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Liz-Vision
  • August 20, 2008 06:19 PM UTC by Liz Claman

    Buffett-Gates vapor trail leads north to Canada

     Billionaire-buddies Warren Buffett and Bill Gates went on an ‘Excellent Adventure’ Monday.  Buffett tells me he and Gates, his good pal and Berkshire Hathaway (BRK) boardmember, hopped a plane to head north to an oilsands development in Alberta, Canada near Fort McMurray.  Buffett told me he took the trip to “just look around and learn a little” about the process by which oil is extracted from rocks.  The company that runs the massive multi-billion dollar project is Canadian Natural Resources (CNQ), whose stock ended up 7% today on the mere whiff Buffett visited the project.  NO investment has been made by him at this point.  Now, I should tell you that at past Berkshire Hathaway shareholder meetings I’ve attended, he and his longtime cohort Charlie Munger have been asked about whether they’d be interested in investing in oilsands.  “We don’t understand it yet” was the response.  Clearly, though, Buffett’s interest is piqued enough so that he at least wanted an “Oilsands 101″ quickie class by going up there to visit.  But don’t think Bill Gates is simply along for the ride.   In fact, Buffett told Fox Business in May that it was *Gates* who beat him to the railroad punch by investing in Canadian National Railway (CNI) before Buffett finally dove in much later by picking up large stakes in Burlington Northern (BNI) and Union Pacific (UNP).  But there’s a lesson to be learned from Buffett’s investment style: he won’t commit a single dollar to any company until he fully understands the business and believes it fits into his tried and true investment parameters.  Now, sometimes he’ll buy an entire business outright without ever seeing it if he just gets the sense it’s exactly what he wants.  He did that with an Israeli auto parts maker, ISCAR….a business he told me is ”the best he’s ever see, run by the smartest people ever.”  He’s been known to read an annual report and then commit hundreds of millions of dollars to the stock…. witness Petrochina, an investment that made him and his shareholders billions.  But if it’s publicly-traded, he scrutinizes annual reports and delves deeply into the bones of a company before he’ll put his shareholders’ (or ‘partners’ as he calls them) money to work.  He and Charlie admit their style is ’boring’ and ’simple’ but clearly it works. Buffett is the world’s richest man, and Gates isn’t far behind.   

    Insurer resumes coverage

    Central Penn Business Journal November 19, 2004 | Olenchek, Christina After a seven-year absence, HealthAmerica Pennsylvania Inc. is getting back into selling health insurance to individuals.

    Individuals will be able to apply for the Dauphin County insurer’s new coverage in late December or early January. The first policies are expected to go into effect Feb. 1.

    HealthAmerica thinks there is great potential for health-insurance coverage marketed to individuals, said Francis S. Soistman Jr., president and chief executive officer of the Swatara Township company. Such coverage appeals to a broad range of people, including the unemployed, sole proprietors and college students, he said.

    “We think it’s a growing market,” Soistman said.

    HealthAmerica joins several other companies that already offer health insurance to individuals. Those insurers include Capital BlueCross, Highmark Blue Shield, Geisinger Health Plan and Aetna Inc.

    The preferred-provider organization (PPO) plans HealthAmerica will offer have a variety of deductibles. The deductibles range from $500 to $3,000 for single coverage and from $1,000 to $6,000 for family coverage.

    Some of the high-deductible plans will be compatible with health savings accounts, which are accounts people can use for medical expenses. The idea behind such accounts is consumers will use health-care dollars more responsibly if they are forced to control their spending.

    The cost of the plans will depend on factors such as the person’s age, gender and whether the person smokes. The plans will be medically underwritten, meaning information about an individuals health status and claims history will help determine the cost of his or her coverage. In addition, claims related to preexisting conditions will not be paid for during the first year of coverage. here highmark blue shield

    Plan prices vary from insurer to insurer. A 34-year-old male, for example, can pay as little as $64 a month for a high-deductible PPO plan from Aetna or $111 a month for a managed-care plan. Geisinger and Capital BlueCross offer managedcare-style plans for $181 and $230, respectively, according to the insurers’ Web sites.

    HealthAmerica last offered individual plans from early 1996 to early 1998. The company exited the market so it could focus on developing its group business, Soistman said.

    During the past several years, however, the need for individual insurance has grown, Soistman said. Some employers are dropping health-care coverage and more people are working as independent contractors, he said.

    “There seems to be a shift in that employer-employee relationship,” Soistman said.

