A Lesson From Buffett: Doubt Yourself

May 5, 2013

A Lesson From Buffett: Doubt Yourself

There was no big news at Berkshire Hathaway Inc.’s annual meeting this past weekend, but there was one great lesson for investors: Perhaps the most important thing you can do when everything seems to be going right in your portfolio is to listen to somebody who insists you are wrong. To spice up the annual ritual, Berkshire’s chairman, Warren Buffett, invited someone who has placed a bet against the stock—short-seller Doug Kass of hedge fund Seabreeze Partners Management—to join the panel of analysts posing questions to Mr. Buffett and vice chairman Charles Munger. Carp, if you will, that it didn’t take much bravery for Mr. Buffett to give air time to one skeptic among the more than 35,000 worshippers who would trample their grandmothers to kiss Mr. Buffett’s feet if he took his socks off. Complain, as many already have, that Mr. Kass’s questions weren’t all that tough. Then ask yourself: When is the last time the management of a major U.S. company sought out unrestricted criticism from someone betting against the stock? To get a sense of how unusual it was for Mr. Buffett to invite a bear to ask questions freely, consider a survey of more than 500 companies by the National Investor Relations Institute in 2011. The research found that 80% placed limits on who can ask questions during the quarterly ritual of the earnings conference call. Nearly 25% of the companies took questions only from “pre-approved lists” of callers. Only 11% permitted individual investors to ask questions; just 12% said the floor is open to everyone. What is more, 76% of companies prepared scripted answers to the questions they expected to get. According to the NIRI survey, the prepared comments by top executives that open the typical earnings conference call are prerecorded by about one out of 12 companies, but more than 80% of them don’t disclose that the remarks have been prerecorded. But before you start comparing U.S. corporate management to a closed system like, say, North Korea, ask yourself another question: When is the last time I tried as hard as possible to find someone to refute my own investing ideas? Mr. Buffett is “self-confident, but he’s not afraid of a challenge,” Mr. Kass told me last week. “I believe he enjoys challenges.” A deliberate, lifelong effort to find people to tell him why he might be wrong is one of the keys to Mr. Buffett’s success. It doesn’t come naturally to most investors. Mr. Buffett once noted about the scientist Charles Darwin that “whenever he ran into something that contradicted a conclusion he cherished, he was obliged to write the new finding down within 30 minutes. Otherwise his mind would work to reject the discordant information, much as the body rejects transplants. Man’s natural inclination is to cling to his beliefs, particularly if they are reinforced by recent experience.” Read more of this post

Warren Buffett and Bill Gates Looking Intense While Tossing Newspaper

Bill Gates Looks Super Intense While Throwing This Newspaper

Joe Weisenthal | May 4, 2013, 12:45 PM | 7,632 | 7

At the Berkshire Hathaway annual shareholder meeting, billionaire, Warren Buffett-buddy, and Berkshire board member Bill Gates participated in the annual, folksy tossing of the newspapers. From Reuters: Berkshire Hathaway CEO Warren Buffett (R) watches friend Microsoft Chairman Bill Gates throw a newspaper in a competition just before the Berkshire annual meeting in Omaha May 4, 2013. Buffett and the board of his conglomerate Berkshire Hathaway Inc are “solidly in agreement” on who should be the company’s next chief executive, he said at Berkshire’s annual shareholder meeting on Saturday. And here’s Warren, also looking incredibly focused post-toss.bill-gates-warren-buffett-newspaperwarren-buffett-28

Buffett Has No New Investment Plan in China, Says There’s No Competitive Advantage; The pessimistic remarks about China came as a strong contrast with five years ago when he said China has huge growth potential

Buffett Has No New Investment Plan in China, Says There’s No Competitive Advantage

05-06 13:58 Caijing

The Buffet-backed BYD in March reported a drop of over 94% in net profit for the year 2012 largely due to weakening demands in the world’s second largest economy amid a downturn.

