Case Study of Warren E. Buffet
analytical Essay
731 words
Case Study of Warren E. Buffet
In 1995 Berkshire Hathaway has made a bid for the shares of GEICO.
This report reviews the offer made by Warren Buffet and will try to
prove that the acquisition of GEICO will serve the long-term goal of
Berkshire Hathaway and the bid price was appropriate. Furthermore, it
will explain what may have caused for the share price increase for
Berkshire Hathaway at the announcement of GEICO’s acquisition.
Would the GEICO acquisition serve the long-term goals of Berkshire
Hathaway?
In 1976, Warren Buffet paid $45.7 million for 34.25 shares of GEICO.
Review of GEICO’s historical dividends shows that GEICO has been a
very profitable investment for Berkshire Hathaway. The growth rate for
1994 is a sharp increase, but even if the growth rate for 1994 is not
considered, GEICO’s historical increase in dividends has been
considerably high so that acquisition of GEICO will serve the
long-term goals of Berkshire Hathaway.
What might account for the share price increase for Berkshire Hathaway
at the announcement?
Review of Warren Buffet’s historical investment success might explain
the increase in share price for Berkshire Hathaway at the
announcement. Given that he has had a good track record, it is
expected that shareholders respond positively. In 1977, the price of
Berkshire Hathaway was $89 closing at $25,400 by 1995, an unparalleled
annual growth of 37.7%. In comparison, the growth rate of the S&P 500
over the same period was 14.3%. Warren Buffet’s formidable investment
performance was also demonstrated when Berkshire Hathaway acquired
Scott & Fetzer. Berkshire Hathaway paid $315 million for Scott &
Fetzer in 1985 after which they received significant dividends. Again,
Buffet’s investment performance on the acquisition of Scott & Fetzer
outperformed the S&P 500 evident by an internal rate of return (IRR)
of 26.4% including the 1994 cash flow or 14.9% without 1994 cash flow
on the Scott & Fetzer investment.
Clearly, Warren Buffet’s positive investment performance carried a
significant weight and influences the market to have a more optimistic
outlook on his investments. Conversely, his historical records of
investment success do add value to shareholders trust.
Was the bid price appropriate?
GEICO Corp was selling for $55.75 at the time Warren Buffet and
Berkshire Hathaway made an offer of $70 including a 26% premium over
the current GEICO stock price. One would expect that what appeared to
be an overprice bid would lead to a negative market reaction. On the
contrary, Berkshire Hathaway’s shares closed up 2.4% for the day for a
gain in market value of $718 million after the announcement. The
gain’s effect was twofold – it increased the value of GEICO shares
(34.25 million) Berkshire Hathaway already owned and it also made the
In this essay, the author
- Analyzes the case study of warren e. buffet's bid for geico and explains what caused the share price increase for berkshire hathaway.
- Analyzes how the geico acquisition serves berkshire hathaway's long-term goals. warren buffet paid $45.7 million for 34.25 shares of the company in 1976.
- Explains that warren buffet's historical investment success might explain the increase in berkshire hathaway’s share price at the announcement.
- Compares berkshire hathaway's growth rate of 37.7% to the s&p 500. warren buffet’s formidable investmentperformance was also demonstrated when they acquired scott & fetzer.
- Analyzes buffet's investment performance on the acquisition of scott & fetzeroutperformed the s&p 500 evident by an internal rate of return (irr) of 26.4% including the 1994 cash flow.
- Asks whether warren buffet and berkshire hathaway's overpriced offer would lead to a negative market reaction.
- Explains that berkshire hathaway made a gain of $488 million due to shares they already owned.
- Explains that berkshire hathaway's value of $73.39 represented added value given that the company would pay only $70 per share.
- Explains that the risk-adjusted discount rate for the cash flows from geico stock was estimated to be 11%.
- Explains that agency theory is the theory of the relationship between principals (shareholders) and agents (managers), and that there is a potentialconflict of interest between principals and agents if their goals are not aligned.
