Berkshire Profit Rises 40 Percent (by selling off U.S. Dollars)

[Up2Late]

Sat Mar 5, 2005 12:53 PM ET

By Jonathan Stempel

NEW YORK (Reuters) - Berkshire Hathaway Inc. (BRKa.N: Quote, Profile, Research) (BRKb.N: Quote, Profile, Research) , the holding company run by Warren Buffett, said on Saturday that quarterly profit surged 40 percent, helped by more than $2.3 billion of investment gains as the billionaire successfully bet the U.S. dollar would fall.

For the year, profit fell 10 percent as earned insurance premiums declined. Buffett, in his annual letter to Berkshire shareholders, said he increased his bet on a falling dollar and wants to deploy more of Berkshire's $43.4 billion of cash. (clip)

Buffett, who is 74 and known as the "Oracle of Omaha," is the world's second richest person according to Forbes magazine, with a net worth of about $42 billion.

FOREIGN CURRENCY CONTRACTS UP

In his annual letter, Buffett said Berkshire increased its stake in foreign currency contracts to $21.4 billion, in 12 currencies, from $20 billion on Sept. 30.

Buffett has wagered against the U.S. dollar since 2002 amid concern about rising U.S. trade and budget deficits.

Last year the trade deficit rose 24 percent to a record $617.7 billion, while the budget shortfall was a record $412.3 billion. President Bush last month projected the budget deficit will rise to $427 billion in fiscal 2005.

(more at link)
<http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=7816321&pageNumber=1>

[despairing optimist]

1. Currency speculation is not value investing. Very un-Buffett.

As if anyone needed further confirmation, these are strange times. Next Buffett will sign on William Bennett as CFO.

[madmark]

13. He's publicly commented on how bad the Bush fiscal policies are

and is simply investing based on those bad policies coupled with the trade deficit which are strong downward pressures on the dollar.

[madmark]

14. I would be surprised if Soros was not doing the same

[anarchy1999]

18. Actually I believe Buffet let it be known before or right at the same

time as Soros. It was last year, I think. I don't have time to go and do the research but Buffett told his stockholders this was something he had never done before, but that the time had come. He was going to shed dollars for foreign currency.

Don't ever think for one minute that Soros and Warren are in the same camp. That would be the biggest mistake you could ever make.

Please don't forget where Warren and many CEO's were on 9/11/2001, waiting for Bush to arrive at Offutt(Sp?)? Base for a special meeting of investors.

[acmavm]

2. What can you say about the financial policies of those running this

country when it becomes a wise and profitable business decision to bet against our own currency? This would be hilarious if it wasn't so sad. Dump the dollar big time to score a profit.

[RawMaterials]

4. he is also looking to use his 43 billion in cash that

is sitting on the sidelines to purches more companys to add to his portforlio. but cant find anything worth investing in.

"My hope was to make several multi-billion dollar acquisitions that would add new and significant streams of earnings," Buffett said in his annual letter to Berkshire shareholders. "But I struck out."

ACQUISITIONS

Berkshire wants to make a $5 billion to $20 billion acquisition. It is generally seeking companies, in part, with at least $75 million of pre-tax earnings, consistent earning power, good returns on equity with little debt, and easy-to-understand businesses.

Recent acquisitions have included food distributor McLane Co., purchased from Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) for $1.5 billion in 2003, and mobile home builder Clayton Homes Inc., bought that year for $1.7 billion.

"What Charlie and I would like is a little action now," Buffett said. "We don't enjoy sitting on $43 billion of cash equivalents that are earning paltry returns. Instead, we yearn to buy more fractional interests similar to those we now own or, better still, more large businesses outright."

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh54024_2005-03-05_21-16-23_n05658640_newsml

"My hope was to make several multi-billion dollar acquisitions that would add new and significant streams of earnings to the many we already have. But I struck out. Additionally, I found very few attractive securities to buy. Berkshire therefore ended the year with $43 billion of cash equivalents, not a happy position," Buffett wrote.

http://money.cnn.com/2005/03/05/news/fortune500/berkshire_earns.reut/index.htm

He is kind off being forced to bet agesnt the us currnecy, becasue of *'sh stupid fiscail poilcy, i thought the repugs were supposed to be good business men, guess not if they like *'sh he has failed at every busness he has tried to run.

[RawMaterials]

5. or succeeded at every business he has tried to ruin n/m

[Career Prole]

7. He bought mobile home builder Clayton Homes Inc. for $1.7 billion.

Buy mobile homes and sell dollars. He's got shrub pegged, alright!

[Voltaire99]

17. Yes, says it all.

Shrubmobiles for the new downwardly mobile.

[Spinzonner]

3. the new George Soros ?

[blm]

6. I hope Buffett uses the extra money to buy some media outlets.

We NEED a real news media in this country.

[Guaranteed]

8. The trade deficit rose 24% last year.

Unbelievable.

[TahitiNut]

9. "the budget shortfall was a record $412.3 billion" including SS surplus!

The projected 2005 budget deficit shown doesn't include the Iraq/Afghanistan proposed "supplemental" spending of $80+ billion, which will put it wayyy over $600 billion ... closing in on $700 billion!! (The 2006 budget proposal is a vicious joke.)

[Up2Late]

11. I heard the other day on Marketplace that...

...if you added in the $150 Billion or so that * is "Borrowing" from the SS trust fund, that $412.3 Billion number to nearly $600 Billion actual debt, even before adding in the "supplementals," or is that the same as what you 're saying?

And lets not forget the National Debt, currently at:

03/03/2005 $7,727,838,587,832.87
<http://www.publicdebt.treas.gov./opd/opdpenny.htm>

or if you like counters, check this link:
<http://www.toptips.com/debtclock.html>

Happy Day's are Here again, NOT!:evilfrown:

[TahitiNut]

12. That's what my graph says. That's why I display it.

:shrug: And here's the Federal Debt ...

[Up2Late]

10. Life is SO MUCH Better than the Bad ol' Days of The Clinton Years

(From BBC News On-line, an most of the links still work!)

Friday, November 12, 1999 Published at 15:02 GMT

Business: The Economy

US dream scenario continues

The productivity of workers in the US rose sharply in the third quarter of this year, keeping growth in labour costs in check.

The official figures, compiled by the US Labour Department, suggest benign inflationary pressures just days before the next monetary policy meeting at the Federal Reserve looks at the level of US interest rates.

Productivity, measuring the output per hour of workers outside the farm sector, rose at an annual rate of 4.2% in the quarter from July to September, the department said.

That was the fastest productivity rate since a 4.4% gain in the first quarter of last year and followed weak growth of just 0.6% in the second quarter of the year.

The figure was well above market expectations of 3%.
(more at link)
<http://news.bbc.co.uk/1/hi/business/the_economy/517441.stm>

[cliss]

15. Of course, when you're Warren Buffet,

you can move markets all by yourself. So the fact that Mr. Buffet gave a thumbs-down on the dollar, probably caused it to drop further in the toilet.

And who can blame him? Even Bill Gates came out about 1 month ago, saying the same thing. When really big market players come out and say these things, you know they will have a self-fulfilling prophecy.

George Soros said the same thing last year. Of course, he had a little more vendetta against BeetleBrain.

So what's next, Smart People of the DU? Any predictions?

[RawMaterials]

16. the only reason that gates said that 1 month ago

was because he is on the board of directors for buffits company breakshire and halthway. so dont get it confused. gates is not buffit when it comes to policy.