Buffett sees economy 'a little softer,' says several Berkshire businesses impacted by coronavirus - CNBC

Berkshire Hathaway Chairman and CEO Warren Buffett said Monday that while the U.S. economy still looks healthy, it isn't as robust as it was even half a year ago thanks to headwinds like the Trump administration's trade war and the burgeoning coronavirus.

"It's strong, but a little softer than it was six months ago, but that's over a broad range," he told CNBC's Becky Quick. "You look at car holdings —railcar holdings, moving goods around. And there again, that was affected by the tariffs too because people front-ended purchases, all kinds of things."

"Business is down but it's down from a very good level," he added. Buffett joined CNBC's "Squawk Box" from Berkshire Hathaway headquarters in Omaha, Nebraska.

Buffett highlighted several macroeconomic headwinds during the interview that, when combined, appear to have weighed on U.S. growth over the last year.

Among those, the "Oracle of Omaha" said that the Trump administration's tit-for-tat trade war and (increasingly) the coronavirus pose a threat to corporate America's bottom line.

"Tariffs — the tariff situation was a big question mark for all kinds of companies. And still is to some degree. But that was front and center for a while. Now coronavirus is front and center," he said.

Buffett said a number of Berkshire's businesses were feeling an impact from the deadly virus, which has now spread beyond China and threatens to disrupt the global economy.

"We have maybe 1,000 Dairy Queen franchises in China ... [and] a great number of them are closed. But the ones that are open aren't doing any business to speak of," Buffett said.

"I mean our much bigger holding is Apple. We own 5.6% of Apple and the company came out and said that [the virus is] affecting not only its stores but all kinds of things, supply chains," he added. "I find that a certain number of our companies have supply chain arrangements that are being affected by this."

Buffett's comments on Monday came amid reports that the coronavirus outbreak in countries outside China has worsened, especially South Korea and Italy, which reported a spike in the number of confirmed cases in recent days. South Korea raised its coronavirus alert to the "highest level" over the weekend, with the latest spike in numbers bringing the total infected to more than 750.

Despite these worries, however, Buffett did say that he was a net buyer of stocks for the moment and that he still recommends buying equities over the long term.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiemh0dHBzOi8vd3d3LmNuYmMuY29tLzIwMjAvMDIvMjQvd2FycmVuLWJ1ZmZldHQtc2F5cy11cy1lY29ub215LWlzLXN0cm9uZy1idXQtYS1saXR0bGUtc29mdGVyLXRoYW4taXQtd2FzLTYtbW9udGhzLWFnby5odG1s0gF-aHR0cHM6Ly93d3cuY25iYy5jb20vYW1wLzIwMjAvMDIvMjQvd2FycmVuLWJ1ZmZldHQtc2F5cy11cy1lY29ub215LWlzLXN0cm9uZy1idXQtYS1saXR0bGUtc29mdGVyLXRoYW4taXQtd2FzLTYtbW9udGhzLWFnby5odG1s?oc=5

2020-02-24 11:31:00Z
52780622536524

TurboTax maker Intuit near deal to buy Credit Karma for $7 billion, WSJ reports - CNBC

Credit Karma

TurboTax maker Inuit Inc. is close to an agreement to buy personal-finance technology portal Credit Karma Inc. for roughly $7 billion, the Wall Street Journal reported, citing anonymous sources.

The deal, which will be in cash and stock, would push Intuit further into the growing online consumer finance sector. The company is expected to announce the agreement on Monday, people familiar with the matter told the newspaper.

The acquisition would be Intuit's largest in its 37-year history. Intuit shares have risen nearly 14% since the beginning of the year, and the company is expected to report second-quarter earnings on Monday.

Credit Karma, a startup headquartered in San Francisco, was valued at about $4 billion in a private share sale roughly two years ago. The platform offers users free access to credit scores and reports, and gives personalized loan and credit card recommendations based on the users' credit history.

Under the agreement, Credit Karma would function as a stand-alone business with its chief executive, Kenneth Lin, staying in charge, one person told The Journal.

