Monday, May 7, 2012

Berkshire Hathaway Shareholder Meeting: The Takeaway

Lifetime partners: Charlie Munger (left) and Warren Buffett (right)
This past weekend, Berkshire Hathaway's "Annual Shareholders Meeting" took place in Omaha, Nebraska. As every first saturday of May over the last 4 decades, the eyes and ears of Wall Street solely focused on what Warren Buffet and his lifetime partner Charlie Munger had to say. This year -just as expected- the conference was a memorable event full of stories, personal views, business analysis and common sense wisdom.

As a habid value investor reader, and of course, as a self-declared Warren Buffett disciple, I always look forward to this weekend. Even though I would love to write a long blogpost full of personal opinions on what Berkshire's meeting entailed, this year I would like to share a great summary of the meeting wrote by Huffington Post´s collaborator James Warren.

I hope James's "took away article" will serve it's unique purpouse: to offer readers a vivid picture of Berkshire Hathaway's unique corporate culture.

Enjoy your reading. Thanks for visiting the blog!

OMAHA -- More than 30,000 roared when executive compensation consultants were called prostitutes. It was similar when libertarian former Federal Reserve Chairman Alan Greenspan was caricatured as believing that any axe murder must be good if it occurs in a free market.

There was funny video featuring the cast of Glee, tennis icons Roger Federer and Billie Jean King and a cartoon in which the character of Herman Cain was voiced by, yes, Herman Cain. Then there was badmouthing of graduate business schools, most any new stock issue and even those who say we must seek "energy independence."

But the stars on stage weren't left-wing comics but two laconic octogenarian investors of rock-solid Midwest bent. And their adoring audience waved butterscotch lollypops, not cell phone cameras, with a revival meeting air laced with opportunities to enjoy fat price breaks on high-end jewelry, cocktail tables, peanut brittle and running shoes.

Throw in the presence of Bono and Bill Gates, huge parties at a furniture mart and a jewelry store and games ranging from ping pong to newspaper tosses and you've got much of the weekend-long annual shareholders gathering of Berkshire Hathaway, the pride of Omaha.

It's a one-of-a-kind event in corporate America or, in fact, corporate Anywhere and explains why for a few days, the local airport might rival O'Hare or Heathrow for private jets. The rich and famous descend upon Nebraska to soak up a good time and a little life's wisdom while celebrating the good fortune of having stock in Berkshire Hathaway, an iconoclastically non-trendy corporate giant.

And at the center of it all is Berkshire's multi-billionaire patriarch Warren Buffett, or "Warren" to most everybody from German hedge fund managers to hotel chambermaids. In an age infatuated with high-tech, his company is largely about railroads, insurance, building supplies and operations as quirkily diverse as Dairy Queen and Benjamin Moore paint.

Buffett, 81, and longtime business partner Charlie Munger, 88, are a corporate Mutt and Jeff act that is by and large quaintly redolent of virtues one might still call Heartland: straight-talking, absent of coastal artifices and loving just coming to work.

If you've never been to a corporate shareholders meeting, be informed that they are virtually all sterile, scripted and rehearsed. The fear of a chief executive saying anything even vaguely provocative will permeate the upper ranks in the days before an event whose only "news" tends to be woefully self-serving announcements.

If the hour or two are both uneventful and totally boring, the upper echelon will consider it a success, breath easy and pat one another on the back. Self-congratulation will be the order of the day for the several days after.

The Berkshire meeting breaks all the rules in a way that explains why shareholders began lining up at 4 a.m. Saturday outside an arena whose doors would open three hours later for a session to begin promptly at 8:30 a.m. You'd think they were lining up to buy Bruce Springsteen tickets, given how a line of several thousand cordial souls wended around the arena and under a nearby roadway by 6 a.m.

With the arena virtually packed, giants screens informed that See's Candies, a Berkshire company, had placed a lollypop at each seat. "DO NOT take your neighbor's. DO NOT open until further instructed by Warren after the movie."

That obviously labor intensive 52-minute movie, produced by Susie Buffett, Warren's daughter and a former journalist, began with a cartoon in which a Buffett-like figure played an unlikely senior citizen trying to crack the University of Nebraska football team. Among those familiar voices playing themselves were television host Charlie Rose, sportcaster Marv Allbert and Cain (Godfather's Pizza is Omaha-based), whose hard-to-fathom "9-9-9" campaign plan for the economy was the object of gentle ridicule.

Then came an array of mock commercials for Geico, a home run Buffett purchase, starring Little Richard and Billie Jean King, and one for NetJets, another Berkshire company, in which Federer is seen trying to lug dozens of his tennis trophies across an airport tarmac.

Buffett's scene with the Glee ensemble was droll and included his playing the ukelele and a duet with maniacal cheerleading coach Sue Sylvester (Jane Lynch), who claims a long-ago romantic liaison with the "Oracle of Omaha."

But the creative cornerstone was a series of scenes involving Buffett's now famous secretary, Debbie Bosanek, who gained initial national attention as a guest of President Obama at the State of the Union address.

She was there, of course, due to her boss pushing for changes in the tax code to prevent what he considers the absurdity of his paying far less in taxes than Bosanek or, he claimed Saturday, anybody else at Berkshire headquarters. His annual income ranges between $25 million and $50 million, he said.

The scenes were shot in their actual, austere offices and had him being forced to answer the phones as Bosanek, now a star, gabbed away on clearly personal chats and would not be bothered assisting her boss.

So he's forced to pick up the phone at one point and it's supposedly Oprah Winfrey... calling for Debbie, not him. The same happens when Obama supposedly calls.

One watches Buffett, phone cupped to ear, alluding to the so-called Buffett Rule the president is proposing and Buffett saying with theatrical chagrin, "You think changing the name to the Bosanek Rule would help it get through Congress? Oh, that's what the polling shows?"

With the movie over, a ritual with no real counterpart began as Bufffett and Munger took the stage and sat at a small table, with bottle water, See's Candies and cans of Coke in front of them (Coke stock is a big part of the Berkshire portfolio).

For six hours, interrupted only by a one-hour lunch break, they took questions, none pre-screened, as if often the case at corporate meetings.

Three journalists -- Andrew Ross Sorkin of the New York Times, Carol Loomis of Fortune and Becky Quick of CNBC -- played roles, though oddly uncritical, as they basically relayed shareholder internet queries. They didn't even serve a potentially useful function of perhaps asking follow-ups to those Buffett-Munger responses that were unclear or too brief.

More pointed, if at times arcane and somewhat lost in the weeds, were questions from three stock analysts who cover the firm. Then there were questions from stations all over the arena.

It was an inquisitorial rope-a-dope in which the questioners wound up exhausted as the Berkshire duo book everything head-on, be it his personal health (he was just diagnosed with very treatable prostate cancer), past investment mistakes, formulas for paying certain key executives or his plans for who'll succeed him:
Repurchase Berkshire stock? Stock repurchases are by and large "idiotic," said Buffett.

On energy, Munger said we should use the rest of the world's oil, then our coal and only then our now very cheap natural gas reserves. He scoffed at the call for U.S. energy independence ("one of the stupidest things I've heard adults discuss"), prompting sidekick Buffett to call that "Charlie's version of saving up sex for your old age."

On executive compensation consultants, the two find that species self-serving handmaidens who tell corporate chieftains what they want to hear so they can then get new client referrals. "Prostitution would be a step up for them," said Munger.

