GE rebounds after CEO share purchases, Wall Street analysts come to company’s defense

General Electric bounced back Friday after the CEO shored up confidence by purchasing a bulk of company shares, and analysts defended the industrial giant. The CEO has roughly doubled his holding of GE shares this week. In the 175-page report, Markopolos accused GE of $38 billion in accounting fraud — “bigger than Enron and WorldCom combined.” “It’s going to make this company probably file for bankruptcy,” Markopolos told CNBC’s “Squawk on the Street ” on Thursday. Markopolos told CNBC that he w


General Electric bounced back Friday after the CEO shored up confidence by purchasing a bulk of company shares, and analysts defended the industrial giant. The CEO has roughly doubled his holding of GE shares this week. In the 175-page report, Markopolos accused GE of $38 billion in accounting fraud — “bigger than Enron and WorldCom combined.” “It’s going to make this company probably file for bankruptcy,” Markopolos told CNBC’s “Squawk on the Street ” on Thursday. Markopolos told CNBC that he w
GE rebounds after CEO share purchases, Wall Street analysts come to company’s defense Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-16  Authors: kate rooney
Keywords: news, cnbc, companies, street, report, shares, told, rebounds, stock, purchases, wall, companys, ceo, morning, defense, worldcom, come, markopolos, share, accounting, ge


GE rebounds after CEO share purchases, Wall Street analysts come to company's defense

General Electric bounced back Friday after the CEO shored up confidence by purchasing a bulk of company shares, and analysts defended the industrial giant.

GE’s stock was up more than 6% on Friday morning following its biggest drop since April 2008 a day earlier. The shares had tanked 11% on Thursday.

The stock began its downward spiral Thursday morning after Harry Markopolos, best-known for pointing out irregularities with Bernie Madoff’s investment strategy years before the Ponzi scheme was exposed, published a report accusing GE of fraudulent financial statements.

Larry Culp, who took over the struggling industrial conglomerate last year, bought 252,200 shares for $7.93 each, according to a Thursday evening filing with the SEC. The CEO has roughly doubled his holding of GE shares this week.

In the 175-page report, Markopolos accused GE of $38 billion in accounting fraud — “bigger than Enron and WorldCom combined.” He outlined a “long history” of accounting fraud at GE, dating to as early as 1995, when it was run by Jack Welch.

“It’s going to make this company probably file for bankruptcy,” Markopolos told CNBC’s “Squawk on the Street ” on Thursday. “WorldCom and Enron lasted about four months. … We’ll see how GE does.”

A U.S. hedge fund, which Markopolos wouldn’t name, paid Markopolos to conduct the report. Markopolos told CNBC that he was getting a “decent percentage” of profits that the hedge fund would make from betting against GE.

Culp, who is a former CEO of Danaher, said the accusations were false, and driven by incentives to profit off of GE’s stock drop.

“GE will always take any allegation of financial misconduct seriously. But this is market manipulation – pure and simple,” he said in a statement. “Mr. Markopolos’s report contains false statements of fact and these claims could have been corrected if he had checked them with GE before publishing the report.”

Leslie Seidman, a GE board director and chair of its audit committee, also pushed back on the Markopolos report, which she said contained “numerous novel interpretations and downright mistakes about the actual accounting requirements.”

“In his own words, he stands to personally financially benefit from today’s significant market reaction to his report,” she said Thursday. “He is selectively front-running widely reported regulatory processes and rigorous investigations without the benefit of any access to GE’s books and records.”


Company: cnbc, Activity: cnbc, Date: 2019-08-16  Authors: kate rooney
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GE CEO Culp calls Markopolos’ report accusing company of fraud pure ‘market manipulation’

GE’s CEO said the accusations of fraud by Madoff whistleblower Harry Markopolos are false, and driven by market manipulation. But this is market manipulation – pure and simple,” Lawrence Culp, chairman and CEO of GE said in a statement. “Mr. Markopolos’s report contains false statements of fact and these claims could have been corrected if he had checked them with GE before publishing the report.” Markopolos on Thursday targeted GE in a 175-page report, accusing the conglomerate of issuing fraud


GE’s CEO said the accusations of fraud by Madoff whistleblower Harry Markopolos are false, and driven by market manipulation. But this is market manipulation – pure and simple,” Lawrence Culp, chairman and CEO of GE said in a statement. “Mr. Markopolos’s report contains false statements of fact and these claims could have been corrected if he had checked them with GE before publishing the report.” Markopolos on Thursday targeted GE in a 175-page report, accusing the conglomerate of issuing fraud
GE CEO Culp calls Markopolos’ report accusing company of fraud pure ‘market manipulation’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-15  Authors: kate rooney
Keywords: news, cnbc, companies, hedge, ges, statements, ge, statement, markopolos, pure, report, fraud, culp, ceo, financial, manipulation, fund, company, market


GE CEO Culp calls Markopolos' report accusing company of fraud pure 'market manipulation'

GE’s CEO said the accusations of fraud by Madoff whistleblower Harry Markopolos are false, and driven by market manipulation.

“GE will always take any allegation of financial misconduct seriously. But this is market manipulation – pure and simple,” Lawrence Culp, chairman and CEO of GE said in a statement. “Mr. Markopolos’s report contains false statements of fact and these claims could have been corrected if he had checked them with GE before publishing the report.”

