Sunday, February 27, 2011

Warren Buffet: annual letter to share holders

Available at http://www.berkshirehathaway.com/letters/2010ltr.pdf

Some interesting paragraphs:


"Partially offsetting our anchor of size are several important advantages we have. First, we possess a
cadre of truly skilled managers who have an unusual commitment to their own operations and to Berkshire.
Many of our CEOs are independently wealthy and work only because they love what they do. They are
volunteers, not mercenaries. Because no one can offer them a job they would enjoy more, they can’t be lured
away.
At Berkshire, managers can focus on running their businesses: They are not subjected to meetings at
headquarters nor financing worries nor Wall Street harassment."

"...the directors who represent you think and act like owners. They receive token compensation: no options, no restricted stock and, for that matter, virtually no cash. We do not provide them directors and officers liability insurance, a given at almost every other large public company. If they mess up with your money, they will lose their money as well. Leaving my holdings aside, directors and their families own Berkshire shares worth more than $3 billion. Our directors, therefore, monitor Berkshire’s actions and results with keen interest and an owner’s eye. You and I are lucky to have them as stewards."

Saturday, February 26, 2011

PBR - Petrobras Brazil

Rio de Janeiro-based Petroleo Brasileiro S.A. (Petrobras; PBR) is a mixed joint stock corporation controlled by Brazil's federal government. PBR is one of the largest oil and gas companies in the world, and operates in five business segments: Exploration and Production (E&P; 24% of 2009 revenues, 55% of 2009 operating income), Supply (47%, 37%), Distribution (18%, 4%), Gas & Energy (4%,3%), and International (7%, 1%).
Each ADS represents two common shares.
The chart looks tempting. But, I will keep my stop loss at 37,87...there are a lot of problems around the world, and who knows what could happen in the Middle East and how the development of the unrests could affect the energy sector.


Technically speaking, I think PBR is beginging a wave 3. But, be careful and maintain your stops.



C - Citigroup

Regarding citigroup, I think it is time to follow this stock. The US banks looks atractive again, and in citigroup I have noticed some interesting things. In this blog I do not make any fundamental analysis (I reserve it to me), but I can tell you some. For example, it has returned to profitability in 2010, with net income of $10.6 billion, versus a loss of $1.6 billion in 2009. Also, it hasmade good progress in improving credit quality. The U.S. government canceled $1.8 billion of its perpetual preferred shares in conjunction with the end of the loss-sharing agreement, but still holds $5.3 billion of preferred shares, which it is selling off gradually. The EPS is at 0,35 per share, not bad. I think that as a result of capital raising activities in the last two years, this company is better prepared than before to withstand further write-downs of their loan and securities portfolios.
Although all this, it has been downgraded to "neutral" from "buy" by Goldman Sachs.
The charts: in the weekly chart, I am following the 55 weekly exponential moving average. Key support.
It is going to break this pattern. I would bet that upward, but who knows?

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