On how much U.S companies pay in taxes, Buffett reiterated his often-articulated belief that what they actually pay -- an average of 13 percent, he said -- is totally unjustified, given corporate profits and a formal rate of 35 percent.

On graduate business education, the duo chided a faddish inclination with the latest mathematical models and a history of "teaching a lot of nonsense about investments," said Buffett. They should instead rely on teaching students about two matters: how to value a business and how to understand a market.

On a shareholder's claim that his father won't buy Berkshire stock due to Buffett's political declarations, Democrat Buffett said it sounds like the father should own shares of Fox, meaning Rupert Murdoch's News Corp., parent of the Fox News Channel. Zing!

On Greenspan, Munger said the former Fed chairman "overdosed on Ayn Rand as a young man and thought if an ax murder takes place in a free market, it was all for the good." And during a story about dealing with an unnamed federal regulator, Munger referred to the man as a "florid-faced alcoholic" who didn't understand the housing market.

When so-called Super PACs came up, Buffett said he won't consider using any of his ample funds to donate to one. "I think the whole idea of Super PACs is wrong," implying that they pervert democracy.

As for investing in gold, Buffett has no interest. He noted that when Berkshire was founded, gold was selling at $20 an ounce and Berkshire stock was at $15. Now gold is at $1,600 and his stock is at $120,000 a share.

On Walmart's apparent corporate scandal in Mexico, involving payoffs to public officials, Buffett was unmoved in his support of the firm (Berkshire owns 39 million shares, or 1.1 percent of the company). Ethical mistakes were made, and will always be made in big sprawling companies, but he feels it won't impact Walmart's longterm performance.

And, indeed, longterm was a word used often since that seems critical to what has set the company apart from many others. It partly explained the mild surprise in Buffett indicating no interest in investing in Google or Apple.

He just doesn't quite fully understand their businesses and the tech world, he claimed, even as Microsoft founder Gates sat a few feet away since he is a member of the Berkshire board of directors. Berkshire has a large position in IBM which, Buffett said, he understands better and feels more confident in than Google or Apple.

No surprise, a question came up about his purchase of the Omaha World-Herald, an enterprise in an industry clearly trending downward. He conceded newspapers have huge problems resulting from costly distribution systems and giving away content for free online as they charge for the same content in print.

And while many traditional content lures, such as jobs and apartment listings, have been undermined by the internet, he argued there is still some local information he and others can't get elsewhere. "They do tell me a lot about my city, about local sports, my neighbors, about things I want to know."

In the day before and after the shareholders gathering, there was ample partying and also the chance to get great prices on a wide array of Berkshire products.

Even before the weekend began, a Berkshire-owned furniture mart did $6 million in business on one day. Meanwhile, Borsheim's, a huge Omaha jewelry store also owned by Berkshire and site of a huge Sunday barbecue for shareholders, surely did a stunning business since it was packed as it gave 25 percent discounts on already-alluring prices for those attending the meeting.

There was glitz, too, with the likes of Bono, the U2 lead singer, hanging around since he's a close friend of Susie Buffett. I hereby concede a fascinating conversation with him as he discoursed on everything from how Jews fared during the Inquisition to a personal theory linking current U.S foreign policy to the appeasement of Adolf Hitler by British Prime Minister Neville Chamberlain.

But, in the end, the most lasting image was less of any particular moment or celebrity but of the tone and habit of mind manifested by Buffett and Munger during the question-and-answer marathon.

It was so un-East or West coast. Which is not to say that these aren't two clearly sophisticated fellows who have complicated enterprises, like insurance firms, they know cold. It's why am amazing eight of their companies would be in the Fortune 500 if they were standalone firms, noted Buffett.

At heart, their philosophy is as basic and old-school as their very successful investments in railroads.

Imagine, railroads, in this airplane and internet age! But listen to the two men discuss their essential role in carrying heavy freight at low costs, the industry's dramatic efficiency increases and the virtually impossible rise of any new competitors, and one comes away saying, "Yes, railroads, smart move."

It's somewhat the same with their basic view of life; of working hard at what you love, not being infatuated with success and money, and giving back to your community. It helped explain why many attendees could be seen taking notes, including Kevin Johnson, the smart former pro basketball player who is the mayor of Sacramento, Ca.

Munger very agreeably plays second fiddle to his more garrulous partner at the gathering, even tending to pass on many questions after Buffett has had the initial say. But, at marathon's end, he succinctly articulated his basic desire for the country in a way that resonated with the large majority from the morning who had remained in the arena until the very end.

We need, he said, more sacrifice, more patriotism, more sensible ways of spending (government) money, more civilized politics.

Simple, smart and very Berkshire Hathaway.

James Warren is former managing editor and Washington bureau chief of the Chicago Tribune.

More than 40,000 people attended Berkshire Hathaway's Annual Meeting

Tuesday, March 6, 2012

La sucesión de Warren Buffett

Warren Buffett, Chairman y CEO del conglomerado Berkshire Hathaway Inc. (BRK.A y BRK.B), anunció hace 8 días que el Consejo de Berkshire ya ha encontrado a su sucesor como CEO.

En su popular y ampliamente comentada "Carta anual a los accionistas", Buffett indicó que el Consejo de Berkshire "ha tenido una gran exposición" al hasta ahora desconocido sucesor, de quien el Board amira tanto "sus habilidades gerenciales y humanas". Buffett también indicó que Berkshire tiene en la mira a dos "excepcionales" candidatos sustitutos. Por el momento el nombre del posible sucesor y sus dos "sustitutos" permanecen en el anonimato.

Buffett quisó dejar muy en claro que, cuando el momento de dejar su cargo como CEO llegue, la transferencia de responsabilidades a su sucesor pasará inadvertida y que el futuro de la compañia seguirá siendo brillante. Para finalizar, Buffett se mostró optimista y seguro sobre su posición en la compañia. "...éstas noticias no significan que tanto Charlie (Munger, VP de Berkshire) o yo vayamos a algún lado...ambos mantenemos un excelente estado de salud y amamos lo que hacemos".

No es la primera vez en que salen a la luz declaraciones sobre la sucesión de Buffett. A sus 81 años de edad, el "óraculo de Omaha" (como se le conoce), ha tratado de atenuar la incertidumbre que gira en torno a su retiro a través de comunicados y cartas a sus accionistas.

En Wall Street y en numerosos medios de comunicación se han barajeado nombres de posibles sucesores, entre ellos Bill Gates -amigo cercano y miembro del Consejo de Berkshire. No obstante, Gates se mantiene alejado de esta polémica y hasta el momento ha negado rotundamente cualquier posibilidad de suceder a Buffett.

Además de Gates, otros de los nombres que se barajean son:

-Ajit Jain, Head de Berkshire Hathaway Reinsurance Group. Jain ha sido constantemente alabado por Buffett por su gran papel en la consolidación del brazo de reaseguros del conglomerado. Tán sólo el negocio que dirige Ajin representó en 2011 un "insurance float" (capital proveniente de las primas) de 70 billones de dólares.
-Gregory Abel, CEO de MidAmerican Energy Holdings (Propiedad de Berkshire). Abel dirige uno de los negocios mas rentables del grupo y Buffett lo considera parte de su "dream team" executivo. MidAmerican es una de las 5 empresas más grandes de Berkshire, con actividades en el sector energético americano.
-Matthew Rose, CEO de Burlington Northern (Propiedad de Berkshire). Rose es la cabeza del imperio ferrocarrilero recien adquirido por Berkshire. Tan sólo en 2011, Rose elevó las ganancias de Burlington en un 21% convirtiendo a la empresa en una de las más rentables del grupo.
-Tony Nicely, CEO de GEICO Insurance. Nicely ha trabajado en GEICO por 50 años, y en sus 18 años como CEO ha llevado a la compañía a ocupar una posición privilegiada en el mercado de seguros automotrices. Nicely opera un negocio cuya eficiencia operativa es reconocida a nivel mundial.

