The Oracle made a move today and we were the beneficiaries. I really want to believe that Warren Buffett is a honest, hard-working billionaire, but does anyone believe that to get to his position in life you can be honest? I wonder the more I follow him. Just a month or so ago he proclaimed that the stock market in the United States will not deliver the same historical returns and the recession would continue for some time. He likened the United States to a farm that keeps selling off its assets to pay bills. Yet here he is buying Wrigley. Makes you wonder doesn’t it?
Be that as it may, Wrigley made a huge jump today in the Thoroughbred Folio. The stock was up 23% after Mars and Berkshire announced they would be purchasing the company and taking it private. Who am I to complain?
We also had a couple of dividends roll in this week. Fifth Third Bancorp continues to throw off impressive dividends in the face of the industry storm. Old reliable General Electric sent us the second dividend check since we have been shareholders as well, raising our grand total of dividends over the 1% mark. Yay.
The Thoroughbred Folio has come back strong again continuing to show resilience in this market environment. It should come as no surprise that Wrigley shot up the Folio to take the second spot. Nucor continues to dominate as steel prices show no sign of slowing down. A bank has actually broken into the top three as M&T Bank Corp barely edged out Family Dollar for third place.
Gannett continues to struggle at the back of the pack. Fifth Third still finds itself in the lower three despite the fact that this bank still posted a profit and still continues to hold its dividend steady. Clorox rounds out the bottom three ahead of their earnings call on May 1.
Thoroughbred Performance (Week 19 of 52): $-60.65 (-2.02%)Dividends To Date: $31.05
Top 3 Stocks
- Nucor Corp $23.36 (31.15%)
- WM Wrigley $20.71 (27.61%)
- M&T Bank Corp $11.72 (15.63%)
Bottom 3 Stocks
- Gannett $-14.55 (-19.40%)
- Fifth Third Bancorp $-11.74 (-15.65%)
- Clorox $-11.29 (-15.05%)
Stocks used in this post:
- (CLX: 53.21, +1.26%, Yield: 3.04%)
- (FITB: 10.56, -0.85%, Yield: 13.62%)
- (GCI: 19.60, -1.16%, Yield: 8.07%)
- (GE: 26.91, +1.51%, Yield: 4.56%)
- (MTB: 71.48, -3.22%, Yield: 3.79%)
- (NUE: 62.54, +0.97%, Yield: 3.65%)
- (WWY: 77.78, +0.05%, Yield: 1.55%)
April 30th, 2008 at 8:55 am
Your criticism of Warren Buffet is unwarranted. He has remained positive on the long term outlook of the US economy throughout this cycle. I saw an extended interview with him a week or two ago and he never said that investing in US companies was a bad idea. In fact he strongly advocated (as he has for many years) investment in US index funds for average Americans. He said never to underestimate the power and resilience of the US economy.
Mr. Buffet has bought bargains throughout his career and there is nothing inconsistent in his current activity that I can see.
April 30th, 2008 at 9:23 am
Thanks for you comment, Brian. I didn’t see the interview you are speaking about, but I did go over the transcript from CNBC from March 7.
He does say we are selling off our assets and that he is investing in cheap companies that make their money in other currencies. Maybe Wrigley is one of those companies.
My impression from watching him and then reading over his transcript is that he is not bullish on the American economy, at least in the short term. Perhaps that is where we disagree.
May 2nd, 2008 at 8:38 am
Jake,
If you ever happen to stumble upon his( Buffets) early partnership letters, you will see that ever since the mid 1960’s he’s been forecasting lower average annual returns for the US stock market. Luckily ( for him) he is in the business of buying businesses cheap, and not in the forecasting business.
May 2nd, 2008 at 5:05 pm
Both of his responses below are bullish (but not glowing) on the long term prospects for the American economy. He doesn’t advocate buying chinese companies or fleeing from the market.
If saying that the market will revert to the mean (i.e. have lower performance to compensate for its excellent 80’s and 90’s performance) then Jack Bogle and most of academia are a pack of crooks.
And actually he’s correct if you compare the level of the market today to where it was at the peak before the internet bubble burst we have had pretty lousy price performance for the indexes.
Anyway, I enjoy your blog so please don’t take this as an attack. I just thought somebody should respond to your characterization of Mr. Buffet as dishonest because he offers his opinion and at the same time continues to do what he’s done all his life.
BUFFETT: Yeah. I–overall in terms of that–I think everybody should read Jack Bogle’s book. Low–what you really want to do is you want to own an American industry which is going to do fine over time, but you want to make sure you don’t put all your money in at once because you might pick just the wrong point.
BUFFETT: I’m only 99 percent Berkshire myself, so I never go 100 percent. Well, I think if you buy equities across the board, which means an index fund, and if you do it over time so that you don’t put all your money at the wrong time, and it’s a low cost index fund, that’s probably the best investment that most people could make. Mm-hmm.