Warren Watch: Cartoon series writes the book on Buffett's secrets to success

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Posted: Sunday, September 1, 2013 12:00 am

Wouldn't you like to know Warren Buffett's secrets for success?

Especially if you're, say, 14 years old?

The secrets are out thanks to Andy and Amy Heyward, family friends of Omaha investor Buffett and originators of the “Secret Millionaires Club” online cartoon series, which introduces youngsters to the world of business and life in general.

Their latest book, “Warren Buffett's 26 Secrets to Success in the Business of Life” (John Wiley & Sons Inc., 146 pages, $24.95), takes off from the cartoons with a story illustrating each secret.

Secret #5: Club member Elena is trying to choose between playing basketball and taking a summer college class when Shaquille O'Neal drops by the club. During some one-on-one, he slips and rolls onto the court, clutching his ankle.

Elena is horrified, but Shaq quickly jumps up and says: “See how quickly an athlete can go from 'superstar' to 'out of work'? But education — education — lasts forever.”

Elena decides to take two college classes instead of going to a basketball camp. The Buffett secret:

“The experience of others is the best classroom you will ever find!”

A Microsoft pick?

Will Buffett help pick Microsoft's next CEO?

It's possible, 24/7 Wall St. speculated, given the close relationship between Buffett, the chairman and CEO of Berkshire Hathaway Inc., and Microsoft co-founder Bill Gates.

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“The most likely candidate is a board member of Buffett's Berkshire Hathaway,” the website said, namely Steve Burke, CEO of the NBCUniversal division of Comcast.

“He is also what Wall Street wants most —- a skilled, great executive and an outsider,” the report said, adding that Burke's knowledge of media content and hardware would be critical to Microsoft's future.

“Gates can make one call to Buffett to get the short list for CEO candidates at Microsoft,” the report said. “From Buffett's standpoint, no one has a resume, or proven skills that could top Steve Burke.”

Community newspapers

Angelo Lynn is patiently waiting for a call from Buffett or Jeff Bezos, purchaser of the Washington Post, but so far no luck.

Lynn, editor and publisher of the Addison County (Vt.) Independent, hasn't even heard from the guys buying the Boston Globe from The New York Times.

“Not that I'd be able to offer financial advice, but, hey, we were just profiled in the New York Times as folks who know how to make newspapers work,” Lynn wrote. “The headline in the Aug. 10 International Herald Tribune, 'Where Newspapers Still Thrive,' even suggested as much. (We're flattered.)

“So, if they call, I've been scrambling for a down-home tidbit to share. How's this? Today, residents and communities are hungry for centers that bind and hold us together. Newspapers can fill that role.”

Buffett's 2011 purchase of The World-Herald led to forming a newspaper division within Berkshire and the purchases of dozens of small and medium-size newspapers.

“Newspaper properties that dominate the local news scene and put money back into their news product can be valuable properties,” wrote Lynn, whose three daughters have followed him into the news business.

“If they do it right, community newspapers will continue to hold a natural advantage in their markets and can reach their audiences in print, on the Web, through mobile and other digital devices,” Lynn wrote, “making them stronger than ever and the glue that binds communities together. ...

“Now that's a business, as Jeff and Warren must also be thinking, with a promising future.”

Having investors' ear

Lou Simpson, who retired in 2010 as investment manager for Berkshire's Geico auto insurance division, now manages SQ Advisors LLC of Naples, Fla., holding 15 stocks valued at $1.69billion, GuruFocus.com and Forbes magazine reported.

Investors pay attention to Simpson's investments because of his success under Buffett.

Simpson's top five holdings, value and percent of SQ's portfolio: Berkshire, $176.9 million, 10.5 percent; DirecTV, $176.6 million, 10.4 percent; TE Connectivity Ltd., $158.6 million, 9.4 percent; Charles Schwab Corp., $155.1 million, 9.2 percent; Oracle Corp., $154.9 million, 9.2 percent.

Ratings affirmed

Stonewall Insurance Co. of Omaha, an affiliate of Berkshire's National Indemnity Co., is running off its business of insuring propeller-powered pleasure aircraft because of below-expectation results, rating agency A.M. Best Co. said.

That means the company isn't writing new coverage but is paying off claims from existing policies until they expire.

Best said it was affirming Stonewall's high financial strength and credit ratings with a stable outlook.

Stonewall also has insured asbestos and environmental exposures. National Indemnity has a reinsurance agreement to cover losses and uncollectible reinsurance, Best said.

Interest in Nasdaq?

Buffett might want to buy Nasdaq, Antoine Gara speculated on TheStreet.com, in light of its recent three-hour trading freeze and other struggles.

The article said Berkshire reportedly was a bidder for the New York Stock Exchange this year and that Buffett has invited calls for help when there is “panic in the markets.”

“Nasdaq, given its prominence as the exchange for Silicon Valley bellwethers, could be a way for Berkshire to bolster its investment in the technology sector without veering too far from its expertise. ...

“This year, the billionaire investor and his lieutenant Charlie Munger both sharply criticized the high-frequency trading that now dominates exchanges such as Nasdaq and is blamed for their recent bouts of instability. If Buffett is of the belief that stock markets need a cleansing, owning an exchange such as Nasdaq could be a way to do so.”

That other Warren

Buffett is back on eBay's auction block.

“Warren Buffett American magnate, investor and philanthropist PORTRAIT” says the item, with a suggested starting bid of $20.95. “Satisfaction guaranteed! We sell items at great prices.”

The portrait, reproduced here, shows some other Warren.

By the end of the week, there were zero bids.

The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.

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