    The percentage of workers receiving health insurance from their employers dropped from 65 percent in 2001 to 61 percent in 2004, according to a national survey from the Menlo Park, Calif.-based Henry J. Kaiser Family Foundation and Health Research & Educational Trust in Chicago.

    Cumberland County-based Highmark Blue Shield also foresees more demand or insurance plans aimed at individuals, said Michael Fiaschetti, the insurer’s senior vice president for the Mid-Atlantic region. The East Pennsboro Township company offers individual plans that do not use medical underwriting. go to web site highmark blue shield

    In January, Highmark Blue Shield will add plans with medical underwriting to make its coverage more affordable for healthy people.

    Geisinger Health Plan in Danville, Montour County, also continues to see steady interest in its products for individuals, said spokeswoman Lisa Hartman.

    “There are a lot of people looking for coverage,” she said. “…From our perspective, there’s definite demand out there.” HealthAmerica’s products for individuals will be offered throughout the insurer’s service area in Pennsylvania and Ohio. The company’s goal is to have at least 20,000 members in the plans within three years, Soistman said.

    Whether the number will go higher depends on whether more employers drop health-insurance coverage or replace it with stipends workers can use to purchase insurance on their own, Soistman said.

    “There are a lot of variables that we can’t predict,” he said.

    Olenchek, Christina

    Sears goes to Lands’ End to boost Web site Sears.com to offer ‘virtual’ tech perfected by catalog giant

    Chicago Sun-Times September 13, 2004 | Sandra Guy Sears Roebuck and Co. goofed its rollout of Lands’ End apparel in Sears stores, but it’s counting on winning the online war with Lands’ End’s unique shopping technology.

    Sears today starts selling apparel and home decor via its Web site at www.Sears.com.

    The Hoffman Estates-based retailer aims to entice Web shoppers with Lands’ End’s “Virtual Model,” which lets shoppers create and dress an online lookalike of themselves, and a “Virtual Decorator” that lets them decorate a bedroom or living room that’s identical to their own.

    “This is a good example of the cross-fertilization between Lands’ End and Sears,” said Bill Bass, vice president and general manager of Sears’ customer direct business. this web site sears coupon code

    Lands’ End lends its expertise in packaging and delivering goods to people’s homes, a vital skill to selling goods online, Bass said.

    Lands’ End, which Sears acquired for $1.9 billion two years ago, is also known for its technological prowess, having pioneered toll- free catalog ordering 20 years ago and the Virtual Model six years ago.

    The Virtual Model tool enables shoppers to create a clone with their personal measurements, body shape, skin color, hair type, hair color and even the shape of their eyes and nose.

    The Virtual Model will propel Sears into the top tier among retailers selling clothes online because shoppers can mix and match clothes from Sears’ best-selling apparel brands. (Shoes are excluded from the Web offerings, and Lands’ End will continue to sell only its own clothing on its Web site, LandsEnd.com.) A Sears online shopper can see how his or her virtual image looks in a Covington shirt and Lands’ End khakis. If the shopper doesn’t like what she sees, she can instantly change her model into a pair of Levi’s jeans and a blouse from Sears’ in-house Apostrophe brand.

    Shoppers can revolve the model to look at how clothes fit, front and back. (Good-bye, dressing room hassles?) Sears also is using its Web site to offer entire selections of apparel brands online, a far wider variety than it can offer in its stores, and to feature its stores’ best-selling items.

    For example, Sears will offer the entire Lands’ End catalog on its Web site, versus the limited selection of Lands’ End apparel it sells in Sears stores. It will sell most of the Structure apparel line for young men, even though only 100 of Sears’ 870 stores will carry the brand this fall, and it will feature its new A-Line brand for women, which is being sold in about half of Sears’ stores this fall.

    Retail analysts have questioned whether Sears paid too much for Lands’ End, especially after the retailer botched its spring apparel order and conceded that Lands’ End bombed with many of its multicultural shoppers in urban markets.

    But Internet analysts see value in the Lands’ End play.

    One reason: Retailers other than Sears and Lands’ End have put virtual models at the bottom of their priority list because of the difficulty of selling a variety of clothing brands online, said Carrie Johnson, senior analyst with Forrester Research in Boston.

    “Sears has leap-frogged the normal learning curve because of Lands’ End,” Johnson said of Sears’ use of Lands’ End online technology. website sears coupon code

    Patti Freeman Evans, an analyst with Jupiter Research in New York, said Sears faces tough competition from online rivals such as Target, JCPenney, Kohl’s and Gap. But Lands’ End is the largest single seller of apparel online.

    The Virtual Decorator works much the same way as the Virtual Model.