Read the full report here

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiamh0dHBzOi8vd3d3LmNuYmMuY29tLzIwMjAvMDIvMjMvdHVyYm90YXgtbWFrZXItaW50dWl0LW5lYXItZGVhbC10by1idXktY3JlZGl0LWthcm1hLWZvci03LWJpbGxpb24td3NqLmh0bWzSAW5odHRwczovL3d3dy5jbmJjLmNvbS9hbXAvMjAyMC8wMi8yMy90dXJib3RheC1tYWtlci1pbnR1aXQtbmVhci1kZWFsLXRvLWJ1eS1jcmVkaXQta2FybWEtZm9yLTctYmlsbGlvbi13c2ouaHRtbA?oc=5

2020-02-23 16:30:00Z
52780627659426

With 9 Short Words, Warren Buffett Just Shared a Brutal Truth That Very Few People Are Brave Enough to Admit - Inc.

This year's letter includes a lot: company performance, Buffett's critique of accounting rule changes, and how much Berkshire paid in income taxes ($3.6 billion, which Buffett says accounts for 1.5 percent of all U.S. corporate income tax).

You can always find more in these annual letters, and in fact I ran the whole text through a word cloud generator, to try to learn from Buffet's word choices and diction. (You can find that result here.)

If you're a business owner, however, there's an especially important truth contained in this year's letter. It took Buffett just nine short words to address it.

And it's something almost nobody wants to admit.

The succession question

The brutal truth Buffett found himself addressing is about leadership and corporate succession.

As Buffett acknowledges, it's something of an "urgent" question at Berkshire, given that he's 89 years old, and his vice-chairman, Charlie Munger, is 96. 

"Charlie and I long ago entered the urgent zone," Buffett acknowledged. "That's not exactly great news for us. But Berkshire shareholders need not worry. Your company is 100 percent prepared for our departure."

The last nine words are the key. Very few people want to face their mortality. 

But if you build a successful organization, that means people will be counting on you: shareholders in Buffett's case, but also employees, their families, and other stakeholders. Quite frankly, they need to know what happens if you can no longer be the leader.

With a company led by a near-nonagenarian and an even-older top lieutenant, here's what Buffett did to try to reassure key stakeholders that there's a succession plan in place--even without actually naming who will take over for him.

Signaling commitment

If he's not willing to name a successor publicly, Buffett has to signal somehow that he actually cares what happens to Berkshire Hathaway after he's gone.

I think he's done so effectively here by stating that:

• Almost his entire net worth (99 percent) is tied up in Berkshire Hathaway stock.
• He's never sold any of his shares. (He's given some away as gifts and charitable donations, and said he had to trade some Berkshire stock in 1980 for stock of a bank he'd acquired, because of a change in banking regulations.)
• HIs will requires his executors and the trustees to hold onto his Berkshire holdings for years afterward. Buffett wrote that he believes the restrictions he's put in place mean "it will take 12 to 15 years for the entirety of the Berkshire shares I hold at my death to move into the market."

Munger's net worth is similarly tied up, Buffett said, and the message is clear: they wouldn't be so heavily leveraged in their own company if they didn't have faith in what it will do after they're gone.

"Key to my 'Berkshire-only' instructions is my fate in the future judgment and faith of Berkshire directors," Buffett added.

Giving air time

There's a lot of speculation that the ultimate successor to Buffett will be one of the firm's top two "other-than-Warren-and-Charlie" executives. Buffett said he plans to give them each a greater voice at the annual shareholders meeting in May.

"I've had suggestions from shareholders, media and board members that Ajit Jain and Greg Abel--our two key operating managers--be given more exposure at the meeting. That change makes great sense."

Jain, 68, is the company's vice chairman of insurance operations; Abel, 57, is vice chairman of non-insurance operations. 

Giving them a bit more "air time" makes it more likely stakeholders could become comfortable with them.

Of course, it might also influence which of them, if either, ultimately gets the nod. Either way, it lets shareholders see and become more comfortable with either potential successor.

Why it matters

You're probably a lot younger than Buffett and Munger. But, it's worth considering that smooth company successions are often the exception to the rule.

