Buffett puts shareholders ahead of patriotism in Canadian deal

<div dir="ltr" style="text-align: left;" trbidi="on"> <h1 style="font-weight: normal; margin: 0px 0px 10px;"> <span style="background-color: rgba(255, 255, 255, 0);">BY LUCIANA LOPEZ</span></h1> <div class="linebreak" style="clear: both; float: none; height: 1px; margin: 0px; overflow: hidden; width: 610px;"> </div> <div class="relatedPhoto landscape" id="articleImage" style="clear: left !important; margin: 0px 0px 10px; position: relative; width: 580px;"> <img alt="Berkshire Hathaway CEO Warren Buffett listens to a shareholder at the Berkshire-owned Borsheims jewelry store where Buffett was selling jewelry as part of the company annual meeting weekend in Omaha, Nebraska May 4, 2014. REUTERS/Rick Wilking" border="0" src="http://s4.reutersmedia.net/resources/r/?m=02&d=20140826&t=2&i=967294740&w=580&fh=&fw=&ll=&pl=&r=LYNXMPEA7P12X" style="display: block; width: 580px;" /><div class="rolloverCaption" id="captionContent" style="bottom: 0px; clear: both; float: left; left: 0px; margin-bottom: 20px; margin-left: -10px; padding-right: 20px; position: relative; width: 590px; z-index: 2;"> <div class="rolloverBg" style="background-image: none; clear: both; float: left; padding-bottom: 0px; width: 610px !important;"> <div class="captionText" style="height: 60px; padding: 10px; position: relative;"> <div style="padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">Berkshire Hathaway CEO Warren Buffett listens to a shareholder at the Berkshire-owned Borsheims jewelry store where Buffett was selling jewelry as part of the company annual meeting weekend in Omaha, Nebraska May 4, 2014.</span></div> <div class="credit" style="margin-top: 5px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">CREDIT: REUTERS/RICK WILKING</span></div> </div> </div> </div> </div> <div class="relatedRai" id="relatedInlineVideo"> </div> <div class="columnLeft" style="clear: left; display: inline; float: left; margin-right: 35px;"> <div class="relatedRail gridPanel grid2" style="display: inline; float: left; margin: 0px; overflow: hidden; width: 140px;"> </div> </div> <div class="columnLeft" style="clear: left; display: inline; float: left; margin-right: 35px;"> <div class="relatedRail gridPanel grid2" style="display: inline; float: left; margin: 0px; overflow: hidden; width: 140px;"> </div> </div> <div class="columnLeft" style="clear: left; display: inline; float: left; margin-right: 35px;"> <div class="relatedRail gridPanel grid2" style="display: inline; float: left; margin: 0px; overflow: hidden; width: 140px;"> </div> </div> <div class="columnLeft" style="clear: left; display: inline; float: left; margin-right: 35px;"> <div class="relatedRail gridPanel grid2" style="display: inline; float: left; margin: 0px; overflow: hidden; width: 140px;"> </div> </div> <div class="columnLeft" style="clear: left; display: inline; float: left; margin-right: 35px;"> <div class="relatedRail gridPanel grid2" style="display: inline; float: left; margin: 0px; overflow: hidden; width: 140px;"> <div class="module" id="relatedTopics" style="float: left; margin: 0px 0px 20px; width: 140px;"> <div class="moduleHeader" style="background-attachment: scroll; background-image: none; background-position: 0px 0px; background-repeat: repeat repeat; border: medium none; float: left; margin: 0px 0px 5px; padding: 0px; width: 140px;"> <h3 style="border-bottom-style: none; border-bottom-width: medium; margin: 0px; padding: 0px;"> <span style="font-size: small;"><span style="background-color: rgba(255, 255, 255, 0);">RELATED TOPICS</span></span></h3> </div> <div class="moduleBody" style="float: left; margin: 0px; padding: 0px; width: 140px;"> <ul style="clear: both; float: left; list-style: none; margin: 0px 0px 5px; padding: 0px; width: 140px;"> <li style="background-attachment: scroll; background-image: none; background-position: 0px 0px; background-repeat: repeat repeat; border-top-color: rgb(204, 204, 204); border-top-style: dotted; border-top-width: 1px; list-style-type: none; margin: 0px; padding: 3px 0px;"><a href="http://www.reuters.com/finance/deals" style="background-color: rgba(255, 255, 255, 0); cursor: pointer; outline: none; text-decoration: none;"><span style="color: black;">Deals »</span></a></li> </ul> </div> </div> </div> </div> <div class="columnLeft" style="clear: