How to Stay Out of Debt: Warren Buffett – Financial Future of American Youth (1999)

laatste update: 05-2022

Buffett became a billionaire on paper when Berkshire Hathaway began selling class A shares on May 29, 1990, when the market closed at $7,175 a share. More on Warren Buffett:

In 1998, in an unusual move, he acquired General Re (Gen Re) for stock. In 2002, Buffett became involved with Maurice R. Greenberg at AIG, with General Re providing reinsurance. On March 15, 2005, AIG’s board forced Greenberg to resign from his post as Chairman and CEO under the shadow of criticism from Eliot Spitzer, former attorney general of the state of New York. On February 9, 2006, AIG and the New York State Attorney General’s office agreed to a settlement in which AIG would pay a fine of $1.6 billion. In 2010, the federal government settled with Berkshire Hathaway for $92 million in return for the firm avoiding prosecution in an AIG fraud scheme, and undergoing ‘corporate governance concessions’.

In 2002, Buffett entered in $11 billion worth of forward contracts to deliver U.S. dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion. In 2006, Buffett announced in June that he gradually would give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006. The largest contribution would go to the Bill and Melinda Gates Foundation. In 2007, in a letter to shareholders, Buffett announced that he was looking for a younger successor, or perhaps successors, to run his investment business. Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.

Buffett ran into criticism during the subprime crisis of 2007–2008, part of the late 2000s recession, that he had allocated capital too early resulting in suboptimal deals. “Buy American. I am.” he wrote for an opinion piece published in the New York Times in 2008. Buffett has called the 2007–present downturn in the financial sector “poetic justice”. Buffett’s Berkshire Hathaway suffered a 77% drop in earnings during Q3 2008 and several of his recent deals appear to be running into large mark-to-market losses.

Berkshire Hathaway acquired 10% perpetual preferred stock of Goldman Sachs. Some of Buffett’s Index put options (European exercise at expiry only) that he wrote (sold) are currently running around $6.73 billion mark-to-market losses. The scale of the potential loss prompted the SEC to demand that Berkshire produce, “a more robust disclosure” of factors used to value the contracts. Buffett also helped Dow Chemical pay for its $18.8 billion takeover of Rohm & Haas. He thus became the single largest shareholder in the enlarged group with his Berkshire Hathaway, which provided $3 billion, underlining his instrumental role during the current crisis in debt and equity markets.

In 2008, Buffett became the richest man in the world, with a total net worth estimated at $62 billion by Forbes and at $58 billion by Yahoo, dethroning Bill Gates, who had been number one on the Forbes list for 13 consecutive years. In 2009, Gates regained the position of number one on the Forbes list, with Buffett second. Their values have dropped to $40 billion and $37 billion, respectively, Buffett having lost $25 billion in 12 months during 2008/2009, according to Forbes.

In October 2008, the media reported that Warren Buffett had agreed to buy General Electric (GE) preferred stock. The operation included extra special incentives: he received an option to buy 3 billion GE at $22.25 in the next five years, and also received a 10% dividend (callable within three years). In February 2009, Buffett sold some of the Procter & Gamble Co, and Johnson & Johnson shares from his portfolio.

In addition to suggestions of mistiming, questions have been raised as to the wisdom in keeping some of Berkshire’s major holdings, including The Coca-Cola Company (NYSE:KO) which in 1998 peaked at $86. Buffett discussed the difficulties of knowing when to sell in the company’s 2004 annual report:

That may seem easy to do when one looks through an always-clean, rear-view mirror. Unfortunately, however, it’s the windshield through which investors must peer, and that glass is invariably fogged.


30 gedachten over “How to Stay Out of Debt: Warren Buffett – Financial Future of American Youth (1999)”

  1. Lol, this guy bought up manufactured housing and owns the finance companies that charge high interest rates doesn't matter what your credit score is yeah listen to him. Pay 60k for a depreciating asset when your done paying the interest you've paid 120k for home that looses value every year. Why in the fuck would you applause or even listen to this thief? Not to mention these homes are half ass put together with the cheapest materials.

  2. WTF , is this guy going to tell you about finance, he has been given all the insider information in the world being a one world order cabal member. Only thing is he may be losing everything he owns if he is involved in treason in the election. This guy is no financial wizard , you could do the same things if the free shit afforded to him.

  3. Yeah.

    Avoid intelligence community personnel if at all possible, given the odds of dishonesty.

    Fun fact-Warren Buffett is intelligence community.

  4. Warren Buffett, have you been 'Edward Snowden' for a minute?
    You should try it out.
    See how you might like that.

    The presupposition of employment as opposed to entrepreneurship is indicative of a pre-established perspective.

    I have more gold stars next to my name in terms of accomplishments on a shoestring budget than anyone I know.
    I have been pre-vetted for a number of things.
    That occurred in the first year of my employment at [redacted].

    You know exactly who I am.
    We have met.

  5. Det här är verkligen en fantastisk video, men för mig tjänar jag enorma vinster på min investering sedan jag började handla med Mrs. Harris Amelia, hennes handelsstrategier är förstklassiga.

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