Last year there were 1,640 CEO changes at big companies, according to Challenger, Gray & Christmas. Many of them were clearly unplanned, and under difficult circumstances.

So that's the key takeaway: Think it through, and have a plan.

The plan can change over time. It might have to change, especially if you wind up staying in charge longer than you might have originally thought.

But the very fact of having a plan, along with sharing as much detail about it as you can, and projecting confidence in its success, will leave your company and your stakeholders in a better position.

That's what Buffett clearly believes. And in most cases, you could do a lot worse than to follow his example.

Published on: Feb 23, 2020

Like this column? Sign up to subscribe to email alerts and you'll never miss a post.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMikwFodHRwczovL3d3dy5pbmMuY29tL2JpbGwtbXVycGh5LWpyL3dpdGgtOS1zaG9ydC13b3Jkcy13YXJyZW4tYnVmZmV0dC1qdXN0LXNoYXJlZC1hLWJydXRhbC10cnV0aC10aGF0LXZlcnktZmV3LXBlb3BsZS1hcmUtYnJhdmUtZW5vdWdoLXRvLWFkbWl0Lmh0bWzSAQA?oc=5

2020-02-23 06:10:52Z
52780622536524

Intuit near deal to buy Credit Karma for $7B - Fox Business

FOX Business' Jackie DeAngelis says coronavirus fears caused selling pressure on the floor of the New York Stock Exchange.

Intuit Inc. is nearing a deal to buy personal-finance portal Credit Karma Inc. for about $7 billion in cash and stock, in a move that would push the bookkeeping-software giant further into consumer finance, according to people familiar with the matter.

Continue Reading Below

The maker of TurboTax could announce a deal to buy privately held Credit Karma by Monday, assuming talks don't fall apart, the people said. Credit Karma was valued at roughly $4 billion in a private share sale about two years ago.

The deal would mark Intuit's largest acquisition by far in its 37-year history and the first sizable transaction under Chief Executive Sasan Goodarzi, who took over a little more than a year ago.

Ticker	Security	Last	Change	Change %
INTU	INTUIT INC.	297.57	-3.67	-1.22%

Credit Karma offers its customers free access to their credit scores and borrowing history, alerts to possible data breaches, credit monitoring and tax preparation and filing. Customers in turn receive offers from other companies for credit cards and loans tailored to their credit history, and Credit Karma makes money when customers use those products.

WILL DIRECTV REMAIN IN AT&T'S LONG-TERM PLAN?

Adding the buzzy startup to its stable would give Intuit a stronger foothold in the burgeoning realm of online personal finance. In addition to TurboTax, the online software that millions of people use to file their taxes, Intuit's offerings include QuickBooks bookkeeping software used by businesses and Mint, an online-budgeting platform that also pitches individuals financial products. Intuit has a market value of roughly $77 billion.

Under the deal being discussed, Credit Karma would operate as a stand-alone unit with its chief executive, Kenneth Lin, remaining in charge, one of the people said. But joining forces could allow both Credit Karma and Intuit to fine-tune their recommendations to customers by expanding the trove of financial data they use to make suggestions.

The move would cap a rapid rise for Credit Karma, which is backed by funders including private-equity firm Silver Lake and financial-technology venture firm Ribbit Capital. Based in San Francisco and founded in 2007 by Mr. Lin, Nichole Mustard and Ryan Graciano, Credit Karma at one point was eyeing an initial public offering no earlier than late 2019.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

But the IPO market has looked more dubious after the disappointing debuts of some startups including Uber Technologies Inc. The merger market, especially for financial technology companies, has remained strong. Such deals have accounted for several of the largest transactions announced so far this year, including Morgan Stanley's $13 billion purchase of E*Trade Financial Corp., announced this past week, and Visa Inc.'s $5.3 billion acquisition of startup Plaid Inc. announced last month.

