Warren Buffett Can’t Find Anything Big to Buy

Blueneck

Former Staff
Jun 2007
53,420
39,689
Ohio
#1
Warren Buffett is always on the hunt for “elephants,” as he calls large acquisitions. But three years have passed since he bagged a new one.

One reason: The Omaha, Neb., billionaire faces unprecedented competition from private equity and other funds looking to make fast acquisitions, often at higher prices than Mr. Buffett is willing to pay. His last major deal, the $32 billion purchase of aerospace manufacturer Precision Castparts Corp., closed in January 2016.

His competitors—global fund managers—had a record $2.1 trillion in private capital ready to deploy as of June 30, according to data from Preqin. That is roughly double the amount they had a decade earlier. Mr. Buffett’s Berkshire Hathaway Inc., meanwhile, had $103.6 billion in cash as of Sept. 30, the fifth straight quarter those holdings exceeded $100 billion.

“With rates low and private equity folks drunk with cash and money all over the place, it’s just naturally going to be harder” for Berkshire to find acquisitions, said Bill Smead, chief executive of Smead Capital Management Inc., which holds Berkshire shares.

On Saturday investors are hoping for new hints on Berkshire’s plans to spend its cash, including whether the company will increase buybacks, in Mr. Buffett’s annual letter to Berkshire shareholders. Berkshire is also expected to release its annual results.

Mr. Buffett’s letters are widely read on Wall Street and beyond for his insights on investing, economics and other topics. In last year’s letter, Mr. Buffett complained about the difficulty of finding attractive deals. “Prices for decent, but far from spectacular, businesses hit an all-time high” in 2017, Mr. Buffett wrote. “Indeed, price seemed almost irrelevant to an army of optimistic purchasers.”
Poor Warren. Must suck to be him.


Warren Buffett Can’t Find Anything Big to Buy

This is why so many people are saying why the fuck not tax billionaires at 70%. This man has 100 billion in cash laying around and he can't find anything to spend it on. Meanwhile average Americans are 3 or more months behind in their car payments and don't have $400 in the bank for an emergency.

It's sickening.
 
Jul 2014
35,316
9,274
midwest
#2
It's not all about him.

Lots of people invest in his company.

He invests THEIR money.

He makes lots of money for lots of people.
 
Feb 2011
16,489
5,756
Boise, ID
#3
Poor Warren. Must suck to be him.

Warren Buffett Can’t Find Anything Big to Buy

This is why so many people are saying why the fuck not tax billionaires at 70%.
Tax billionaires' what at 70%? Their ordinary income? Capital gains? Their wealth? 70% upper tax brackets are not about billionaires.

This man has 100 billion in cash laying around and he can't find anything to spend it on. Meanwhile average Americans are 3 or more months behind in their car payments and don't have $400 in the bank for an emergency.

It's sickening.
First of all, Buffet himself doesn't have this much in cash, the firm he manages does. Second, you need to read between the lines a little here. Note the language you quoted, "often at higher prices than Mr. Buffett is willing to pay."

Mr. Buffett's willingness to pay is a reflection of his beliefs about valuation. If he thinks things are overvalued, he won't buy. If he's not buying, it's a reflection of his belief that things are overvalued, which causes his overall position to be conservative, which is essentially a belief that we are headed for a dip, because that's where overvaluation eventually ends up.

The guy and the people he's hired have a track record of being relatively smart in this way. The guy himself is also politically smart in that he has publicly advocated for higher taxes on the rich. When you're superlatively rich, saying those types of things is a great public relations strategy, as it causes the equality advocates to lay down their pitchforks before they arrive at the gates of your mansion.
 
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Blueneck

Former Staff
Jun 2007
53,420
39,689
Ohio
#4
Tax billionaires' what at 70%? Their ordinary income? Capital gains? Their wealth? 70% upper tax brackets are not about billionaires.



First of all, Buffet himself doesn't have this much in cash, the firm he manages does. Second, you need to read between the lines a little here. Note the language you quoted, "often at higher prices than Mr. Buffett is willing to pay."