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In this essay, the author
- Analyzes how jeffrey skilling and kenneth lay exhibited legitimate power by having an executive position within enron corporation. they became greedy as they held their chief executive officer and president positions.
- Explains that the executives of enron were in that position because they were intelligent and knew the system. they had the skills and knowledge needed to excel in their positions.
- Describes how enron became one of the top leaders in the natural gas industry after the deregulation of pipeline regulations by the us government.
- Explains that transactional leadership is a style of leadership that sets clear objectives and goals for constituents. enron executives used this approach by offering bonus incentives and company perks to employees who produced substantial profits for the firm.
- Explains that transformational leadership by definition is a style of leadership in which the leader realizes the need for change.
- Explains that reward power relies on the ability to bring something of value to other people.
- Explains that jeffrey skilling and kenneth lay were competent in business standards, accounting practices, and investment decisions. they were transactional leaders who abused the power given to them.
- Opines that an effective leader must adapt their leadership styles to the needs and personality types of their employees.
2437 wordsRead More - Enron's Case Studyexplanatory essayKenneth Lay – Lay was the Enron founder and later known as the dishonorable Enron business executive who was ultimately convicted of conspiracy and fraud. Lay was born in Missouri in 1942. He was very smart; he got his bachelors, masters and Ph.D. in economics. He started his carrier as economist and speech writer, then lecturer and assistant professor, but latter he got to be an energy deputy under-secretary for the United States Department of Interior. He also got to be the Florida Gas Company vice-president and then president, and other high standing positions with The Continental Group, Transco Energy Company, Houston Natural Gas Corporation, and of course Enron’s chairman, CEO, and president. In 1985, Lay formed Enron after
In this essay, the author
- Describes kenneth lay, the founder of enron, who was convicted of conspiracy and fraud.
- Explains that andrew fastow was born on december 21, 1961 in washington d.c. and was the son of middle class jewish parents who worked in retail and merchandising.
- Introduces sherron watkins, a certified public accountant, who started her career in 1982 as an auditor for arthur andersen.
- Explains that arthur andersen was the 5th largest audit company until enron collapsed.
- Describes jeff skilling as the "smart guy" who resigned from enron in 2001 before it collapsed in december 2001.
1341 wordsRead More - Rise Of Enron Essayanalytical essayEnron formed in 1985 when InterNorth merged with Houston Natural Gas, whose CEO Kenneth Lay would become the CEO of the newly formed Enron, who at its peak was worth 70 billion dollars. Lay held a Ph.D. in Economics. Lay was also a contributor to being granted deregulation and the ability to sell energy on the free market. It was this deregulation that caused Ken Lay to see the money he could make in energy and what ultimately caused Enron to form. This is what Ken Lay had dreamed of since he was a child, not wanting to be poor. And Enron was going to deliver this to him. After-all he had something the whole world needed (energy with a price that flowed and fluxed with the market). Combine this with his ability to create a market which allowed
In this essay, the author
- Analyzes how ken lay was granted deregulation and the ability to sell energy on the free market, which led to the formation of enron.
- Explains that jeffrey skilling, who would later end up working at enron, would not immediately start at the main company.
- Describes how andy fastow used structured finance to hide the debts of enron and raise the stock price.
- Explains that mark-to-market accounting allowed enron to estimate the value of all long-term deals. they were the first non-financial company to use this method.
- Explains that enron was considered one of the best and most innovative companies in the world, and the seventh largest company in terms of size.
- Narrates the aftermath of the enron energy services debacle and the sarbines-oxley act of 2002.
- Explains that the banks involved in fastow's fake companies said they had no idea about enron’s intentions with these deals. ken lay was convicted of all six counts of security and wire fraud but "died" of heart problems in june.
1854 wordsRead More - Enron Case Studyexplanatory essay#4 The Enron Company was created in 1985 when Inter-North took up Houston Natural Gas. After the formation of the new company, Enron pursued many non-energy related fields of business including internet bandwidth, risk management, and weather insurance for seasonal businesses. Enron was extremely successful in their different businesses and, their numbers were showing that they were highly profitable and successful as a business. Because their numbers were extremely excellent, investigations began into their business, offshore partnerships, and accounting journals.