Culp said the fact that Markopolos never talked to company officials before publishing the report “goes to show that he is not interested in accurate financial analysis, but solely in generating downward volatility in GE stock so that he and his undisclosed hedge fund partner can personally profit.”

Markopolos on Thursday targeted GE in a 175-page report, accusing the conglomerate of issuing fraudulent financial statements to hide the extent of its accounting problems.

A U.S. hedge fund, that Markopolos wouldn’t name, paid Markopolos to research and publish his report, and Markopolos told CNBC that he was getting a “decent percentage” of profits that the hedge fund would make from betting against GE.

GE board director and audit committee chair Leslie Seidman also accused Markopolos of inaccuracies.

“The report contains numerous novel interpretations and downright mistakes about the actual accounting requirements, making his conclusions about GE’s reporting questionable at best,” she said in a statement. “In his own words, he stands to personally financially benefit from today’s significant market reaction to his report, and he is selectively front-running widely reported regulatory processes and rigorous investigations without the benefit of any access to GE’s books and records.”


Company: cnbc, Activity: cnbc, Date: 2019-08-15  Authors: kate rooney
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GE falls the most in 11 years after Madoff whistleblower calls it a ‘bigger fraud than Enron’

Markopolos alleges that GE has a “long history” of accounting fraud, dating to as early as 1995, when it was run by Jack Welch. A website has been set up to disseminate the report, www.GEfraud.com , where Markopolos calls it “a bigger fraud than Enron.” A year after the Enron scandal broke, long-distance phone company WorldCom, filed for bankruptcy after revelations of an accounting fraud. Separately, he goes on to find issues with GE’s accounting on its oil and gas business Baker Hughes. Addres


Markopolos alleges that GE has a “long history” of accounting fraud, dating to as early as 1995, when it was run by Jack Welch. A website has been set up to disseminate the report, www.GEfraud.com , where Markopolos calls it “a bigger fraud than Enron.” A year after the Enron scandal broke, long-distance phone company WorldCom, filed for bankruptcy after revelations of an accounting fraud. Separately, he goes on to find issues with GE’s accounting on its oil and gas business Baker Hughes. Addres
GE falls the most in 11 years after Madoff whistleblower calls it a ‘bigger fraud than Enron’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-15  Authors: john melloy kate rooney, john melloy, kate rooney
Keywords: news, cnbc, companies, ge, billion, markopolos, insurance, enron, calls, ges, company, madoff, whistleblower, accounting, 11, financial, report, bigger, fraud, falls


GE falls the most in 11 years after Madoff whistleblower calls it a 'bigger fraud than Enron'

Enron, which had more than $63 billion in assets at the time, declared bankruptcy on December 2001 in what was then the largest corporate collapse in U.S. history . Roughly 4,000 Enron employees lost their jobs following its collapse. The energy company’s downfall began with the discovery of accounting irregularities. Twenty-one people, including former CEO Jeffrey Skilling, were convicted in the scandal, and accounting firm Arthur Andersen was forced out of business after it was found guilty of obstruction of justice.

Culp said the fact that Markopolos never talked to company officials before publishing the report “goes to show that he is not interested in accurate financial analysis, but solely in generating downward volatility in GE stock so that he and his undisclosed hedge fund partner can personally profit.”

“GE will always take any allegation of financial misconduct seriously. But this is market manipulation – pure and simple,” Lawrence Culp, chairman and CEO of GE said in a statement. “Mr. Markopolos’s report contains false statements of fact and these claims could have been corrected if he had checked them with GE before publishing the report.”

The stock closed 11% lower in its biggest drop since April 2008, ending the day at $8.01 per share.

“It’s going to make this company probably file for bankruptcy,” Markopolos told CNBC’s ” Squawk on the Street . ” “WorldCom and Enron lasted about four months. … We’ll see how GE does.”

“My team has spent the past 7 months analyzing GE’s accounting and we believe the $38 Billion in fraud we’ve come across is merely the tip of the iceberg,” Markopolos said in the 175-page report. Markopolos alleges that GE has a “long history” of accounting fraud, dating to as early as 1995, when it was run by Jack Welch.

A website has been set up to disseminate the report, www.GEfraud.com , where Markopolos calls it “a bigger fraud than Enron.” The financial investigator, who was probing GE for an unidentified hedge fund, writes that after more than a year of research he has discovered “an Enronesque business approach that has left GE on the verge of insolvency.”

General Electric shares saw their biggest drop in more than a decade Thursday after Madoff whistleblower Harry Markopolos targeted the conglomerate in a new report, accusing it of issuing fraudulent financial statements to hide the extent of its problems.

A year after the Enron scandal broke, long-distance phone company WorldCom, filed for bankruptcy after revelations of an accounting fraud. It had $107 billion in assets at the time.

One area of Markopolos’ case focuses on GE’s long-term care insurance unit, for which the company had to boost reserves by $15 billion last year. By examining the filings of GE’s counterparties in this business, he alleges that GE is hiding massive losses that will only increase as policyholders grow older. He claims that GE has filed false statements to regulators on the unit. Separately, he goes on to find issues with GE’s accounting on its oil and gas business Baker Hughes.

The Wall Street Journal first reported on Markopolos’ findings.

Markopolos is a Boston-based accounting expert who gained attention after pointing out irregularities with Bernie Madoff’s investment strategy, and how it was impossible to generate the returns the fraudster claimed years before the Ponzi scheme was exposed. He was largely ignored at the time. More recently, Markopolos helped uncover a foreign currency trading scandal at a group of banks.