Warren Buffett, the Berkshire Hathaway CEO, said he has no new plans to invest in China, as the Oracle of Omaha remained conservative about competitive edges of the world’s second largest economy, following disappointing performance of his once favored investment in Chinese auto-maker BYD. There’s no competitive advantage in China, said the billionaire in taking up a question from a shareholder from Shanghai as the annual meeting of Berkshire Shareholders was drawing to a close in Omaha on May 4th. The pessimistic remarks about China came as a strong contrast with five years ago when he invested in a new plant of Iscar Metalworking Companies (IMC) in Dalian, a coastal city in northeast China, saying China has huge growth potential.  Buffett purchased 1.3% stake in PetroChina, China’s largest oil and gas producer, with $488million between 2002 and 2003 before selling all the shares in November, 2011, which gained the investor as much as $4billion. Berkshire Hathaway bought 225million shares of BYD, a Chinese auto and battery maker, or just under 10% of the company’s stock at 8 HKD a share before it soared to over 80HKD in 2010. The company, however, had seen slumping businesses since then with its shares dropping as much as over 80% to 12.44HKD in October, 2011. The Buffett-backed BYD in March reported a drop of over 94% in net profit for the year 2012 largely due to weakening demands in the world’s second largest economy amid a downturn. Buffett said he would prefer Chinese companies that export quality goods, especially consumer goods at last year’s annual shareholder’s meeting for Berkshire Hathaway. Berkshire vice chairman Charlie Munger said China has a huge auto market which is BYD’s main focus, and the number of cars he expected BYD to sell in the U.S. would be very small.

Investors having tough time copying Buffett’s strategies these days; Sage of Omaha’s transition to master financier baffles some, but homey advice still rings true

Investors having tough time copying Buffett’s strategies these days

Sage of Omaha’s transition to master financier baffles some, but homey advice still rings true


AP MAY 6, 2013

Israel’s inverted economic pyramid and how to flip it

Israel’s inverted economic pyramid and how to flip it

The opposing examples of IDB Group and Iscar indicate a pressing need to shift the economic narrative from financiers who specialize in gimmicks toward businessmen who build something of real value.

By Sami Peretz | May.03, 2013 | 2:20 PM

Over a hundred years ago, the socialist Zionist leader Dov Ber Borochov defined the structure of Jewish labor in the Diaspora as an inverted pyramid. The narrow base consisted of a few productive workers employed in industry and agriculture and, above them, in a much wider layer, were those dealing in “airy-fairy” jobs (“luftgescheft” in Yiddish), such as middlemen, small merchants and moneylenders.

At that time, the inverted pyramid was the result of Jews being denied access to other jobs and thus pushed into these professions by default. The need, therefore, to transform the Jew from a person dealing with such impractical or insubstantial work into a productive, industrial person was deeply embedded and an integral part of the drive to create a Jewish national home in Israel. A hundred years later, the financial news from this week may confirm this Zionist ideal.

On one hand, we have the Wertheimer family, founders of Iscar, a shining example of a productive industrial business, which just sold another 20 percent stake in the company to Warren Buffett for $2 billion, a deal that reflected a total company worth of $10 billion. On the other hand, a court has nominated an observer to supervise activity at IDB Development, one of the companies in Nochi Dankner’s collapsing pyramid.  Read more of this post

Korean chaebol forced to reduce cross-affiliate deals

2013-05-05 10:48

Chaebol forced to reduce cross-affiliate deals

Regulations feared to drive large firms out of country
By Lee Hyo-sik
President Park Geun-hye’s pledge to penalize inter-subsidiary dealings has been troubling Korea’s family-controlled conglomerates. She has vowed to curb business transactions among chaebol affiliates in the name of “economic democratization,” which her advisors say seeks to correct unfair business practices by large family-run groups, as well as protect small businesses.

The government expects the National Assembly will approve the revised Fair Trade Act in July, designed to discourage intra-group transactions by imposing fines on and prosecuting those orchestrating them.

Policymakers and civic groups argue that generating the bulk of revenues from exclusive dealings with affiliated companies is tantamount to unfair business practices. Such transactions, they say, deprive unrelated firms, most of which are small- and medium-sized enterprises, of potential business opportunities.

They also say the exclusive intra-group dealing is misused, serving to boost the wealth of offspring and other family members of group chairmen. These family members often hold substantial stakes in the benefiting entities. Read more of this post

More chaebol children stock-rich

2013-05-05 6:49 p.m.