In this essay, the author
- Explains that the enron company was created in 1985 when inter-north took up houston natural gas. they pursued many non-energy related fields of business including internet bandwidth, risk management, and weather insurance for seasonal businesses.
- Explains that jeff skilling, the president of enron's trading operations, persuaded federal regulators to allow them to operate their business on a system called market to market accounting.
- Explains how enron's contracts with customers and other parts of its business were projected into the accounting numbers to manipulate projections to inflate business revenue.
- Explains that the market to market technique caused many problems for people to see how enron was making profits. skilling said their accounting method permitted their company to make money, project the earnings, and grow without bringing in a lot of taxable cash.
- Explains how enron's business was constantly buying new business ventures and forming off balance sheet entities to make their credit rating extremely high.
- Explains how the company's first tragedy occurred when the telecom industry fell, and financial analysts began to look into how enron made its profits.
- Narrates how enron's stock fell from $86 to 30 cents in 2001. employees lost their jobs, and investors went bankrupt.
- Explains that kenneth lay, the current ceo at the time, was charged with violating antifraud, periodic reporting, books and records, and internal controls provisions of the federal securities laws.
- Analyzes lay's defense argument that there was "wickedness" and pressure during the financial break down of the company which made company employees and leaders confess to fraud.
- Explains that the securities act of 1933 ensures clear financial statements to investors so that they can make accurate investment decisions. enron had violated both parts of the act.
- Explains that the securities exchange act of 1934 set requirements for businesses to register all securities listed within stock exchanges, disclosure, proxy solicitations, and margin and audit requirements. enron violated this by not honestly and clearly stating their income statements on their accounting records.
- Explains lay was tried for securities and wire fraud and was convicted for all of them. skilling was found guilty on conspiracy, insider trading, five false statements to auditors, 12 accounts of securities fraud, and not guilty.
- Explains that enron was charged with violating the employee retirement income security act of 1974 (erisa).
- Explains that skilling was charged and found guilty for securities fraud, making false representations to auditors, and insider trading. he defended himself by saying that the jury was biased because it was in houston where enron’s headquarters were.
1249 wordsRead More - Japanese Economic Developent Post World War IIexplanatory essaygrowth is one of the greatest of any nation in that period. It is now one of the world’s biggest
In this essay, the author
- Opines that the u.s. fleet in hawaii is a dagger pointed at our throat.
- Narrates how japan was torn between wanting to continue the war and wanting peace.
- Opines that the u.s. would now protect japan.
- Analyzes how japan's reforms helped it develop as a free nation.
- Describes japan's actions during world war ii, including demobilizing the armed forces and disbanding the army.
- Explains that macarthur had some of his own ideas for the born again.
- Narrates how the emperor endorsed the document and it went into effect.
- Explains that fair trading enforced fair trading and put a stop to monopolies that once ruled
- Explains that the 1960's were known as the era of rapid growth for japan.
- Explains that the second cause was the new industrial policy from the ministry of trade and industry in 1959.
- Explains that this idea created broader trade because the products were similar in quality to those in the industry.
- Explains that there was a shortage of workers for the industries, which drew workers from agriculture.
- Describes tokyo's population, which went from 3 million in 1945 to 9 million, in 1970.
- Explains that japan was losing their place in the global economy by the middle of the 1970's.
- Opines that embargoes of oil and soybean exports made japan feel that once again the world was against them.
- Explains that the japanese economy had become one of the world's largest economies by the 1980s.
- Narrates how the market rose 500 percent (time.com). the largest securities markets in the world.
- Explains that japan's trade with the world kept the country alive, and its exports stabilized its economy.
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- Explains nippon telegraph and telephone (ntt) is one of the largest private companies in the world.
- Explains that ntt is only able to do this with the help of the japanese.
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- Describes the reasons why japan has become the world's most advanced country.
- Explains that japan was a huge militaristic power in world war ii. their aggressive behavior caused them to be stripped of their military and their power for self.
