Investor Warren Buffett: Good Deals Hard to Find on Wall Street

Investor Warren Buffett says Wall Street’s lust for deals has prompted CEOs to act like oversexed teenagers and overpay for acquisitions, so it has been hard to find deals for Berkshire Hathaway.

In his annual letter to shareholders Saturday, Buffett mixed investment advice with details of how Berkshire’s many businesses performed. Buffett blamed his recent acquisition drought on ambitious CEOs who have been encouraged to take on debt to finance pricey deals.

“If Wall Street analysts or board members urge that brand of CEO to consider possible acquisitions, it’s a bit like telling your ripening teenager to be sure to have a normal sex life,” Buffett said.

Berkshire is also facing more competition for acquisitions from private equity firms and other companies such as privately held Koch Industries.

Sticking with guideline

Buffett is sitting on $116 billion of cash and bonds because he’s struggled to find acquisitions at sensible prices. And Buffett is unwilling to load up on debt to finance deals at current prices.

“We will stick with our simple guideline: The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own,” Buffett wrote.

He said the conglomerate recorded a $29 billion paper gain because of the tax reforms Congress passed late last year. That helped it generate $44.9 billion profit last year, up from $24.1 billion the previous year.

Investors left wanting

Buffett’s letter is always well-read in the business world because of his remarkable track record over more than five decades and his talent for explaining complicated subjects in plain language. But this year’s letter left some investors wanting more because he didn’t say much about Berkshire’s succession plan, some noteworthy investment moves or the company’s new partnership with Amazon and JP Morgan Chase to reduce health care costs.

Edward Jones analyst Jim Shanahan said he expected Buffett to devote more of the letter to explaining his decision to promote and name the top two candidates to eventually succeed him as Berkshire’s CEO. Buffett briefly mentioned that move in two paragraphs at the very end of his letter.

That surprised John Fox, chief investment officer at FAM Funds, which holds Berkshire stock.

“He didn’t say a lot about succession. I was expecting more,” Fox said.

Greg Abel and Ajit Jain joined Berkshire’s board in January and took on additional responsibilities. Jain will now oversee all of the conglomerate’s insurance businesses while Abel will oversee all of the conglomerate’s non-insurance business operations.

Bet pays off for charity

Buffett, 87, has long had a succession plan in place for Berkshire to ensure the future of the conglomerate he built even though he has no plans to retire. Until January, he kept the names of Berkshire’s internal CEO candidates secret although investors who follow Berkshire had long included Jain and Abel on their short lists.

Shanahan said it also would have been nice to read Buffett’s thoughts on why he is selling off Berkshire’s IBM investment but maintaining big stakes in Wells Fargo and US Bancorp.

But Buffett did offer some sage investment advice based on his victory in a 10-year bet he made with a group of hedge funds. The S&P 500 index fund Buffett backed generated an 8.5 percent average annual gain and easily outpaced the hedge funds. One of Buffett’s favorite charities, Girls Inc. of Omaha, received $2.2 million as a result of the bet.

Buffett said it’s important for people to invest money regularly regardless of the market’s ups and downs, but watch out for investment fees, which will eat away at returns.

Succeeding in the stock market requires the discipline to act sensibly when markets do crazy things. Buffett said investors need “an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential.”

Buffett said investors shouldn’t assume that bonds are less risky than stocks. At times, bonds are riskier than stocks.

Berkshire owns more than 90 subsidiaries, including clothing, furniture and jewelry firms. It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.

Investor Warren Buffett: Good Deals Hard to Find on Wall Street

Investor Warren Buffett says Wall Street’s lust for deals has prompted CEOs to act like oversexed teenagers and overpay for acquisitions, so it has been hard to find deals for Berkshire Hathaway.

In his annual letter to shareholders Saturday, Buffett mixed investment advice with details of how Berkshire’s many businesses performed. Buffett blamed his recent acquisition drought on ambitious CEOs who have been encouraged to take on debt to finance pricey deals.