Me resulta sumamente difícil escoger uno de éstos candidatos como "favorito" para la sucesión de Buffett. Todos y cada uno de ellos, así como los restantes Directores Ejecutivos de Berkshire, cuentan con credenciales sobresalientes. Sin embargo, me aventuraré en mencionar que quizás Jain o Nicely sean los favoritos para quedarse con la posicion de CEO.

Por un lado, Ajit Jain es un conocedor de uno de los pilares de Berkshire, el negocio de los reaseguros. Gran parte del capital disponible para invertir en el conglomerado proviene de las estrategias financieras creadas por el Jain. Por otro lado, Tony Nicely es uno de los directivos con mayor antigüedad dentro de Berkshire. Con más de 50 años de experiencia, conoce perfectamente a Buffett, es un ferviente promotor de la cultura de la compañía y ha sido párticipe de prácticamente todas y cada una de las operaciones realizadas por el conglomerado.

Al final, serán Buffett y el resto del Consejo quienes decidan el quién, cuando y cómo de esta "telenovela sucesoria" que por años ha llamado la atención de Wall Street. No es para menos, sustituir al inversionista más exitoso en la historia moderna no es cosa fácil. ¿Quién estará dispuesto a asumir ésta responsabilidad de proporciones mayúsculas?

Santiago Hernández G.

Monday, January 30, 2012

¿Invertir en oro?

Ante la incertidumbre e inestabilidad financiera resulta frecuente escuchar a inversionistas y analistas financieros promoviendo las inversiones en oro como un refugio "seguro" ante la tempestad de los mercados.

Pero ¿que tan acertada es la visión de quienes promueven invertir en oro vs invertir en los mercados?

Hay dos gráficas que considero fundamentales para explicar por qué el oro -contrario a lo que muchos expertos opinan- esta lejos de ser un instrumento/estrategia de inversión de largo plazo.

1. Los rendimientos históricos de S&P 500 claramente superan aquellos del oro.
Quízas el oro pueda salvar a los inversionistas de la tempestad, pero en los buenos tiempos quizás tambien mantenga a los inversionistas lejos de los rendimientos positivos que sólo las empresas son capaces de crear.

2. El valor del oro vs valor del indice S&P.
Quizás el valor del oro hoy nos sorprenda, pero si echamos vista un par de décadas atrás podremos darnos cuenta de la interrelación que guardan el indice compuesto S&P500 vs la onza troy. El alza en los precios del oro es una respuesta natural a uno de los periodos de crisis mas importantes en nuestra era. Cuando los mercados vuelvan a la nomalidad ¿el oro podrá mantenerse en sus niveles actuales? Difícilmente.

Para finalizar, quisiera dejar un extracto sobre la visión de Warren Buffett al rspecto de las inversiones en oro:

". . .if you took all of the gold in the world it would roughly make a cube 67 feet on a side and that would be the whole thing. Now for that same cube of gold it would be worth at today's market prices about $7 trillion. That's probably about a third of the value of all the stocks in the United States. So you could have a choice of owning a third of all the stocks in the United States or you could have a choice of owning that little block of gold, which can't do anything but kind of shine there and make you feel like Midas or Croesus or something of the sort.

Now, for $7 trillion, there are roughly a billion of farm-acres of farmland in the United States. They're valued at about $2 1/2 trillion. It's about half the continental United States, this farmland. You could have all the farmland in the United States, you could have about seven ExxonMobils, and you could have $1 trillion of walking around money. And if you offered me the choice of looking at some 67-foot cube of gold and looking at it all day, you know, I mean touching it and fondling it occasionally, you know, and then saying, you know, `Do something for me,' and it says, `I don't do anything. I just stand here and look pretty.' And the alternative to that was to have all the farmland of the country, everything, cotton, corn, soybeans, seven ExxonMobils. Just think of that. Add $1 trillion of walking around money. I, you know, maybe call me crazy but I'll take the farmland and the ExxonMobils."

¿Invertir en oro? No estoy tan seguro de que sea la respuesta.

*Comentario basado en el artículo "Dissecting Gold Is a Bubble" de M.J. Kosares*

Friday, December 9, 2011

The Warren Buffett you don't know

I would like to share this interesting and compelling article about Warren Buffett. The article was the cover story of BusinessWeek's Magazine (July 5th 1999). Hope you enjoy the article and keep visiting "Buffett is my Idol"

Santiago Hernández

The Warren Buffett You Don't Know
Ace stockpicker, of course--and now, an empire-builder

Warren Buffett is returning to the U.S. from Europe in a private jet. As his plane nears its destination, the flight attendant gives out landing cards and a warning to all eight passengers aboard. ''The customs inspector here is utterly humorless,'' she says, ''so no wisecracks or he will tear the plane apart from fore to aft.'' Buffett, who quips as reflexively as he breathes, takes his card without comment.

In the terminal, a surly looking man with a crewcut and a pistol on his hip sits behind a small table. Buffett hands over his passport and landing card to the inspector, who does not seem to realize that the professorial-looking 68-year-old standing before him is America's second-richest man. Or perhaps he just gets a kick out of trying to take the high and mighty down a peg. ''You left some things blank,'' the inspector says peevishly. ''Do you have $10,000?''

The question could have launched a dozen snappy retorts, but Buffett restrains himself. ''I have what I left with,'' he says carefully. The inspector furrows his brow--was that some kind of joke?--but does not press the issue. He asks Buffett if he has any anything to declare. ''I was given two books,'' Buffett says. ''Well, you have to put it down, then,'' snaps the agent, who fills in the blank himself.

Buffett shows not a flicker of annoyance at being treated like a misbehaving child. He stands mute and impassive before the inspector, who, after a few more curt remarks, can think of nothing else to do but let ''the Oracle of Omaha'' be on his way.


Has there ever been a less pompous billionaire than Warren Edward Buffett? Hollywood might cast him in the role of an amiable teacher at a Midwestern college or a sweet-tempered, wisecracking inventor who eventually wins a Nobel prize and gets the girl besides. To hear Buffett sing his beautifully artless rendition of Ain't She Sweet to his own ukulele accompaniment is to wonder not only how such a man came to measure his net worth in billions but also whether he might not be a time-traveler from a more innocent age.

If Buffett had a business card, it would identify him as chairman and chief executive of Berkshire Hathaway Inc. (BRK.A) But he is far better known--indeed, world-famous--as the greatest stock market investor of modern times. The figures, though often cited, still astound: Had you put $10,000 into Berkshire when Buffett bought control of it in 1965, you'd have $51 million now, vs. just $497,431 if the money were invested in the Standard & Poor's 500-stock index.

The numbers don't lie, but the story they tell is out of date. Buffett has not added a major position to Berkshire's bulging stock portfolio since amassing 4.3% of McDonald's Corp. (MCD) in 1995. In the meantime, he has transformed what long has been a sideline at Berkshire--the acquisition of entire companies--into the main event. Over the past three years, Berkshire has spent $27.3 billion to buy seven companies in industries as disparate as aviation, fast food, and home furnishings. The $22 billion purchase of reinsurer General Re Corp., which closed late last year, was Buffett's largest ever.

