Buffett

Stocks took another steep dive yesterday as the Dow Jones industrial average fell below 7,000 for the first time since 1997 on signs of further turmoil among financial companies, including AIG and HSBC Holdings, and a downbeat report from investment guru Warren Buffett. The Dow industrials plunged 299.64 points, or 4.2 percent, to 6,763.29. It was the first time the widely followed market gauge - which includes such well-known companies as GE, IBM and Coca-Cola - had closed below 7,000 since May 1997.

Federal prosecutors are expected to call Warren E. Buffett, the chief executive of Berkshire Hathaway, to testify in the trial of five senior insurance executives accused of helping the American International Group manipulate its finances through $500 million in fraudulent transactions, according to court papers filed yesterday. The former executives - four from the General Re Corp., part of Berkshire Hathaway, and one from AIG - were indicted in 2006 on charges of fraud, conspiracy and lying to the Securities and Exchange Commission over what the government has called a scheme to inflate AIG's reserves.

A Howard County police officer and an auxiliary police officer are suing the driver of a bus for Jimmy Buffett over an accident that injured them after a concert at Merriweather Post Pavilion in August 1998.Officer Richard L. Rutledge and Auxiliary Officer Kurt T. Sturr were directing traffic after Buffett's concert as Kevin J. Cieslinski was driving away in a bus.The suit claims that Cieslinski ignored the officers and struck them as he was leaving the concert. Both officers claim they sustained serious injuries.

NEW YORK -- In his annual reports to Berkshire Hathaway Inc. shareholders, Chairman Warren Buffett shows a table that pits his investment record against the Standard & Poor's 500 index, the benchmark for most money managers.This year, the reading will look like an aberration. For the first time since 1980, Buffett, widely labeled as one of the world's shrewdest investors, won't beat the market.Buffett compares the annual percentage increases in Berkshire Hathaway's book value -- and there have been nothing but gains starting with 1965 -- with gains and losses in the S&P 500. Berkshire's book value, or net worth, includes its earnings over the years, the market value of its stocks and bonds and adjustments for acquisitions.

ROBERT G. Hagstrom isn't your average Warren Buffett groupie.For seven consecutive years, he's made the trek from his home in Wayne, Pa., to Berkshire Hathaway Inc.'s annual meeting in Omaha, Neb. He's written two books on the man called the "Oracle of Omaha" and the world's greatest investor. And he follows Buffett's teachings as a true disciple, by managing his own mutual fund -- the Legg Mason Focus Trust -- the way Buffett would."I clearly couldn't have picked a better role model to study," said Hagstrom, 42.The approach is paying off, not only in the fund's performance but recognition.

Think of Baltimore's financial nerve center, and many picture the gleaming skyscrapers downtown, where Legg Mason Inc., Deutsche Banc Alex. Brown Inc., T. Rowe Price Associates Inc. and Mercantile Bankshares Corp. call home.But about a mile north of the Inner Harbor is another cluster of companies that are also involved in high finance. They are tucked away in a grittier, more eclectic part of the city -- Mount Vernon.Best known for its quaint shops, restaurants, tree-lined streets, and even occasional gunbattle, Mount Vernon has become the city's other hub to a growing number of money managers who collectively oversee $10.4 billion in assets.

LONDON -- Billionaire investor Warren Buffett said yesterday that he was having trouble finding value in U.S. stocks."The general level of the stock market does not offer much opportunity to buy things at prices that we consider appropriate," said Buffett, chairman of Berkshire Hathaway Inc., at a news conference in London."

WASHINGTON -- Billionaire investor Warren Buffett reported his third significant stake in a real estate investment trust, stating that he owns 5.1 percent of Baltimore-based Town & Country Trust.Buffett, the chairman of Berkshire Hathaway Inc., holds 797,200 common shares in Town & Country, according to a Schedule 13G filed yesterday with the U.S. Securities and Exchange Commission.In recent months, Buffett has also reported buying shares in Tanger Factory Outlet Centers Inc. and MGI Properties Inc. While Buffett often provides stock picks for Berkshire Hathaway, the REIT stakes have been listed solely under his own name in SEC filings.

Wall Street's unprecedented bull run throughout the 1990s has led companies to increasingly issue stock options as compensation, as a way to lure and retain executives and workers.But stock options can not only hamper a company's earnings, they also can mislead potential investors, since existing accounting rules do not require companies to report options as labor expenses.A recent study found that several companies -- including Coca-Cola Co. and Merrill Lynch & Co. -- would have had significantly reduced net income levels in 1996 if stock options were reported as a compensation expense.

OMAHA, Neb. -- Berkshire Hathaway Inc., the investment vehicle of billionaire Warren E. Buffett, said yesterday that it will pay $22 billion in stock for General Re Corp., the largest U.S. reinsurance company, creating one of the largest reinsurers in -- the world.The transaction values General Re at about $283.15 a share, or a 29 percent premium to its closing price of $220.25. General Re fell $3.875 in trading before the companies announced their merger.Berkshire will trade 0.0035 of its Class A shares or 0.105 of its B shares for each share of the Stamford, Conn.