The Markopolos group looking into GE includes forensic accounting veteran John McPherson, co-founder of MMS Advisors, which specializes in the insurance industry.

“GE has been running a decades long accounting fraud by only providing top line revenue and bottom line profits for its business units and getting away with leaving out cost of goods sold, SG&A, R&D and corporate overhead allocations,” the report said.

GE’s market value as of Wednesday’s close was $78.8 billion. With Thursday morning’s skid, the market cap was down to $69.9 billion. Markopolos told the paper the insurance unit would need to raise reserves by more than $18.5 billion. He estimates GE’s already hefty debt-to-equity ratio of 3:1 would skyrocket all the way to 17:1 if the company restates its actual results.

Here are the main points Markopolos makes in the report which are now available to read online:

“This is my accounting fraud team’s ninth insurance fraud case in the past nine years and it’s the biggest, bigger than Enron and WorldCom combined. In fact, GE’s $38 Billion in accounting fraud amounts to over 40% of GE’s market capitalization, making it far more serious than either the Enron or WorldCom accounting frauds.”

“GE utilizes many of the same accounting tricks as Enron did, so much so that we’ve taken to calling this the GEnron case.”

“Of the $29 Billion in new LTC reserves that GE needs, $18.5 Billion requires cash immediately while the remaining $10.5 Billion is a non-cash GAAP charge which accounting rules require to be taken no later than 1QTR 2021. These impending losses will destroy GE’s balance sheet, debt ratios and likely also violate debt covenants.”

“When you benchmark GE to a responsible insurance carrier using going concern accounting such as Prudential (PRU), GE needs $18.5 Billion in additional reserves in order to be able to pay claims. We compare GE’s LTC policies to Prudential and Unum, two insurers with similar pre-mid-2000’s vintage LTC policies, but whose policies have much lower risk characteristics than GE’s. Prudential’s 2018 loss ratio on similar policies was 185% and they’re reserving $113,455 per policy while GE’s loss ratios are several times higher and they’re only reserving $79,000 per policy. Just to match Prudential’s level of reserves would require an immediate $9.5 Billion increase in reserves.”

“GE would change its reporting formats every 2-4 years to prevent analysts from being able to make comparisons across time horizons! In other words, GE went out of its way to make it impossible to analyze the performance of their business units.

“Why would a company do that? We could only think of two reasons: 1) to conceal accounting fraud or 2) because they’re so incompetent they’re not capable of keeping proper books and records. I’m not sure which reason is worse because both are bad and each is a path to bankruptcy.”

GE is already under investigation by the Justice Department and SEC for potential accounting practices. That includes a $22 billion charge the company took in the third quarter related to acquisitions made in its power business.

The struggling industrial conglomerate abruptly removed its former CEO and chairman John Flannery last year after only a year on the job and installed Culp, former Danaher CEO, as his successor.

Flannery had been appointed in August 2017, taking the reins from Jeff Immelt as GE’s stock steadily eroded. The company’s value had continued set new lows as investors remain unconvinced by Flannery’s turnaround vision. Last summer, GE was kicked out of the Dow Jones Industrial Average. It had been the longest-serving component of the blue chip index at 111 years.

Long-term care policies typically pay for end-of-life costs, like nursing homes or assisted living. It’s known as one of the more costly and unpredictable parts of the insurance market — especially as the average American lifespan rises. In January 2018, GE reported a $6.2 billion charge based on liabilities in its long-term care business, which is run by the company’s financial services unit, GE Capital. To make up for the costs, GE Capital said it needed to set aside $15 billion to hold against potential losses, and stopped paying a dividend to its parent company for the “foreseeable future.”

The costs prompted an investor lawsuit and prompted an investigation by the Securities and Exchange Commission, which GE has said it is cooperating with.

GE pointed out that Markopolos gave an unnamed hedge fund he is working with access to the report ahead of time. Markopolos said he has given the report to securities regulators and that certain information he has uncovered has been given to law enforcement only, and is not in the public report.

A disclaimer on the website read: “Prior to the initial distribution of this Report on August 15, 2019, the Company entered into an agreement with a third-party entity to review an advanced copy of the Report in exchange for later-provided compensation. That compensation is based on a percentage of the profits resulting from the third-party entity’s positions in the securities, derivatives, and other financial instruments of, and/or relating to, General Electric Company (“GE”) (NYSE: GE). Those positions taken by the third-party entity are designed to generate profits should the price of GE securities decrease.”

GE reported better-than-expected second-quarter earnings and gave an upbeat outlook for its industrial cash flow — a key metric watched by investors. GE also announced that long-time executive Jamie Miller, who has been with GE since 2008, was stepping down. She was appointed as CFO in 2017 under Flannery.

GE said its power unit is showing “signs of stabilization” but the segment’s orders remained sluggish, with $4.9 billion in booked orders, representing a drop of 22% from a year earlier. Revenue fell by 25% year over year in the second quarter, while power barely reported a profit of $100 million.

Here is the full GE statement to CNBC:

“We have never met, spoken to or had contact with this person. While we can’t comment on the detailed content of a report that we haven’t seen, the allegations we have heard are entirely false and misleading. It’s widely known and the WSJ has previously reported that he works for and is compensated by unnamed hedge funds. Such funds are usually financially motivated to try to generate short selling in a company’s stock to create unnecessary volatility.

GE stands behind its financials. We operate to the highest-level of integrity in our financial reporting and we have clearly laid out our financial obligations in great detail.

