What the World’s Richest 5 Could Buy

http://business.time.com/2014/03/03/what-the-worlds-richest-5-people-could-buy/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

You know that private island you've always dreamed of? These guys own them.

By Harry SwartoutMarch 03, 201418 Comments

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Bill Gates regains his title as “World’s Richest Person” in the new Forbes’ Billionaire list for 2014.  Gates spends so much of his money on charity that for four years, he was not listed as the richest of the rich.

But let’s face it: Every person on the Forbes list has a mind-boggling amount of money. Big ticket items like diamonds and houses represent incidental splurges for this group.  What would it look like if these moneybags decided to drop some serious coin?   What can that kind of money buy?

We decided to take a look at what this year’s top 5 could buy if they decided to blow it all in one glorious spending spree.

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How Much of Your Success Is Due to Dumb Luck? - TIME

How Much of Your Success Is Due to Dumb Luck?

http://time.com/12803/how-much-of-your-success-is-due-to-dumb-luck/

How Much of Your Success Is Due to Dumb Luck?

• The Drucker Exchange @DruckerInst
 

March 5, 2014

    

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Would you like the Mona Lisa if others didn’t? Would you still think Beethoven’s Pastoral Symphony was good? Would you still think the songs of the Beatles were superior to those of, say, Justin Bieber?

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In a report last week on NPR’sMorning Edition, Alix Spiegel raised the question of whether our collective aesthetic judgments are due more to chance than we think. She reported that a Princeton professor named Matthew Salganik has run an experiment addressing precisely this issue.

The test went as follows: Some 30,000 teenagers recruited online were separated into nine groups and exposed to a collection of 48 songs from emerging recording artists. They could download the ones they liked best for free. The findings? If they could see a history of what their peers in their group had already picked, the teens often joined the crowd, giving certain songs momentum. But the songs that emerged as leaders differed from group to group. A song that came in first in one group came in 40th in another.

“There were differences in the beginnings, and then the process of social influence and cumulative advantage sort of magnified those small, random initial differences,” Salganik told Spiegel.

The takeaway, in Salganik’s view, goes beyond music: “I think that if you believe that there’s a large role for chance in the outcomes that people have and the kinds of success that people have and also the kinds of failures that people have, it changes how you treat other people,” he said.

In other words, we ought to be a bit humbler about our success and recognize the role of luck.

As far as Peter Drucker was concerned, he maintained that some works of art have inherent qualities that elevate them into the realm of the sublime—regardless of audience differences. For instance, in the case of Dante’s Divina Commedia, it is the “multiplicity of levels on which this book can be read, from being a fairy tale to being a grand synthesis of metaphysics, that makes it the overpowering work of art that it is,” Drucker wrote in a 1969 essay on communication.

But not even the greatest art can be counted on to promote itself, and even Dante required sales and distribution. As Drucker wrote in Post-Capitalist Society, “Even the most solitary artists, writers or paintersdepend on others for their work to become effective—the writer on an editor, a printer, a bookshop; the painter on a gallery.”

And while luck has a big role in our lives, and many things are a matter of chance, long-term success tends not to be. “‘Opportunity is where you find it,’ says an old proverb. It does not say: ‘ . . . where it finds you,’” Drucker noted in Managing for Results. “Luck, chance and catastrophe affect business as they do all human endeavors. But luck never built a business. Prosperity and growth come only to the business that systematically finds and exploits its potential.”

What Ukraine Means for the Markets - TIME

What Ukraine Means for the Markets

http://business.time.com/2014/03/03/what-ukraine-means-for-the-markets/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

By Rana ForooharMarch 03, 20142 Comments

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Global markets have been falling on worries over conflict in the Ukraine. Is this the end of the multi-year bull market that has taken stocks to record highs recently? In a word no, but there are some important economic impacts that will be lasting; below, my top three market takeaways:

1. Oil prices will stay higher than they should be based on demand. There’s been a lot of talk in recent months about the impact of the shale oil and gas revolution in the U.S. We’ve got so much more energy coming online at home, surely it will mean lower prices, especially when you consider that big emerging markets like China are slowing and buying less oil, right? Wrong.
   The lesson from the Ukraine is that geopolitical risk matters a lot in oil markets – prices were already over $100 thanks to worries over conflict in Syria and general turmoil in the Mid-east. They are now being pushed up further as the situation in the Crimea heats up, even though other commodities have been falling because of slow demand. The world has enough energy – but just the perception that some of it may be cut off is enough to keep prices higher than they should be.
2. High oil and gas prices will allow Russia to play petro-politics with Europe, making effective sanctions difficult to implement. The U.S. isn’t dependent on Russian gas, but Europe gets about 40 percent of its supply from Russia, much of it via pipelines that flow through the Ukraine. Germany and the Netherlands in particular will be affected, in part because of bad energy policies that have already pushed up prices in those markets.
   German banks also have large investments in Russia, so Europe may not be able to play tough on sanctions. Why can’t the U.S. just export some of its gas to Europe if Russia plays hardball? Because unlike oil, gas is a localized market – and the first American LNG export terminal won’t be completed until next year.
3. U.S. blue chips will likely rebound, but mainly because of the “prettiest house on an ugly block” phenomenon. I’ve been worried about frothy U.S. markets for some time .(U.S. large cap stocks are trading at 17 times earnings, close to the multi-year highs of last year.) Technology in particular feels like it’s in bubble territory ($19 billion for WhatsApp? What?).
   But look around – where else are you going to put your money if not in high quality U.S. stocks? Even before the trouble in the Ukraine, emerging markets were doing badly – Russia and Turkey are tanking, India and Brazil are stalling and China is brewing up a real estate bubble that could make pre-2008 Florida and Arizona look like small potatoes. Europe is trying to stave off deflation, double-digit youth unemployment and possibly now higher energy prices thanks to the trouble in the Ukraine. Meanwhile, the U.S. will grow faster than the world economy as a whole this year. Valuations may be inflated, but it’s only after this bout of geopolitical conflict is over that we will we see a correction that really reflects whether the Fed inflated bull run has come to an end.

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Why Warren Buffett Thinks the Economy Is Going to Be Just Fine - TIME

Why Warren Buffett Thinks the Economy Is Going to Be Just Fine

Read more: Why Warren Buffett Thinks the Economy Is Going to Be Just Fine | TIME.com http://business.time.com/2014/03/03/buffett-economic-growth/#ixzz2uzMmq41l

Steady growth ahead

By Associated PressMarch 03, 2014Add a Comment

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OMAHA, Neb. — Investor Warren Buffett says the economy continues the steady improvement that began in fall of 2009 and he remains optimistic about the future.

Buffett appeared on the business cable channel CNBC Monday morning after releasing an upbeat annual letter to his Berkshire Hathaway shareholders over the weekend. Buffett is chairman and CEO of the Omaha, Neb., conglomerate.

Buffett says the reports he gets from Berkshire’s 80-odd subsidiaries in a variety of industries show that the economy is growing at a moderate rate.

He notes that there’s been little change in the growth rate since 2009, despite swings in investors’ mood.

But Buffett says he doesn’t make investment decisions based on the economy. He says he focuses on the prospects of the business in which he’s investing, and the price.

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The Truth About Warren Buffett’s Money - TIME

The Truth About Warren Buffett’s Money

http://business.time.com/2014/03/01/warren-buffet-berkshire-hathaway-2013-earnings/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

He's got more than ever

By Sam Frizell @Sam_FrizellMarch 01, 20147 Comments

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Warren Buffett, Chairman and CEO of Berkshire Hathaway answers questions at a press conference in November, 2013

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Warren Buffett’s investing conglomerate saw record profits in 2013 of $19.5 billion, riding a wave of economic improvement in the United States, the company said in its annual report released Saturday.

Buffett’s holding company Berkshire Hathaway exceeded analysts’ expectations of $18 billion and saw significant gains over 2012, when it posted net profits of $14.8 billion.

The company’s stellar performance depends on well-known consumer goods and services that do well in economic boom times, as Buffett chiefly invests in established, large companies like Walmart, General Motors, American Express, and Coca-Cola.

Buffett’s annual shareholder letter, known for its rustic tone, emphasized his commitment to supporting American companies for the long term.

“Who has ever benefited during the past 237 years by betting against America? If you compare our country’s present condition to that existing in 1776, you have to rub your eyes in wonder. And the dynamism embedded in our market economy will continue to work its magic,” the so-called “Oracle of Omaha” said in the letter. “America’s best days lie ahead.”

Berkshire purchased major assets of NV Energy and H. J. Heinz Geico, which “will be prospering a century from now,” Buffett said. Berkshire’s insurance company reported a $394 million operating profit in the fourth quarter.

Buffet’s conglomerate didn’t edge out the S&P 500, which grew at a phenomenal rate of 32.4% last year, while Berkshire saw a gain in per-share book value of 18.2%. Since 1965, Berkshire has seen a compounded annual gain of 19.7%, while the S&P 500 has increased 9.8%.

Buffett, 83, has helmed Berkshire for more than half a century and overseen its growth into a $288 billion holding company.

Read more: Warren Buffett's Berkshire Hathaway Boasts Record $19.5 Billion Profits | TIME.com http://business.time.com/2014/03/01/warren-buffet-berkshire-hathaway-2013-earnings/#ixzz2utScKMD9