“If Wall Street analysts or board members urge that brand of CEO to consider possible acquisitions, it’s a bit like telling your ripening teenager to be sure to have a normal sex life,” Buffett said.

Berkshire is also facing more competition for acquisitions from private equity firms and other companies such as privately held Koch Industries.

Sticking with guideline

Buffett is sitting on $116 billion of cash and bonds because he’s struggled to find acquisitions at sensible prices. And Buffett is unwilling to load up on debt to finance deals at current prices.

“We will stick with our simple guideline: The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own,” Buffett wrote.

He said the conglomerate recorded a $29 billion paper gain because of the tax reforms Congress passed late last year. That helped it generate $44.9 billion profit last year, up from $24.1 billion the previous year.

Investors left wanting

Buffett’s letter is always well-read in the business world because of his remarkable track record over more than five decades and his talent for explaining complicated subjects in plain language. But this year’s letter left some investors wanting more because he didn’t say much about Berkshire’s succession plan, some noteworthy investment moves or the company’s new partnership with Amazon and JP Morgan Chase to reduce health care costs.

Edward Jones analyst Jim Shanahan said he expected Buffett to devote more of the letter to explaining his decision to promote and name the top two candidates to eventually succeed him as Berkshire’s CEO. Buffett briefly mentioned that move in two paragraphs at the very end of his letter.

That surprised John Fox, chief investment officer at FAM Funds, which holds Berkshire stock.

“He didn’t say a lot about succession. I was expecting more,” Fox said.

Greg Abel and Ajit Jain joined Berkshire’s board in January and took on additional responsibilities. Jain will now oversee all of the conglomerate’s insurance businesses while Abel will oversee all of the conglomerate’s non-insurance business operations.

Bet pays off for charity

Buffett, 87, has long had a succession plan in place for Berkshire to ensure the future of the conglomerate he built even though he has no plans to retire. Until January, he kept the names of Berkshire’s internal CEO candidates secret although investors who follow Berkshire had long included Jain and Abel on their short lists.

Shanahan said it also would have been nice to read Buffett’s thoughts on why he is selling off Berkshire’s IBM investment but maintaining big stakes in Wells Fargo and US Bancorp.

But Buffett did offer some sage investment advice based on his victory in a 10-year bet he made with a group of hedge funds. The S&P 500 index fund Buffett backed generated an 8.5 percent average annual gain and easily outpaced the hedge funds. One of Buffett’s favorite charities, Girls Inc. of Omaha, received $2.2 million as a result of the bet.

Buffett said it’s important for people to invest money regularly regardless of the market’s ups and downs, but watch out for investment fees, which will eat away at returns.

Succeeding in the stock market requires the discipline to act sensibly when markets do crazy things. Buffett said investors need “an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential.”

Buffett said investors shouldn’t assume that bonds are less risky than stocks. At times, bonds are riskier than stocks.

Berkshire owns more than 90 subsidiaries, including clothing, furniture and jewelry firms. It also has major investments in such companies as Coca-Cola Co. and Wells Fargo & Co.

Australia Failing to Curb Corruption, Global Survey Finds

Australia appears to be failing in its efforts to crack down on bribery, according to the latest survey conducted by Transparency International, a non-governmental organization based in Germany.

The group said developed countries – including Australia – appeared to be lagging in their efforts to combat corruption in the public sector.  It pointed to an inadequate regulation of foreign political donations in Australia, conflicts of interest in planning approvals, revolving doors and improper industry lobbying in large-scale mining projects.  

While Australia’s ranking is unchanged – it remains ranked 13th out of 180 countries – its corruption score has slipped eight points since the index started in its current form in 2012.

Concern about Australia’s ranking comes as debate continues about the need for a nationwide anti-corruption body similar to the Independent Commission Against Corruption in the state of New South Wales.  It was set up in 1989 and has scored many notable victories, including the jailing of corrupt state politicians.

Professor A.J. Brown, who leads a project called “Strengthening Australia’s National Integrity System” for Transparency International, says much more work needs to be done.