The effect has been dramatic: In short order, Berkshire has been transformed from a closed-end fund in corporate drag to a bona fide operating company. At the start of 1996, the company's famous stock portfolio accounted for fully 76% of Berkshire's $29.9 billion in assets. But by the end of 1999's first quarter, the figure had plummeted to 32% as assets quadrupled, to $124 billion. Today, Buffett's company employs 47,566 workers, double the number in 1995.

And he isn't done yet. ''I'd love to make a $10 billion to $15 billion acquisition, and we could go bigger than that if I really like the company,'' says Buffett, who holds $15 billion in cash and is sitting on top of an additional $30 billion in unrealized gains in Berkshire's stock portfolios.

It's all there in black and white in Berkshire Hathaway's famously literate annual reports, but somehow the company's transformation has gone not just unheralded but unnoticed. Berkshire is ''possibly the most talked about and the least understood company in the world,'' contends Alice Schroeder, a PaineWebber Inc. insurance analyst who in January published one of the few comprehensive studies of the company ever undertaken by a brokerage house.

MISUNDERSTOOD. The common view is that Berkshire shares fetch a premium because of Buffett's reputation as a latter-day Midas. The ''Buffett premium'' undoubtedly is real in the sense that if the man died today, the stock would plunge tomorrow. In Schroeder's view, though, Berkshire's stock is already trading at a sizable discount to its true value, which she estimates at $91,000 to $97,000 per A share. The A shares lately have been trading at about $70,000. The basic problem, Schroeder says, is that the world continues to misperceive Berkshire as little more than the sum of the stocks it holds in its $37 billion portfolio. In other words, the market tends to overreact to news about the seven stocks that form the core of Berkshire's holdings (table). Over the past 12 months, Berkshire has fallen by about 17%, from a high of $84,000 in June, 1998. In Schroeder's view, the main cause of this decline is the plunging value of Buffett's colossal stakes in Coca-Cola Co. (KO) and Gillette Co (G).

The radical recent shift in Berkshire's corporate profile does not reflect a radical change in Buffett's thinking. In most ways, he remains true to the conservative precepts of value investing. In essence, Buffett continues to prefer today's sure thing to the next big thing, no matter how spectacular its potential. Forget Internet stocks: Buffett still will not invest in even such well-seasoned high-tech companies as Microsoft Corp. (MSFT) or Hewlett-Packard Co. (HWP) because he doesn't believe that anyone can predict how much they will earn over the next decade or two. ''I can't do it myself,'' he says. ''And if I don't know, I don't invest.''

Even in his stock-picking heyday, Buffett preferred owning businesses to passive minority investment. Until recently, though, Berkshire's acquisitions have been few and far between because Buffett insisted on buying top-quality businesses at discount prices. What has changed is that he is now willing to pay a premium for one-of-a-kind businesses.

Why this is so is not completely clear. The Buffett psyche is notoriously labyrinthine. ''I could easily spend a lot of time trying to analyze Warren if I didn't consciously try not to,'' says Olza M. Nicely, CEO of auto insurer GEICO Corp., one of Berkshire's largest subsidiaries. ''There are certain mysteries you just have to accept.''

In Buffett's view, he is putting the finishing touches on his masterpiece. ''Berkshire is my painting, so it should look the way I want it to when it's done,'' he says.

In an era in which most CEOs at least mouth the platitudes of good corporate governance and shareholder rights, Buffett, in his good-natured way, is a throwback to a time when a mogul was a mogul and did as he damn well pleased. ''Berkshire is the company I wanted to create. It's not the company Alfred P. Sloan wanted to create. It fits me,'' he says. ''I run it with our investors and managers in mind, but it is designed to fit me.'' To be blunt, Buffett stands revealed as a driven, even monomaniacal corporate empire-builder.

For all his offhand charm, Buffett is pretty much all business all the time. Aside from an addiction to luxury air travel, he is a man of simple tastes and frugal habits. He neither spends his money nor gives much of it away. Philanthropy, the renascent vogue of America's superrich, interests him peripherally at most. Buffett intends to take his fortune to the grave--and to keep adding to it until the day he dies. ''The problem I've got with doing anything else except what I'm doing is that there is nothing remotely as fun as running Berkshire,'' he says. ''I'm selfish that way.''

So far, Berkshire's legendarily devoted shareholders would not have it any other way. In May, some 15,000 of them flocked to Omaha to sit at the feet of the master during Berkshire's three-day festival of an annual meeting, which Buffett calls ''Woodstock for Capitalists.'' Of course, Buffett and his wife, Susan T. Buffett, are the largest Berkshire shareholders by far: Their 38.4% stake is worth about $40 billion.

The highest circle of management power at Berkshire has always been tight, but it has shrunk in recent years--to Buffett alone. Charles T. Munger, Buffett's longtime vice-chairman and business alter ego, continues to enliven the annual meeting by playing the part of drolly laconic sidekick to Buffett's ebullient master of ceremonies. Behind the scenes, though, his influence has waned. ''Charlie and I don't talk a lot anymore,'' acknowledges Buffett, who says he did not even bother to consult his vice-chairman before making the epochal Gen Re acquisition.

By all accounts, including their own, Munger and Buffett have not fallen out. But while Buffett is wholly devoted to building Berkshire, Munger, 75, now spends his time chairing a not-for-profit hospital and serving as a trustee of a private high school. ''Charlie is broader in his interests than I am,'' Buffett says. ''He doesn't have the same intensity for Berkshire that I have. It's not his baby.'' Munger concurs: ''Warren's whole ego is poured into Berkshire.''


In mid-April, Buffett led a small entourage on a whirlwind European tour to promote one of Berkshire's latest acquisitions, Executive Jet Aviation. I went along for the ride (on one of EJA's Gulfstream IV-SP jets) and got an unusual chance to observe the notoriously press-shy Buffett at close range against a kaleidoscopic backdrop of private airports, luxury hotels, and banquet halls stretching from London to Frankfurt to Paris.

Buffett survived a demanding regimen of midmorning coffees, two-hour luncheons, 90-minute press conferences, and four-course banquets. ''I never get tired,'' he told reporters in London, ''except for my voice.'' Actually, Buffett was ashen with fatigue midway through the third day but soldiered gamely on, answering even the lamest questions with the same expansiveness and wit the fifth time he heard them as he did the first.

Only once did Buffett show annoyance. During a press conference at the Frankfurt airport, Richard Santulli, EJA's normally understated chief executive, let his admiration of Buffett overflow. ''People say that he's the most astute investor of the 20th century,'' he said. ''I say ever.''

Buffett, who was sitting at Santulli's side, gave a little snort. ''Why not?'' he said sourly. ''I'm sitting right here.''

Like any mogul, Buffett has his special needs. On this trip, he indulged two of them, listed here in reverse order of importance: red meat (at lunch and dinner) and Coca-Cola (all the time).

Whenever I lost track of Buffett, Coke often appeared to guide me--a carbonated version of the proverbial trail of crumbs. In London, our party went from airport to hotel in separate cars. When I arrived at the Berkeley Hotel, I did not have to wonder for long whether Buffett had preceded me. A bellhop approached with a shopping bag. ''Is this yours?'' he asked. Inside were two six-packs of Cherry Coke. Two days later, I was in the crowded lobby of the Schlosshotel Kronberg near Frankfurt, following a white-gloved waiter bearing aloft a single bottle of Coca-Cola on a silver tray.