left; display: inline; float: left; margin-right: 35px;"> <div class="relatedRail gridPanel grid2" style="display: inline; float: left; margin: 0px; overflow: hidden; width: 140px;"> <div id="thirdPartyLinkbackNews"> </div> </div> </div> <div class="columnLeft" style="clear: left; display: inline; float: left; margin-right: 35px;"> <div class="relatedRail gridPanel grid2" id="relatedInteractive" style="display: inline; float: left; margin: 0px; overflow: hidden; width: 140px;"> </div> </div> <div class="columnLeft" style="clear: left; display: inline; float: left; margin-right: 35px;"> <div class="relatedRail gridPanel grid2" style="display: inline; float: left; margin: 0px; overflow: hidden; width: 140px;"> </div> </div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">(Reuters) - <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" data-ls-seen="1" href="http://www.reuters.com/people/warren-buffett?lc=int_mb_1001" style="cursor: pointer; outline: none; text-decoration: none;">Warren Buffett</a></span> may be most famous for the billions of dollars he has made from investing but he is also well known as a cheerleader for the United States. The Oracle of Omaha routinely exhorts investors to put their money in America, "the mother lode of opportunity," as he wrote in his annual letter this year.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">So Buffett's participation in fast-food chain Burger King Worldwide Inc's purchase of coffee and doughnut chain <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" data-ls-seen="1" href="http://www.reuters.com/finance/stocks/overview?symbol=THI&lc=int_mb_1001" style="cursor: pointer; outline: none; text-decoration: none;">Tim Hortons</a></span> Inc – complete with relocation of Burger King's domicile to Canada – might at first blush raise questions about his patriotism.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">Investors and tax experts say Miami-based Burger King's move to Canada through a so-called tax inversion will help curb its U.S. tax bill. Similar recent moves by other U.S. companies - mainly through the purchase of European companies - have drawn the ire of President <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" data-ls-seen="1" href="http://www.reuters.com/people/barack-obama?lc=int_mb_1001" style="cursor: pointer; outline: none; text-decoration: none;">Barack Obama</a></span>, who suggested they are corporate deserters lacking economic patriotism.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">But analysts and investors say that the Burger King deal underlines the market savvy that's helped him build his fortune more than prompting questions about his commitment to the U.S.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">"When <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" data-ls-seen="1" href="http://www.reuters.com/people/warren-buffett?lc=int_mb_1001" style="cursor: pointer; outline: none; text-decoration: none;">Warren Buffett</a></span> advocates investing in America, as I understand it, that's because that's where the opportunities largely lie," said Meyer Shields, managing director at investment bank Keefe, Bruyette & Woods Inc. "Investing in America is actually the outcome of his analysis instead of the beginning assumption."</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">Buffett's <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" data-ls-seen="1" href="http://www.reuters.com/finance/stocks/overview?symbol=BRK.B&lc=int_mb_1001" style="cursor: pointer; outline: none; text-decoration: none;">Berkshire Hathaway</a></span> has committed $3 billion of preferred equity for 3G Capital, which controls Burger King, to buy <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" data-ls-seen="1" href="http://www.reuters.com/finance/stocks/overview?symbol=THI&lc=int_mb_1001" style="cursor: pointer; outline: none; text-decoration: none;">Tim Hortons</a></span> in a deal worth almost $12 billion. That should give him a juicy return and a stake in any increase in value of the combined entity.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">Berkshire, a sprawling conglomerate with more than 80 companies and a wide-ranging stock portfolio, will have no role in operating the new entity.