Word: buffetts
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Stock options are another Buffett hot button. While that Sun Valley conference was under way last summer, Coke's board voted to begin treating the options it grants to executives and other employees as an expense that reduces reported earnings--which is how Buffett and increasingly others say they ought to be accounted for. Coke was just the third large company to make the change, preceded years earlier by Boeing and Winn-Dixie Stores. Since Coke made the move, about 150 others have piled on. The Financial Accounting Standards Board is widely expected to begin requiring such treatment of stock...
...Buffett is in fashion today--but that wasn't the case just a few years ago. In December 1999--about the same time Buffett presciently warned in FORTUNE that stock-market returns were on the verge of a dramatic and long-lasting slowdown--a writer at Barron's stated what many were thinking: "Warren Buffett may be losing his magic touch." As the Internet craze mounted through the '90s, Buffett had become a renowned technophobe. But consider this feat: during the past three grueling bear-market years, Berkshire stock has soared nearly 40%. Those remarkable returns came during a period...
...Buffett's investing savvy during those hard years has made his giant insurance businesses, Geico and General Re, the envy of their industry. While other insurers have lost billions investing the premium payments they receive, Berkshire's insurance units have benefited from Buffett's deft hand. For example, he got General Re to dump all its stocks before Berkshire bought the company in December 1998, ahead of the market's collapse. Now Geico and General Re have deep enough pockets to ride out the insurance industry's famously volatile cycles and capture more business in the long term as struggling...
...Buffett's influence over the influential is what gives his views so much currency. His position on an issue inspires strategy in places where he holds no board seat or investment stake. Look again at the earnings-guidance issue. Daft sought out Buffett. McDonald's made its announcement after CEO Jim Cantalupo had turned to one of his advisers--Don Keough, a former long-time Coke executive and FOB (Friend of Buffett). Keough had adopted Buffett's view. On the question of expensing stock options, Cathleen Black, president of Hearst Magazines, who sits with Buffett on the Coke board...
...Buffett declined to be interviewed for this story lest, he says, he be besieged by follow-up media requests. No time for all that while he's hard at work saving American business from itself. Yet he doesn't view himself as any sort of caped crusader. "I've never seen him try to push an agenda," says Black. Buffett's efforts tend to be understated. But now that he's becoming more vocal about his beliefs, he can expect more opposition. In an op-ed article in the Wall Street Journal, Harvey Golub, a director at Dow Jones...