Buffett bought Executive Jet in mid-1998 for $725 million. Although this is a pittance compared with what Berkshire paid for General Re, the EJA deal was no less a milestone in its way. EJA, which pioneered the fractional ownership of business jets, is the first true emerging-growth company that Buffett has ever owned. What's more, the very idea of investing in business aviation would have been considered downright sacrilegious throughout most of Berkshire's history.

For years, Buffett mocked corporate ownership of jets as a wasteful executive perk. But in 1986, he bought a small used plane for Berkshire, then traded up to a more expensive model a few years later. He named the jet ''The Indefensible'' and made sport of its purchase in his 1989 report to shareholders: ''Whether Berkshire will get its money's worth from the plane is an open question, but I will work at achieving some business triumph that I can (no matter how dubiously) attribute to it.''

The truth is, Buffett had fallen in love with his plane but could not yet admit it. In 1995, he was introduced to Santulli by the head of one of Berkshire's operating companies and bought a one-quarter share of a Hawker for personal use. His wife, who has become a frequent flier, called the new plane ''The Richly Deserved.'' (Not to be outdone, Buffett renamed Berkshire's jet ''The Indispensable.'') Santulli offered to sell his company to Buffett when Goldman, Sachs & Co. (GS), a founding minority investor, began pressuring him to float a public stock offering.

Executive Jet in no way resembles the sort of business on which Buffett cut his teeth as an apprentice to the late Benjamin Graham, co-author of the value-investing bible, The Intelligent Investor. Graham's method emphasized creating a ''margin of safety'' by investing only in stocks trading at two-thirds of net working capital. He called them ''cigar butts''--companies the stock market had discarded but that still held a puff or two of value to extract.

Buffett was Graham's most accomplished disciple. But as the pupil established himself, he began to feel constrained by the mentor's method. For Graham, a business was an abstraction wholly defined by a set of numbers on a page; he had no interest in its products, its management, its personality. But Buffett's boundless curiosity and enthusiasm were not satisfied by the ghoulish exercise of profiting from the last dying gasps of derelict companies. Buffett's yearnings and dissatisfactions did not begin to coalesce into an investment philosophy of his own until he met the blunt-spoken Munger in 1959. The two, closely matched in intellect and outlook, quickly became the closest of partners. Munger urged his friend to leave the cigar butts in the gutter and think of value in more expansive terms. Says Buffett: ''Charlie kept pushing me back to the idea that what we really needed to own was the wonderful business.''

Even so, it took Buffett a long time to tailor Graham's straitjacket conservatism to the more generous dimensions of his own personality. His $11 million purchase of Berkshire Hathaway in 1965 was a costly case in point. Initially, Buffett saw the floundering old-line company as a classic Graham play. But then the textile manufacturer rallied unexpectedly, and Buffett sank more money into it on the belief that this cigar butt had a future after all. It did indeed, but not in textiles.

Buffett did not come fully into his own until he and Munger collaborated on the $25 million acquisition of See's Candies in 1972. The San Francisco maker of boxed chocolates was the first business of any sort for which Buffett paid more than book value--three times book, in fact.

What, in Buffett's view, makes a business wonderful? It starts with ''a sustainable competitive advantage.'' Underline sustainable. Buffett will not invest in a business unless he feels reasonably certain how much it will earn over the next 20 to 25 years. But for all of Buffett's cerebration, he does not feel truly comfortable unless a business ties into his own everyday experience. His favorite companies tend to traffic in elementally appealing brand-name products that Buffett not only uses himself but also invests with almost totemic meaning: a bottle of Coca-Cola, a Gillette razor blade, a box of See's candy, and, yes, even a Gulfstream jet.

Buffett has always been especially partial to companies that can sustain a competitive edge without tying up much capital. Consider Scott Fetzer, which makes a variety of industrial and consumer products, including Kirby vacuum cleaners and Quikut knives. Since 1986, when Berkshire paid $315 million for Scott Fetzer, its earnings have risen by only 5.5% a year on average. Yet Buffett repeatedly has praised it as a model of capital efficiency. In 1998, Scott Fetzer netted $96.5 million after taxes on its $112 million in equity, a return on equity of 86%. This is all the more breathtaking considering that Buffett has been milking it for 13 years, extracting more than $1 billion all told.

Ever since Berkshire's 1967 acquisition of National Indemnity Co., insurance has held double appeal for Buffett. Not only does he like the economics of the business--or parts of it, anyway--but a well-run underwriter also generates a steady flow of low-cost investment dollars, or ''float,'' as a matter of course. The 1996 acquisition of GEICO, now the sixth-largest U.S. auto insurer, doubled Berkshire's float at one stroke, and the Gen Re buy nearly tripled it, to $21 billion.

In Buffett's view, the quality of a company's management is integral to its value as a business. And when acquiring companies, Buffett is as concerned with the motives of the selling CEOs as he is with their abilities. ''What I must understand is why someone will continue to get out of bed in the morning once they have all the money they could want,'' Buffett says. ''Do they love the business, or do they love the money?''

No less an authority than John F. Welch, CEO of General Electric Co., considers Buffett a superb judge of managerial talent. Buffett and Welch have gotten to know each other over the years as golf partners and as rivals in auto insurance and other businesses. ''Take 20 people you know quite well but Warren has just met casually,'' Welch says. ''If you ask Warren his opinion about them, he'll have each one nailed. He's a masterful evaluator of people, and that's the biggest job there is in running a company.''

In 34 years, Berkshire has never lost an operating chief except to death. In fact, the great majority of its subsidiaries are still run by the same executive who brought them to Berkshire in the first place. The operating head of longest tenure is Charles N. Huggins, who has been president of See's Candies since Buffett acquired it. Huggins is 74 years old now, but he's not Berkshire's oldest manager. That would be 85-year-old Harold Alfond, who founded Dexter Shoe Co. in 1956 and sold to Buffett in 1993 for Berkshire shares now worth $1.5 billion.

Berkshire's operating ranks contain a second octogenarian billionaire: 82-year-old Albert L. Ueltschi, chairman and CEO of FlightSafety International Inc., a pilot-training concern Berkshire bought for $1.5 billion in 1996. An ex-pilot, Ueltschi founded the company in a LaGuardia Airport hangar in 1951. ''I'm like Warren,'' says Ueltschi, who has no plans to retire. ''I like what I do so much that I don't consider it work.''


Somewhere between Frankfurt and Paris, Buffett gets up and walks back to the airplane's pantry to fetch a box of Swiss Sprungli chocolates an admirer had given him in Germany. Buffett makes his way slowly up the aisle of the plane in his shirtsleeves, offering the candy to each passenger aboard.

A half-empty box of See's chocolates rests on the table where I'm sitting. Buffett pops a piece in his mouth. I ask him whether he thinks he could identify See's in a blind taste test against other brands. ''Of course,'' he says. ''I can also tell Coke from Pepsi. The thing is, most Americans prefer Pepsi to Coke because it is 4% sweeter, but Coke still outsells Pepsi by a huge margin.''

As Buffett continues in this vein, he starts staring at the box of Sprungli he carries. He shifts it to one hand as if he were about to choose a piece, then seems to change his mind. ''It's a showy sort of candy, isn't it?'' he says and then falls silent. He gazes raptly at the Sprungli for a full 45 seconds as the conversation continues around him. Then he abruptly sets the box down and returns to his seat without a word.