“We do not have a federal anti-corruption body amongst other things, so it is also about the fact that our track record in terms of government commitment to controlling foreign bribery or money laundering and some of the things that the private sector is also involved in internationally is not that strong.  We are moving but we have been moving very slow and very late, and not very comprehensively,” Brown said.

This year, New Zealand and Denmark were ranked highest in the Transparency International survey, the U.S. is ranked 16th, while South Sudan and Somalia were the lowest-ranked nations. The best performing region was Western Europe, while the most corrupt regions were Sub-Saharan Africa, followed by Eastern Europe and Central Asia.

The survey found that more than 6 billion people live in countries that are corrupt. Transparency International said most countries failed to protect the independence of the media, which plays a crucial role in preventing corruption.

 

More US Companies End Marketing Programs With National Rifle Association

Three more companies say they have ended marketing programs with the National Rifle Association (NRA), as gun control advocates stepped up pressure on firms to cut ties to the gun industry following last week’s school shooting in Florida.

Activists have posted petitions online, identifying businesses that offer discounts to NRA members, in a push to pressure the companies to cut ties to the gun rights organization.

Corporations that ended their discount programs with NRA members on Friday included insurance company MetLife, car rental company Hertz, and Symantec Corp., the software company that makes Norton Antivirus technology.

The move comes after several other companies cut their ties to the NRA earlier this week, including car rental company Enterprise, First National Bank of Omaha, Wyndham Hotels and Best Western hotels.

The NRA is one of the country’s most powerful lobbying groups for gun rights and claims 5 million members.

Florida shooting renews debate

Last week’s shooting at a Florida high school that left 17 people dead has renewed the national debate about gun control.

Gun control activists have been mounting a campaign on Twitter, including using the hashtag #BoycottNRA as well as using social media to pressure streaming platforms, including Amazon, to drop the online video channel NRATV, which features gun-friendly programming produced by the NRA.

On Thursday, NRA Executive Vice President Wayne LaPierre told the Conservative Political Action Conference (CPAC) that those advocating for stricter gun control are exploiting the Florida shooting.

Receiving a rousing reception, LaPierre said, “There is no greater personal individual freedom than the right to keep and bear arms, the right to protect yourself and the right to survive.”

Arming teachers

On Friday, President Donald Trump reiterated to CPAC for the third time this week the need to arm teachers with concealed weapons to prevent more shootings in U.S. schools.

“It’s time to make our schools a much harder target for attackers. We don’t want them in our schools,” Trump said.

Trump has also proposed raising the age to buy assault-style rifles from 18 to 21, which is opposed by the NRA.

In his speech to CPAC, Trump indicated he does not intend to battle the powerful organization.

“They’re friends of mine,” Trump said of the NRA, which gave more than $11 million to his presidential campaign in 2016 and spent nearly $20 million attacking his Democratic Party general election challenger, Hillary Clinton.

The mass shooting in Florida on Feb. 14 has sparked a wave of rallies in Florida, Washington and in other areas of the United States in an attempt to force local and national leaders to take action to prevent such attacks.

 

Trump Pushes to Arm Some Teachers in Wake of Florida School Shooting

U.S. President Donald Trump repeated his call to arm some teachers in the wake of the high school shooting in Florida. Trump spoke before a conservative group near Washington. He is the latest in a series of U.S. presidents forced to deal with the impact of a mass school shooting and with the question of what can be done to prevent them. VOA national correspondent Jim Malone reports that presidents have often been frustrated when trying to bridge the great divide over guns in the United States.

At Trump’s Home Military Base, Airmen Share Stories of Diversity

President Donald Trump’s first year in office has at times been racially charged, from his push to temporarily ban citizens from certain countries to his comments after a race riot in Charlottesville, Virginia, when some said he didn’t swiftly condemn white supremacists. But no matter the controversy, he remains the U.S military’s commander-in-chief. At the president’s home base, Joint Base Andrews, just outside of Washington, airmen from all backgrounds are celebrating their diversity and sharing their stories of race relations with our Pentagon correspondent Carla Babb.

