Warren Buffett Owns Up To Mistakes - Business Tips from Warren Buffett

What makes a man an even bigger man? A man who is accountable. Warren Buffett is that kind of a man. No wonder he's the world's most widely followed investor.

Being the respectable businessman that he is, Warren Buffett had this to say in his annual letter to shareholders of Berkshire Hathaway Inc., Warren Buffett's insurance and investment company

"During 2008 I did some dumb things in investments," he wrote, adding later, "I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action."

"The economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond -- but that conclusion does not tell us whether the stock market will rise or fall."

"Though the path has not been smooth, our economic system has worked extraordinarily well over time," he said. "It has unleashed human potential as no other system has, and it will continue to do so. America's best days lie ahead.

Berkshire Hathaway went down by a significant percentage, overall the company ended the year with $25.54 billion of cash, down from $44.33 billion a year earlier. It said it made roughly $6 billion of acquisitions in 2008, and spent $14.5 billion on fixed-income securities from General Electric Co, Goldman Sachs Group Inc and chewing gum maker Wm Wrigley Jr Co. Buffett sold some stocks to fund the latter purchases.

For all of 2008, profit at Berkshire fell 62 percent to a six-year low of $4.99 billion, or $3,224 per share, from $13.21 billion, or $8,548. Revenue fell 9 percent to $107.8 billion.

Wow even the world's most-admired investors, and Forbes magazine's second-richest American had a bad year in 2008

Some tips, which indexes does Warren Buffett use?

• Standard & Poor's 500
• Britain's FTSE 100
• Europe's Euro Stoxx 50
• Nikkei 225 in Japan

Predictions on How the Philippine Economy will Suffer along with the rest of the World

It's a good thing the Philippines wasn't so advanced in the first place in terms of investment because if we had been, then the Philippines would also be in a pretty bad shape now.

The only reason the Philippine economy is still afloat is because the Philippines was too poor to invest its finances in the riskier financial institutions. Unfortunately the smarter more advanced economies thought that taking smaller more secure investments and reinvesting them into riskier investments made them a lot more money. Unfortunately, that didn't work out the way they planned it.

The Philippines will feel the ripple effect of the US economic slowdown. The impact will be felt first of course in the stock market as well as direct exposure. The latter is minimal while the stock market will hurt PSE among other things. And then in terms of incoming investments. The export industry will suffer - particularly those that service the US and Europe. Yes Europe is also in trouble as a result of the sub prime catastrophe. Iceland has already declared bankruptcy and I'm pretty sure that country was much better off than the Philippines. Both the US and the UK have put in place bailouts as sponsored by their governments. Let's hope they make it through this as well. Because we are all interconnected financially, the Philippines owing money to other countries, make it susceptible to these changes although not on our shores.

Nevertheless the living conditions won't be as bad as it has always been - prices will continue to be high, gasoline prices have at least has gone down because there is less demand for oil now as a result. Business that are dependent on tourism and incoming remuneration from abroad will be hit specifically.

If OFWs abroad will have a difficult time, the Philippine economy will be hit pretty bad although I doubt the the extent to which overseas Filipino income will be threatened any worse than an American or European.

The newspapers these days are just peppered with images of the stock market and how it has just crashed amidst the US economic trouble. The bail-out will take a few months or even years to take effect - as the primary issues now are that people are no longer comfortable with spending money, banks are no longer free to give as much credit as they used to. There is a lack of predictability as to what might happen to the stock market, everything being red now.

Some people are buying stocks while their dirt cheap while most are just unloading what seems like lost causes.

The world will be a lot wiser after this economic slum... if it will survive it

Sony Invests In Sharp. Would you invest in your competitor?

I didn't know how closely tied competing companies were in the industry of electronics. From this article from Bloomberg is shows that Sharp, Sony and Samsung seem to be co-dependent on each other in terms of investment. Would you do the same and invest in direct competitors? This article might provide some insight into their business strategy in terms of securing supply.

Sony Corp., the world's second-largest maker of consumer electronics, will invest in Sharp Corp.'s newest liquid-crystal display factory to meet demand for brighter flat-panel televisions.

Sony agreed to buy 34 percent of a venture that will operate the factory Sharp is building in Sakai City, Osaka, the companies said today, without providing an investment amount. Sharp, Japan's largest LCD maker, will own the remaining 66 percent.

The venture reduces Sony's reliance on main supplier Samsung Electronics Co. as LCD TV sales are forecast to rise 29 percent this year, outpacing demand for plasma sets. UBS AG and Lehman Brothers Holdings Inc. predict a shortage of LCDs will persist in 2008.

``The stake will give Sony some clout in determining production schedules and secure a stable supply of panels,'' Osamu Hirose, an analyst with Tokai Tokyo Research Center, said by telephone from Tokyo. He recommends buying Sony shares ``on weakness.''

The Sakai plant, the most advanced in the industry, will produce screens measuring as much as 60 inches diagonally. The companies expect to set up the venture in April 2009, with the factory scheduled to begin operations that fiscal year.

The plant will have a monthly production capacity of 72,000 glass substrates, from which panels are cut, Sony and Sharp said. Initial production is set at 36,000 per month.

Factory Investment

Sony agreed to invest more than 100 billion yen ($926 million) in the Sharp plant, the Nikkei newspaper reported today, without saying where it got the information. In July last year, Sharp said it would invest 380 billion yen to build the factory.

Sony rose 1.2 percent to close at 5,200 yen on the Tokyo Stock Exchange, while Sharp was unchanged at 2,100 yen. Samsung declined 1.7 percent to 571,000 won on the Korea Exchange.

Samsung and Sony in 2004 set up S-LCD Corp., a panel-making venture that has invested about 3.9 trillion won ($4.1 billion) in two factories to make screens measuring 40 inches to 52 inches.

The Japanese company overtook Samsung as the world's largest LCD TV maker by revenue during the fourth quarter, researcher DisplaySearch estimated this month. Sony plans to sell 10 million units of its Bravia LCD TVs in the year ending March 31, up from 6.3 million a year earlier.

``In the long term, Sony's agreement with Sharp will have an impact on Samsung as it may need to find another secure customer,'' Woo Jun Sik, an analyst at Tong Yang Investment Bank, said by phone from Seoul. ``With Japanese panel makers becoming aggressive in the LCD market, competition in the industry may intensify.''

Smaller Portion

Sony probably got 58 percent of its LCD TV panels from Samsung in the three months ended Sept. 30, down from 91 percent a year earlier, Woo said.

Japanese companies are entering partnerships to secure supplies as LCD televisions gain popularity over plasma sets. Global LCD TV shipments are estimated to rise 29 percent to 101 million sets this year, almost seven times the number for those with plasma screens, said James Kim, an analyst at Lehman Brothers Holdings Inc.

Matsushita Electric Industrial Co. President Fumio Otsubo said in January that it faces ``difficulties'' in securing LCDs as televisions using these panels outsell plasma TVs, its main business.

The maker of Panasonic-brand electronics is spending 300 billion yen to build an LCD factory in Hyogo prefecture, western Japan, that will be owned by a venture between Matsushita and Hitachi Ltd.

Sharp said in December it gained Toshiba Corp. as a customer. Sharp's share of sales to other companies from LCD panels, including those to be made at the Sakai plant, will probably exceed 30 percent in the fiscal year starting April 1, from 20 percent at present, President Mikio Katayama said in January.

(image from Krunker.com)