Investment

» axolotl - Warren goes foreign and Big Blue chips........

My guess is that some of these new positions are not Warren's - there is another individual in BRK who is allowed to invest - Warren cannot afford to look at anything small - big blue chips may be coming back into favor and maybe BRKA will make a spurt upward after moving sideways for so many months. Warren's attempt at currency trading has not been wildly successful so I think he is trying to go to some foreign stocks to get out of the dollar. I would not be surprised to see BRKA hit a new all time high in the next 12 months.

-- posted by axolotl

» PEIC - Buffett: Give while living

http://www.kansascity.com/mld/kansascity...

A lesson from Buffett: Give while living

His decision reflects a growing interest among the wealthy in making donations before their deaths.

By RACHEL EMMA SILVERMAN and ELIZABETH BERNSTEIN
The Wall Street Journal

You don’t have to be as rich as Warren Buffett to give away your money like him.

Numerous people have tried to emulate Buffett’s famous investing style to build fortunes of their own. Now, philanthropy advisers think his new philanthropic plan will become a model for how to donate money to get the maximum charitable impact.

The Berkshire Hathaway Inc. chairman said he plans to give the bulk of his huge fortune — a gift worth about $31 billion in Berkshire shares — to the Bill and Melinda Gates Foundation, starting this year. Buffett also is giving about $6 billion to four family foundations, including ones run by his three children.

The moves reflect a growing interest among wealthy people who make big donations while they are alive, rather than as a bequest at death. Philanthropy advisers say giving while living, as it’s called, is often a smart choice. Donors can reap the joy over their good deed and keep tabs on their gifts.

There also can be attractive tax benefits. When you make a lifetime gift, you get an income-tax deduction, and you also move money out of your estate. The income-tax deduction may be limited, however, depending on several factors, said charity law expert Conrad Teitell.

Jan T. Vilcek, a professor of microbiology at New York University, has already given a majority of his wealth away. He funded a family foundation, with a current endowment of about $15 million, and donated a percentage of the future royalties of the drug’s sales to NYU’s medical school last year, a gift estimated at $105 million. Besides taking advantage of tax benefits, Vilcek, 73, says, “Another reason for doing things in your lifetime is that when you make donations to large institutions and set general guidelines for how these things can be used, you can keep an eye on how your legacy is fulfilled.”

But those with lesser means than Buffett say they worry about running out of money after making a major gift or fear not having enough on hand to cover their charitable pledges if they have a reversal of fortune.

Victor Clarke, chief executive of Gables Engineering, a Miami-based airplane instrumentation company, has given about $15 million away. When institutions bring him proposals, Clarke evaluates his finances and makes sure he can cover the pledge.

If maintaining an income stream is a worry, the charitable world offers several options that allow donors to still receive a cash flow even after making a gift. While these strategies vary, you make a donation and in return receive regular payments during your lifetime. Another bonus: You can receive an income-tax deduction for the amount estimated to ultimately end up with the charity.

For some people, bequests are a safer bet because they can change the terms of their will until they die. What’s more, many donors’ wealth is tied up in illiquid assets that might not be freed until death. And, of course, many donors choose to make substantial gifts during their lifetime as well as support their favorite charities or family foundations in their wills.

There is an ever-growing roster of ways to give away your money. Some methods can be great tax-savers. A few charities, such as the Jewish National Fund, have new “donor-managed investment account” programs in which financially savvy donors can manage the investment of their charitable gifts.

What’s more, a number of Web-based tools, such as Guidestar.org, Charitynavigator.org and Give.org, have sprung up to help donors.

Buffett’s decision to give the majority of his wealth away while he’s still alive is a departure from his previous plan to compound the money over the course of his lifetime and leave a bigger pot to charity in his will. He cited personal reasons for this reversal: Buffett had always expected to die before his wife and that she would take care of giving the money away. When she died in 2004, he realized he’d have to come up with a different plan.