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);"><span class="mandelbrot_refrag"><a class="mandelbrot_refrag" data-ls-seen="1" href="http://www.reuters.com/finance/stocks/overview?symbol=BRK.B&lc=int_mb_1001" style="cursor: pointer; outline: none; text-decoration: none;">Berkshire Hathaway</a></span> and Buffett did not return calls requesting comment.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">Buffett tried to explain the reasons for the move to Canada in comments to the Financial Times. "Tim Hortons earns more money than Burger King does," he told the paper. "I just don't know how the Canadians would feel about Tim Hortons moving to Florida. The main thing here is to make the Canadians happy."</span></div> <div style="margin-bottom: 20px; padding: 0px;"> </div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">NOT A DIME MORE</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">Buffett, the world's third richest person, has been clear in the past on the question of corporate tax rates.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">"Anybody who thinks corporate taxes are too high should look at a chart of corporate taxes as a percentage of GDP since World War II," Buffett said at the annual Berkshire Hathaway stockholders' meeting in Nebraska in May this year in reference to a big drop in that level.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">He has also advocated higher tax rates for the ultra rich, noting that his longtime secretary, Debbie Bosanek, pays a higher tax rate than he does.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">But for all that Buffett has defended the idea that corporations in the U.S. see enviable profits, he's also been clear that it's not his job to write any more checks to the government than necessary.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">"I will not pay a dime more of individual taxes than I owe, and I won't pay a dime more of corporate taxes than we owe," he told Fortune magazine this year.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">Berkshire's stock portfolio is stuffed full of iconic American companies, such as Coca Cola and IBM. And the investment company owns plenty of well-known names, as well, including Dairy Queen and insurer Geico.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">But in the criteria he's talked about over the years for why he buys a company, such as the simplicity of a business, strong management and <span class="mandelbrot_refrag"><a class="mandelbrot_refrag" data-ls-seen="1" href="http://www.reuters.com/finance/markets/earnings?lc=int_mb_1001" style="cursor: pointer; outline: none; text-decoration: none;">earnings</a></span> power, a U.S. headquarters does not factor.</span></div> <div style="margin-bottom: 20px; padding: 0px;"> <span style="background-color: rgba(255, 255, 255, 0);">Simply put, said Bill Smead, chief investment officer of Smead Capital Management and a Berkshire investor, "Buffett is a capitalist first and a patriot second."</span></div> <div style="margin-bottom: 20px; padding: 0px;"> </div> <span id="articleText" style="background-color: rgba(255, 255, 255, 0);"><span id="midArticle_start"></span><span id="midArticle_0"></span><span class="focusParagraph"></span><span id="midArticle_1"></span><span id="midArticle_2"></span><span id="midArticle_3"></span><span id="midArticle_4"></span><span id="midArticle_5"></span><span id="midArticle_6"></span><span id="midArticle_7"></span><span id="midArticle_8"></span><span id="midArticle_9"></span><span id="midArticle_10"></span><span id="midArticle_11"></span><span id="midArticle_12"></span><span id="midArticle_13"></span><span id="midArticle_14"></span><span id="midArticle_15"></span><span id="midArticle_0"></span><span id="midArticle_1"></span><span id="midArticle_2"></span><span id="midArticle_3"></span><span id="midArticle_4"></span><span id="midArticle_5"></span></span><br /> <div class="relatedTopicButtons"> </div> <br /> <div style="font-family: georgia, 'times new roman', serif; font-size: 15px; line-height: 23px; margin: 0px 0px 20px; padding: 0px;"> (Reporting by Luciana Lopez; Edited by Martin Howell)</div> </div>

Buffett puts shareholders ahead of patriotism in Canadian deal

BY LUCIANA LOPEZ Berkshire Hathaway CEO Warren Buffett listens to a shareholder at the Berkshire-owned Borsheims jewelry store whe...