More chaebol children stock-rich

By Cho Mu-hyun

The number of parents and grandparents transferring stocks worth more than 100 million won ($ 91,300) to childrens names has soared to a record high, according to a report released Sunday.Chaebul.com, which tracks large conglomerates and their owners said, as of April, there were 118 102 children under the age of 12 who had stocks worth 100 million won The figure was a year ago, thirty one such offspring had stocks worth more than 1 billion won, and two had more than 10 billion won The richest child in Korea is the 12-year-old son of Huh Yong-soo, senior vice president of GS Energy and cousin of GS Group Chairman Huh Chang-soo. The boy had 42.9 billion won worth of stocks. Huhs son topped the list last year as well, when his stocks were valued at 45.3 billion won. He received 259,000 of stocks GS Holdings when he was four years old in 2004, and currently has 740,341 His nine-year-old younger brother was runner-up with 17.4 billion won worth of stocks Relatives Lim Sung-Gi, chairman and CEO of Hanmi Pharmaceutical, hold seven spots in the top ten aged between five and ten, they each own stocks valued at more than 8.44 billion won in the company’s subsidiaries Hanmi Science and Hanmi Pharm LB Investment CEO Koo Bon-chuns two sons, aged 12 and 10, had stocks worth 6.05 billion won and 55.5 billion won. The elder son first appeared on the annual list two years ago, when his stocks were worth 7.5 billion won. Koo is the son-in-law of Lee Sang-deuk, a former lawmaker of The Saenuri ruling Party and the elder brother of former President Lee Myung-bak, Seoul Pharma CEO Hwang Woo-sungs two 9-year-old sons both had stocks valued at 4.25 billion won four of the grandchildren of Hankook Tire Chairman Cho Yang-rae appeared on the list. The 7-year-old son and 10-year-old daughter of sis son and Hankook Tire President Cho Hyun-bum, who is also the son-in-low of former president Lee Myung-bak, owned stocks worth 810 and 800 million won, respectively, there are also stock-rich Infants The granddaughters of Koo and the Korea Watos Chairman Song Gong-suk, both just turned 1 who own stocks valued at 160 and 100 million won Critics say owners of conglomerates have been transferring stocks larger to relatives so they can accumulate fortunes by receiving dividends or making it easier for them to control their BUSINESSES One example is the Hyosung Group, whose Chairman Cho Suk-Raes three grandchildren owned stock in the company worth around 80 million won in 2008. When the stock price quadrupled in 2010, it was sold for a profit of 300 million won each. Another advantage of the ploy includes avoiding heavy taxes.

China-only Iron Man 3: whatever it takes to profit

China-only Iron Man 3: whatever it takes to profit

Staff Reporter


The special edition of Hollywood blockbuster Iron Man 3 made exclusively for Chinese audiences reflects the compromises that movie producers are willing to make to crack the lucrative Chinese film market, reports the Commercial Times, our Chinese-language sister paper.

Iron Man 3, co-produced by US Marvel Studios and China’s DMG Entertainment Group, debuted in China last week with four minutes of additional footage and featuring the so-called “Chinese elements” required by Beijing to satisfy tight controls designed to protect the domestic film industry. This highly anticipated China-exclusive version, however, has been widely panned for coming across as awkward and adding nothing to advance the flow and plot points of the film.

According to Chinese viewers, the extra four minutes of footage were dominated by domestic product placement, including the milk product Guo Li Duo and domestic electronics makers TCL and Zoomlion. Veteran Chinese actor Wang Xueqi, who made a five-second cameo in the international version of the film, was given more screen time as a doctor prescribing Chinese medicine to aid Iron Man, while Chinese superstar Fan Bingbing, who did not appear at all in the international version, played Wang’s nameless assistant. Iron Man is also seen on a television screen with cheering Chinese school children. Read more of this post

