How to Stay Out of Debt: Warren Buffett – Financial Future of American Youth (1999)







Buffett became a billionaire on paper when Berkshire Hathaway began selling class A shares on May 29, 1990, when the market closed at $7,175 a share. More on Warren Buffett: https://www.amazon.com/gp/search?ie=UTF8&tag=tra0c7-20&linkCode=ur2&linkId=9113f36df9f914d370807ba1208bf50b&camp=1789&creative=9325&index=books&keywords=Warren%20Buffett

In 1998, in an unusual move, he acquired General Re (Gen Re) for stock. In 2002, Buffett became involved with Maurice R. Greenberg at AIG, with General Re providing reinsurance. On March 15, 2005, AIG’s board forced Greenberg to resign from his post as Chairman and CEO under the shadow of criticism from Eliot Spitzer, former attorney general of the state of New York. On February 9, 2006, AIG and the New York State Attorney General’s office agreed to a settlement in which AIG would pay a fine of $1.6 billion. In 2010, the federal government settled with Berkshire Hathaway for $92 million in return for the firm avoiding prosecution in an AIG fraud scheme, and undergoing ‘corporate governance concessions’.

In 2002, Buffett entered in $11 billion worth of forward contracts to deliver U.S. dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion. In 2006, Buffett announced in June that he gradually would give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006. The largest contribution would go to the Bill and Melinda Gates Foundation. In 2007, in a letter to shareholders, Buffett announced that he was looking for a younger successor, or perhaps successors, to run his investment business. Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.

Buffett ran into criticism during the subprime crisis of 2007–2008, part of the late 2000s recession, that he had allocated capital too early resulting in suboptimal deals. “Buy American. I am.” he wrote for an opinion piece published in the New York Times in 2008. Buffett has called the 2007–present downturn in the financial sector “poetic justice”. Buffett’s Berkshire Hathaway suffered a 77% drop in earnings during Q3 2008 and several of his recent deals appear to be running into large mark-to-market losses.

Berkshire Hathaway acquired 10% perpetual preferred stock of Goldman Sachs. Some of Buffett’s Index put options (European exercise at expiry only) that he wrote (sold) are currently running around $6.73 billion mark-to-market losses. The scale of the potential loss prompted the SEC to demand that Berkshire produce, “a more robust disclosure” of factors used to value the contracts. Buffett also helped Dow Chemical pay for its $18.8 billion takeover of Rohm & Haas. He thus became the single largest shareholder in the enlarged group with his Berkshire Hathaway, which provided $3 billion, underlining his instrumental role during the current crisis in debt and equity markets.

In 2008, Buffett became the richest man in the world, with a total net worth estimated at $62 billion by Forbes and at $58 billion by Yahoo, dethroning Bill Gates, who had been number one on the Forbes list for 13 consecutive years. In 2009, Gates regained the position of number one on the Forbes list, with Buffett second. Their values have dropped to $40 billion and $37 billion, respectively, Buffett having lost $25 billion in 12 months during 2008/2009, according to Forbes.

In October 2008, the media reported that Warren Buffett had agreed to buy General Electric (GE) preferred stock. The operation included extra special incentives: he received an option to buy 3 billion GE at $22.25 in the next five years, and also received a 10% dividend (callable within three years). In February 2009, Buffett sold some of the Procter & Gamble Co, and Johnson & Johnson shares from his portfolio.

In addition to suggestions of mistiming, questions have been raised as to the wisdom in keeping some of Berkshire’s major holdings, including The Coca-Cola Company (NYSE:KO) which in 1998 peaked at $86. Buffett discussed the difficulties of knowing when to sell in the company’s 2004 annual report:

That may seem easy to do when one looks through an always-clean, rear-view mirror. Unfortunately, however, it’s the windshield through which investors must peer, and that glass is invariably fogged.

http://en.wikipedia.org/wiki/Warren_Buffett

The Vietnam War: Reasons for Failure – Why the U.S. Lost







In the post-war era, Americans struggled to absorb the lessons of the military intervention. About the book: https://www.amazon.com/gp/product/0871137992/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0871137992&linkCode=as2&tag=tra0c7-20&linkId=d1bb53399f448906b40e7c954de052ac

As General Maxwell Taylor, one of the principal architects of the war, noted, “First, we didn’t know ourselves. We thought that we were going into another Korean War, but this was a different country. Secondly, we didn’t know our South Vietnamese allies… And we knew less about North Vietnam. Who was Ho Chi Minh? Nobody really knew. So, until we know the enemy and know our allies and know ourselves, we’d better keep out of this kind of dirty business. It’s very dangerous.”

