Warren Buffett Dumps Intel, But Reveals Two New Energy Positions

Berkshire Hathaway's latest 13-F filing is out. It includes any investment moves during the second quarter.

New positions include National Oilwell Varco (2,841,200 shares) and Phillips 66 (27,163,918 shares).

National Oilwell Varco supplies equipment to oil and gas drillers.

Phllips 66 is an oil refiner.

During the reporting period, Berkshire sold off all of its position in Intel (7,745,000 shares).

Other major moves include Bank of New York (raised to 18,719,515 shares from 5,607,466 shares), Viacom (raised to 6,813,200 shares from 1,591,670 shares), Ingersoll-Rand (lowered to 20,400 shares from 636,000 shares), Johnson & Johnson (lowered to 10,333,128 shares from 29,018,127 shares), and Sanofi-Aventis (lowered to 261,900 shares from 1,429,200 shares).

Read more: businessinsider.com

The Most Successful Email I Ever Wrote - Derek Sivers'

Below is an except from Derek Sivers' bestselling book, Anything You Want. Sivers founded online music store CDBaby, which he sold in 2008 for $22 million:

When you make a business, you’re making a little world where you control the laws. It doesn’t matter how things are done everywhere else. In your little world, you can make it like it should be.

When I first built CD Baby, every order resulted in an automated email that let the customer know when the CD was actually shipped. At first this note was just the normal “Your order has shipped today. Please let us know if it doesn’t arrive. Thank you for your business.”

After a few months, that felt really incongruent with my mission to make people smile. I knew could do better. So I took twenty minutes and wrote this goofy little thing:

Your CD has been gently taken from our CD Baby shelves with sterilized contamination-free gloves and placed onto a satin pillow.

A team of 50 employees inspected your CD and polished it to make sure it was in the best possible condition before mailing.

Our packing specialist from Japan lit a candle and a hush fell over the crowd as he put your CD into the best gold-lined box that money can buy.

We all had a wonderful celebration afterwards and the whole party marched down the street to the post office where the entire town of Portland waved “Bon Voyage!” to your package, on its way to you, in our private CD Baby jet on this day, Friday, June 6th.

I hope you had a wonderful time shopping at CD Baby. We sure did. Your picture is on our wall as “Customer of the Year.” We’re all exhausted but can’t wait for you to come back to CDBABY.COM!!

That one silly email, sent out with every order, has been so loved that if you search Google for “private CD Baby jet,” you’ll get almost twenty thousand results. Each one is somebody who got the email and loved it enough to post it on his website and tell all his friends.

That one goofy email created thousands of new customers.

When you’re thinking of how to make your business bigger, it’s tempting to try to think all the big thoughts and come up with world-changing massive-action plans.

But please know that it’s often the tiny details that really thrill people enough to make them tell all their friends about you.

From businessinsider.com

Related Books

Anything You Want

Mark Zuckerberg And Steve Jobs Have One Weird Trait In Common

Most successful founders of tech companies spread their wealth and invest in startups as angel investors.

But you rarely see stories about Facebook CEO Mark Zuckerberg doing so.

In fact, you don't see stories, period.

That's because he simply chooses not to invest in startups, we have heard from several people close to him.

Zuckerberg is running a site that serves nearly one billion people a month—about half of whom show up every day. This requires an enormous amount of focus.

You know whose name also never comes up in stories about angel investors?

Steve Jobs. Like Zuckerberg, Jobs was known for his singular focus on Apple—especially in the period after he sold Pixar to Disney, which happens to be when Apple began its iPhone-powered rise to the top.

Here's the simple math on why it's not in Zuckerberg's interest to play angel investor on the side.

He could easily invest $1 million in a startup, which might—might—sell for $100 million.

In return, Zuckerberg would devote some of his time and energy to helping that startup.

But for Zuckerberg, who is running a company that is already worth tens of billions of dollars, $100 million is a rounding error.

Instead, Zuckerberg is constantly heads down solving Facebook's problems—as any good CEO is.