Later, I recount this to Chuck Huggins, See's president, who chuckles knowingly. ''Yeah, that's Warren. Brand-loyal.''

The office next to Buffett's is occupied by Michael Goldberg. A former McKinsey & Co. consultant, Goldberg was hired in 1981 to bring order to Berkshire's far-flung insurance interests and essentially functioned as chief operating officer for the next 11 years. The single-minded intensity Goldberg brought to the job created friction in the ranks--and gave him a bad case of burnout. In 1993, Buffett reassigned Goldberg to ''special projects'' and eliminated his old position.

The line managers who once reported to Goldberg, now 53, have reported directly to Buffett ever since--as do the chiefs of all 22 of Berkshire's operating companies. Buffett essentially lets the chiefs of the companies that Berkshire acquires run their businesses as before, except that he requires them to transfer their excess cash to Omaha and clear capital-spending plans with him. Buffett, who thinks of his role as Berkshire's ''capital allocator,'' collects the enormous cash flow that the subs produce--$13.4 billion last year--and uses the money to buy more businesses, either in whole or in part, through the stock market.

Buffett tends not to initiate contact with his operating executives: He waits for the phone to ring. ''Let me know about any bad news as soon as possible,'' he tells his subordinates, ''but otherwise, you are free to call me as often or as seldom as you like.'' Buffett's managerial passivity should not be mistaken for indifference. Some operating chiefs say he nearly memorizes the monthly reports they send to Omaha.

During holiday seasons, Buffett requests daily sales reports from See's and Borsheim's, Berkshire's huge upscale jeweler in Omaha, because the ebb and flow of retailing hold an enduring fascination for him. Year-round, he speaks to two execs almost every day: Richard Santulli and Ajit Jain, who runs Berkshire's reinsurance business in Stamford, Conn.

Berkshire's homegrown insurance group offers a variety of property-and-casualty coverage in certain U.S. markets. But its chief business is a high-risk, high-reward specialty that Jain developed over the past decade in reinsuring ''super-catastrophes''--earthquakes, hurricanes, floods, and such. Buffett found the economics of ''super-cat'' seductive: Berkshire has made at least $865 million pretax in underwriting profits since 1991. But it was the complexities of analyzing super-cat risk that hooked him. Says Jain, 47: ''Warren and I might have had a 30-second conversation or a 30-minute one, but he has been involved in every piece of business I have done.''

As for Santulli's business, Buffett is intrigued not just by the novel challenges posed by EJA's rapid growth but also the logistical complexities of the fractional-shares business. ''He likes the mental challenge of it,'' says Santulli, a former mathematics professor. ''He calls it 3-D chess.'' Even so, Buffett is careful not to impinge on Santulli's operating authority. EJA's chief once asked Buffett for advice in making a decision and was rebuffed. ''Don't bother with that,'' Buffett told him. ''Just decide.''

Buffett's laissez-faire management style has been tested most severely in recent years by Berkshire's misadventures in shoes. From 1991 to 1993, Buffett laid out $650 million to buy three old-line makers of midprice shoes: H.H. Brown, Lowell, and Dexter. In essence, he was betting that his companies would benefit as the appeal of imports waned and U.S. consumers returned to home brands. Buffett hasn't made many fundamental strategic errors, but this was a doozy: Imports now account for 95% of domestic shoe purchases, vs. 70% in the early 1990s. Since 1994, operating profits of Berkshire's shoe group have plummeted 57% on an 18% decline in revenues.

Dexter has fared much worse than Brown, which absorbed Lowell and has buoyed itself by shifting much of its production offshore. Although Dexter now does some manufacturing in Puerto Rico, it has placed overriding emphasis on maintaining full employment at its four factories in its home state of Maine. By all accounts, Buffett has played no part in this divergence in basic strategy--and performance--between H.H. Brown and Dexter except to countenance it by his silence. ''It's amazing how little he bothers you,'' says Francis Rooney, chairman and CEO of H.H. Brown. ''He never even comments.''

The deference Buffett shows Berkshire's subsidiaries is all the more remarkable because it does not come naturally to him. ''With almost every one of the companies Berkshire owns, I think I would do something different if I was running them--in some cases, substantially different,'' Buffett says. The reason he doesn't impose his views, he adds, ''is simply that I am not inclined to make myself unhappy. I sort of accept things as they come.''

It's not that simple. Buffett knows the sort of self-motivated, hands-on exec he covets wouldn't tolerate being pushed around by Omaha. And Buffett's respectful treatment of his managers has instilled in them an ambition to ''make Warren proud,'' as one puts it. ''Somehow, Warren has been able to keep a diverse cast of characters working harder for him than they did for themselves,'' Goldberg says. ''I see it every day--and I still don't know how he does it. But I do know that all of us feel this incredible responsibility to him.''


We arrive late to Paris, touching down in a freakish, near-gale-force windstorm that both thrills and alarms our pilot. In four cars, we race as fast as rush-hour Paris traffic allows from Le Bourget to Dassault Aviation Group's magnificent 19th century chateau--familiarly known as Le Rond Point--on the Champs Elysees. EJA is the largest commercial customer of Dassault Aviation, Europe's leading manufacturer of business jets. Serge Dassault, the company's chairman, is hosting tonight's gala reception and dinner in Buffett's honor. By the time we arrive, the reception is in full swing. But Buffett takes a few steps into the foyer and hustles up a flight of stairs. It will be a good 35 minutes until he descends and joins the party.

Downstairs, the guest of honor's whereabouts is Topic A among Dassault's distinguished guests. It might puzzle them to learn that Buffett is on a transatlantic call to one of his employees. The matter he is discussing with Ajit Jain this evening is not urgent. But it is Buffett's custom to speak with Jain every evening. If that means keeping 200 of France's richest people waiting, then c'est la vie.

In mid-May, Buffett moderated a panel on Internet commerce at Microsoft's annual CEO summit in Seattle. As Buffett tells it, the assignment reflected William H. Gates III's sense of humor. But the Microsoft chairman and CEO, a friend of Buffett's since 1991, says it was no joke: ''Every principle that Warren holds about business and business value will still apply in this new world we're going into.'' Gates, who owns Berkshire stock in his personal account, adds that he has learned more about business from Buffett than from anyone else. ''People really underestimate what he has created in Berkshire,'' he says.

Unlike most megacorporations, Berkshire was not erected on the foundation of a single great business. Buffett began with a dying textile maker and parlayed its dwindling cash flow into ownership of a massive portfolio of enduringly profitable operating businesses. By the end of 1998, Berkshire had amassed shareholder equity worth $57 billion. This is a staggering sum, putting Berkshire well ahead of General Electric, Microsoft, and every other U.S. corporation and ranking it second in the world to Royal Dutch/Shell Group. Buffett could retire tomorrow and be confident of his place in business history not only as stock investor extraordinaire but as a corporate builder of the first rank.

LIMITS OF SCALE. Instead, of course, he is still in there pitching, to borrow one of the baseball metaphors that so delight him. From 1965 through 1998, Berkshire's book value per share rose 24.7% a year on average--trouncing the 12.9% average annual gain in the S&P 500. For some time now, Buffett has warned that the company's sheer bulk will prevent it from matching its breathtaking historical average in the future. His avowed goal is to increase its worth at an average of 15% a year. It's a modest aspiration only by comparison, for it implies adding $58 billion of shareholder equity over the next five years.