- Explains that germany and japan had united to take over europe, russia, and the pacific islands. the focus of the japanese was to conquer china.
- Describes how the japanese sunk or damaged 18 ships, including eight battleships, at pearl harbor, in hawaii, killing 2,400 americans and wounding 1,000 others.
- Explains that the u.s. and japan played tug-of-war for four years until the united states had had enough. newly elected president harry truman warned the japanese.
- Narrates how the u.s. dropped a second atomic bomb over japan three days after hiroshima. the bomb killed 37,500 instantly.
- Explains that the japanese surrender was signed by the foreign minister and then by general umezu yoshijiro and concluded with a separate surrender with china in nanking on september 9, 1945.
- Explains that the most important reform carried out by the occupation was the establishment of a new constitution.
- Narrates how macarthur and the u.s. military left japan on april 28, 1952, and japan was declared a sovereign nation.
- Explains that japan's economy at the return of independence in 1952 was in the process of growth and change.
- Explains that as the economy took change, so did the social life of the japanese. the decline in birth rate stabilized the population.
- Explains how japan expanded its raw materials sources in the 1970s and 80s, and became a firm advocate of international free trade.
- Explains that japan is the largest donor in developmental aid and the world's leading net creditor.
- Explains that japan's network of telecommunications and postal services is among the best in the world.
- Opines that japan's economic growth is one of the greatest of any nation in that period.
2468 wordsRead More - Enron Case Studyexplanatory essayEnron was an American energy, commodities, and services company that was based out of Houston, Texas. Enron was created by the joining of two natural gas companies, InterNorth Inc . of Omaha, Nebraska and Houston Natural Gas. Enron had a rapid rise to become one of the biggest corporations in the United States at the time and also became one of the biggest business collapses in United States history. I will talk about how Enron came into existence and how it ultimately failed.
In this essay, the author
- Describes kenneth lay as the ceo of houston natural gas and enron after samuel segnar stepped down. he attended the university of missouri and earned a bachelor and masters degree in economics.
- Explains that the two natural gas companies would merge in 1985 to create enron, according to daniel rosenheim of the chicago tribune.
- Explains that the merger would create a giant energy corporation with the nation's second-largest natural-gas pipeline system, stretching from canada to the texas panhandle.
- Explains that analysts considered $70 a share an excessive price and predicted that internorth's earnings would be diluted by the deal.
- Explains that even when the company was first merged some people were skeptical if it would work. samuel segnar stepped down and made kenneth lay the new ceo of enron.
- Describes enrononline as the first web-based transaction system that allowed buyers and sellers to buy, sell, and trade commodity products around the world.
- Explains how enron became aggressive and traded in everything, including newsprint, television advertising time, insurance risk, high speed data transmission, and many more. they used many different tactics to hide their losses.
- Explains that jeffrey skilling and kenneth lay were convicted of conspiracy and fraud in what might be the biggest corporate fraud cases ever.
- Opines that businesses cannot get away with scamming the entire u.s. without them finding out. the society wants to see the economy grow and make money, but people want to do it fairly.
- Explains how enron was created by the joining of two natural gas companies, internorth inc. of omaha, nebraska, and houston natural gas.
- Explains how enron became the largest seller of natural gas by 1992. the company used wall street magic to transform energy supplies into financial instruments that could be traded online.
- Explains how enron used the mark-to-market method to finance a power plant without putting the entire firm at risk.
- Explains that the crash of enron into bankruptcy and the ensuing court cases happened after an investigation uncovered an elaborate conspiracy to prop up the company’s stock prices by overstating its financial well-being.
- Analyzes how the court ruled that the publicity and community prejudice did not prevent skilling from receiving a fair trial.
- Explains that president bush signed the sarbanes-oxley act of 2002, which mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures, and combat corporate and accounting fraud.