CLICK HERE TO READ MORE ON FOX BUSINESS

Mountain View, Calif.-based Intuit was founded in 1983 and went public in 1993. Best-known for its bookkeeping software, the company has said it wants to push further into the finances of the individuals and businesses it serves by adding more offerings to its platform. It is set to report its fiscal second-quarter earnings Monday afternoon.

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiPGh0dHBzOi8vd3d3LmZveGJ1c2luZXNzLmNvbS9tYXJrZXRzL2ludHVpdC1jcmVkaXQta2FybWEtZGVhbNIBQGh0dHBzOi8vd3d3LmZveGJ1c2luZXNzLmNvbS9tYXJrZXRzL2ludHVpdC1jcmVkaXQta2FybWEtZGVhbC5hbXA?oc=5

2020-02-23 11:17:53Z
52780627659426

Intuit Near Deal to Buy Credit Karma for $7 Billion - The Wall Street Journal

Buying Credit Karma, the buzzy startup with headquarters in San Francisco, would give Intuit a stronger foothold in online personal finance.

Photo: Jason Henry for The Wall Street Journal

By

Cara Lombardo and

Cara Lombardo
The Wall Street Journal
• Biography
• @CaraRLombardo
• cara.lombardo@wsj.com

Dana Cimilluca

Dana Cimilluca
The Wall Street Journal
• Biography
• @danacimilluca
• Dana.Cimilluca@wsj.com

Feb. 22, 2020 11:58 pm ET

Intuit Inc. INTU -1.22% is nearing a deal to buy personal-finance portal Credit Karma Inc. for about $7 billion in cash and stock, in a move that would push the bookkeeping-software giant further into consumer finance, according to people familiar with the matter.

The maker of TurboTax could announce a deal to buy privately held Credit Karma by Monday, assuming talks don’t fall apart, the people said. Credit Karma was valued at roughly $4 billion in a private share sale about two years ago.

The deal would mark Intuit’s largest acquisition by far in its 37-year history and the first sizable transaction under Chief Executive Sasan Goodarzi, who took over a little more than a year ago.

Credit Karma offers its customers free access to their credit scores and borrowing history, alerts to possible data breaches, credit monitoring and tax preparation and filing. Customers in turn receive offers from other companies for credit cards and loans tailored to their credit history, and Credit Karma makes money when customers use those products.

Adding the buzzy startup to its stable would give Intuit a stronger foothold in the burgeoning realm of online personal finance. In addition to TurboTax, the online software that millions of people use to file their taxes, Intuit’s offerings include QuickBooks bookkeeping software used by businesses and Mint, an online-budgeting platform that also pitches individuals financial products. Intuit has a market value of roughly $77 billion.

A Credit Karma deal would be Intuit CEO Sasan Goodarzi’s first sizable transaction in the job, which he has held for a little more than a year.

Photo: Adm Golub/Associated Press

Under the deal being discussed, Credit Karma would operate as a stand-alone unit with its chief executive, Kenneth Lin, remaining in charge, one of the people said. But joining forces could allow both Credit Karma and Intuit to fine-tune their recommendations to customers by expanding the trove of financial data they use to make suggestions.

The move would cap a rapid rise for Credit Karma, which is backed by funders including private-equity firm Silver Lake and financial-technology venture firm Ribbit Capital. Based in San Francisco and founded in 2007 by Mr. Lin, Nichole Mustard and Ryan Graciano, Credit Karma at one point was eyeing an initial public offering no earlier than late 2019.

But the IPO market has looked more dubious after the disappointing debuts of some startups including Uber Technologies Inc. The merger market, especially for financial technology companies, has remained strong. Such deals have accounted for several of the largest transactions announced so far this year, including Morgan Stanley’s $13 billion purchase of E*Trade Financial Corp., announced this past week, and Visa Inc.’s $5.3 billion acquisition of startup Plaid Inc. announced last month.

Mountain View, Calif.-based Intuit was founded in 1983 and went public in 1993. Best-known for its bookkeeping software, the company has said it wants to push further into the finances of the individuals and businesses it serves by adding more offerings to its platform. It is set to report its fiscal second-quarter earnings Monday afternoon.