Except for the shoe group, Berkshire appears to be in fine fettle. Executive Jet is by no means its only hope for growth. GEICO, Berkshire's largest subsidiary in terms of revenue, has been wresting market share from rivals at an impressive rate and yet still has only 3.5% of the vast U.S. auto-insurance market. Like EJA, Gen Re is planning to expand in Europe and around the world. At the same time, Borsheim's, Scott Fetzer, See's Candies, and other Berkshire companies are experimenting with E-commerce. ''The No. 1 topic Warren and I talk about now is whether retail selling is going to move over to the Internet,'' says Ralph E. Schey, Scott Fetzer's chairman and chief executive.

The pursuit of accelerated growth carries added risk. In 1998, Berkshire had a banner year, posting a 48% increase in net earnings, to $2.8 billion, on revenues of $13.8 billion. But net income dropped 25%, to $541 million in the first quarter, largely because of earnings declines at GEICO and Gen Re. While both insurers were hurt by intensifying price competition, a German subsidiary of Gen Re's also took an embarrassing $275 million pretax loss on a workers' compensation pool. The down quarter did not seem to faze Buffett, who is famous for taking the long view.

If Berkshire were in fact a painting, it would look like a Jackson Pollock: an idiosyncratic product of inspired improvisation. In building his company virtually from scratch over the past quarter-century, Buffett conjured no overarching strategic vision, followed no master plan other than to buy good businesses at the right price. Even when he erred--a rare occurrence--he enfolded his purchases in an embrace intended to be permanent. ''We buy everything, even a stock, with the idea that we will hold it forever,'' he says.

It is hugely important to Buffett that his corporate handiwork outlast him. In fact, it is his hope that Berkshire--his masterpiece in progress--survive him in exactly the form it exists upon his death, like a painting framed and hung on a museum wall. But might there not come a time when his successor might be smart to sell some of Berkshire's weaker units? ''I don't think so,'' Buffett says. ''I hope whoever follows me would behave pretty much as I would if I were to live forever. I feel I owe it. I owe it to the people who sold me their businesses. They didn't have to sell to me. If I die tonight, I want them to get what they were expecting.''

MYSTERY HEIRS. Buffett says he already has picked a successor--two of them, actually: one to manage the stock portfolio, the other to oversee the operating companies. Their identities have not been disclosed to shareholders or, for that matter, to the heirs apparent themselves, because Buffett reserves the right to change his mind. He says he might eventually settle on a single successor.

Munger, who has most of his own billion-dollar net worth in Berkshire stock, professes optimism about the company's post-Buffett prospects. ''The corporate culture of Berkshire is more durable than that of the average corporation. That will go on,'' Munger says. ''The one place a death will hurt us is we're not likely to get as good an allocator of capital as Warren in the next CEO, whoever that is. But it will still be one hell of a business.''

In a company as decentralized as Berkshire Hathaway, the operating businesses need not suffer an immediate loss of momentum from Buffett's passing. On the other hand, it is not clear that a holding company with a grand total of 12 employees can be said to have a corporate culture. Without question, Berkshire's operating chiefs are united in their admiration of Buffett and his principles. But most of them barely know one another, and none is remotely Buffett's equal in terms of breadth of knowledge or personal authority. With its challengingly eccentric mix of businesses and its loose, informal structure, Berkshire Hathaway fits Buffett to a T but might well prove unwieldy for lesser mortals--especially ones constrained by loyalty to Buffett's preservationist credo.

The outlook for Buffett's personal fortune is no less problematic. His wife is his sole heir, but she is 67 years old and might not outlive him. The Buffetts have three children--Susan, 46; Howard, 44; and Peter, 41. Howard and Susan are directors of Berkshire, but none of the Buffett progeny is involved in the management of the company.

FAMILY PLAN. Buffett has said that it is his wish that 99% of the money he has made eventually go to the Buffett Foundation, to be distributed to worthy causes under the direction of Allen Greenberg, 42, the ex-husband of his daughter Susan A. Buffett. Greenberg works out of a one-person office in the same building that houses Berkshire. The foundation was set up in the mid-1960s but operates with a scanty endowment. Currently, it disburses $11 million to $12 million a year, with the bulk of the funds going to groups that provide family-planning services, including abortions. When the foundation comes into its full endowment, it is likely to rank as the world's largest philanthropy.

Buffett is often criticized--privately, to be sure--as a tightwad. But he insists that he is holding tight to his Berkshire stock not out of greed but out of a desire to ensure that control of the company passes to his heirs. ''I think I could control it with as little as 1% of the stock,'' Buffett says. ''With 35%, my wife could carry on, but not with 1%. I'd view it as a tragedy if someone whose achievement was issuing the most junk bonds or having the silliest stock price took over the company and all that we've built evaporated.''

It would indeed be a tragedy in the classical sense if the specialness of Buffett's great gifts contains the seeds of his empire's eventual undoing. For just as no one other than Buffett could have created Berkshire Hathaway, it may well come to pass that no one other than Buffett can make it work.


Monday, November 14, 2011

Buffett invierte US$10bn en IBM

Nueva York, 14 nov (EFE).- Berkshire Hathaway, la compañía de Warren Buffett, anunció hoy que este año ha comprado el 5,5 % de las acciones de la tecnológica IBM en una operación valorada en 10.700 millones de dólares.

El multimillonario inversor y el tercer hombre más rico del mundo reveló el porcentaje de su inversión en IBM durante una entrevista en la cadena de televisión financiera CNBC y precisó que la mayor parte de las compras las realizó en el segundo y tercer trimestre de este año.

Buffett precisó que su compañía posee ahora el 5,5 % de las acciones de IBM y que de momento no piensa adquirir nuevos títulos.

"No estaría hablando de ello si lo estuviera haciendo", dijo Buffett a esa cadena de televisión, donde también precisó que solo compraría más títulos de la tecnológica si su precio fuera bajo y su compañía, Berkshire, tuviera suficiente dinero para ello.

El reconocido inversor estadounidense indicó que la compra de títulos de IBM comenzó en marzo pasado y que lo hizo habiéndose puesto como meta la adquisición de 10.000 millones de dólares en títulos.

Asimismo, indicó a CNBC que no había hablado al respecto de sus adquisiciones con el presidente y consejero delegado de IBM, Sam Palmisano, al tiempo que señaló que el ejecutivo de la tecnológica esta haciendo "un trabajo increíble" al frente de la firma, de la que dijo que tiene por delante un futuro excelente.

Tras la apertura de la bolsa neoyorquina, las acciones de IBM progresaban el 0,99 %, hasta 189,18 dólares cada una, mientras que en lo que va de año se han revalorizado el 28,85 % y el 31,66 % en los últimos doce meses.

Los títulos de Berkshire Hathaway, por su parte, perdían el 0,87 % hasta 114.344 dólares cada uno, mientras que en lo que va de año han perdido el 5,07 % y el 4,99 % en los últimos doce meses.

Thursday, November 3, 2011

La diferencia entre crisis de ética y crisis de confianza

Wall Street Journal Americas

Fraudes y crisis financieras infames han destruido la fe de la gente en las compañías en los últimos años, lo que ha llevado a muchas de ellas a intentar reparar el daño con un énfasis en la ética.

No obstante, no se trata de una crisis de ética sino de confianza.

No sólo porque sus clientes o empleados piensen que usted es ético (moral, honesto y justo), confiarán en usted o deberían hacerlo. La confianza se gana cuando uno cumple todos los días lo prometido, como gerente, empleado y empresa. Involucra un constante trabajo en equipo, comunicación y colaboración.