China Intensifies Scrutiny of Importer, Exporter Capital Flows

China Intensifies Scrutiny of Importer, Exporter Capital Flows

China’s currency regulator said it will increase scrutiny of cross-border capital flows by importers and exporters to prevent speculative funds entering the country disguised as trade bills. The State Administration of Foreign Exchange will send out risk-warning notices to companies whose goods and capital flows do not match, as well as those that are bringing big amounts of cash into China, it said in a statement on its website. Recipients of such notices have 10 days to explain the need for their transactions and those that fail to comply or are unable to provide satisfactory proof will then be placed on SAFE’s so-called B list, which means their activities will be closely monitored for a period of at least three months. A return to SAFE’s A list can only take place once relevant indicators return to a normal range, the statement said. SAFE said it would finalize the B list and send out the first batch of warnings before May 10. It also ordered banks to adjust their foreign-exchange positions to comply with regulations. The yuan fell 0.03 percent to 6.1572 per dollar as of 12:01 p.m. in Shanghai, after earlier touching a 19-year high of 6.1521.

–Judy Chen. Editors: James Regan, Robin Ganguly

To contact Bloomberg News staff for this story: Judy Chen in Shanghai at xchen45@bloomberg.net.

German euro founder calls for ‘catastrophic’ currency to be broken up

German euro founder calls for ‘catastrophic’ currency to be broken up

Oskar Lafontaine, the German finance minister who launched the euro, has called for a break-up of the single currency to let southern Europe recover, warning that the current course is “leading to disaster”.

Mr Lafontaine said on the parliamentary website of Germany’s Left Party that Chancellor Angela Merkel will “awake from her self-righteous slumber” once the countries in trouble unite to force a change in crisis policy at Germany’s expense. Photo: Reuters

By Ambrose Evans-Pritchard, International Business Editor

9:30PM BST 05 May 2013

“The economic situation is worsening from month to month, and unemployment has reached a level that puts democratic structures ever more in doubt,” he said.

“The Germans have not yet realised that southern Europe, including France, will be forced by their current misery to fight back against German hegemony sooner or later,” he said, blaming much of the crisis on Germany’s wage squeeze to gain export share. Read more of this post

Buffett worries about Fed’s ‘huge experiment’, thinks the Fed chief may have overplayed his hand

Buffett worries about Fed’s ‘huge experiment’

By Stephen Gandel, senior editor May 4, 2013: 3:17 PM ET

Says he admires Ben Bernanke, but thinks the Fed chief may have overplayed his hand.

Warren Buffett

FORTUNE — Warren Buffett has a piece of advice for Ben Bernanke: It’s easier to buy than it is to sell.

Buffett, speaking on Saturday at Berkshire Hathaway’s (BRKAannual meeting in Omaha, said he is worried about what will happen when the Federal Reserve tries to wind down its recent efforts to stimulate the economy. Via a program nicknamed QE, short for quantitative easing, the Fed in recent years has bought up over $2 trillion in bonds in order to lower interest rates and promote borrowing and investment.

Some have warned that when the Fed decides to sell its trove of bonds, or even just stops adding to it, stock markets could tank. Rising interest rates could cause banks to lose billions, perhaps igniting another financial crisis. Buffett says we don’t know what will happen, but he is concerned.

“QE is like watching a good movie, because I don’t know how it will end,” says Buffett. “Anyone who owns stocks will re-evaluate his hand when it happens and that will happen very quickly.” Read more of this post

Google set to unveil subscriptions for specialist YouTube videos

May 5, 2013 2:52 pm

Google set to unveil subscriptions for specialist YouTube videos

By Matthew Garrahan in Los Angeles and Andrew Edgecliffe-Johnson in New York

Google is on the verge of unveiling an à la carte subscription service for some of YouTube’s specialist video channels, to finance a broader range of content and add a second revenue stream to the digital video market leader.

The move, which has been in the works for months, could be announced as early as this week. It will apply to as many as 50 YouTube channels, people familiar with the plan say. Viewers will be able to subscribe to each channel for as little as $1.99 a month. Read more of this post

Marketers Must Understand The Power Of Three

Marketers Must Understand The Power Of Three

Ira KalbMarshall School of Business, USC | May 5, 2013, 6:37 AM | 2,369 | 

Good marketing follows certain universal truths. To succeed in an increasingly skeptical and fragmented marketplace, therefore, it behooves marketers to learn and apply these universal truths to marketing their products. One of the most important “truths” is the “power of three.”