Mr. Buffett's willingness to pay is a reflection of his beliefs about valuation. If he thinks things are overvalued, he won't buy. If he's not buying, it's a reflection of his belief that things are overvalued, which causes his overall position to be conservative, which is essentially a belief that we are headed for a dip, because that's where overvaluation eventually ends up.

The guy and the people he's hired have a track record of being relatively smart in this way. The guy himself is also politically smart in that he has publicly advocated for higher taxes on the rich. When you're superlatively rich, saying those types of things is a great public relations strategy, as it causes the equality advocates to lay down their pitchforks before they arrive at the gates of your mansion.
Oh, well excuse me for not being more careful before allowing my jaw to drop open when I hear that anyone; person, company or investment firm, has 100 billion dollars in cash to go shopping with.

Wealth inequality is a real thing. Did you know that the Walton family makes more money in one minute than it's employees make in a year?

I've never believed that people paying higher taxes benefited me in any way unless those higher taxes are directed towards a program such as Medicare For All or something like that. But I truly believe this shit is rigged so people who work hard their entire lives can't keep their heads above water, always worrying about money, always one emergency away from bankruptcy. Is there nothing we can do to get the wealthy to start investing with their hearts? There doesn't seem to be a single billionaire who's out to prove you do anything with money except use it to make more money and if you can screw over your employees to do it, that's even better.

You would think they'd get bored with that.

They told us greedy employees and cheap customers were why they stopped offering pensions or commission for sales clerks. "We have to stay profitable" is the lie that justifies less employees doing more work for less pay and benefits.

That may be true for small businesses trying to compete with Walmart, but it's really not true for Amazon or any of the rest of those who live in clouds made of money. I think they like making people who work for them suffer.

I'm concerned about our collective humanity. I think it's on the verge of extinction.
 
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Apr 2015
13,421
2,306
Katmandu
#5
Poor Warren. Must suck to be him.


Warren Buffett Can’t Find Anything Big to Buy

This is why so many people are saying why the fuck not tax billionaires at 70%. This man has 100 billion in cash laying around and he can't find anything to spend it on. Meanwhile average Americans are 3 or more months behind in their car payments and don't have $400 in the bank for an emergency.

It's sickening.
This is actually a big problem, companies have a lot of cash to spend but the market is way over priced so there are few acquisitions that are worth it. A decade of near zero interest rates from the FED and the transition from traditional retirement plans have made it worse. That is what is really driving all the stock buy backs, there isn't another outlet for that cash.

Buffet wouldn't be in that 70% AOC bracket, his salary is $100k a year. Buffet's $100 billion estate won't see a penny of taxation, that is something else that should be addressed.
 
Likes: Macduff

Blueneck

Former Staff
Jun 2007
53,420
39,689
Ohio
#6
This is actually a big problem, companies have a lot of cash to spend but the market is way over priced so there are few acquisitions that are worth it. A decade of near zero interest rates from the FED and the transition from traditional retirement plans have made it worse. That is what is really driving all the stock buy backs, there isn't another outlet for that cash.

Buffet wouldn't be in that 70% AOC bracket, his salary is $100k a year. Buffet's $100 billion estate won't see a penny of taxation, that is something else that should be addressed.
You talking about capital gains taxes?
 

Tedminator

Former Staff
Jun 2010
26,753
18,862
South Florida
#8
Poor Warren. Must suck to be him.


Warren Buffett Can’t Find Anything Big to Buy

This is why so many people are saying why the fuck not tax billionaires at 70%. This man has 100 billion in cash laying around and he can't find anything to spend it on. Meanwhile average Americans are 3 or more months behind in their car payments and don't have $400 in the bank for an emergency.

It's sickening.
In that case he should guest star on Shark Tank for shits&giggles.
 
Likes: Blueneck

Blueneck

Former Staff
Jun 2007
53,420
39,689
Ohio
#10
No, Buffet's estate won't have to pay capital gains tax.

Buffet pays some capital gains annually, but nothing significant compared to the increase in his portfolio.
Remember the good old days when these geezers would retire and give the bulk of their money to philanthropic causes?
 
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