Ross MacDonald
.Los estudios muestran que las empresas que generan más confianza tienen menos rotación de personal, y mayores ingresos, rentabilidad y rendimientos para accionistas. Tiene sentido. ¿Qué empleado, cliente o inversionista elegiría hacer negocios con un socio en el que confía poco cuando tiene disponible una opción altamente confiable?

A continuación, cinco principios que los líderes pueden adoptar para demostrar que son confiables y plasmarlos en sus compañías.

1. Muestre que tiene los mismos intereses. Antes de confiar en alguien, solemos preguntarnos: ¿qué tan probable es que esta persona trabaje a mi favor? Cuando los intereses están bien alineados, la confianza se da más fácil. Cuestionamos la competencia de nuestro cirujano, no sus motivos. Esto es así porque nos damos cuenta de que él también se beneficia si sobrevivimos la operación. Los líderes que generan confianza intentan alcanzar sus metas al servir los intereses de todos los que tienen algo en juego, no al favorecer a algunos mientras se perjudica o manipula a otros.

2. Demuestre interés por los demás. La gente confía en quienes se interesan por el bienestar de otros y desconfía de aquellos que parecen preocupados sólo por sí mismos. Para ganar confianza, los líderes deben demostrarles a los demás que harán lo que sea bueno para ellos incluso si eso les genera un riesgo. Un presidente ejecutivo eligió decirle a un subdirector de marketing que iba a ser despedido justo cuando la empresa debía desarrollar su plan de publicidad. El presidente ejecutivo sabía que podía ser contraproducente para la planificación de la firma, pero le avisó al ejecutivo de inmediato en lugar de esperar hasta que el plan estuviera terminado.

3. Cumpla sus promesas. Sólo seremos confiables si honramos nuestros compromisos. Las buenas intenciones, la benevolencia e incluso la conducta ética no garantizan confianza si la persona es incompetente. Si los líderes quieren ganar confianza, deben probar que pueden cumplir sus compromisos.

Este a veces es el defecto de líderes visionarios que no pueden ejecutar sus ideas. Los líderes que inspiran mucha confianza se aseguran de que hay una probabilidad y capacidad razonables de cumplir antes de hacer promesas.

4. Sea coherente y honesto. Los líderes altamente confiables suelen comportarse con coherencia e integridad. Este tipo de gerentes siempre tratan de cumplir su palabra y si fallan, se disculpan y se aseguran de que no se convierta en un hábito. Cuando Warren Buffett fue avergonzado por las revelaciones de que su mano derecha, David Sokol, tenía un conflicto de interés desconocido (una inversión personal de US$10 millones en acciones) en un importante negocio de la empresa, no se escondió detrás de abogados o dijo "sin comentarios". Admitió el error y tomó medidas para asegurarse de que no volviera a suceder. La mayoría de la gente sabe que sólo se puede aspirar a la perfección. La confianza proviene de siempre esforzarse por cumplir la palabra de uno.

5. Comuníquese con frecuencia, con claridad y de forma abierta. Debido a que la confianza implica mayormente relaciones, la comunicación es crítica. También es el vehículo a través del cual se concretan los otros cuatro elementos de la confianza. La capacidad de alinear intereses, demostrar benevolencia, comunicar con precisión las capacidades propias y poner en práctica lo que predica requieren destrezas efectivas de comunicación.

—Hurley es profesor de la Universidad de Fordham y autor de un libro sobre la confianza en las empresas.

Tuesday, November 1, 2011

Grecia pone en jaque a la UE

La UE recordó hoy a Grecia sus compromisos con la eurozona ante el referéndum que pretende celebrar sobre el segundo rescate y que ha puesto a los gobiernos europeos en alerta máxima por el riesgo de que su gran plan anticrisis se quede finalmente en papel mojado y el país heleno abocado a la quiebra.

Grecia, el epicentro de la crisis de deuda soberana en Europa, es el eje del acuerdo global anticrisis que aprobaron en la madrugada del jueves los jefes de Estado y de Gobierno de la eurozona, y pese a haber sido saludado como la salvación del país por el propio primer ministro griego, Yorgos Papandréu, éste ha puesto pocos días después en riesgo todo el plan europeo y provocado más nerviosismo en los mercados financieros del Viejo continente.

El plan anticrisis europeo está interconectado con el segundo rescate griego, que asciende a 100.000 millones de euros y a 130.000 millones si se tiene en cuenta que la eurozona aportará 30.000 millones en garantías a los acreedores privados para que acepten condonar a Grecia el 50 % de la deuda (100.000 millones).

Sin rescate griego, todo el acuerdo está en peligro, pues prepara a la banca ante un impago de Grecia y el impacto de la deuda soberana de países con problemas con una recapitalización de 106.447 millones de euros -incluidos 30.000 millones para las entidades griegas- y eleva la capacidad del Fondo Europeo de Estabilidad Financiera (FEEF) a un billón de euros para servir de cortafuegos y prevenir el contagio a economías más grandes, como Italia y España.

Ante el temor de que este escenario se haga realidad, los principales parqués europeos aumentaban a media sesión los descensos de la apertura y sufrían caídas de hasta del 5 %.

El malestar y la irritación por el anuncio sorpresa de Grecia por parte de los socios de la eurozona ha sido expresado hoy por el primer ministro luxemburgués y presidente del Eurogrupo, Jean Claude Juncker, quien ha asegurado que Papandréu tomó la decisión "sin haber consultado" previamente a sus homólogos europeos.

El anuncio ha provocado frenéticas gestiones en las principales capitales de la eurozona.

No es para menos, porque la agencia de calificación de riesgos Fitch advirtió hoy de que un resultado negativo en el referéndum aumentaría el riesgo de una quiebra forzada y desordenada y de una salida de Grecia del euro, al tiempo que tendría implicaciones financieras severas para la estabilidad financiera y la viabilidad de toda la eurozona.

Tampoco Juncker pudo descartar una suspensión de pagos: "no puedo excluir que ése sería el caso" si ganara el "no", en las urnas, dijo a una emisora de radio luxemburguesa.

Un tono más diplomático emplearon los presidentes de la Comisión Europea, José Manuel Durao Barroso, y del Consejo Europeo, Herman Van Rompuy, quienes, tras conversar por teléfono con Papandréu y otros líderes de la eurozona, recordaron sin embargo a Atenas sus compromisos y las obligaciones que conlleva compartir una moneda.

"Tomamos nota de la intención de las autoridades griegas de celebrar un referéndum. Estamos convencidos de que este acuerdo es lo mejor para Grecia. Confiamos plenamente en que Grecia honrará los compromisos que ha asumido con la eurozona y con la comunidad internacional", afirmaron.

En el Elíseo, Sarkozy convocó una reunión interministerial y una conversación telefónica con la canciller alemana, Angela Merkel, tras la cual ambos reafirmaron su determinación de garantizar que el rescate griego y todo el plan anticrisis será aplicado, porque su puesta en marcha "es más necesaria que nunca" y permitirá a Grecia recobrar un crecimiento sostenible.

Frente a la convicción de la eurozona de haber logrado una buena solución para Grecia, el 60 % de los griegos están en contra del plan, según un reciente sondeo.

La situación no solo incomoda a la eurozona, sino es sobre todo incómodo para Papandréu, quien tendrá que viajar a Cannes en vísperas del G20 y aguantar los más que probables reproches de Sarkozy, Merkel y de otros líderes por el anuncio del referéndum.