We remain focused on running our business every day and following the strategic path we have laid out. We will not be distracted by this type of meritless, misguided and self-serving speculation and neither should anyone in the investor community. ”

Addressing Mr. Markopolos’s allegations: GE Insurance: We believe that our current reserves are well-supported for our portfolio characteristics, and we undertake rigorous reserve adequacy testing every year. The future implementation of the GAAP insurance accounting standard, which will be highly dependent on a number of variables, will not affect statutory accounting, which drives our funding requirements.

BHGE accounting: As a majority shareholder of BHGE, we are required to report consolidated earnings (under U.S. GAAP law), contrary to what Mr. Markopolos alleges. Further, consolidation of BHGE by GE includes additional disclosure of BHGE’s results made through BHGE segment results reporting in the notes to GE’s consolidated financial statements. BHGE is also a stand-alone SEC registrant with its own separate SEC filings under Form 10-Q and 10-K as a separate company. In the most recent 10Q, GE disclosed the loss upon deconsolidation of BHGE from a sale of our interest (taking us below our current majority position) would be approximately $7.4B as of 7/26/19. GE’s liquidity: Contrary to Mr. Markopolos’s allegations, GE continues to maintain a strong liquidity position, committed credit lines, and several executable options to monetize assets. The Company ended the second quarter with $16.9B of Industrial Cash excluding Baker Hughes GE, $12.5B of liquidity at GE Capital and access to $35B of credit facilities. As it relates to GE’s leverage targets, as the Company has previously stated during 2Q earnings, it expects to make significant progress towards these goals by the end of 2020.

Read the entire report here.

Correction: An earlier version misstated the years when GE was removed from the Dow Jones Industrial Average and when GE reported a $6.2 billion charge.


Company: cnbc, Activity: cnbc, Date: 2019-08-15  Authors: john melloy kate rooney, john melloy, kate rooney
Keywords: news, cnbc, companies, ge, billion, markopolos, insurance, enron, calls, ges, company, madoff, whistleblower, accounting, 11, financial, report, bigger, fraud, falls


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GE CEO Larry Culp bought nearly $2 million worth of the company’s stock after fraud accusation

General Electric CEO Larry Culp bought nearly $2 million worth of the company’s stock after Madoff whistleblower Harry Markopolos called the company “a bigger fraud than Enron.” A Thursday evening filing with the SEC revealed that Culp bought 252,200 shares for about $7.93 each. Culp, who took over the struggling industrial conglomerate last year, has roughly doubled his holding of GE shares this week, according to the filing. In a 175-page report, Markopolos targeted the company, accusing it of


General Electric CEO Larry Culp bought nearly $2 million worth of the company’s stock after Madoff whistleblower Harry Markopolos called the company “a bigger fraud than Enron.” A Thursday evening filing with the SEC revealed that Culp bought 252,200 shares for about $7.93 each. Culp, who took over the struggling industrial conglomerate last year, has roughly doubled his holding of GE shares this week, according to the filing. In a 175-page report, Markopolos targeted the company, accusing it of
GE CEO Larry Culp bought nearly $2 million worth of the company’s stock after fraud accusation Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-15  Authors: christine wang kate rooney, christine wang, kate rooney
Keywords: news, cnbc, companies, ge, culp, million, markopolos, nearly, seidman, market, worth, companys, larry, ges, shares, accounting, stock, statements, report, ceo, fraud


GE CEO Larry Culp bought nearly $2 million worth of the company's stock after fraud accusation

General Electric CEO Larry Culp bought nearly $2 million worth of the company’s stock after Madoff whistleblower Harry Markopolos called the company “a bigger fraud than Enron.”

A Thursday evening filing with the SEC revealed that Culp bought 252,200 shares for about $7.93 each. Culp, who took over the struggling industrial conglomerate last year, has roughly doubled his holding of GE shares this week, according to the filing.

Shares of GE were up about 2.5% in after-hours trading.

In a 175-page report, Markopolos targeted the company, accusing it of issuing fraudulent financial statements to hide the extent of its accounting problems. Following those allegations, GE shares plunged 11% during the normal session to $8.01 per share, their biggest drop since April 2008.

Culp, who is former CEO of Danaher, said the accusations were false and driven by market manipulation.

“GE will always take any allegation of financial misconduct seriously. But this is market manipulation – pure and simple,” he said in a statement. “Mr. Markopolos’s report contains false statements of fact and these claims could have been corrected if he had checked them with GE before publishing the report.”

A U.S. hedge fund, that Markopolos wouldn’t name, paid Markopolos to conduct and publish his report, and Markopolos told CNBC that he was getting a “decent percentage” of profits that the hedge fund would make from betting against GE.

Leslie Seidman, a GE board director and chair of its audit committee, also pushed back on the Markopolos report, which she said contained “numerous novel interpretations and downright mistakes about the actual accounting requirements.”

“In his own words, he stands to personally financially benefit from today’s significant market reaction to his report, and he is selectively front-running widely reported regulatory processes and rigorous investigations without the benefit of any access to GE’s books and records,” Seidman said.

The report went through a list of accounting irregularities that Markopolos says amount to a $38 billion fraud, equivalent to more than 40% of GE’s market capitalization. Much of the report focuses on GE’s business of reinsuring long-term care insurance providers.