DONATION DECISIONS

You don’t need to have billions to make a donation. Some lessons from Warren Buffett’s gift:

•Make a major gift while living, rather than a bequest, so you can witness the results.

•Give to a group run by people you know and trust.

•Include your children in your philanthropy.

•Make sure the charity is equipped to handle a major donation.

-- posted by PEIC

» PEIC - Truth About Buffett's Tax Bill

The Truth About Buffett's Tax Bill
By Allan Sloan
Newsweek

Sept. 4, 2006 issue - It's almost labor day, the end of vacation season. But before fall sets in, I'd like to revisit one of this summer's biggest financial stories: Warren Buffett's decision to donate $38 billion of his Berkshire Hathaway stock to charity, most of it to the Bill & Melinda Gates Foundation.

A fascinating aspect of this gift is that the folksy Buffett, usually a cold-eyed tax whiz, isn't being at all tax-efficient. He's saving a relative pittance in income taxes, he told me last week, and expects his estate to pay an eight-digit tax—even though he'll have given all of his Berkshire stock away.

Berkshire is famous for being smart about minimizing its tax bill, including some moves so clever that I've written about them throughout the years. But Buffett isn't doing anything like that with his donations.

Here's why you should care: when you compare Buffett's current tax-inefficient behavior with Berkshire's tax efficiency, you can see the man's sincere about giving his wealth away because he thinks it's the right thing to do—not to get some hidden tax break. Buffett joked that if he wanted to spend all his money he had at least two choices: "I could hire 50,000 people to paint my portrait until I got a perfect one." Or, "I could really outdo the Egyptians and build a tomb that would make everyone forget the Sphinx."

I write frequently about people and corporations ducking taxes, but couldn't discern any tax dodging when I read the terms of Buffett's gift. Yet I found myself deluged with e-mails claiming that Buffett, a prominent opponent of the push in Washington to eliminate taxes on estates and income from investments, was a tax-dodging hypocrite.

So to see if I'd missed something, I asked Buffett about his taxes. No, I'm not looking to be nice to a guy who's on the board of NEWSWEEK's owner, The Washington Post Company. If anything, I'd be harder on him than on someone who's not important at my place of employment. Did I find a hidden tax agenda? Nope.

Buffett has pledged to give 12.05 million Berkshire B shares to the Gates Foundation and four Buffett family foundations. This year's donation is worth $1.9 billion at current prices. Each year he'll donate 5 percent fewer shares, but I'm assuming for simplicity's sake that Berkshire's stock will rise just enough—5.3 percent a year—to make each annual donation the same as this year's. (Disclosures: I own Berkshire stock through NEWSWEEK's 401[k] plan; the Post Company owns a significant Berkshire stake, and Melinda Gates sits on the Post Company's board.)

So how much will Buffett save on taxes this year from his whopping donation? Nothing, he said, because his taxable income this year and next will be offset by tax losses from previous years.

In 2008, he estimated, he'll save $500,000 to $1 million. Call it one two-thousandth of 1 percent. "I can get the same benefit by donating $4 million" as by giving almost $2 billion, he said. His savings are so small (by billionaire standards) because he's donating so-called appreciated property—stock worth more than he paid for it—to private foundations. You can offset only 20 percent of your income with this kind of donation, as opposed to the 50 percent you can save by writing checks to public charities.

Even though Buffett has committed to giving away all his Berkshire stock, including about $7 billion worth not covered by his recent pledges, he said he still expects his estate to pay about what his wife's estate paid after she died two years ago: $80 million to $90 million.

The Buffetts could have deferred that bill by having her leave everything to him—spouses can pass on unlimited assets, tax-free, to each other. But they chose not to do that, presumably because they believed that minimizing taxes isn't the most important thing in the world. If all he cared about were saving taxes, Buffett, 76, could have waited to see if the estate tax passes away before he does. But, of course, he's not waiting.

