It might be a new year, but not everyone is excited for what 2023 may bring. Stocks are down, economic growth seems to be slowing and inflation remains rampant.
But Warren Buffett’s right-hand man Charlie Munger suggests that we should, in fact, be more content with our current situation.
“People are less happy about the state of affairs than they were when things were way tougher,” Munger said earlier this year.
“It’s weird for somebody my age, because I was in the middle of the Great Depression when the hardship was unbelievable.”
Best known as Berkshire Hathaway’s vice chairman and Buffett’s long-time business partner, Munger also serves as the chairman of Daily Journal, a newspaper publisher with a sizable stock portfolio of its own.
So if you’re hoping some of Munger’s blunt realism will rub off on you this year, why not borrow some of his investing picks too? If these three stocks can keep the 98-year-old investing veteran happy, maybe they’ll work for you too.
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Daily Journal held 2.3 million shares of Bank of America (NYSE: BAC) at the end of September, worth approximately $69.46 million at the time. Occupying 42.49% of the portfolio, that makes the bank the largest publicly traded holding at Munger’s firm.
With economic turmoil forecast for the year ahead, it’s a savvy holding for Munger. While many sectors fear rising interest rates, banks look forward to them. That’s because banks lend money at higher rates than they borrow, then pocket the difference.
When interest rates increase, the spread of a bank’s earnings widens.
And it just so happens that Bank of America has steadily been upping its payout to shareholders.
In July, Bank of America boosted its quarterly dividend by 5% to 22 cents per share — and that’s after the company’s 17% dividend increase in July 2021.
At the current share price, the bank offers an annual yield of 2.7%.
Buffett likes the company, too, as Bank of America happens to be the second-largest holding at Berkshire Hathaway.
With approximately $1.9 trillion in assets, Wells Fargo (NYSE:WFC) is another heavyweight player in America’s financial services industry. It serves one in three households in the U.S. and more than 10% of small businesses in the country.
Daily Journal owned 1.59 million shares of Wells Fargo as of Sept. 30, making the bank its second-largest public holding with a 39.16% weight.
According to the company’s latest earnings report, Wells Fargo generated $19.5 billion of revenue in Q3, representing a 4% increase year-over-year. Earnings came in at 85 cents per share for the quarter, down from the $1.17 per share at the same time a year before.
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While the economy faces uncertainty going forward, management remains optimistic.
“Wells Fargo is positioned well as we will continue to benefit from higher rates and ongoing disciplined expense management,” Wells Fargo’s CEO Charlie Scharf said in a statement.
“Both consumer and business customers remain in a strong financial condition, and we continue to see historically low delinquencies and high payment rates across our portfolios.”
Wells Fargo has a quarterly dividend rate of 30 cents per share, translating into an annual yield of 2.9%.
Chinese tech stocks haven’t exactly been market darlings of late. E-commerce giant Alibaba Group, for instance, plunged 26% in 2022 and is down more than 60% over the past two years.
But Daily Journal has kept the company as its third-largest holding. As of Sept. 30, it owned 300,000 shares of Alibaba — a stake valued at $24.0 million at the time.
And the downturn in Alibaba shares could give contrarian investors something to think about.
In Q3, the Chinese tech company grew its revenue by 3% from a year ago to $29.1 billion.
Management noted that the company delivered this top line growth despite “the impact on consumption demand by the COVID-19 resurgence in China as well as slowing cross border commerce due to increasing logistics costs and foreign currency volatility.”
While Alibaba doesn’t pay a dividend, it still returns cash to shareholders through its stock buyback program.
As of Nov. 16, the company has repurchased approximately $18 billion of its own shares under its existing $25 billion share repurchase program.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
If you really want to rev up your retirement savings and minimize income taxes, the best thing to be is a late-career professional in private practice. When you’re making a lot of money and are close to retirement age, you have savings options that go way beyond the levels of the typical workplace 401(k) plan. As long as you can handle a little extra paperwork and some fees, you can set up a solo retirement plan and enjoy higher limits than most employees.