Some have suggested that “the responsibility for the ultimate failure of this policy [America’s withdrawal from Vietnam] lies not with the men who fought, but with those in Congress…” Alternatively, the official history of the United States Army noted that “tactics have often seemed to exist apart from larger issues, strategies, and objectives. Yet in Vietnam the Army experienced tactical success and strategic failure… The…Vietnam War…legacy may be the lesson that unique historical, political, cultural, and social factors always impinge on the military…Success rests not only on military progress but on correctly analyzing the nature of the particular conflict, understanding the enemy’s strategy, and assessing the strengths and weaknesses of allies. A new humility and a new sophistication may form the best parts of a complex heritage left to the Army by the long, bitter war in Vietnam.”

U.S. Secretary of State Henry Kissinger wrote in a secret memo to President Gerald Ford that “in terms of military tactics, we cannot help draw the conclusion that our armed forces are not suited to this kind of war. Even the Special Forces who had been designed for it could not prevail.” Even Secretary of Defense Robert McNamara concluded that “the achievement of a military victory by U.S. forces in Vietnam was indeed a dangerous illusion.”

Doubts surfaced as to the effectiveness of large-scale, sustained bombing. As Army Chief of Staff Harold Keith Johnson noted, “if anything came out of Vietnam, it was that air power couldn’t do the job.” Even General William Westmoreland admitted that the bombing had been ineffective. As he remarked, “I still doubt that the North Vietnamese would have relented.”

The inability to bomb Hanoi to the bargaining table also illustrated another U.S. miscalculation. The North’s leadership was composed of hardened communists who had been fighting for independence for thirty years. They had defeated the French, and their tenacity as both nationalists and communists was formidable. Ho Chi Minh is quoted as saying, “You can kill ten of my men for every one I kill of yours…But even at these odds you will lose and I will win.”

The Vietnam War called into question the U.S. Army doctrine. Marine Corps General Victor H. Krulak heavily criticised Westmoreland’s attrition strategy, calling it “wasteful of American lives… with small likelihood of a successful outcome.” In addition, doubts surfaced about the ability of the military to train foreign forces.

Between 1965 and 1975, the United States spent $111 billion on the war ($686 billion in FY2008 dollars). This resulted in a large federal budget deficit.

More than 3 million Americans served in the Vietnam War, some 1.5 million of whom actually saw combat in Vietnam. James E. Westheider wrote that “At the height of American involvement in 1968, for example, there were 543,000 American military personnel in Vietnam, but only 80,000 were considered combat troops.” Conscription in the United States had been controlled by the President since World War II, but ended in 1973.”

By war’s end, 58,220 American soldiers had been killed, more than 150,000 had been wounded, and at least 21,000 had been permanently disabled. According to Dale Kueter, “Sixty-one percent of those killed were age 21 or younger. Of those killed in combat, 86.3 percent were white, 12.5 percent were black and the remainder from other races.” The youngest American KIA in the war was PFC Dan Bullock, who had falsified his birth certificate and enlisted in the US Marines at age 14 and who was killed in combat at age 15. Approximately 830,000 Vietnam veterans suffered symptoms of posttraumatic stress disorder. An estimated 125,000 Americans fled to Canada to avoid the Vietnam draft, and approximately 50,000 American servicemen deserted. In 1977, United States President Jimmy Carter granted a full, complete and unconditional pardon to all Vietnam-era draft dodgers. The Vietnam War POW/MIA issue, concerning the fate of U.S. service personnel listed as missing in action, persisted for many years after the war’s conclusion.

http://en.wikipedia.org/wiki/Vietnam_War