Judges Decline to Immediately Toss Pennsylvania Congressional map

A new congressional map in Pennsylvania on Friday survived a request from eight of the state’s Republican congressmen that federal judges throw it out immediately, but the case remained far from settled days before candidates will start collecting signatures to get on the primary ballot.

Hours after they were appointed to the case, a three-judge panel declined to temporarily hold up implementation of the map put in place by the state Supreme Court on Monday. The new map substantially overhauls a Republican-drawn one that has helped produce a predominantly Republican delegation and was widely viewed as among the nation’s most gerrymandered.

The three federal judges laid out a schedule for the parties to elaborate on their legal positions, including a March 9 hearing in Harrisburg.

Congressional candidates in Pennsylvania are scheduled to start collecting signatures Tuesday to get their names on the primary ballot.

The GOP congressmen and two Republican state senators sued two high-ranking state elections official Thursday, asking the federal court to require the use of a Republican-drawn 2011 congressional district map for this year’s primary and general elections.

They argued the map the state justices produced was biased in favor of Democrats, and that the state court did not give state lawmakers sufficient time to produce a replacement map.

A lawyer for Democratic Governor Tom Wolf wrote the court Friday on behalf of the elections officials, noting that two other Republican leaders in the Legislature had a request for a stay of the new map pending before the U.S. Supreme Court.

Deputy General Counsel Thomas Howell asked the federal court to defer action on the congressmen’s lawsuit until that request has been resolved.

‘Rife’ with errors

Howell claimed that the lawsuit against Wolf’s acting secretary of state and the head of the Bureau of Commissions, Elections and Legislation had “significant hurdles” and was “rife with legal and factual errors.”

The judicial panel, named pursuant to a federal law governing constitutional challenges to congressional reapportionment, consists of Judge Christopher Conner, a Pennsylvania-based district judge; Judge Jerome Simandle, a senior district judge from New Jersey; and Judge Kent Jordan, a circuit judge who was formerly a district judge in Delaware.

Conner and Jordan were chosen for the federal bench by President George W. Bush, while Simandle was nominated by President George H.W. Bush.

In the parallel case, House Speaker Mike Turzai and Senate President Pro Tempore Joe Scarnati on Wednesday asked the U.S. Supreme Court to put the new map on hold, arguing state justices had overstepped their authority. On Thursday, the leaders also asked the state Supreme Court to delay the map. Wolf and other parties were given until noon Monday to weigh in.

The 2011 map has helped Republicans maintain a 13-5 edge in the congressional delegation for three elections.

The Democrats who are the majority on the state Supreme Court ruled in January that the 2011 map violated the state constitution’s guarantee of free and equal elections. After lawmakers did not enact a Wolf-supported plan during a two-week window, the judges drew their own map.

Democrats have about 800,000 more registered voters in Pennsylvania, but President Donald Trump, a Republican, narrowly defeated Hillary Clinton in the state during the 2016 election.

Democrats are hopeful that new Pennsylvania congressional districts will help them flip enough Republican seats to retake majority control of the U.S. House this year. Six Pennsylvania congressmen elected in 2016 are not running again, an unusually large number.

Judges Decline to Immediately Toss Pennsylvania Congressional map

A new congressional map in Pennsylvania on Friday survived a request from eight of the state’s Republican congressmen that federal judges throw it out immediately, but the case remained far from settled days before candidates will start collecting signatures to get on the primary ballot.

Hours after they were appointed to the case, a three-judge panel declined to temporarily hold up implementation of the map put in place by the state Supreme Court on Monday. The new map substantially overhauls a Republican-drawn one that has helped produce a predominantly Republican delegation and was widely viewed as among the nation’s most gerrymandered.

The three federal judges laid out a schedule for the parties to elaborate on their legal positions, including a March 9 hearing in Harrisburg.