Among the many Warren Buffett quotes thrown around, none has caught the imagination more than his timeless, “be fearful when others are greedy, and greedy when others are fearful” nugget. And it looks like 2023 will be the perfect opportunity for Buffett to once again demonstrate his use of the axiom. At least that is the opinion of Elon Musk, who recently said he “suspects Warren Buffett is going to be buying a lot of stock next year." Having called Buffett a “bean counter” in the past, Musk is
New year, new Social Security rules.
With the help of a cohort of first-time African American hotel investors, the two were able to acquire the 70-room property located in the Raleigh neighborhood part of the city for $3.85 million.
Or is it just hot air?
To figure out if $1.5 million is enough for retirement, you'll need to factor in Social Security, pension and other income, as well as fixed and variable costs. For instance, your lifestyle and how long you will live in retirement … Continue reading → The post Can You Retire on $1.5 Million Comfortably? appeared first on SmartAsset Blog.
U.S. stocks slid Tuesday in a downbeat start to a busy first trading week of 2023.
While it might not be a feast now for income-oriented investors, it’s a lot better than the famine that prevailed for much of the past decade. Investors can get 3% to 5% yields on municipal bonds, 8% to 9% yields on junk debt, 6% to 8% on preferred stock, and 4% on risk-free short-term Treasuries. Within the stock market, there are yields of 5% to 9% on pipeline companies, 6% on telecom operators, 4% on real estate investment trusts, and 3% on utilities and a broad group of dividend-paying companies, including big banks.
Intel says it now has the world's fastest mobile processor.
Tesla stock is picking right up where it left off in 2022: Lacking juice.
Tesla shares are starting 2023 on the wrong foot after the automaker reported a delivery miss for the fourth quarter. Tesla delivered 405,278 vehicles globally for the quarter, missing analyst expectations of 420,760 as compiled by Bloomberg. For the quarter, Tesla produced 439,701 vehicles, a number that exceeded deliveries by 34,423 vehicles.
The venture capitalist, who has always bet on the rise of bitcoin, is confident despite the difficulties of the crypto space.
Gemini has a crypto lending product called Earn in partnership with DCG's crypto firm Genesis. Genesis halted customer withdrawals in November, following the collapse of major crypto exchange FTX. Winklevoss said Genesis owed more than $900 million to some 340,000 Earn investors, and that he had been trying to reach a "consensual resolution" with Silbert for the past six weeks.
The outlook for 2023 looks good as well, with Berkshire (ticker: BRK.A, BRK.B) standing to benefit from an upturn in insurance profits, its acquisition of insurer Alleghany in the fourth quarter of 2022, higher yields on the company’s big cash position, and income from all the 2022 equity investments, led by Chevron (CVX) and Occidental Petroleum (OXY), that were spearheaded by Warren Buffett, its 92-year-old CEO. One wild card is stock buybacks. Berkshire cut its share repurchases in 2022, which totaled $5 billion through the third quarter, against $27 billion in 2021 and $25 billion in 2020.
Warren Buffett's conglomerate Berkshire Hathaway performed better in 2022 than Elon Musk and Tesla.
Executives, experts, and influencers join the Yahoo Finance team to discuss what's moving the world of finance.
Petroleo Brasileiro SA's preferred shares fell 4% after Brazil's new president removed the oil company, known as Petrobras, from a list of state-controlled businesses slated for privatization.
Apple (NASDAQ: AAPL) stock tumbled 4% through 2 p.m. ET on Tuesday, knocking the tech titan below $2 trillion in market capitalization for the first time since 2021, and putting Apple stock a full one-third below the $3 trillion market cap it hit a year ago. As its first stock action of the new year, BNP downgraded Apple stock from outperform to neutral this morning, and slashed its price target on the tech giant by 22%, to just $140 a share. BNP's downgrade is certainly weighing on Apple stock today, but it's worth pointing out that BNP may only be reacting to other news that necessitated the downgrade.
Two top-notch dividend stocks, with yields of 7.2% and 8%, are ripe for the picking, while another income stock with a yield of nearly 70% could be in for a rough year.
Devon Energy (NYSE: DVN) paid a gusher of dividends in 2022. Fueled by its innovative fixed-plus-variable dividend framework, the oil company paid investors $5.17 per share in 2022. With the stock recently trading at around $60 per share, Devon's dividend yield is 8.5%.