Think for Yourself, Buffett Style

We've written twice about the pending hostile takeover of Cadbury by Kraft. As an illustration of the Agency Dilemma or principal-agent problem and a quick followup. The story continues to remain interesting (at least to me- hey, I find this stuff dramatic, ok? Some like football, I like hostile takeovers. Call me a finance nerd!) Anyway, Kraft's largest shareholder is none other than Warren Buffett's Berkshire Hathaway. Berkshire owns some 9.4% of the company, a significant voting block. Kraft just sent out proxies for a "special shareholder meeting". "Special" shareholder meetings are not, as one might assume, some grand event to celebrate the company's success complete with band, sushi buffet, dancing and balloons.

TARP update and a few afterthoughts on the crisis of '08

There has been a flurry of activity lately surrounding TARP. You remember "TARP" don't you? The legislation that was passed with great debate and outrage in early October 2008. It was derided as a massive "bank bailout" sure to cost the taxpayers hundreds of billions. Even more important, many politicians, pundits and commentators shouted that in addition to the cost, it wouldn't work. Not only would TARP fail, but the proper course of action was to do nothing. Mostly Republican and free-market purest voices were heard to repeat, to varying degrees, that such intervention was futile- simply letting events unfold as they may is the only truly prudent course of action. No "bailout" was needed, they said; the system would right itself, they said; we aren't really facing a complete financial meltdown they argued.

A Buffett Contest

No, not a buffet eating contest. As many of you may recall, we here are big fans of Warren Buffett. Well, I'm a big fan of Buffett, I can't speak for Karl or Julio. Anyway, each year Buffett holds Berkshire's annual meeting on the first Saturday in May (May 2 this year) in Omaha. The gathering is sometimes called "Woodstock for Capitalists" on account of it being a gathering of some 30,000 [mostly] wealthy Berkshire shareholders who gather to hear the Oracle of Omaha opine on a rich variety of subjects for nearly the whole day.

Buffett and Bailouts

I always pay attention when Warren Buffett makes a move.  The "Oracle of Omaha" is the world's greatest investor and a stand up guy to boot.  He has been sitting on the sidelines during this crisis, refusing to have any part of AIG even though parts of it would mesh perfectly with Berkshire's insurance operations.  I suspect he is waiting to buy pieces in the fire sale.  Even more interesting to me, is last night's news.