Write to Cara Lombardo at cara.lombardo@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiW2h0dHBzOi8vd3d3Lndzai5jb20vYXJ0aWNsZXMvaW50dWl0LW5lYXItZGVhbC10by1idXktY3JlZGl0LWthcm1hLWZvci03LWJpbGxpb24tMTE1ODI0MzM4ODDSAQA?oc=5

2020-02-23 04:58:00Z
52780627659426

Berkshire Hathaway empire ready for Warren Buffett’s departure - South China Morning Post

[unable to retrieve full-text content]

1. Berkshire Hathaway empire ready for Warren Buffett’s departure  South China Morning Post
2. Warren Buffett acknowledges he won't live forever, tells investors: 'Don't worry'  Fox Business
3. Buffett's Berkshire Hathaway was responsible for 1.5% of the taxes paid by corporate America in 2019  Yahoo Finance
4. Read Warren Buffett's annual letter to Berkshire Hathaway shareholders  CNBC
5. Warren Buffett Flashes ‘Urgent’  Bloomberg
6. View Full Coverage on Google News

https://news.google.com/__i/rss/rd/articles/CBMid2h0dHBzOi8vd3d3LnNjbXAuY29tL25ld3Mvd29ybGQvdW5pdGVkLXN0YXRlcy1jYW5hZGEvYXJ0aWNsZS8zMDUxOTQ1L2JlcmtzaGlyZS1oYXRoYXdheS1lbXBpcmUtcHJlcGFyZWQtd2FycmVuLWJ1ZmZldHRz0gF3aHR0cHM6Ly9hbXAuc2NtcC5jb20vbmV3cy93b3JsZC91bml0ZWQtc3RhdGVzLWNhbmFkYS9hcnRpY2xlLzMwNTE5NDUvYmVya3NoaXJlLWhhdGhhd2F5LWVtcGlyZS1wcmVwYXJlZC13YXJyZW4tYnVmZmV0dHM?oc=5

2020-02-23 02:17:08Z
52780622536524

Warren Buffett’s Berkshire Hathaway Stock Underperforms the Most Since 2009 - The Wall Street Journal

Berkshire Hathaway Chairman Warren Buffett, left, and Vice Chairman Charlie Munger at the annual Berkshire shareholder shopping day in Omaha, Neb., last year.

Photo: scott morgan/Reuters

By

Nicole Friedman

Nicole Friedman
The Wall Street Journal
• Biography
• @nicolefriedman
• nicole.friedman@wsj.com

Updated Feb. 22, 2020 10:56 am ET

Warren Buffett sought to reassure investors about Berkshire Hathaway Inc.’s BRK.B 0.51% long-term future following an underwhelming year for the conglomerate’s performance.

The 89-year-old Mr. Buffett, Berkshire’s chairman and chief executive, is renowned for his long-term success as a stock investor and deal maker. But in recent years, Berkshire’s stock performance has failed to beat the market.

Berkshire’s stock rose 11% in 2019 compared with a 31.5% total return in the S&P 500, including dividends—Berkshire’s biggest underperformance since 2009.

Mr. Buffett has long said that investors should focus on companies’ long-term performance and ignore shorter-term fluctuations in the stock market.

Some investors have agitated for Berkshire to spend more of its massive cash pile buying back shares or paying a dividend. They have also asked to hear more from Ajit Jain and Greg Abel, the two Berkshire vice chairmen who are leading contenders to succeed Mr. Buffett as CEO.

In his annual letter to shareholders released Saturday, Mr. Buffett mostly skirted the issue of Berkshire’s underperformance relative to the broader market. But he said shareholders should not be worried about the future of Berkshire after he or his 96-year-old business partner, Berkshire Vice Chairman Charlie Munger, die.

“Your company is 100% prepared for our departure,” Mr. Buffett said.

He also said that at Berkshire’s annual meeting in May, shareholders will be able to ask questions of Messrs. Jain and Abel. That is a change from previous meetings, when any comments by Berkshire leaders besides Messrs. Buffett and Munger have been rare.