2992 wordsRead More - Lehman Brothers Case Studyanalytical essayThe history of Lehman Brothers (LBs) is dated back to 1844 when Henry Lehman and his two brothers established a small shop in Alabama (United States) to sell groceries and other commodities (Geisst, 2001). In the early 1900’s, they formed to a greater business company trading on the New York exchange market and the Cotton Exchange, which successfully promoted the family business to the retail giants with a partnership with Goldman and Sachs (Geisst, 2001; Wechsberg, 1966). Subsequently, the further opportunity raised in collaboration with some firms in the railway industry such as the Baltimore and Ohio railways, Chicago railways and others (Harward Business School, 2012). In 1975, the company achieved its success when it became the 4th largest investment bank in the US by merging with Kuhn, Loeb and Company, which boosted their financial activities in the financial market (Sloane, 1977). In the new line of business by diversifying their operations from a small shop via investments in the industry sectors, eventually they transformed to the company operating in the banking and brokerage (Geisst, 2001). Although LBs experienced remarkable successes and achievements, the housing market bubble in USA led to their collapse causing that in September 2008 the company filed for chapter 11 bankruptcy petitions that triggered a negative flow of consequences (Caplan et al., 2010).
In this essay, the author
- Explains the history of lehman brothers (lbs) which dates back to 1844 when henry and his brothers established a small shop in alabama to sell groceries and other commodities.
- Analyzes how a banking failure of lehman brothers had significant negative influence on economics and financial markets worldwide.
- Argues that despite various opinions, the single standpoint is not provided on the question what contributed in the demise of the company and triggered the financial crisis subsequently.
- Analyzes how lbs' investments in the housing market led to a failure. the company's unethical behaviour, complexity of structure, insufficient valuation, and misrepresentation of financial statements were contributing factors.
- Analyzes how lbs manipulated its financial position to display a healthier picture of the company, which improved their leverage ratio and issued fictitious positive results.
1203 wordsRead More - Case Study: Enron Corporationanalytical essayEnron, the US Energy Trading and Utilities Company grows in just 15 years into one of America’s largest and most successful Corporations. Enron’s officials ignored warnings of accounting irregularities, as they pocketed millions of dollars in stock market gains. When the company collapsed, they declared bankruptcy and thousands of people are thrown out of work. The investors, including most of Enron’s employees lose billions, as Enron’s shares sink to penny stock levels. The top executives walk away with millions in profit until the government comes calling.
In this essay, the author
- Analyzes how enron, the us energy trading and utilities company, grows in just 15 years into one of america's largest and most successful corporations.
- Describes how kenneth lay, 43, merges huston’s natural gas and omaha, nebraska's internorth to form enron corporation.
- Analyzes how enron was worth $70 billion in the 1990s to 2000s, and its stock reached an all-time high of nearly $91 per share. lay retired in 2001, leaving skilling with the ranges.
- Explains how enron's executives and insiders began to sell their own stock to capitalize on it. lay and skilling made over a billion dollars' profit by selling 17 million shares of stock.
- Analyzes how enron's stock began plummeting after jeff skilling unexpectedly resigned and cashed in nearly $60 billion in shares, prompting the securities and exchange commission investigation.
- Explains that andrew fastow was the first of the enron executives to be indicted by the federal government on 78 counts of fraud, conspiracy, money laundering, and insider trading.
- Analyzes how the enron scandal is a lesson in corporate greed, but it also brought about much needed change in corporate auditing procedures.
848 wordsRead More - Buffett Case Studyanalytical essayGrowing up, kids have high aspirations and believe that they can do anything. Often kids say they want to be a fireman, an astronaut, or other heroic jobs that they seem to be fascinated on. This though was not the case for Warren Buffett. From Buffett himself, he states:
In this essay, the author
- Analyzes how buffett builds trust through letters he writes to his shareholders at berkshire hathaway, which shows his credibility and integrity.
- Explains that buffett uses what bennis calls innovative learning when investing in a stock. he does not normally invest in companies that dealt with dsl, cable, and other technological advances.
- Explains that buffett is conservative with his investments, but investing is still a risky practice. he has taken risk and failed but through these mistakes learned lessons.
- Illustrates how buffett excelled through chaos during the great recession. he invested around 25 billion in several companies and made a 10 billion dollar profit.