Fine, you say. But isn't Buffett avoiding an enormous potential estate tax by giving away so much wealth? Sure. But look at the big picture, folks: he's giving the money away. As far as his family's wealth is concerned, that's like paying a 100 percent estate tax.

To be sure, Buffett is being tax-efficient by donating Berkshire stock on which he has huge gains and will pay no capital-gains tax. But anyone with paper profits on a stock portfolio can do this, and get a bigger break than Buffett's getting.

So if you want to go after Buffett for his tax opinions (which I share), go right ahead. But don't accuse him of giving away his fortune to duck taxes. At a rate of .0005 of 1 percent, his tax savings aren't even a rounding error.

URL: http://www.msnbc.msn.com/id/14535862/sit...

-- posted by PEIC

» PEIC - Buffett Sells Car to The Learning Annex President for 10x value

Posted on: Monday, 25 September 2006, 09:01 CDT

Going, Going, Gone - Warren Buffett Sells His Used Car to The Learning Annex President for 10 Times Its Value

NEW YORK, Sept. 25 /PRNewswire/ -- Legendary investor and second richest man in the United States Warren Buffett sold his used Lincoln Town Car to Learning Annex President Bill Zanker for $73,200. All monies will benefit Mr. Buffett's charity, Girls Inc.

Bill Zanker made the winning bid so he could meet Mr. Buffett (#2 on Forbes list of richest Americans) and invite him to teach at the next Learning Annex Real Estate and Wealth Expo. Donald Trump (Forbes #94) currently gets $1.5 million per hour to speak for The Learning Annex. What will Mr. Zanker pay Mr. Buffett's favorite charity to teach? Zanker isn't saying, except that, "It will knock his socks off."

As part of the deal, Mr. Buffett has to pick up Bill Zanker in a chauffeur's cap. Zanker exclaims, "I am so excited to meet the legendary Warren Buffett, own his car and be able to support such a worthy cause. I'd be honored for him to teach a class on 'How You Can Invest at Any Age' at our NYC Learning Annex Real Estate & Wealth expo on November 18th & 19th."

The Learning Annex hosts these expos around the country with speakers like Donald Trump, Rich Dad Robert Kiyosaki, George Foreman, Suze Orman, Jim Cramer, Al Gore and other All Star experts. Zanker adds, "I plan on using this car to chauffeur all these celebrities to and from my expos. How cool will it be to ride around in Warren Buffett's car?"

About The Learning Annex:

The Learning Annex was founded by Bill Zanker 27 years ago in his NYC studio apartment with $5000. It is now the largest adult education company in North America and offers over 8000 classes per year. In addition to its regular course schedule The Learning Annex Real Estate & Wealth Expo, the largest of its kind, will tour 14 cities in 2007 after completing a 10 city tour in 2006. The Learning Annex most recently made the INC 500 List of fastest growing private companies and expects to triple its sales again this year. For more information log onto LearningAnnex.com

About Warren Buffett's charity, Girl's Inc:

Girls Incorporated is a nonprofit organization that inspires all girls to be strong, smart, and bold. With local roots dating to 1864 and national status since 1945, Girls Inc. has responded to the changing needs of girls through research-based programs and public education efforts that empower girls to understand, value, and assert their rights. In 2005, Girls Inc. reached nearly 800,000 girls through Girls Inc. affiliates, our website, and educational publications.

The Learning Annex

CONTACT: Heather Moore, The Learning Annex, +1-646-346-2904 office,+1-917-312-1077 cell

Web site: http://www.learningannex.com/

-- posted by PEIC

» smile_1 - Berkshire Hathaway stock hits $100,000

In response to Berkshire Hathaway stock hits $100,000 posted by Kirk:

Reflects the effect of stock splits. Buffett told shareholders on March 14, 1984, when the stock was $1,300, he had no intention of splitting the shares. But he offered lower-cost class B shares (BRKB) in 1996. Consider what a no-split policy can do: If General Electric (GE) hadn't split its stock nine times since going public in 1892, it would now be $163,722, not $35.53, GE says.