    It lets shoppers set up a room with their choices of flooring, lighting, wall paint and art, window coverings and, in a bedroom, bed coverings and pillows.

    Shoppers can rotate the room to see how shadows change, zoom in to get a close look at a fabric and even put a dog or a cat in their virtual bedroom.

    A photo and a description pop up to explain the features of each item in the room, such as a lamp’s height or a bedsheet’s thread count.

    Now the challenge is to integrate Sears’ in-store and online processes.

    “We’re trying to make it easy for customers to shop,” Bass said. “We’re constantly looking at things to add to the Web site to make the shopping experience better.” Sandra Guy

DaveinHackensack

Berkowitz beat them both to CNQ. It has been a top holding of the Fairholme fund for sometime.

August 22, 2008 at 2:50 pm

ed

Hi liz this is not part of the story but I just pick up an artical from the baltimore examiner. nice pice on G.M going to use solar panels at the the plant here in baltimore check it out

August 22, 2008 at 6:53 am

Robert Lee

Apparently, there is so much down there (so deep) that they have had to come up with new technologies to complement the standard practices already in place. If you can trust Mr. Buffett to invest, well, it is a sure thing then. Fort Mac T that is...

August 22, 2008 at 2:23 am

Mike Sharq

Ms. Claman: This is about your interview of the gentleman from Ohio Independent Business. Your retort of employees coming to work ill and spreading disease because they don't receive paid leave, let your California Commie and Lefty CNBC background slip into the SpinZone. We have enough Nanny State rules and when schools really educate kids, they'll know to save for sick days! Like your work on the show though. Regards Mike

August 21, 2008 at 3:59 pm

Barry Ritholtz

Fascinating stuff Liz -- Up til now, Buffetty ha snot been a huge energy investor . . .

August 21, 2008 at 9:33 am

LordRobot

Buffett is just greedy. Here is a guy that "complains" that he pays less federal tax than his secretary. Then he goes on says that taxes need to be hiked. This is a case of the rooster in the henhouse. Buffett has been a cleaver. All his life he took advantage of every tax break written into the law. Could he have voluntarily paid more tax? Sure he could pay out of the goodness of his heart. But he never has. But now that he has accumulated massive capital and knows it will never be touched, he wants to tax the young successful rising stars preventing them from getting rich. It is an old story. Joe Kennedy was a master and after his efforts at the SEC, made sure that honest hard working men and women would find a tough time obtaining the American dream of getting rich. As it stands now, the top 1% of the population pays 30% of all the federal income tax. The top 5% pays 60% of all taxes. That is disproportionate and unfair. These people do not use more rights than anyone else. They should not be punished for success. How rich are they? The top 5% makes incomes over 150 thousand dollars a year. That is not a lot of money. In fact it shows how poor America is if this is the top of the income earners. Equality in my eyes means all persons should pay taxes in an equal state to the services they use. I like consumption taxes. Why? They reward conservation they don't penalize your productivity. Obama who knows nothing about tax has been told by George Sorso that he should raise capital gains taxes. This siffles long term investing and discourages investment. It also protects the likes of Soros, Buffett, and Gates who obtained their wealth by skirting taxes. In this country, we have to get in step with the globe or we will become the third world country. With 3 to 4 billion low cost labor hands coming online, the worst thing that government can do is raise tax on the most productive Americans. This will crush the ambitions of youth to innovate and become rich. Also note one other point. We applaud Gates and Buffett for giving their wealth to charity, charity destined for Africa. The money was made in the United States markets with US dollars. Some 60 billion gets sent to Africa and removed from capital investment that could have enriched Americans. Before you pray at the alter of Buffett or Gates, watch their activities. Both of these gent were selling the dollars short for the last year. Helping to trigger the valuation crunch we have today. They got out they outfoxed the dumb working Americans and robbed their 401Ks with impunity. Sure as I write this, they will be out with their private equity capital ready to buy mortgage portfolios for ten cents on the dollar. But Buffett thinks the wealthy should be taxed much more aggressively meanwhile his accountants look for every loophole and take it.

August 20, 2008 at 10:11 pm

Barry Ritholtz

Interesting Liz Much of Canadian energy production -- including Oil sands -- is ripe for further US investment. And Buffett isn't a huge energy investor -- yet.

August 20, 2008 at 7:02 pm

about this blog

  • Liz Claman joined FOX Business Network (FBN) as an anchor in October 2007. Her debut included an exclusive interview with Berkshire Hathaway CEO and legendary investor Warren Buffett.

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