Third rock from the sun

Most of us learned in science class that the Earth is the third rock from the sun. Relating to another story we learned in school, Goldilocks and the Three Bears, life as we know it evolved on Earth because it is not too hot and not too cold. The climate is just right, or what scientists call the habitable zone of a solar system. While it may be difficult to prove that the power of three comes from this coincidence, there is no doubt that three derives its power from the evolution of the human brain.

People like choice but not too many choices

Our brains evolved in a way protect us from harm. As part of our protection system, we like to have choices. We know that if we don’t have a choice in a dangerous situation, we may not find a way out of it. On the other hand, our brains also know that if we have too many choices, we often get confused. If we are confused, we may make the wrong choice, which could cause us serious harm. This means that the brain likes to have choices, but not too many choices. That brings us back to Goldilocks. Three choices enable us to avoid the ones that are too hot and too cold, too big and too small, and select the one that is just right. To tap into this protection mechanism in the human brain, marketers should recognize this power of three that is built into almost everything. Read more of this post

The Chinese Are Freaking Out About A Potential Drop In Housing Prices

The Chinese Are Freaking Out About A Potential Drop In Housing Prices

The Economist | May 4, 2013, 5:54 PM | 10,113 | 9

ASK ordinary people about their own Chinese dream, and you find owning a home is high on the list.

But years of rising house prices have put that dream out of reach of many. A slowing economy appeared to take some of the heat out.

Now, alas, the residential property market is soaring again (see chart). A new survey of developers and property firms on May 2nd showed average house prices up more than 5% in April on a year earlier.

20130504_cnc511 Read more of this post

What LinkedIn Looked Like When It Started 10 Years Ago

What LinkedIn Looked Like When It Started 10 Years Ago

Kevin Smith | May 5, 2013, 10:11 AM | 2,688 | 1

Today is LinkedIn‘s 10th birthday. The professional social network is over 200 million members strong. LinkedIn has gone through many site redesigns and added features and services to help its users connect even further. But here’s what LinkedIn’s first profiles looked like 10 years ago:


LinkedIn’s Real Value: Knowing All About People in All the Right Places

May 5, 2013, 5:20 p.m. ET

LinkedIn’s Real Value: Knowing All About People in All the Right Places


Dear LinkedIn LNKD -12.93% : Please put up a few more disappointing quarters so investors who have missed the boat can pile in.

Smart types long ago realized the professional social network is more than just an improved online job board.

LinkedIn Corp.’s main product, driving 57% of first-quarter sales, is enterprise software. It charges recruiters about $8,500 annually for premium tools to find, contact and track a wide pool of desirable job candidates. Alternatively, a headhunter may charge a quarter of a new hire’s first-year salary. Fill one slot and LinkedIn pays for itself. That should help the company to steadily raise prices, especially as more members sign up and it adds new features like “endorsements” where skills listed on a profile are verified by contacts. A more modest price increase went into effect this quarter. But LinkedIn raised prices to $8,200 from $7,000 in the first quarter of 2011. Since then, the number of corporate customers has risen nearly fivefold to more than 18,000.

One reason clients didn’t seem to mind the higher price is the expanding pool of potential hires: Over the same period, the number of LinkedIn users has leapt to nearly 220 million from 90 million. Read more of this post

By allowing the use of software, rather than lawyers, to sift through legal documents in the AB InBev deal, the Justice Department is likely to spark interest in such programs

Updated May 5, 2013, 8:47 p.m. ET

Document-Review Software Gets Boost From AB InBev Deal With Grupo Modelo



In the legal arena’s contest of man versus machine, the U.S. Justice Department has given a big boost to the machines.

Department officials reviewing the proposed merger of Anheuser-Busch InBev NVBUD +1.00% and Mexico’s Grupo Modelo GMODELO.MX -0.64% SAB recently approved a request to use software—rather than a horde of lawyers—to determine which documents needed to be turned over to the government.