- Explains buffett's aspirations of being a fireman, astronaut, or other heroic jobs, but he didn't want to be an astronaut. his stockbroker father taught him the basics of supply and demand.
- Analyzes how buffett's three-day conference is a way to treat his stockholders for staying with him. the promise to donate 99 percent of all of his charities after he dies shows his integrity.
- Explains that buffett is a leader in every sense of the word, and that he learned from his mentor graham that all successful leaders need great followers to make their goals happen.
1804 wordsRead More - Enron Case Studyanalytical essayWhat were the key criticisms levied by different interest groups against Enron and the Dabhol Power Project? Discuss whether these concerns were valid, given particularly India’s priorities and problems, as a transition economy.
In this essay, the author
- Explains that a world bank report questioned the guarantee arrangement because, in its opinion, it was nothing more than an loan made by the federal government on behalf of the mseb if it could not cover its payments to enron.
- Explains that the revised agreement expanded phase i of the project from 695 to 740 megawatts, and committed the state to both phase i and phase ii.
- Explains that in 2001, power from dabhol was four times more expensive than that from domestic power producers. these financial problems were expected to dramatically worsen after phase ii came on line.
- Argues that dabhol power project had no competitive bidding on it, critics argued that rs2.40 per unit was too high and that the company would be making huge profits.
- Analyzes how enron's criticism was directed at its lack of competitive bidding for its principal equipment supplier, general electric, and its construction partner, bechtel.
- Explains that enron was also criticized for its plan to import gas for phase ii from its gas processing plant in qatar.
- Describes the key criticisms levied by different interest groups against enron and the dabhol power project.
- Analyzes how the munde committee reviewed the dabhol project and found that the initial memorandum of understanding was rushed and one-sided, condemned the absence of competitive bids and lack of transparency in the process.
- Explains how indian communities and other indian interest groups strongly opposed the dabhol project throughout its development.
799 wordsRead More - The Bernie Madoff Ponzi Schemeanalytical essayThe Bernie Madoff Ponzi Scheme is a well-known case and is known as one of the biggest Ponzi scheme’s. In summary the scheme occurred for many reasons that I will some up into 3 points; A lack in competency by regulatory agencies, a lack of regulation, and finally a breach in ethics by Bernie Madoff himself. To explain further, the regulatory agencies like the lawyers and SEC are supposed to prevent schemes such as this one from happening but because they lacked the skills to correctly assess the situation, interpreting the number of tips they had received regarding scheme that had been filed, and to act on those in an efficient manner. One of the tips was made by Harry Markopolos in 2000, of who correctly predicted that Madoff was guilty of fraud. Even after this tip from Markopolos, Madoff was not arrested until 2009. Many family members were also a part of the fraud along with some non-family members such as Frank DiPascali and a team known as the 17th floor team, who helped Madoff carry out his fraud. The idea behind Madoff’s fraud was that he would produce false statements of their investments and when people wanted to pull out their investments, the money wasn’t actually there, which rightfully rose more than a few eyebrows and ultimately led to his arrest.
In this essay, the author
- Explains that the bernie madoff ponzi scheme is a well-known case and is known as one of the biggest ponzie schemes.
- Explains that reputation and trust are important to pretty much everyone, but individuals have different values, attributes, and priorities that guide their decisions and behavior.
- Analyzes how kramer's article explains that bernie madoff used the value of trust in an unethical way.
- Opines that managers should manage in a way that brings good people into the organization and makes them want to stay. managers, especially immediate supervisors determine whether employees stay with or leave the company.
- Explains that bob mcmahon was fired because of his ethical behavior. madoff did not want ethical people working for him because they would not be agreeable to his scandal.
- Explains that madoff traded his managed accounts through his affiliated broker-dealer bmis, which executed and cleared these trades, and all assets were custodied and administered within his organization.
- Opines that good managers prevent problems and ethics scandals, while poor managers mire their organizations in controversy and scandal.
- Analyzes how bernie madoff is narcissistic and blames everyone but himself in the ponzi scheme.