Company: cnbc, Activity: cnbc, Date: 2019-08-15  Authors: christine wang kate rooney, christine wang, kate rooney
Keywords: news, cnbc, companies, ge, culp, million, markopolos, nearly, seidman, market, worth, companys, larry, ges, shares, accounting, stock, statements, report, ceo, fraud


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Warren Buffett’s Berkshire Hathaway raises Amazon stake by 11%, now worth $947 million

Warren Buffett’s Berkshire Hathaway has been loading up on shares of Amazon. Berkshire upped its stake in the e-commerce giant by 11%, the Omaha, Nebraska-based holding company revealed in a government filing Wednesday. Berkshire now owns 537,300 shares of Amazon, worth $947 million. Buffett announced his initial Amazon investment in May, but said he was not the one behind the share purchases. In its last major SEC filing, Berkshire Hathaway disclosed an 18% increase in its J.P. Morgan Chase sta


Warren Buffett’s Berkshire Hathaway has been loading up on shares of Amazon. Berkshire upped its stake in the e-commerce giant by 11%, the Omaha, Nebraska-based holding company revealed in a government filing Wednesday. Berkshire now owns 537,300 shares of Amazon, worth $947 million. Buffett announced his initial Amazon investment in May, but said he was not the one behind the share purchases. In its last major SEC filing, Berkshire Hathaway disclosed an 18% increase in its J.P. Morgan Chase sta
Warren Buffett’s Berkshire Hathaway raises Amazon stake by 11%, now worth $947 million Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: kate rooney
Keywords: news, cnbc, companies, buffetts, berkshire, million, stake, raises, amazon, shares, increase, holdings, holding, worth, filing, 947, warren, hathaway, told


Warren Buffett's Berkshire Hathaway raises Amazon stake by 11%, now worth $947 million

Warren Buffett’s Berkshire Hathaway has been loading up on shares of Amazon.

Berkshire upped its stake in the e-commerce giant by 11%, the Omaha, Nebraska-based holding company revealed in a government filing Wednesday. Berkshire now owns 537,300 shares of Amazon, worth $947 million. The holdings are as of the end of the second quarter.

Buffett announced his initial Amazon investment in May, but said he was not the one behind the share purchases.

“One of the fellows in the office that manage money” bought shares of Amazon on behalf of Berkshire, Buffett told CNBC’s Becky Quick on the eve of the company’s annual shareholders meeting in Omaha.

Buffett also slightly increased his bet on bank shares, which have been hit this month on concerns about an inverted yield curve hurting profits for the group. Berkshire’s Bank of America stake was increased by 3.5% last quarter, according to the filing. It also raised its holding of US Bancorp by 2.4%. Other big bank holdings, including Wells Fargo and J.P. Morgan Chase, remained the same.

The famous value investor has historically avoided major technology bets, ending a rough chapter in IBM last year. But in February 2017, he announced that Berkshire was buying a large stake in Apple. In the the first quarter of 2018, Berkshire added 75 million shares of the iPhone maker and told CNBC at the time that he clearly likes Apple, and “we buy them to hold.”

One of his two lieutenants, Todd Combs or Ted Weschler, who each manage portfolios of more than $13 billion in equities for Berkshire, is behind the original Amazon purchase and likely the increase seen last quarter.

The Berkshire chairman and CEO has long admired Amazon founder Jeff Bezos and is working with him on a joint health care venture. But the legendary investor has basically said that he missed his chance on Amazon.

Amazon has “far surpassed anything I would have dreamt could have been done. Because if I really felt it could have been done, I should have bought it,” Buffett told CNBC in 2018. “I had no idea that it had the potential. I blew it.”

Apparently one of his managers thinks there is still an opportunity for gains still in the shares, which are 12% in the last month amid a broader market sell-off.

Kraft Heinz, Berkshire’s fourth largest holding, hit a record low last week after the company announced an additional write-down of $1.22 billion and missed revenue expectations. Buffett told CNBC in June that he “made a mistake in the Kraft purchase in terms of paying too much. ”

In its last major SEC filing, Berkshire Hathaway disclosed an 18% increase in its J.P. Morgan Chase stake to 59.5 million shares in its last quarterly filing, and a 22% increase to its Red Hat holdings to 5.1 million shares. Red Hat was acquired by IBM for $34 billion in July.


Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: kate rooney
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Hedge fund manager Bill Ackman reveals a new stake in Warren Buffett’s Berkshire Hathaway

Consumers are America’s not so secret weapon to lift economyWith markets reeling from recession fears, the world is watching the so far resilient U.S. consumer, now in the strongest position since before the financial crisis. Market Insiderread more


Consumers are America’s not so secret weapon to lift economyWith markets reeling from recession fears, the world is watching the so far resilient U.S. consumer, now in the strongest position since before the financial crisis. Market Insiderread more
Hedge fund manager Bill Ackman reveals a new stake in Warren Buffett’s Berkshire Hathaway Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: kate rooney
Keywords: news, cnbc, companies, resilient, reeling, buffetts, berkshire, strongest, stake, secret, world, position, weapon, reveals, markets, manager, recession, warren, watching, hathaway, fund, bill, hedge


Hedge fund manager Bill Ackman reveals a new stake in Warren Buffett's Berkshire Hathaway

Consumers are America’s not so secret weapon to lift economy

With markets reeling from recession fears, the world is watching the so far resilient U.S. consumer, now in the strongest position since before the financial crisis.