Cases involving large companies often require legal counsel to sift through millions of electronic documents. In the past decade, that task has typically fallen on armies of contract, or temporary, lawyers who earn $25 to $40 an hour. Industry experts peg the cost for clients at more than $1 per document. Read more of this post

The Cold Truth About Emotional Investing: New research shows that even the pros invest more from the heart than from logic

May 2, 2013, 3:58 p.m. ET


The Cold Truth About Emotional Investing

New research shows that even the pros invest more from the heart than from logic


When it comes to investing, emotion is commonly seen as a weakness that must be shunned. But new research from professors David Tuckett and Richard Taffler suggests that emotions play an inevitable part in all investing, by amateurs and pros alike.

In their recent book “Fund Management: An Emotional Finance Perspective,” the professors present the results of interviews with 52 experienced fund managers in the U.S., U.K., France and Asia. The picture that emerges is one of acute anxiety and emotional conflict.

The bottom line, they say: Individuals and pros perform better when they acknowledge that investing is inherently emotionally charged and when they understand how emotions affect their behavior.

We talked with Prof. Taffler, professor of finance and accounting at Warwick Business School in the U.K., and Prof. Tuckett, a fellow of the Institute of Psychoanalysis in London and visiting professor at University College London, about the role of emotions in investing. Here are edited excerpts of those conversations. Read more of this post

Companies Add to Lineups of ‘Free’ ETFs

Updated May 3, 2013, 1:29 p.m. ET


Companies Add to Lineups of ‘Free’ ETFs

Still, trading commissions are only one cost, so other funds may be more attractive on balance



How attractive is “free”? Some of the largest online brokers of exchange-traded funds are determined to find out.

Two have recently expanded the lineups of ETFs they offer without trading commissions, bringing their menus closer to the size of their competitors’.

In February, Charles Schwab Corp.SCHW +6.27% expanded its commission-free ETF menu to 105 funds, up from just its own 15 broad-based index offerings. A few weeks later, Fidelity Investments expanded its exclusive partnership with BlackRock Inc.BLK +3.43% to offer 65 of BlackRock’s iShares ETFs commission-free, up from 30, in addition to Fidelity’s one ETF.

Both programs now challenge TD Ameritrade Holding Corp. AMTD +6.08% and Vanguard Group, whose commission-free ETF choices were already large and diverse. TD Ameritrade offers 101 funds and exchange-traded notes selected by researcher Morningstar Inc., and Vanguard features all 65 of its own ETFs. Read more of this post

A New Era for Do-It-Yourself Investing. Many investors want to call the shots—while turning to tools and people for help as needed

Updated May 3, 2013, 11:37 a.m. ET

A New Era for Do-It-Yourself Investing

Many investors want to call the shots—while turning to tools and people for help as needed

Instead of going it entirely on their own, more investors are pursuing a kind of modified DIY approach, tapping an array of increasingly sophisticated online tools and a-la-carte advice services offered by financial firms. The result is that there has been strong growth in customer assets at the mutual-fund and discount-brokerage companies that have traditionally served the do-it-yourself market, a group that includes Vanguard Group, Fidelity Investments and Charles Schwab Corp.SCHW +6.27%

IF-AB144_DIYcov_G_20130502113550IF-AB146_DIYjum_G_20130501151515 Read more of this post

Shedding some light on the dark world of party discipline in China

Shedding some light on the dark world of party discipline

Monday, 06 May, 2013, 12:00am

Wang Xiangwei xiangwei.wang@scmp.com

Lawyers and media commentators say the harsh system known as shuanggui contravenes efforts to push for rule of law

In China’s uphill battle against rampant corruption, no other Communist Party agency evokes more fear among officials than the Central Commission for Discipline Inspection (CCDI), the country’s top anti-graft watchdog.

The commission’s name may sound innocuous, and so does its most potent weapon, known as shuanggui – a two-word abbreviation from a clause in the party’s regulations that requires members to explain their so-called disciplinary violations at a specific time and venue.

But those two words have given the commission sweeping powers to indefinitely detain and question any official suspected of wrongdoing. Read more of this post

‘Boring’ Blue Chips Lead Record-Setting Market Runup; Bufett’s Bear Doug Kass says when the market is led by defensive stocks, “it is time to be fearful of the broader markets.”

May 5, 2013

‘Boring’ Blue Chips Lead Record-Setting Market Runup



Boring bulls are powering the market higher.