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The Best Business Book I’ve Ever Read - Bill Gates

<div dir="ltr" style="text-align: left;" trbidi="on"> <div class="headline" style="-webkit-font-smoothing: antialiased; background-color: white; box-sizing: border-box; font-family: MillerDisplay, serif; font-size: 34px; line-height: 40px; padding-bottom: 8px; padding-top: 8px;"> <h1 class="headlineh1" style="-webkit-font-smoothing: antialiased; box-sizing: border-box; font-size: 34px !important; font-weight: normal; margin: 0px;"> <span style="color: #666666; font-family: DINWebPro-Medium, sans-serif; font-size: 14px; line-height: 20px; text-transform: uppercase;">BY</span><span style="color: #666666; font-family: DINWebPro-Medium, sans-serif; font-size: 14px; line-height: 20px; text-transform: uppercase;"> </span><span class="billhover" style="background: transparent; box-sizing: border-box; font-family: DINWebPro-Bold, sans-serif; font-size: 14px; line-height: 20px; text-transform: uppercase;"><a href="http://www.gatesnotes.com/Books/Business-Adventures?WT.mc_id=07_17_2014_BizBook_TabA&WT.tsrc=TabA#" style="background: transparent; box-sizing: border-box; color: #666666; text-decoration: none;">BILL GATES</a> -</span><span style="color: #666666; font-family: DINWebPro-Medium, sans-serif; font-size: 14px; line-height: 20px; text-transform: uppercase;"> JULY, 2014</span></h1> </div> <div class="artlinerel" id="content_0_sharePanel" style="-webkit-font-smoothing: antialiased; background-color: white; box-sizing: border-box; clear: both; float: left; font-family: MillerDisplay, serif; font-size: 16px; line-height: 16px; margin-left: -40px; margin-top: 0px; position: relative; width: 766.65625px;"> </div> <div class="articleContent" id="content_0_articlePanel" style="-webkit-font-smoothing: antialiased; background-color: white; box-sizing: border-box; clear: both; font-family: MillerDisplay, serif; font-size: 18px; line-height: 25px;"> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> Not long after I first met Warren Buffett back in 1991, I asked him to recommend his favorite book about business. He didn’t miss a beat: “It’s <em style="box-sizing: border-box;">Business Adventures</em>, by John Brooks,” he said. “I’ll send you my copy.” I was intrigued: I had never heard of <em style="box-sizing: border-box;">Business Adventures</em> or John Brooks.</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> Today, more than two decades after Warren lent it to me—and more than four decades after it was first published—<em style="box-sizing: border-box;">Business Adventures</em> remains the best business book I’ve ever read. John Brooks is still my favorite business writer. (And Warren, if you’re reading this, I still have your copy.)</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> A skeptic might wonder how this out-of-print collection of <em style="box-sizing: border-box;">New Yorker</em> articles from the 1960s could have anything to say about business today. After all, in 1966, when Brooks profiled Xerox, the company’s top-of-the-line copier weighed 650 pounds, cost $27,500, required a full-time operator, and came with a fire extinguisher because of its tendency to overheat. A lot has changed since then.</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> It’s certainly true that many of the particulars of business have changed. But the fundamentals have not. Brooks’s deeper insights about business are just as relevant today as they were back then. In terms of its longevity, <em style="box-sizing: border-box;">Business Adventures</em> stands alongside Benjamin Graham’s <em style="box-sizing: border-box;">The Intelligent Investor</em>, the 1949 book that Warren says is the best book on investing that he has ever read.</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> </div> <div class="gnYoutubeHolder videoEmbed" style="-webkit-font-smoothing: antialiased; box-sizing: border-box; height: 0px; overflow: hidden; padding-bottom: 431.234375px; padding-top: 30px; position: relative;"> <iframe allowfullscreen="true" frameborder="0" height="432" src="http://www.youtube.com/embed/AH2MqBUzXeI?rel=0" style="box-sizing: border-box; height: 461.234375px; left: 0px; position: absolute; top: 0px; width: 766.65625px;" width="768"></iframe>Brooks grew up in New Jersey during the Depression, attended Princeton University (where he roomed with future Secretary of State George Shultz), and, after serving in World War II, turned to journalism with dreams of becoming a novelist. In addition to his magazine work, he published a handful of books, only some of which are still in print. He died in 1993. As the journalist Michael Lewis wrote in his foreword to Brooks’s book <em style="box-sizing: border-box;">The Go-Go Years</em>, even when Brooks got things wrong, “at least he got them wrong in an interesting way.” Unlike a lot of today’s business writers, Brooks didn’t boil his work down into pat how-to lessons or simplistic explanations for success. (How many times have you read that some company is taking off because they give their employees free lunch?) You won’t find any listicles in his work. Brooks wrote long articles that frame an issue, explore it in depth, introduce a few compelling characters, and show how things went for them. In one called “The Impacted Philosophers,” he uses a case of price-fixing at General Electric to explore miscommunication—sometimes intentional miscommunication—up and down the corporate ladder. It was, he writes, “a breakdown in intramural communication so drastic as to make the building of the Tower of Babel seem a triumph of organizational rapport.”