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Warren Buffett: Genius or Thief? (old, but must read!)
The Disciplined Investor ^ | 2 October 2008 | Andrew Horowitz

Posted on 09/19/2011 1:18:49 PM PDT by MegaSilver

According to Bloomberg and other sources around the web:

Buffett’s Berkshire Hathaway Inc. agreed to buy $3 billion in preferred shares that pay an annual 10 percent dividend and are callable after three years at a 10 percent premium. GE also said it will sell $12 billion in common stock, gathering more cash to fund operations.

Somehow, this is a new program/sales pitch to build confidence in the stock by showing that the world’s savviest investor bought into the company. This is clearly designed to entice investors as the company is looking to raise money through some kind of stock offering. Preferred stock offerings are the latest craze as they do not cause dilution and are seemingly expendable. Is that fair?

Maybe we should look at the sweetheart deal the Mr. Buffet received as a simple endorsement fee. (Goldman Sachs (GS) deal was similar in all regards). Is that fair?

Don’t be upset if you do not get the same seal on the GE share offering that Mr. Buffett received. Yours will not come with any guarantees or warrants. The shares that you buy will also have a yield far less than the 10% Mr. Buffett received. Is that fair?

Oh, by the way, have you looked at the performance of Berkshire Hathaway lately? The Bailout(s) of the financial sector have been very, very good to him! Is that fair?

On October 1, Barron’s ran this:

Shares of General Electric (GE) have fallen 8%, pacing the decline in major market averages, as the conglomerate finds itself in the awkward position of defending its capital basis just a week after admitting that its quarter wasn’t going to live up to expectations. Appearing to respond to market chatter suggesting that the debt markets might have shut down for its GE Capital operation, GE said that its commercial paper funding has gone smoothly, and has seen ”no disruption” to its funding. GE said it had no plans to draw down its bank lines as a means of replacing any dents in its access to the debt markets. Still, the cost of insuring GE debt against default swelled notably Wednesday, as the company’s credit default swaps shot up 125 basis points, climbing to 740 basis points at its high for the day, according to Bloomberg. Meanwhile, Deutsche Bank lowered its earnings forecasts for the company, and said it expected earnings to decline in 2009 versus this year, because of the tightness in the capital markets and the shrinkage of some assets at its GE Capital operation. Deutsche said that, under its assumptions, GE looked expensive.

TOPICS: Business/Economy; Miscellaneous; News/Current Events
KEYWORDS: bailout; recession; taxes; warrenbuffet; warrenbuffett
My money is on thief: I don't make it a secret that I really, strongly dislike Warren Buffet, not because of his political worldview, but because I cannot suffer the sanctimonious social moralizing of a man whose entire fortune is built on robber barony and who has never added ANYTHING of value to the world economy. Nevertheless, his political views are very revealing. From Warren Buffet needs to shut up:

"I’m sure you wouldn’t mind it if they raised taxes, Warren. After all, you (and all of your super-rich oligarchical friends like Bill Gates and Rockefeller) are exempt from all of the taxes that y’all wrote into the tax code.

"Folks, when they talk about raising taxes on “the rich”, they ain’t talking about people like Bill Gates, Warren Buffet, etc. They’re talking about a couple that make $250,000 a year or more. With food, fuel, and other living expenses costing as much as they do now, let me tell you something… those people aren’t rich. What guys like Buffet are doing is promoting a false class warfare. With fourty-four million people on food stamps, it’s easy for obligarchs like them to say “Hey, let’s get those guys!”, but before long, they’ll be directing the welfare hoards at you and your family too. If you really want to tax the rich, tax people like Buffet or Gates; because in the end, it’s going to be either them or us....

"Warren Buffet is pretending to be a generous, caring individual, when really he’s trying to push other people around by creating a false image of what it means to be wealthy...

"If you want to tax people who are harmful to society, tax those people who lie, cheat, and create loopholes in tax laws so they can maintain their entrenched plutocracy."

I would add to that: end ALL tax deductibility for charitable contributions and revoke ALL non-profit status for any organization that is not primarily a house of worship, a cemetery or a regular school. Time for greedy NGO directors (along with their bankrollers, the Soroses and Buffets) to get a taste of the real world hell they've been lobbying for for everyone else. As Martin Hutchinson put it on Prudent Bear last December:

"When some leftist billionaire like Warren Buffett calls for higher taxes, or advocates the retention of the estate tax, my blood boils. However worthy the Bill and Melinda Gates Foundation, if as he plans Buffett leaves it a legacy of some $30 billion his estate will pay no estate tax on that amount. That will deprive the Treasury of about $12 billion in revenue, which must be made up by the rest of us, who lack Buffett's means."

1 posted on 09/19/2011 1:18:52 PM PDT by MegaSilver
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To: MegaSilver

He’s a hypocrite. Everything he says and does is for his benefit. When he says he wants rich people to pay higher taxes, he means the rich people below himself. He will continue to shelter his money from taxes.

2 posted on 09/19/2011 1:29:09 PM PDT by Moonman62 (The US has become a government with a country, rather than a country with a government.)
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To: MegaSilver

Buffet has opened his mouth one too many times for me.

3 posted on 09/19/2011 1:43:39 PM PDT by Vendome (Don't take life so seriously, you won't live through it anyway)
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To: Vendome
Buffet has opened his mouth one too many times for me.

Just one?

4 posted on 09/19/2011 2:20:19 PM PDT by MegaSilver
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