Buffett’s Berkshire falls below $100,000/share

New York: Shares of Warren Buffett’s Berkshire Hathaway Inc fell below $100,000 on Thursday for the first time since October 2006, after the company revealed large unrealized losses on derivative contracts tied to the stock market’s performance.
Berkshire’s Class A shares fell as much as 7% to $96,050, before recovering along with the broader stock market. Though major stock indexes ended more than 6 percent higher, Berkshire stock closed down $533, or 0.5%, at $102,800.
On Friday, Berkshire reported a 77% decline in third-quarter profit, with much of the drop attributable to falling insurance premiums and to paper losses on contracts tied to the performance of stock market indexes.
Berkshire estimated that shareholder equity fell about $9 billion in October, reflecting exposure to the derivative contracts and to other investments. It ended September with $76 billion of stock and $29.6 billion of fixed-income holdings.
Buffett has said the derivative contracts expire between 2019 and 2027, and that he expects them to be profitable. In the interim, Berkshire is able to invest the upfront premiums it received by entering into the contracts.
Omaha-based Berkshire owns some 76 companies, and is best known for its insurance holdings such as auto insurer Geico Corp and reinsurer General Re Corp.
Berkshire shares have fallen 32.2% from their record high of $151,650 set last 11 December.

Berkshire Hathaway Q3 Operating Earnings Fall 19% To $1335/Share

Berkshire Hathaway's third quarter operating earnings fell 19.3 percent to $1,335 a share from $1,655 a share in the same period the year before.
That's below the average forecast of $1429 from the two analysts following the stock, as tracked by Thomson One Analytics.
Operating earnings for Berkshire's insurance-underwriting activities took a big hit, falling to $81 million from $486 million in the year-ago quarter.
Net earnings plunged 77 percent to $1.06 billion ($682 per share) from $4.55 billion ($2942 per share.) A big factor there are investment and derivative losses of $1.01 billion, compared to gains of $1.99 billion in last year's quarter. That year-ago period got a boost from Berkshire's profitable sale of PetroChina stock.
The derivative portion of the gains and losses are on paper only. Buffett has said the derivative contracts held by Berkshire will eventually be profitable, but right now they're losers.

Read more at CNBC

Indian IT trioka fit for Buffett's portfolio: S&P

NEW DELHI: The world's greatest investor Warren Buffett may have shied away from putting his money in Indian companies so far, but those fulfilling his investment criteria include at least three companies based here -- namely Infosys, Wipro and Satyam Computer.

Standard and Poor's, one of the world's biggest investment services providers that compiles a list of stocks meeting the legendary investor's appetite twice a year, has named the three of the biggest names in Indian IT space in the latest model portfolio.

The American Depositary Receipts of the three Indian IT giants have been named alongside global giants Microsoft, Oracle, Ericsson, Cisco Systems, Diageo, China Mobile and SAP.

Besides, the list also includes 3M Company, Altria, British American Tobacco, Mcgraw-Hill Company and Qualcomm.

Read more in The Economic Times