Market Insider

read more


Company: cnbc, Activity: cnbc, Date: 2019-08-14  Authors: kate rooney
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Trump just blinked, giving China a possible edge in trade war, Jim Chanos and others say

In backing off on China tariffs Tuesday, President Donald Trump showed just how much pain the U.S. could tolerate — and China may use that to its advantage, key voices on Wall Street say. John Rutledge, chief investment officer of global principal investment house Safanad, said the trade war is causing pain on both sides. In China, Rutledge said Xi is feeling pressure to show strength in the trade war, while Washington is grappling with mounting political pressure and costs to consumers. The pre


In backing off on China tariffs Tuesday, President Donald Trump showed just how much pain the U.S. could tolerate — and China may use that to its advantage, key voices on Wall Street say. John Rutledge, chief investment officer of global principal investment house Safanad, said the trade war is causing pain on both sides. In China, Rutledge said Xi is feeling pressure to show strength in the trade war, while Washington is grappling with mounting political pressure and costs to consumers. The pre
Trump just blinked, giving China a possible edge in trade war, Jim Chanos and others say Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-13  Authors: kate rooney
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Trump just blinked, giving China a possible edge in trade war, Jim Chanos and others say

In backing off on China tariffs Tuesday, President Donald Trump showed just how much pain the U.S. could tolerate — and China may use that to its advantage, key voices on Wall Street say.

Markets rallied on the announcement by the U.S. Trade Representative office that certain items were being removed from the new tariff list, while duties on others would be delayed until mid-December.

The short-seller Jim Chanos, who tweets under the alter ego “Diogenes,” hinted that Chinese President Xi Jinping may take this as a sign that the U.S. may cave with enough pressure.

“So then tell me why Xi should not continue to wait out The World’s Greatest Negotiator, who keeps ‘dealing’ with himself?” tweeted Chanos, founder and managing Partner of Kynikos Associates.

Some investors took Tuesday’s announcement as a sign that despite the White House’s claim that China would bear the brunt of tariff impacts, the trade war was indeed hurting consumers. The products in the group exempt from tariffs include cellphones, some apparel, and video games — all of which are crucial to the U.S. consumer market, especially during the holiday shopping season. Trump announced on Aug. 1 that 10% tariffs would go into effect on Sept. 1 on the remaining $300 billion worth of Chinese imports that had not been slapped with U.S. duties.

Trump told reporters Tuesday afternoon that he postponed tariffs for the Christmas season “in case it had an impact on shopping” and the delay would “help a lot of people.”

Hedge fund manager and Hayman Capital Management founder Kyle Bass said based on the tariff de-escalation, “it does look like President Trump has blinked.” While Trump has been vocal in the tariff fight, Bass said “every time it makes the stock market go down a few hundred points” the president “backs away.”

“It looks like he doesn’t want the price of iPhones going up into Christmas,” Bass said on CNBC’s “Squawk Alley ” Tuesday. “The Chinese are going to read this as a key weakness.”

China meanwhile, has not publicly backed off. It announced last week that it would not resume buying U.S. agricultural products, despite assurances otherwise by Xi to Trump at the June G-20 summit. It also has retaliated with its own tariffs on U.S. goods and set off more worries about the trade war on Friday by letting its currency weaken.

John Rutledge, chief investment officer of global principal investment house Safanad, said the trade war is causing pain on both sides. In China, Rutledge said Xi is feeling pressure to show strength in the trade war, while Washington is grappling with mounting political pressure and costs to consumers.

But that can change quickly, Rutledge said, depending on which of Trump’s trade advisors have his ear at the moment.

“There’s a battle of the bands among advisors — this may be just a tick up as the rational group prevailed,” Rutledge said, referring to White House economic advisor Larry Kudlow, Secretary of Commerce Wilbur Ross and Treasury Secretary Steven Mnuchin, whom he calls “market thinkers” in opposition to trade hawk and advisor Peter Navarro.

Still, Rutledge said its nearly impossible to predict the White House’s next move and investors should take this as “one day and one data point.”

“We shouldn’t extrapolate or draw a trend, since it might get revered,” Rutledge said.

The president’s top priorities — a strong stock market and a tough China trade deal — have been at odds. Uncertainty around the trade war has weighed on financial markets. Stocks saw their worst day of the year on Aug. 5 after China let its currency weaken below 7 yuan to the dollar and made its announcement about U.S. farm products.

“The White House is now delaying the tariffs and removing some items. Did some acronym called the SPX cause someone to blink?,” David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates, said in a tweet.

China’s Commerce Ministry said Vice Premier Liu He had a phone call with U.S. Trade Representative Robert Lightizer and Mnuchin. Trade talks are set to continue in two weeks. According to Chinese news outlet CGTN, the call for the world’s two largest economies to meet again on trade came from Lighthizer, not China.

So far, the pain felt by the stock market has not been that exaggerated. At its low point for this sell-off, the S&P 500 was down only a little more than 6% from its high.

“These developments are modestly positive, especially compared to the recent torrent of negative news, but we caution against viewing the tariff delay as anything more than an attempt to partially shield the American consumer heading into the holiday season,” Isaac Boltansky of Compass Point Research wrote in a note to clients. “We continue to believe that a broad deal will not emerge prior to the 2020 election.”

Trump, himself, accused China last week of trying to wait out the 2020 election for a trade deal.