After a turbulent year that included avoiding a near bankruptcy and breaking off a merger with billionaire Warren Buffett for another partner, Constellation Energy Group Chairman and Chief Executive Officer Mayo A. Shattuck III faced some tough questions from shareholders. At Constellation's annual meeting Friday, several longtime shareholders asked him to account for the near collapse of the company, while also questioning whether he should keep his job. "I am very sympathetic to the sentiment that's associated with the disappointment of what's happened in the last year," Shattuck said, acknowledging he expected questions about his leadership.

Gov. Martin O'Malley's administration is seeking ratepayer relief and other concessions from Constellation Energy Group as part of behind-the-scenes negotiations related to the Baltimore company's proposed deal to sell half its nuclear power business to a French utility. According to internal correspondence obtained by The Baltimore Sun, O'Malley's office and Constellation may be nearing a settlement agreement that could include immediate electricity price reductions for strapped consumers, longer-term discounts and commitments that the company will make investments in environmentally friendly energy projects.

Buffett's MidAmerican cuts stake in Constellation MidAmerican Energy Holdings Co., whose deal to buy Constellation Energy Group last year was abandoned, has further reduced its stake in the Baltimore energy company, according to a regulatory filing made public Thursday. MidAmerican, a subsidiary of Warren Buffett's Berkshire Hathaway, owned 6.26 percent of Constellation as of Tuesday, down from 7.45 percent in February. Buffett had received a 10 percent stake in Constellation as part of a series of incentives when Constellation rejected his offer in favor of an investment from France's largest utility.

Stocks took another steep dive yesterday as the Dow Jones industrial average fell below 7,000 for the first time since 1997 on signs of further turmoil among financial companies, including AIG and HSBC Holdings, and a downbeat report from investment guru Warren Buffett. The Dow industrials plunged 299.64 points, or 4.2 percent, to 6,763.29. It was the first time the widely followed market gauge - which includes such well-known companies as GE, IBM and Coca-Cola - had closed below 7,000 since May 1997.

Maryland widows and orphans may soon start subsidizing billionaire Warren E. Buffett's corporate jet. Is it right? No. Legal? Maybe not. But whether anything can be done about it, at this point, is an open question. When Constellation Energy canceled its $5 billion merger with Mr. Buffett's company, MidAmerican Energy Holdings, it was obligated to pay $1.1 billion in termination fees. The fees, which amount to $6 for each share, are paid directly by Constellation and indirectly by its shareholders, who now see the share price trade at $27, or $6 lower than a $33 price without the fees.

Constellation Energy Group repaid a $1 billion emergency loan this week, plus $5 million in interest, to Warren Buffett's MidAmerican Energy Holdings Co., according to documents filed yesterday with the Securities and Exchange Commission. Last month, Constellation terminated a $4.7 billion takeover deal with MidAmerican, which also had provided the immediate cash infusion in mid-September. At the time, CEG was teetering near bankruptcy amid a liquidity crisis in its commodities-trading business.

This has proved to be a memorable year for Constellation Energy Group, but not often for the better. From the company's disastrous financial downturn this summer to its rescue by Warren E. Buffett's MidAmerican Energy Holdings to its apparent rescue from its rescuer last week by state-owned Electricite de France, it's getting difficult to know who is winning and losing in all these transactions. Aside from the only obvious winner - the celebrated investor from Omaha doubled his company's initial $1 billion payout in a mere three months - the rest of the picture looks muddled.

EDF buyout may put taxpayers on the hook If Electricite de France rescues Constellation Energy, who will rescue EDF? Among the details of the deal intended to rescue Constellation and usher in the nuclear renaissance EDF has in mind that The Baltimore Sun failed to mention is how EDF and Constellation plan to finance the revival of the nuclear industry. ("French firm EDF charts future in Maryland" Dec. 18). Financing for the $10 billion French-designed reactors EDF plans to build at Calvert Cliffs and several other sites hinges on taxpayer-backed loan guarantees.

For months, the only words to escape from Constellation Energy Group's boardroom were statements praising the company's $4.7 billion emergency takeover by investor Warren Buffett - support required under the terms of the hastily arranged agreement. But minutes after Constellation executives called off the deal in favor of a $4.5 billion nuclear energy partnership with Paris-based Electricite de France, chief executive Mayo A. Shattuck III emerged with a different perspective. "We were well aware that there was a window for someone else to come in and make a better offer," Shattuck said Wednesday, shortly after the company released details of the EDF deal.

"Warren Buffett loses out to the French" was the gist of several headlines yesterday on Electricite de France's deal to invest $4.5 billion in Constellation Energy Group. Constellation's board spurned Buffett's competing offer and blocked his plans to merge the Baltimore-based energy seller into another power company based in Iowa. But Buffett rarely loses, and he didn't lose here. At a time when no investor is making profits on anything, his investment in Constellation more than doubled his money in a few months.