That the stock market has climbed as much as it has this year surprises many analysts. Perhaps the biggest shocker: the kinds of companies leading the charge.

Technology, Internet or other companies making cutting-edge products? Hardly. A group of decidedly unsexy companies—from Procter & Gamble PG +0.55% (PG) and Johnson & Johnson JNJ +0.69% (JNJ) to Colgate-Palmolive CL +0.35% (CL), Clorox (CLX) and General Mills GIS +0.54% (GIS)—are en vogue. Read more of this post

Unmeltable, Uncrushable: The Holy Grail in Painkillers

Updated May 5, 2013, 9:18 p.m. ET

Unmeltable, Uncrushable: The Holy Grail in Painkillers



The arms race to build a safer painkiller is under way.

In the wake of a key decision by the Food and Drug Administration, more than a dozen pharmaceutical companies—from startups to Pfizer Inc. PFE -1.06% —are vying to create painkilling drugs that are difficult to abuse.

The FDA moved last month to block the manufacture and sale of generic versions of the original OxyContin, which has gone off patent but which is easier to abuse than the current version. A newer version of OxyContin, introduced by its maker, Purdue Pharma LP, in 2010, contains an infusion of polymer that makes the pill difficult to crush, meaning addicts can’t get all of the extended-release ingredients at once to get high. Read more of this post

Buffett devotees stick by him even as growth slows; Buffett Says Next CEO to Bolster Berkshire Aura for Crisis Deals

Buffett devotees stick by him even as growth slows

4:04pm EDT

By Jonathan Stempel and Jennifer Ablan

OMAHA, Nebraska (Reuters) – Short-seller Douglas Kass, Warren Buffett’s handpicked bear, raised a concern on the minds of many shareholders at the “Woodstock for capitalists” this weekend: Has Berkshire Hathaway Inc become so big that it will find it hard to grow?

Many retail investors who converged on Omaha, Nebraska, for Berkshire’s annual meeting on Saturday acknowledged that its fastest growth days are likely behind it. But they said Berkshire is still a good long-term bet as faith remains in Buffett and his management team’s more than 4-decade-long record of stellar returns, and the company’s tentacles into many sectors of the U.S. economy.

“Yes, it is a concern, but I have to get my expectations in line,” said Julie Fehrnstrom, a mother of three from Orinda, California, attending her fifth meeting. “They are not driven by short-term decision making and they have really smart management. You really don’t always find that.” Read more of this post

Leaders Pore Over Southeast Asia’s Investment Hurdles

May 5, 2013, 10:14 p.m. ET

Leaders Pore Over Southeast Asia’s Investment Hurdles


GREATER NOIDA, India—Asian policy makers have been working hard to improve access to funding for regional infrastructure projects, but other hurdles could be a bigger constraint to investment in the sector. Read more of this post

Disruptions: New Motto for Silicon Valley: First Security, Then Innovation. Silicon Valley to replace posters with ones that say, “Move slowly and protect your users.”

MAY 5, 2013, 11:00 AM

Disruptions: New Motto for Silicon Valley: First Security, Then Innovation


At Facebook’s headquarters in Palo Alto, Calif., are stark white posters with bright red statements like “Done is better than perfect” and “Move fast and break things.”

These disruptive philosophies embody the spirit not just of Facebook but of Silicon Valley. Yet today, when technology companies have become the prime targets of rogue governments and hackers, the ideologies that drive these companies to provoke could end up disrupting these companies.

Conversely, the signs sitting in security research firms across the country warn, “Carelessness causes security incidents.”

Although technology companies say they take security seriously, protecting their customers seems to come second to announcing new products. Take Twitter, where people’s accounts are frequently hacked. In the last few months alone, this has happened to Burger King, BBC, NPR, The Associated Press and a slew of celebrities and users. In that time, Twitter has proudly announced updates to features on its mobile and desktop apps, introduced a music Web site and redesigned its company blog. But it still hasn’t released two-factor authentication, a security tool used by the rest of the industry to deter hackers. Read more of this post

Media Giants Chase Online Ads With Original Shows

May 5, 2013

Media Giants Chase Online Ads With Original Shows


Everyone wants to be in show biz, and these days — on the Web at least — it seems as if everyone is.