From businessinsider.com

The Death of Buy and Hold Investing?

Years ago, Warren Buffett remarked during a Berkshire Hathaway shareholder meeting that he and Charlie Munger weren't concerned about sharing their investment philosophy because when push came to shove, most people simply cannot resist the biological, primal urges that cause them to make foolish financial decisions; namely, buying when assets are appreciating and selling when asset prices are falling.

At the time, I thought it strange and, to be honest, doubted this assertion. In my younger days, I couldn't believe that people would work against their own long-term self-interest and spend decades working, then throw the money away on a security simply because the price was moving north, or sell their interest in a great business when the economy hit a rough patch. After all, I was able to not only be the first member of my family to graduate from college, but effectively retired at only 24 years old because my ownership in businesses and the income from my investment portfolio provided more than enough for me to spend my days reading, visiting family and friends, and studying finance. By spending my teenage years studying Rockefeller, Carnegie, Buffett, Graham, Munger, Lynch, and others, I saw first hand that the power of compound interest, when coupled with a collection of operating businesses, could set you free.

Now, at the very moment stocks are cheapest and my personal balance sheet and companies are breaking the bank to come up with every excess penny we can - to the point that I literally confiscated the coffee budget so I could buy additional shares of General Electric when they were at $6.00 each - I find that everyone from CNBC to investment newsletters, personal finance writers to professional investors are declaring that the buy and hold philosophy is dead. Evidence to the contrary is simply ignored. Consider a basic fact pointed out by Fortune Magazine recently: "If you'd bought a single share [of Johnson & Johnson] when the company went public in 1944 at its IPO price of $37.50 and had reinvested the dividends, you'd now have a bit over $900,000, a stunning annual return of 17.1%." On top of that, you'd be collecting somewhere around $34,200 per year in cash dividends! The article goes on to say, "Even if you hadn't reinvested the dividends, that single share would now be 2,500 shares as a result of splits, and you'd be collecting dividends of $4,500 a year from that $37.50 investment. If only Grandpa had bought 100 shares."

Five essentials of a successful investing framework

As a young analyst at Richardson Greenshields, I worked with a big guy with an unusual name, Pentti Karkkainen. After years as a highly regarded oil analyst, Pentti now plies his trade in Calgary at KERN Partners, a private equity firm he co-founded. I introduce him here because I’ve always liked his investment framework. The KERN team doesn’t just look at two commodities when making an energy investment, it looks at five – oil, gas, capital, time and people.

I’ve kept the notion of five commodities in mind, partly because of the elegance of Pentti’s presentation and partly because I wanted to adapt it to the process an individual investor goes through. What are their commodities, or essential elements of their investing framework?

My initial list had 10 items, but I forced myself to align it with Pentti’s five. Like his, the first two are raw materials. The other three are how to successfully extract them.


Time
The law of compounding is very powerful. If you invest $100,000 over 25 years and earn an annualized return of 5 per cent, the market value will grow to $338,636. Investors, whether they are private equity managers or disinterested amateurs, simply need to let the calendar work for them.


Risk
Like oil, risk can be messy, but it’s not a dirty word. Indeed, when combined with time, it’s the fuel that drives returns. Diversifying across the four basic risks – interest rate, credit, liquidity and ownership risk – is what investing is all about.

Notice I didn’t define risk as short-term volatility, as investors most certainly are doing today and the investment industry does all the time. Risk in its truest form is permanent loss of capital, but for investors who are properly diversified, it’s better defined as the possibility of not achieving their long-term return objectives. However you define it, using this commodity properly means embracing volatility, not avoiding it.

Road mapHaving an investment plan that sets out where you need to get to and how you’re going to get there, is the most basic of investing disciplines. (I hate to waste space on it because it seems so obvious, but far too many investors don’t have one.)

A good plan encompasses the crucial components of successful investing: a strategic asset mix, a process for rebalancing and managing cash flows (in and out) and a framework for assessing performance and costs. Without one, investors are ruled by the unexpected and irrational short term, rather than the more predictable long-term.