______________

$1300/shr to 100,000/shr is 21.16% annualized return, certainly nothing to sneeze or goof on, and pretty impressive when you consider Buffet stayed away from tech and stayed with what he knew, but GE is correct in their statement that many a stock including GE would best that $100,000 per share level with a no-split policy.

MSFT probably Intel and many other stocks unsplit would best that record.

-- posted by smile_1

» axolotl - Berkshire Hathaway stock hits $100,000

In response to Berkshire Hathaway stock hits $100,000 posted by smile_1:
No dividends helped too. It is just an ecentric thing that penalizes the stock - at least do some splits to be reasonable, but it does make it easy to see Warren's record. This awakening of BRKA is a sign that this upward market move is real because BRKA does not make many false moves.

-- posted by axolotl

» Jas_Jain - Warren Buffet: “They [US Govt.] Are Taking Very Very Good Care o

October 26, 2006

Warren Buffet: "They [US Govt.] Are Taking Very Very Good Care of the Rich"

"I have the lowest tax rate in my office. The receptionist pays higher tax rate than I."

The quotes are from an interview that Mr. Buffett gave recently. Yeah, I know, Warren Buffett is a socialist and Jas Jain (a born capitalist) is a socialist too.

The second richest man in the world is second only because the richest man became rich by being the biggest Crook in the world (by engaging in what Buffett thought, in 1995!, was financial fraud, i.e., not expensing options from 1995-2005 and inflating earnings).

The governments of Anglo-America have been controlled by Capitalist Crooks for more than 300 years. The so-called democracy IS a Scam, a Fraud, a Con Game that allows the Capitalistic Crooks to keep people in line and fight their wars. Americans are in denial of the fact that they don't own their govt. and the Crooks do. What saved Americans in the past was that Capitalist Crooks were God-fearing and that is what kept them from being financial rapists of the population. No more. Financial rapists, without the fear of God, are in charge now. The chickens will come home to roost when, in another few short years, at least 50 million American households will be victims of the largest financial rape in American history.

Yeah, yeah, the American system will survive all this. Unpleasant surprises await those who suffer from blind faith.

It is NOT the System, Stupid! (It is the character of the people, especially, the leaders).

Jas

-- posted by Jas_Jain

» axolotl - Warren Buffet: “They [US Govt.] Are Taking Very Very Good Care o

In response to Warren Buffet: “They [US Govt.] Are Taking Very Very Good Care o posted by Jas_Jain:
Warren likes to engage in silly stuff such as claiming his secretary pays a higher tax rate. No, Warren, you make a salary as CEO of BRKA and you pay the same rates on that salary as your secretary. Any investment income may be taxed lower, but your secretary is free to invest too, Warren - even in BRKA. Warren just doesn't get it - he is free to give whatever he wishes to government - apparently Warren likes force of law to take some of his money. Warren also contradicts himself by giving his money to a charity instead of government - he is saying that he thinks Bill Gates is better than the government at redistributing income. Silly stuff, Warren. Of course Warren once said "listen to the politicians - they have experience at their jobs."

-- posted by axolotl

» Happy_2 - starving artist

I think Warren may be talking about the combined effect of Income taxes and Social Security Taxes. It always amazes me that an artist client of mine whose taxable income is $29,000 per year is in 50% bracket.

25% Federal bracket
9.3% Calif. braket
15 % payroll taxes
2% CA SDI

total 51.3%.

Seems pretty high to me.

-- posted by Happy_2

» axolotl - Is Warren going to collect any SS?

Yes, some people pay SS tax and will never collect much from SS (I think) because their income will be too high in retirement. The statistics are that the top 5% or 10% in income, pay like 80% or 90% of all income taxes. In any case, Warren is wrong about rates being the problem - a flat tax or a VAT tax would be more efficient and less socialist and less complicated. Warren is super at making money, but on other subjects, he is not so super.

-- posted by axolotl