Company: cnbc, Activity: cnbc, Date: 2019-08-13  Authors: kate rooney
Keywords: news, cnbc, companies, trade, tariff, possible, china, xi, giving, say, rutledge, edge, white, chanos, market, war, trump, jim, tariffs


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Investors, ‘starved for returns,’ flood private markets in search of high-growth opportunities

The total invested in private markets hit all-time highs last year and continues to break multi-decade records this year. “Private equity has, on average, managed to outperform public markets over the last couple of decades.” Growth in smaller public companies has been significantly slower than their private-market counterparts. They’re able to operate “outside of the quarterly spotlight or the glare of public markets,” and often take a longer-term view, he said. “As a consequence, you’ve seen c


The total invested in private markets hit all-time highs last year and continues to break multi-decade records this year. “Private equity has, on average, managed to outperform public markets over the last couple of decades.” Growth in smaller public companies has been significantly slower than their private-market counterparts. They’re able to operate “outside of the quarterly spotlight or the glare of public markets,” and often take a longer-term view, he said. “As a consequence, you’ve seen c
Investors, ‘starved for returns,’ flood private markets in search of high-growth opportunities Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: kate rooney
Keywords: news, cnbc, companies, highgrowth, equity, private, investments, flood, companies, search, public, klempner, total, opportunities, high, investors, markets, starved, returns


Investors, 'starved for returns,' flood private markets in search of high-growth opportunities

Panoramic Images | Getty Images

Many global investors are turning toward Silicon Valley instead of Wall Street in search of returns. The total invested in private markets hit all-time highs last year and continues to break multi-decade records this year. In the first half of the year, total investments in venture capital hit a 19-year high of $53.3 billion, according to data from Refinitiv published last week. That marked a 21% increase by total dollar amount compared to the first half of 2018. The steady stream of funding comes alongside a drop in the number of publicly listed companies, rock-bottom global bond yields, and historically weak small-cap performance. “The incentives for early exposure to rapidly growing, mature companies are still intact,” PitchbBook senior manager Garrett James Black said in the firm’s 2019 “Unicorn Report” published Monday. “With those imperatives in place and current market conditions — despite concern about a supposed imminent recession— looking to persist, unicorns aren’t going away anytime soon.” Analysts say the trend is largely the result of relatively lower expectations for Wall Street investments such as stocks or bonds. As the trade war between the U.S. and China escalates and economic indicators weaken, investors have fled to safer assets such as Treasurys. The 10-year Treasury note fell below 1.7% Monday.

‘Starved for returns’

Money managers for pensions and endowments are turning to alternative investments — private equity, venture capital or hedge funds – to “keep up with expectations that they set years ago with their stakeholders,” according to McKinsey Partner Bryce Klempner. “In a world where big institutional investors find themselves starved for returns, it’s not surprising that they have steadily increased allocations to private markets and you’ve seen capital continuing to flow into the asset class,” Klempner told CNBC in a phone interview. “Private equity has, on average, managed to outperform public markets over the last couple of decades.” Growth in smaller public companies has been significantly slower than their private-market counterparts. PitchBook looked at the valuations of late-stage, Series D funded companies compared to the small-cap benchmark Russell 2000. That index is in correction territory, trading nearly 14% below its 52-week intraday high in August of 2018. The S&P 500 is off by 4% from its high. Meanwhile, there has also been a contraction in the total number of public companies. Part of that is due to mergers and consolidation, but Klempner said managers — not just investors — tend to prefer private ownership, too. They’re able to operate “outside of the quarterly spotlight or the glare of public markets,” and often take a longer-term view, he said. “As a consequence, you’ve seen considerable management talent migrate to private equity portfolio companies,” Klempner said. One factor allowing companies to stay private was a change in legislation. The 2012 JOBS Act raised the limit of private shareholders in a company from 500 to 2,000 – meaning companies can stay private until they reach that limit. And in many ways, companies don’t need to go public: They can raise money with ease from private investors and don’t need the cash injection that comes with an initial public offering.

Foreign buyers


Company: cnbc, Activity: cnbc, Date: 2019-08-12  Authors: kate rooney
Keywords: news, cnbc, companies, highgrowth, equity, private, investments, flood, companies, search, public, klempner, total, opportunities, high, investors, markets, starved, returns


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Investors are buying up these ‘tariff-proof’ tech stocks to keep exposure to the sector

Enterprise software is emerging as an exception to some investors’ caution around the technology sector. “Software names are not exactly recession proof, but they’re more resilient to downturn.” The S&P 500 Technology sector — which doesn’t include Amazon, Google or Facebook — is the most international of any S&P sector when it comes to revenues, according DataTrek Research. The U.S.-China trade battle has been a jolt to the sector, “with a new level of uncertainty representing a dark cloud over


Enterprise software is emerging as an exception to some investors’ caution around the technology sector. “Software names are not exactly recession proof, but they’re more resilient to downturn.” The S&P 500 Technology sector — which doesn’t include Amazon, Google or Facebook — is the most international of any S&P sector when it comes to revenues, according DataTrek Research. The U.S.-China trade battle has been a jolt to the sector, “with a new level of uncertainty representing a dark cloud over
Investors are buying up these ‘tariff-proof’ tech stocks to keep exposure to the sector Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-09  Authors: kate rooney
Keywords: news, cnbc, companies, names, stocks, technology, trade, sp, exposure, investors, microsoft, sector, ives, software, buying, tariffproof, newton, tech


Investors are buying up these 'tariff-proof' tech stocks to keep exposure to the sector

Enterprise software is emerging as an exception to some investors’ caution around the technology sector.

