, as more studies emerged, laden with more evidence that international stocks reduce risk.

But the

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Early yesterday, Michigan-based Energy Conversion Devices, Inc. (ENER) declared that it has signed a multi-year supply agreement with Johns Manville, a Berkshire Hathaway (BRK.A) company. Energy Conversion will supply its UNI-SOLAR laminates for commercial roofs to Johns Manville.

The deal is mutually beneficial. For Energy Conversion, this increases its exposure in the rooftop solar technology apart from increasing its order backlog. The company will also be able to tap into Johns Manville’s customer base spread across the industry segments aerospace, automotive and transportation, air handling, appliance, HVAC, pipe and equipment, filtration, waterproofing, building, flooring, interiors and wind energy. For Johns Manville, this will facilitate its entry into the field of solar energy.

Johns Manville is a prominent manufacturer and marketer of premium-quality products for building insulation, mechanical insulation, commercial roofing and roof insulation, apart from fibers and nonwovens for commercial, industrial and residential applications. The company operates 40 manufacturing facilities

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Pending approval from the shareholders, IPC holdings Ltd. (IPCR) exclusively pointed to the storm-proof pact before selling itself to Validus (VR) for $1.65 billion stock and cash.

With the onset of hurricane season, IPCR wants to make sure that losses from hurricanes and tornadoes do not let Validus walk away from the deal. However, the risk-reward ratio is balanced. IPCR is well capitalized against the risk arising from hurricane losses.

Though there were more than a dozen bidders vying for ownership of IPC, most of them were unwilling to take the potential risk arising from the alliance. Validus took the bet.

Hurricane losses can severely impact the insurer’s profitability. Though IPCR’s second-quarter net income improved, storm losses can eat into the company’s profitability in the coming quarters. Depending upon the intensity of the hurricane, losses may outweigh the value of business underwritten.

Earlier in June, IPC’s amalgamation

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