Buffett is Buying!!!!!!
Shares of Target gapped open this morning and traded up to a 52-week high as breathless traders piggy-backed a filing made by Berkshire Hathaway reporting a large stake in the company.
But investment legend Warren Buffett probably is not behind the purchases. The 2004 Berkshire annual report explains that GEICO’s Lou Simpson, an astute investor in his own right, manages approximately $3 billion with Buffet’s blessing. And it appears he has the authority or wherewithal to establish positions up to the $300 million mark…
the Oracle of Omaha opines…
Even then, it is not typically I who makes buying decisions. Lou Simpson manages about $2.5 billion in equities that are held by GEICO, and it is his transactions that Berkshire is usually reporting. Customarily his purchases are in the $200-$300 million range and are in companies that are smaller than the ones I focus on.
You may be surprised to learn that Lou does not necessarily inform me about what he is doing. When Charlie and I assign responsibility , we truly hand over the baton-and give it to Lou just like we do to our operating managers. Therefore I typically learn of Lou’s transactions about 10 days after the end of each month. Sometimes, it should be added, I silently disagree with his decisions. But he is usually right.
Given that the position is smack dab in the middle of Simpson’s sweet spot, it is likely investors are chasing Lou’s pick not Warren’s.
Wonder if Warren likes this one.
The Little Book That Could
The diminutive category of “little books” by value investors is getting a bit crowded with the recent release of Christopher Browne’s Little Book of Value Investing. Browne, a charter member of the lucky sperm club, works at the eponymously named firm Tweedy, Browne Company LLC, which is one of the more stable and successful buyside shops on the street. Solid citizens all around in our eyes.
Morningstar offers up an explanation of the investment genre, if you will, practiced by Browne and his slow money group...which reminds us of the Ohio State football teams under Woody Hayes...three yards and a cloud of dust. Not very sexy, but it gets the job done and builds dynasties.
Morningstar concludes with an excerpt from the book, where the silver spoon himself offers up a nugget of advice that, if followed, should keep the benjamin’s flowing to his firm.
Browne states the following…
I prefer funds where the individuals running the fund are also the owners of the investment management firm.
Eddie Lampert Superhero
Eddie Lampert needs no introduction to regular readers of UTC. His investment prowess is the stuff of legend...and his interests in Kmart and later Sears, Roebuck formed a retailing colossus. Of course, it was his escape from kidnappers that cemented his fame. Andy Serwer pretty much summed up the incident in an appearance on the now defunct Wall Street Week
He was always a private, very secretive even kind of guy, and this was just accentuated dramatically. In January of 2003, last year, four thugs kidnapped Lampert in his parking garage in that suburban Connecticut business park where he works. They gagged him, bound him up, threw him in the back of a Blazer, drove him up Route 95 in Connecticut up to New Haven, and they put him in a Days Inn, a cheap hotel outside of New Haven, put him in the bathtub and threatened to kill him if he didn’t pay them ransom money. He was terrified. He thought he was going to die. And he somehow talked his way out, and they also then tracked the kidnappers, because the kidnappers used his cell phone, Lampert’s cell phone and credit card to order a pizza. So there is a little bit of an element of preposterousness. But you know these guys, these kidnappers are very scary. They typed into Google, say, you know, richest person in Connecticut, and Eddie Lampert’s name came up, and they tracked him down.
Idol Worship is one of the few constants on Wall Street....and Eddie is always in vogue. We believe the following video chronicles Eddie, trading under the pseudonym “Mr. P”, interacting with his head trader Stewart as they buy a block of Kmart stock early in their accumulation of the shares.
This rare archival footage is of major historical significance and should be of interest to all the foot soldiers in Eddie’s Army.
No relation to Arnie’s Army
Junk Food for Thought
Back in the late 90’s when the dissemination of information was a little different than the vortex we now spin around in everyday, Herb Greenberg was probably the man most feared by long managers on the street. The CFRA’s Howard Schilit was certainly a close second.
Herb effectively used his bully pulpit at thestreet.com to lay waste to pretty much anything he put his mind to. If Herb hit a position of yours with his hatchet, you were looking a bad day and months of hand-to-hand combat with the shorts. Of course, Herb now writes for MarketWatch.com.
He just does not carry the same impact that he used to...although we still enjoy keeping tabs on the Herbinator.
Herb is ranting today about about what would appear to be a case of front running an analyst move in the shares of Krispy Kreme.
Now hear this: An hour-and-a-half after the close a report by Prudential Equity Group analyst Howard Penney hit First Call with his initiation of coverage with an overweight rating and a 12-to-18 month target of $15. The report, dated Thursday, uses Thursday’s closing price. Never mind that in a market like this a report like that can set a fire under a stock, even if it’s undeserving. (And I’m not saying it is or isn’t—or if a recommendation of a company like Krispy Kreme is yet another sign of a toppy market.) A bigger question here, your honor—as the headline on this post said—is who knew what when? Something tells me we will find out.
Yawn...It must be a slow news day on the west coast. Chill out and enjoy the weekend Herb.
