Posted on 10/26/2010 7:34:29 AM PDT by WebFocus
Warren Buffett hired 39-year old Todd Combs, a former Connecticut hedge fund manager with $400 AUM (assets under management), to oversee Berkshire Hathaway's portfolio.
From FOXNews:
"For three years Charlie Munger and I have been looking for someone of Todd's caliber to handle a significant portion of Berkshire's investment portfolio," Buffett said in a statement. "We are delighted that Todd will be joining us."
Combs previously worked at Castle Point Capital, where he managed just $400 million. Under Buffett, Combs will manage a “significant portion” of the investment portfolio, according to the firm.
What caught his eye? The Wall Street Journal says Combs' fund has returned 34% cumulatively since 2005
(Excerpt) Read more at businessinsider.com ...
Here Are The Stocks That Buffett’s Heir Apparent Is Invested In Right Now (Looks like most of it are FINANCIALS):
http://www.businessinsider.com/todd-combs-history-investment-castle-point-2010-10
39????? YIKES.
My youngest daughter has more money than that.
Journalism is a pathetic field.
hmm, they’re all bank/financial institutions, isn’t that dangerous?
It actually is 400 million...although I totally hope your daughter has more than that....I just wish I did too...lol.
Joe Biden says that the Republicans are spending $200B in this campaign season.
Nancy Pelosi said that 300 million Americans lose their jobs every month.
Obama said that a tornado in Kansas killed 10,000 people (actual death count: 12)
Al Gore said the internal temperature of the Earth is "millions of degrees".
And the current article literally says that this guy managed a hedge fund worth $400.
These people do not understand numbers. Politicians and Journalists lie about half the time, and the other half of the time they just say things that aren't so.
So much for Berkshire. This clown is a “shoot out the lights” fund manager, as is apparent from his concentration in one sector style.
Berkshire got where it is by doing two things:
1. Invest in REAL stuff. Financial companies don’t deal in REAL stuff. They deal in money, which is merely little bits of paper with numbers on them, passed back and forth between liars. Buffett was pretty wise in his investment strategy, he invested in companies making REAL stuff - eg, his most recent acquisition was Burlington Northern Rail. Trains are very real things, hauling very real stuff.
2. Diversifying across the economy. This guy shows no diversification. Here’s a little tip for all the investing noobs out there: Diversification is the only “free” protection you can obtain in the markets. Other little factoid: about 60% of a stock’s upwards or downwards move is actually due to the underlying sector - ie, you can make or lose about 60% of your gains by choosing the right sector. The rest comes from choosing a particular stock within that sector. This is why a hedge fund might load up so heavily on one sector, as this guy has done - but if you choose wrongly, there will come a day when you’ll have to sell or protect the entire portfolio in order to escape the beat-down in said sector.
heck--I've got more than $400. Hire me.
“invest in REAL stuff. Financial companies don’t deal in REAL stuff.”
Some major BH subsidiaries are:
Central States Indemnity [Insurance]; Gateway Underwriters Agency [Insurance]; GEICO Auto Insurance [Insurance]; General Re [Insurance]; National Indemnity Company [Insurance]; UCFS (United Consumer Financial Services - a unit of the Berkshire Hathaway subsidiary “Scott Fetzger Companies”) [Insurance]; United States Liability Insurance Group [Insurance]; Wesco Financial Corporation (includes Wesco Financial Insurance Company [Insurance], Kansas Bankers Surety Company [Insurance], as well as the non-financial industry companies CORT Business Services and Precision Steel Warehouse Inc.).
http://www.berkshirehathaway.com/subs/sublinks.html
And, Berkshire Hathaway financial statements for 2009, listing assets by business categories, lists $223 billion for “Insurance and Other”, $29 billion for “Finance and Financial Products”, for a combined insurance and finance total of $252 billion out of an overall total of $297 billion.
On the revenue side, for 2009, “Insurance” represented $93 billion, and “Finance and Financial Products” $8 billion, out of a total of $112 billion. Again, combined they represent the largest share of Berkshire Hathaway’s earnings.
http://www.berkshirehathaway.com/2009ar/linksannual09.html
So much for your idea that Buffet concentrates his dollars on companies that produce “real” stuff.
He DOES own a large variety of companies BUT insurance (”pieces of paper” on which income is earned by speculating on risk) and financial services ARE the largest of his investments, by dollar value.
You do know that somehow he’s put the “real stuff” inside the overall insurance operation, right?
I should amend that:
The utilities and retail/manufacturing that he owns outright are called out, but th equity investments in all the stuff like BNSF, Coke, Washington Post, GE, Wrigley’s, Dow, etc... those are in the insurance operation, as well as the holdings of Treasury/Muni debt, corporate paper, cash, etc.
“The utilities and retail/manufacturing that he owns outright are called out, but th equity investments in all the stuff like BNSF, Coke, Washington Post, GE, Wrigley’s, Dow, etc... those are in the insurance operation, as well as the holdings of Treasury/Muni debt, corporate paper, cash, etc.”
Yes, those equity investments (in “real things”) - by his many subsidiaries - are investments backing up the risk taking he is doing in his highest revenue earning businesses - creating revenue from creating “financial papers” in which he places a bet on what that paper will cost him (insurance). THAT is how he MAKES his money.
The same is true when you look under ANY big INSURANCE outfit - investments in “solid performing” businesses, as a hedge/bet/protection of their capital. Regardless, the business they are in, the business from which they earn most of their revenue IS - creating revenue from making “financial” bets.
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