Wall Street analysts and investors including Carl Icahn are turning to software companies, which don’t rely as much on supply chains and manufacturing, as the trade war and strong dollar threaten the rest of the high-flying sector.

Although names like Microsoft, Salesforce and Twilio are not entirely “tariff-proof,” they may hold up better than some consumer technology names that manufacture products in China, according to Rishi Jaluria, senior research analyst at D.A. Davidson.

“They’re a safe haven right now,” Jaluria told CNBC. “Software names are not exactly recession proof, but they’re more resilient to downturn.”

One ominous factor is a strong dollar. The S&P 500 Technology sector — which doesn’t include Amazon, Google or Facebook — is the most international of any S&P sector when it comes to revenues, according DataTrek Research. Fifty-eight percent of sales come from outside the U.S., compared with 39% for the S&P 500 overall. Materials is the only other sector that gets more than half of its revenue outside of the U.S.

“That means global slowing hurts the sector more than the average S&P company,” said Nick Cola, co-founder of DataTrek.

Equity markets saw a sharp pullback this week after more tariff escalation, a fall in the Chinese yuan against the dollar and tumbling bond yields that fueled global growth concerns. Tech shares led a rebound on Thursday, with the sector rising more than 1%.

Still, Mark Newton, president and founder of Newton Advisors, is bearish on tech and said it could see more of a pullback throughout the rest of August. He’s recommending that clients take some profits and diversify out of popular technology stocks, which have led a record bull run since the financial crisis.

“Enterprise software is the standout that’s still resilient,” Newton said.

Wedbush Securities managing director Dan Ives is also cautious on tech. The U.S.-China trade battle has been a jolt to the sector, “with a new level of uncertainty representing a dark cloud over the sector,” Ives said. And if the trade situation escalates, Ives is anticipating major impacts on supply chains that could hit semiconductor companies, and Apple.

“We believe on large cap Microsoft is a compelling name to own with negligible China exposure and overall the software sector we would be buying here as it is primarily immune from the trade war,” Ives said.

The S&P technology sector is down 1.7% for the month, compared with a 1.4% drop in the broader S&P index. Microsoft is up about 1.4% in that time frame.


Company: cnbc, Activity: cnbc, Date: 2019-08-09  Authors: kate rooney
Keywords: news, cnbc, companies, names, stocks, technology, trade, sp, exposure, investors, microsoft, sector, ives, software, buying, tariffproof, newton, tech


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Peter Navarro says US will take strong action against China if it devalues yuan to ‘neutralize tariffs’

White House trade advisor Peter Navarro said China plans to devalue its currency — and if it does, the U.S. will respond forcefully. “Clearly, they are manipulating their currency from a trade point of view,” Navarro told CNBC’s “Closing Bell ” on Friday. Earlier this week, China allowed its currency to drop against the dollar to a key level unseen since 2008. Navarro said China was taking actions to deal with the effects of tariffs. “China has devalued its currency by over 10% with the express


White House trade advisor Peter Navarro said China plans to devalue its currency — and if it does, the U.S. will respond forcefully. “Clearly, they are manipulating their currency from a trade point of view,” Navarro told CNBC’s “Closing Bell ” on Friday. Earlier this week, China allowed its currency to drop against the dollar to a key level unseen since 2008. Navarro said China was taking actions to deal with the effects of tariffs. “China has devalued its currency by over 10% with the express
Peter Navarro says US will take strong action against China if it devalues yuan to ‘neutralize tariffs’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2019-08-09  Authors: kate rooney
Keywords: news, cnbc, companies, week, devalues, white, yuan, action, china, tariffs, currency, strong, trade, tariffschina, trump, navarro, neutralize, peter, stop


Peter Navarro says US will take strong action against China if it devalues yuan to 'neutralize tariffs'

White House trade advisor Peter Navarro said China plans to devalue its currency — and if it does, the U.S. will respond forcefully.

“Clearly, they are manipulating their currency from a trade point of view,” Navarro told CNBC’s “Closing Bell ” on Friday. “They’re going to, and we’re going to take strong action against them.”

Earlier this week, China allowed its currency to drop against the dollar to a key level unseen since 2008. The Trump administration later labeled Beijing a “currency manipulator. ” Navarro said China was taking actions to deal with the effects of tariffs.

“China has devalued its currency by over 10% with the express purpose of neutralizing tariffs, full stop,” Navarro said.

Last week, President Donald Trump abruptly ended a cease-fire with China by announcing 10% tariffs on $300 billion worth of Chinese goods, claiming China failed to buy U.S. farm goods as it promised. The trade war continued to boil over this week as China announced it would stop buying American agricultural products in retaliation for Trump’s surprise tariffs threat.

Navarro said that every American farmer will be “made whole” and “will not be hurt by China.” He also insisted that China, not U.S. consumers, will suffer financially because of tariffs.

“China will bear virtually the entire burden of that through the currency manipulation and by slashing prices,” he said. “China is the one that suffers far more harm than what might be inflicted on us.”

Over the next couple of months, Navarro said White House officials plan to have Chinese negotiators back to the U.S. for trade talks.

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Company: cnbc, Activity: cnbc, Date: 2019-08-09  Authors: kate rooney
Keywords: news, cnbc, companies, week, devalues, white, yuan, action, china, tariffs, currency, strong, trade, tariffschina, trump, navarro, neutralize, peter, stop


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