Congressional candidates in Pennsylvania are scheduled to start collecting signatures Tuesday to get their names on the primary ballot.

The GOP congressmen and two Republican state senators sued two high-ranking state elections official Thursday, asking the federal court to require the use of a Republican-drawn 2011 congressional district map for this year’s primary and general elections.

They argued the map the state justices produced was biased in favor of Democrats, and that the state court did not give state lawmakers sufficient time to produce a replacement map.

A lawyer for Democratic Governor Tom Wolf wrote the court Friday on behalf of the elections officials, noting that two other Republican leaders in the Legislature had a request for a stay of the new map pending before the U.S. Supreme Court.

Deputy General Counsel Thomas Howell asked the federal court to defer action on the congressmen’s lawsuit until that request has been resolved.

‘Rife’ with errors

Howell claimed that the lawsuit against Wolf’s acting secretary of state and the head of the Bureau of Commissions, Elections and Legislation had “significant hurdles” and was “rife with legal and factual errors.”

The judicial panel, named pursuant to a federal law governing constitutional challenges to congressional reapportionment, consists of Judge Christopher Conner, a Pennsylvania-based district judge; Judge Jerome Simandle, a senior district judge from New Jersey; and Judge Kent Jordan, a circuit judge who was formerly a district judge in Delaware.

Conner and Jordan were chosen for the federal bench by President George W. Bush, while Simandle was nominated by President George H.W. Bush.

In the parallel case, House Speaker Mike Turzai and Senate President Pro Tempore Joe Scarnati on Wednesday asked the U.S. Supreme Court to put the new map on hold, arguing state justices had overstepped their authority. On Thursday, the leaders also asked the state Supreme Court to delay the map. Wolf and other parties were given until noon Monday to weigh in.

The 2011 map has helped Republicans maintain a 13-5 edge in the congressional delegation for three elections.

The Democrats who are the majority on the state Supreme Court ruled in January that the 2011 map violated the state constitution’s guarantee of free and equal elections. After lawmakers did not enact a Wolf-supported plan during a two-week window, the judges drew their own map.

Democrats have about 800,000 more registered voters in Pennsylvania, but President Donald Trump, a Republican, narrowly defeated Hillary Clinton in the state during the 2016 election.

Democrats are hopeful that new Pennsylvania congressional districts will help them flip enough Republican seats to retake majority control of the U.S. House this year. Six Pennsylvania congressmen elected in 2016 are not running again, an unusually large number.

Trump: White House Chief of Staff to Decide Fate of Kushner Security Clearance

It will be up to the White House chief of staff to decide whether the U.S. president’s son-in-law is able to maintain his security clearance.

That is what President Donald Trump told reporters Friday, declaring that his daughter’s husband, Jared Kushner, had “been treated very unfairly.”

Trump, during a joint news conference with Australian Prime Minister Malcolm Turnbull, was asked whether Kushner would still be allowed access to classified information.

Chief of Staff John Kelly, in a memo last week, said White House personnel whose clearances had been pending since last June would no longer have access to top-secret documents.

Kushner falls into that category.

Federal process

Trump expressed frustration with the federal government’s process for security clearances, calling it a “broken system and it shouldn’t take this long.”

“People without a problem in the world” are facing unreasonable delays to receive clearances, he said. 

Trump could personally intervene and grant his son-in-law an exemption, but he replied Friday — the day interim clearances are being revoked — that he would not do that.

“I will let General Kelly make that decision and he’s going to do what’s right for the country and I have no doubt he’ll make the right decision,” Trump said.

In a lengthy response in the East Room during the nationally televised news conference, Trump praised Kushner, 37, saying he is “a high-quality person” who “doesn’t get a salary.”

Kushner, a second-generation real estate developer, is “working on peace in the Middle East and some other small and very easy deals.”

Trump said the U.S. effort to make a deal between the Israelis and the Palestinians is “actually making great headway.”