“I’m so excited for that. I think it’s an absolutely terrific idea,” said Thomas Russo, partner at Gardner Russo & Gardner, a longtime holder of Berkshire shares. He said it would be helpful for shareholders to hear more directly from Messrs. Jain and Abel about overseeing the day-to-day operations of Berkshire’s companies.

Berkshire increased its buybacks in the fourth quarter to $2.2 billion, bringing its total repurchases for the year to $5 billion, the company said. That still barely dented the company’s huge pile of cash, which totaled $128 billion as of Dec. 31, the company said Saturday, slightly down from a record $128.2 billion at the end of the third quarter.

In his letter, Mr. Buffett lamented the difficulty of finding attractively priced acquisition targets that are big enough to move the needle for Berkshire.

“The opportunities to make major acquisitions possessing our required attributes are rare,” he said.

Berkshire’s biggest deal in 2019 was a $10 billion investment in Occidental Petroleum Corp. ’s bid to acquire Anadarko Petroleum Corp.

Some of Berkshire’s 60-odd subsidiaries completed acquisitions, but those deals tend to be small. Berkshire spent $1.7 billion on bolt-on acquisitions in 2019, the company said, up from $1 billion the prior year.

“I think there’s more capacity for buybacks,” said James Shanahan, senior equity-research analyst at Edward Jones. “It’s no doubt that the significant outstanding cash balances have been an extraordinary drag on earnings.”

The Omaha, Neb., conglomerate reported net earnings of $29.2 billion, or $17,909 per Class A share equivalent, up from a loss of $25.4 billion, or $15,467 a share, the year before. Berkshire’s earnings were mostly boosted by unrealized investment gains, while its results a year ago were dragged down by an unexpected write-down at Kraft Heinz Co.

Berkshire posted operating earnings of $4.4 billion, down from $5.7 billion a year earlier, due to lower results in insurance underwriting and some of Berkshire’s smaller operating businesses. Operating earnings exclude some investment results and Mr. Buffett has said they are more reflective of Berkshire’s performance than net earnings, which can fluctuate widely due to unrealized investment gains or losses.

Berkshire’s Class A shares closed Friday at $343,499, up 1.1% for the year. In contrast, the S&P 500 is up 3.3% this year.

Cathy Seifert, equity analyst CFRA Research, said she thought Mr. Buffett should have addressed Berkshire’s results compared with the index more directly. “It’s easy to say you’re not concerned about short-term performance,” she said. But “this short-term underperformance could turn into a longer-term underperformance.”

Mr. Buffett also used his letter to discuss corporate boards of directors, which he said are often ill-equipped to oversee companies and incentivized not to challenge executives. Noting that he has served as a director for 21 public companies over the past 62 years, Mr. Buffett complained that board members are often too reliant on their board-related income to truly function as independent overseers. He also said many board members are not experts in finance or investing.

“Almost all of the directors I have met over the years have been decent, likable and intelligent,” Mr. Buffett said. “Nevertheless, many of these good souls are people whom I would never have chosen to handle money or business matters. It simply was not their game.”

Berkshire runs a large insurance operation as well as railroad, utilities, industrial manufacturers and retailers. Its holdings include recognizable names like Dairy Queen, Duracell, Fruit of the Loom, Geico and See’s Candies.

Berkshire’s insurance business sits at the core of its moneymaking machine. Insurance brings in billions of dollars of “float,” upfront premiums customers pay and that Berkshire invests for its own gain. Berkshire also holds large stock investments, including in Apple Inc. and Wells Fargo & Co.

Write to Nicole Friedman at nicole.friedman@wsj.com

Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Let's block ads! (Why?)

https://news.google.com/__i/rss/rd/articles/CBMiZGh0dHBzOi8vd3d3Lndzai5jb20vYXJ0aWNsZXMvYmVya3NoaXJlLWhhdGhhd2F5LXBvc3RzLTI5LTItYmlsbGlvbi1pbi1xdWFydGVybHktZWFybmluZ3MtMTE1ODIzNzk2MzDSAQA?oc=5

2020-02-22 15:56:00Z
52780622536524