</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> In “The Fate of the Edsel,” he refutes the popular explanations for why Ford’s flagship car was such a historic flop. It wasn’t because the car was overly poll-tested; it was because Ford’s executives only pretended to be acting on what the polls said. “Although the Edsel was supposed to be advertised, and otherwise promoted, strictly on the basis of preferences expressed in polls, some old-fashioned snake-oil selling methods, intuitive rather than scientific, crept in.” It certainly didn’t help that the first Edsels “were delivered with oil leaks, sticking hoods, trunks that wouldn’t open, and push buttons that…couldn’t be budged with a hammer.”</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> One of Brooks’s most instructive stories is “Xerox Xerox Xerox Xerox.” (The headline alone belongs in the Journalism Hall of Fame.) The example of Xerox is one that everyone in the tech industry should study. Starting in the early ’70s, the company funded a huge amount of R&D that wasn’t directly related to copiers, including research that led to Ethernet networks and the first graphical user interface (the look you know today as Windows or OS X).</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> But because Xerox executives didn’t think these ideas fit their core business, they chose not to turn them into marketable products. Others stepped in and went to market with products based on the research that Xerox had done. Both Apple and Microsoft, for example, drew on Xerox’s work on graphical user interfaces.</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> I know I’m not alone in seeing this decision as a mistake on Xerox’s part. I was certainly determined to avoid it at Microsoft. I pushed hard to make sure that we kept thinking big about the opportunities created by our research in areas like computer vision and speech recognition. Many other journalists have written about Xerox, but Brooks’s article tells an important part of the company’s early story. He shows how it was built on original, outside-the-box thinking, which makes it all the more surprising that as Xerox matured, it would miss out on unconventional ideas developed by its own researchers.</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> </div> <div class="bainteractive" style="-webkit-font-smoothing: antialiased; box-sizing: border-box;"> Brooks was also a masterful storyteller. He could craft a page-turner like “The Last Great Corner,” about the man who founded the Piggly Wiggly grocery chain and his attempt to foil investors intent on shorting his company’s stock. I couldn’t wait to see how things turned out for him. (Here’s a spoiler: Not well.) Other times you can almost hear Brooks chuckling as he tells some absurd story. There’s a passage in “The Fate of the Edsel” in which a PR man for Ford organizes a fashion show for the wives of newspaper reporters. The host of the fashion show turns out to be a female impersonator, which might seem edgy today but would have been scandalous for a major American corporation in 1957. Brooks notes that the reporters’ wives “were able to give their husbands an extra paragraph or two for their stories.”</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> Brooks’s work is a great reminder that the rules for running a strong business and creating value haven’t changed. For one thing, there’s an essential human factor in every business endeavor. It doesn’t matter if you have a perfect product, production plan, and marketing pitch; you’ll still need the right people to lead and implement those plans.</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> That is a lesson you learn quickly in business, and I’ve been reminded of it at every step of my career, first at Microsoft and now at the foundation. Which people are you going to back? Do their roles fit their abilities? Do they have both the IQ and EQ to succeed? Warren is famous for this approach at Berkshire Hathaway, where he buys great businesses run by wonderful managers and then gets out of the way.</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> <em style="box-sizing: border-box;">Business Adventures</em> is as much about the strengths and weaknesses of leaders in challenging circumstances as it is about the particulars of one business or another. In that sense, it is still relevant not despite its age but because of it. John Brooks’s work is really about human nature, which is why it has stood the test of time.</div> <div style="-webkit-font-smoothing: antialiased; box-sizing: border-box; margin-top: 1em;"> <b>Note: Ebere Samuel's Blog is just a month old. Please, we will value your comments- suggestions and encouragement. Thank you.</b></div> </div> </div>

The Best Business Book I’ve Ever Read - Bill Gates

BY   BILL GATES  -  JULY, 2014 Not long after I first met Warren Buffett back in 1991, I asked him to recommend his favorite book a...

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