Administration officials are said to be examining ways that Kushner can continue to be engaged in sensitive discussions and his diplomatic missions, which have also included China, without needing a top-level security clearance.

Visiting Seoul, Pyeongchang

Kushner is married to the president’s daughter, Ivanka Trump, who is currently engaged in her own diplomatic foray.

She received a red-carpet welcome in Seoul on Friday before dining with South Korean President Moon Jae-in at the presidential compound.

Ivanka Trump is leading the presidential delegation to Sunday’s closing ceremony of the Winter Olympics in Pyeongchang. 

A top North Korean official is also scheduled to be at the event.

When asked whether the president’s daughter or any other member of the U.S. delegation would be meeting with Kim Yong Chol — vice chairman of North Korea’s ruling Workers’ Party Central Committee — a senior U.S. official succinctly responded, “No.”

Donald Trump on Thursday and Friday, when asked by VOA during brief encounters with reporters whether he wanted his daughter to meet the North Koreans, did not respond.

During Friday’s news conference he said, “We cannot get a better representative” than Ivanka Trump in South Korea.

The current administration has not nominated an ambassador to Seoul. The top diplomat at the embassy there is interim U.S. Charge d’Affaires Marc Knapper, a top-ranking career foreign service officer.

While in Seoul, Ivanka Trump said she was there “to reaffirm our bonds of friendship and partnership.” But she explained she wanted to “reaffirm our commitment to our maximum-pressure campaign to ensure that the Korean Peninsula is denuclearized.”

Trump Recites Inflammatory, Anti-immigrant ‘Snake’ Song

U.S. President Donald Trump on Friday recited the lyrics of a song seen as anti-immigration called “The Snake” to drive home his point about restricting immigration — an inflammatory move that harkened back to his days on the campaign trail.

In a speech to conservatives at a convention outside Washington, he also bashed opposition Democrats for failing to back his proposal for putting 1.8 million so-called Dreamer immigrants on a pathway to citizenship in exchange for tightening border security and severely restricting legal immigration.

During his hourlong address, Trump pulled a piece of paper from his pocket and read “The Snake,” a ballad by Al Wilson about a reptile who repays a “tender woman” that nurses it back to health with a deadly bite.

During his campaign, as well as in a speech early in his presidency, Trump used the song, based on one of Aesop’s fables, as a less-than-subtle allegory about immigrants entering the United States. 

Some Republicans recoil

On Friday, he made no secret about the comparison he was making.

“Think of it in terms of immigration,” he urged attendees at the Conservative Political Action Conference (CPAC) as he launched into the song.

“You knew damn well I was a snake before you took me in,” he said, reading the final line of the song, before returning to his speech.

“And that’s what we’re doing with our country, folks — we’re letting people in, and it’s going to be a lot of people. It’s only going to be worse.”

Some mainstream Republicans have recoiled at Trump’s continued recitation of the lyrics.

“Trump’s snake story is vicious, disgraceful, utterly racist and profoundly un-American,” tweeted Steve Schmidt, a former campaign aide for president George W Bush.

Democrats ‘totally unresponsive’

In his wide-ranging speech, Trump warned that efforts to reach a deal on the status of undocumented migrants brought to the US illegally as children could fail — and blamed his opponents.

“The Democrats are being totally unresponsive. They don’t want to do anything about DACA, I’m telling you,” he said, referring to negotiations on Capitol Hill on replacing an expiring program that defers deportation for some undocumented migrants.

“It’s very possible that DACA won’t happen.”

Former president Barack Obama launched the Deferred Action for Childhood Arrivals (DACA) program, whose recipients were given legal permission to work, live and go to school in the United States. 

DACA-related bills

Last September, Trump announced he was rescinding DACA and called on Congress to craft a solution before March 5, setting off months of bipartisan negotiations.

The Senate held votes on several DACA-related bills last week, but none of them advanced. 

Many conservatives in Congress including Senator Ted Cruz have been outspoken in their opposition to any legislation that provides “amnesty” to people who are in the United States illegally.