By Steve Jordon
WORLD-HERALD STAFF WRITER
Now that the Decade of the Aughts is done, let’s look at the Decade of Warren Buffett.
Some of the 2000s’ highlights for Omaha’s most famous, and richest, citizen:
From Dec. 31, 1999, to Dec. 31, 2009, Berkshire Hathaway Inc.’s stock price gained 77 percent while the Standard & Poor’s index of 500 stocks fell 24 percent and the Dow Jones Industrial Average fell 9 percent. The Dow and S&P figures don’t reflect dividends paid to shareholders, however.
His long-awaited biography, which he had intended to write but delegated to a former insurance analyst, opened Buffett’s personal and business sides. Others also write books about Buffett, but Alice Schroeder’s “Snowball: Warren Buffett and the Business of Life” will remain the prime source of inside information about him, his family and his business dealings.
If you count the pending purchase of Burlington Northern Santa Fe Corp., Buffett acquired 33 businesses in the ’00s, a tally that does not include big investments in General Electric, the Chinese automaker BYD and other companies. Buffett had decided that, in general, owning an entire good company is better than owning a piece of a company through an investment.
Berkshire ends the decade with about 225,000 employees, all but 19 of them outside its home office in Omaha. That’s down about 21,000 from a year ago because of recession-related job cuts. The businesses acquired since 2000 (not counting Burlington Northern) employ about 178,000 people.
Buffett has become something of a regular on cable TV, chatting with anchors when things are going well and when it’s gloomy. His New York Times opinion piece in October 2008 (headlined “Buy American. I Am.”) helped turn people’s attitudes toward recovery.
His life changed with the death of his wife, Susan Thompson Buffett, in 2004 and his 2006 marriage to Astrid Menks.
Buffett became the biggest philanthropist in history when he pledged the bulk of his wealth — estimated at $37 billion when he made the announcement in 2006 — to the Bill & Melinda Gates Foundation. He also pledged large donations to the Susan Thompson Buffett Foundation and to foundations headed by his three children.
As Berkshire grew, Buffett’s universe of worthwhile financial deals shrank because a transaction needs to be huge to make a difference on Berkshire’s balance sheet. In 2000 his acquisition criteria included after-tax annual profits of at least $50 million; the latest criteria put that figure at $75 million.
Buffett, 79, discusses plans for his successor in each annual report. His concluding remarks have not changed during the decade: “Lest we end on a morbid note, I also want to assure you that I have never felt better. I love running Berkshire, and if enjoying life promotes longevity, Methuselah’s record is in jeopardy.”
Acquisition talk
News outlets quote unidentified sources as saying Buffett is interested in acquiring Residential Capital, a division of GMAC that originates and processes mortgages, but Buffett has not commented.
The New York Post said ResCap, as the division is known informally, is falling close to its minimum net worth of $250 million. GMAC has said it wanted to have a plan in place by the end of 2009 for ResCap, which has lost more than $1 billion each quarter since mid-2007.
But another unidentified source said he would be surprised if Buffett bought the division now.
“ResCap is a good solid business platform and has technology,” the Post quoted David Lykken, president of consultant Mortgage Banking Solutions, as saying, and would make sense for Berkshire at the right price.
ResCap services the nation’s fifth-biggest portfolio of mort- gages and would profit if interest rates rose and people took longer to repay mortgages. But if the recession deepens, loan delinquencies could hurt ResCap profits, the sources said.
Reuters reported that Buffett is in talks with hedge fund managers David Tepper of Appaloosa Management and Marc Lasry of Avenue Capital to buy ResCap.
New board member
The newest member of Berkshire’s board of directors, Stephen Burke, is the son of retired Capital Cities/ABC executive Daniel Burke, who served during the time Berkshire was an investor in Capital Cities.
Stephen Burke, 51, is chief operating officer of Comcast Corp., the nation’s largest cable TV company, and “is business-savvy, owner-oriented and keenly interested in Berkshire,” Buffett said in a statement announcing Burke’s election to the Berkshire board.
Last week Burke became a Berkshire shareholder, buying five Class A shares for $98,780 each, according to a filing with the Securities and Exchange Commission.
Bloomberg News reported that Buffett had praised Daniel Burke for his work in the 1990s. Stephen Burke’s work path includes the Walt Disney Co., which also was partly owned by Berkshire, as president of ABC Broadcasting.
He also is on the board of JPMorgan Chase & Co. and has been credited with integrating Comcast’s acquisitions of AT&T Inc.’s broadband unit and Adelphia Communications Corp.’s cable systems, Bloomberg said.
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