Digital and traditional media companies, including newspapers and magazines, have for years been building a video presence on the Internet. But until now the offerings have largely been low-budget, single-camera affairs featuring talking heads.

Last week, however, major media companies like Condé Nast, The Wall Street Journal and Univision presented ambitious slates of original programming to advertisers for the first time.

Companies that were already producing Web content, like Yahoo and Hulu, also announced greatly expanded offerings.

As a result, viewers are being bombarded with an array of new Internet programs — 11 from Yahoo, 14 from AOL and a whopping 30 from Condé Nast, including one that will let viewers watch a Vogue editor, Hamish Bowles, as he shops around the world. Read more of this post

Warren Buffett Says He’s Not a Buyer of Gold After Price Slump

Warren Buffett Says He’s Not a Buyer of Gold After Price Slump

Billionaire investor Warren Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., comments on the investment appeal of gold. He spoke to reporters in Omaha, Nebraska, on May 2. Gold rallied 4.9 percent in the past two weeks after entering a bear market April 12. Futures in New York are still down 13 percent this year to $1,464.20 an ounce. On whether he would buy gold after recent declines:

“No. Gold’s not reproduced or anything since I wrote about it a year or two ago. It just sits there, and you hope somebody pays you more for it. ‘‘If gold went to $1,000 I wouldn’t be a buyer. If it went to $800, I wouldn’t be a buyer. It’s never interested me. If you go back to 1965, Berkshire was at $15 and gold was at $35, so you could’ve bought two shares of Berkshire for an ounce of gold, a little more than two shares. And so far, two shares of Berkshire’s been better.” Read more of this post

Sweden a Crisis Casualty No More Shows How Haven Appeal Is Won

Sweden a Crisis Casualty No More Shows How Haven Appeal Is Won

After suffering through devaluations, three years of economic contraction and a banking crisis in the 1990s, Sweden has learned how to handle financial turmoil.

Now, the largest Nordic economy is emerging as a permanent haven from global market turbulence, according to the nation’s debt office.

“Sweden is looked at in a different light than before,” Thomas Olofsson, head of the Swedish government’s debt management, said in an interview in Stockholm. “There’s definitely a completely different interest in Sweden than five to 10 years ago. In the past, the Swedish exchange rate and interest rates often suffered during times of turbulence in a way that we haven’t seen this time around.”

The country cemented its status as a haven from Europe’s debt crisis last year, after posting the biggest economic rebound in the European Union in 2010 while keeping its budgets in surplus. Sweden boasts the lowest default risk in the world, after oil-rich Norway, credit derivatives suggest, and has managed to produce some of Europe’s best-capitalized banks.

The success in navigating way through the current crisis follows lessons learned two decades ago. Swedes suffered three years of economic decline from 1991 through 1993, culminating in the 1992 currency crisis, when the Riksbank abandoned the krona peg after failing to stem capital flight even with a 500 percent interest rate. Read more of this post

Berkshire Skips Apple Bonds as Buffett Says Not at Those Yields

Berkshire Skips Apple Bonds as Buffett Says Not at Those Yields

Warren Buffett, the billionaire chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), said he isn’t investing in corporate debt, including Apple Inc. (AAPL)’s record offering, because yields are too low. “We’re not buying corporate bonds of any kind now,” Buffett, 82, said May 4 during an interview with Bloomberg Television’s Betty Liu in Omaha, Nebraska, where Berkshire held its annual meeting. “Not at those yields.” Berkshire held $12.2 billion of corporate bonds as of March 31, according to a quarterly filing issued on May 3. That’s down 14 percent from two years earlier. The value of Berkshire’s equity portfolio climbed 54 percent to $97.2 billion in the two years ended March 31 as markets rallied and Buffett added shares of International Business Machines Corp. Yields on debt from corporate securities to Treasuries have tumbled as the Federal Reserve slashed interest rates and bought bonds to help the economy recover from recession. The payout rate on dollar-denominated company debt fell to a record 3.35 percent on May 2, according to the Bank of America Merrill Lynch U.S. Corporate & High Yield Index. Yields have averaged 5.87 percent during the past decade.

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