I Love You, Warren Buffet

Sometime around 1980, can't remember exactly, there was a flight of money from many countries to Switzerland. The clock makers had so much money pouring in that the banks took interest rates to zero and even for a period of time were actually making you pay ?% interest to them to put your money in their banks. Yes, it actually happened because people believed their money was going to be safe there. It was.

Warren Buffett recently sold some convertible debentures - about $400 million. These are bonds that can be converted into shares of stock in the same company, namely Berkshire Hathaway (BRKA). Mr. B said the money was to be used for general purposes and possible acquisitions. Their statement indicates they have plenty of money now, but Warren is very good at buying companies that are in trouble.

What Warren has done has never been done to the American investor before or at least I haven't heard of it. The bond portion of the offering only pays 3% interest. Not much, but Berkshire Hathaway has an excellent history of making money so investors would rather have 3% for sure than 5% of maybe not getting their money with another company. But here is the kicker that sets Mr. B apart from anyone else. Along with the debenture come a warrant. A warrant in this instance is like an option to buy additional shares - nothing new here. If you want to keep the warrant active you must pay Berkshire Hathaway 3 ? % interest.

The warrant is convertible into the stock of Berkshire Hathaway at a price 15% higher than the price on May 21, 2002, about $78,000. The stock has to go up to $89,700 to break even. In other words you are giving Mr. Buffet say $100,000 for which he is paying you 3%, $3,000 annually, and in turn to keep the warrant you are then paying him 3 ?%, $3,750 annually. He is using your money until the year 2007. Wow! What a deal - for him. The reason Warren can get away with this is that he has a great reputation for making money. If, and that is a big "if" in this bear market, the stock of Berkshire does go up you will be able buy it at a real bargain. That is the reason you are paying the premium. Today's Price/Earnings ratio is 101 and the S&P Index is 41. What will the P/E and price of Berkshire be if the P/E of the S&P goes to 17?

Mr. Buffett himself has said we are going to have to be very astute to make 5% in the market over the next 7 or 8 years. Any stock in a bear market is like a ship that is in the water. When the tide goes out all the boats go down. This is a bet that investors believe Warren can beat the bear. He thinks we are in for a long-term bear from which he can't help but profit because he will not have to pay off the warrants.

It is hard to believe anyone who is an astute investor would buy this; however, the offering was oversubscribed. Warren Buffet you are a genius.

Al Thomas' best selling book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter to receive his market letter for 3 months at www.mutualfundmagic.com to discover why he's the man that Wall Street does not want you to know.

Comments to al@mutualfundmagic.com

kitchen deep cleaning Mundelein ..

In The News:

Cybersecurity experts warn about a ShadowLeak vulnerability that weaponized ChatGPT's Deep Research agent to steal personal data from Gmail accounts through hidden commands.

Tesla's Full Self-Driving system faces federal investigation following 58 reports of crashes, with six vehicles running red lights before colliding with other cars.

The Fox News AI Newsletter brings you the latest developments on artificial intelligence, with news on OpenAI moving to soon allow erotica for adult users.

Eric Schmidt alerts that hackers can reverse-engineer AI models to bypass safety measures, citing examples like the jailbroken ChatGPT variant called DAN.

Cybercriminals exploit Microsoft Teams through impersonation, malicious links and fake profiles to gather intel and deliver ransomware to personal and work devices.

Google, Dior, Allianz and dozens of other companies lost sensitive customer data in Salesforce-related breaches affecting millions of records across multiple sectors.

Apple launches iOS 26 with new Preview app that combines document editing, PDF annotation and scanning features into one streamlined iPhone experience.

New AI road monitoring system uses sensor-embedded fabric to predict infrastructure problems, potentially reducing maintenance costs and traffic disruptions for cities.

Holiday charity scams target retirees through lookalike organization names, untraceable payment requests, and data broker information to steal donations.

The Federal Trade Commission says criminals are posing as IRS agents, law enforcement officers or other officials, often over the phone or online, to steal thousands of dollars at a time.

AI phishing scams now use voice cloning and deepfake technology to trick victims, but Kurt "CyberGuy" Knutsson reveals warning signs to watch for.

Inversion Space unveils Arc, a reusable reentry vehicle that can deliver up to 500 pounds of cargo from orbit to anywhere on Earth in under an hour.

Red flags like processing fees, urgent countdowns and requests for full Social Security numbers expose fraudulent settlement sites targeting consumers.

Comprehensive analysis of Google Maps, Waze and Apple Maps examines usability, routing accuracy, data handling and features across the top navigation platforms.

Expert analysis reveals whether wired Ethernet or wireless Wi-Fi connections are safer for home internet use, plus practical steps to secure your network from attackers.

Australian construction robot Charlotte uses sand, crushed brick and recycled glass to 3D print fireproof, floodproof homes with reduced carbon footprint.

Cybercriminals are using fake invitation emails to trick recipients into downloading malware and stealing personal information and data.

Flying drones could help retailers fight a 93% increase in theft rates as Flock Safety promotes airborne security systems to track suspects and deter crime.

The Fox News Artificial Intelligence Newsletter brings you the latest news on the emerging technology every Saturday, highlighting top stories.

Hacker group Radiant stole data from 8,000 children at Kido nursery chain, demanding ransom and directly contacting parents with intimidation tactics.

As 18 states implement bell-to-bell cell phone bans, creative students use Google Docs, iMessage on MacBooks and Post-It notes to stay connected in class.

A sheriff's captain says deputies often spend hours writing reports between calls, but Axon's AI program, Draft One, helps them save crucial time in the field.

Sora 2, OpenAI's new video-generation app, can create AI-generated videos based on a singular prompt. The results are both mind-blowing and terrifying.

iPhone and Android users can reduce Wi-Fi calling battery drainage through settings adjustments, background app limits and stronger Wi-Fi connections.

Work email scams are becoming harder to detect as criminals use AI and spoofed addresses to trick employees into opening malicious attachments and links.

I Love You, Warren Buffet

Stocks & Mutual Fund