- Analyzes how bernie madoff was disguised as a trusting person to those around him. he made people feel superior, and then did the unthinkable.
- Argues that the madoff ponzi scheme and the bennett funding scheme were ponzi schemes, but were different in the aspect of size.
- Opines that increased authority for the sec would make fraud harder. madoff's fraud pales in comparison to the misdeeds of wall street firms.
- Analyzes how the management structure of bmis was non-extent, leading to ethical dilemmas. investors trusted madoff too easily, because of his impressive reputation, and chose to invest with him.
- Explains that bernie madoff was the biggest stakeholder in the ponzi scheme. he lost his reputation, his family, and the rest of his life.
- Opines that the madoff case has taught them a number of valuable lessons. one lesson is to be mindful that your values are not being taken to the extreme because they can go from being seemingly ethical to unethical.
2602 wordsRead More - Warren Buffett Case Studyanalytical essayWhat is the possible meaning of the change in stock prices for Berkshire Hathaway and Scottish Power plc on the day of acquisition announcement? Specifically, what does the $2.55 billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp?
In this essay, the author
- Analyzes how buffet's bid for pacificorp was $9.4 billion, which falls out of the range of possible values. buffett may make a purchase as long as the bid is at the price below or equal to the intrinsic value.
- Analyzes the possible meaning of the change in stock prices for berkshire hathaway and scottish power plc on the day of acquisition announcement.
- Explains the range of possible values for pacificorp based on the multiples for comparable regulated utilities.
- Analyzes how berkshire hathaway has performed impeccably in the last 40 years. they believe that investing in midamerican energy holdings was a smart decision.
- Evaluates berkshire hathaway's investment in buffett’s big four: american express, coca-cola, gillette, and wells fargo.
- Explains warren buffett's view of intrinsic value, its importance, and the way to estimate it.
- Explains buffett's investment philosophy, which is based on the principle of "value creation: time is money".
- Opines that berkshire hathaway's shareholders should endorse the acquisition of pacificorp.
1809 wordsRead More - The Madoff Ponzi Schemeexplanatory essayBernie Madoff began his career as an investment broker in 1960, where he legally bought and sold over-the-counter stocks not listed on the New York Stock Exchange (NYSE). From the 1960’s through the 1990’s, Madoff’s success and business grew substantially, mainly from a closed circle of known investors and friends through word of mouth. In the 1990’s Bernard L. Madoff Investment Securities traded up to 10 percent of the NASDAQ on any given day. With the success of the securities business, Madoff started an illegal money-management business, promising his investors consistent returns from 10-12 percent, unheard of returns at the time, which should have tipped off most investors that something was amiss.
In this essay, the author
- Explains that hsbc, fred wilpon, and saul katz have agreed to pay $62.5 million, while globeop financial services llc will pay $10 million to settle allegations of funding feeder funds associated with fairfield greenwich group.
- Explains that an apple doesn't fall far from the tree, a classic reference to the illegal and unethical acts performed by the madoff parents passed down to bernie and peter.
- Explains that bernie madoff began his career as an investment broker in 1960, where he legally bought and sold over-the-counter stocks not listed on the new york stock exchange.
- Describes how bernie madoff, son of ralph and sylvia, grew up in a modest three-bedroom home outside of queens, new york.
- Describes how madoff's investment firm grew from $7 billion to over $50 billion, with investors like grupo santander, fortis bank, union bancaire, and the abu dhabi investment authority lured into the scheme.
- Opines that the madoff family will face years of civil suits as individuals, funds and government entities try to recover assets and repair some of the damage left in the wake of bernie.
- Cites barlyn, s., and larson, e.
3353 wordsRead More - Jordan Belfort: The Wolf of Wall Streetanalytical essayJordan Belfort is the notorious 1990’s stockbroker who saw himself earning fifty million dollars a year operating a penny stock boiler room from his Stratton Oakmont, Inc. brokerage firm. Corrupted by drugs, money, and sex he went from being an innocent twenty – two year old on the fringe of a new life to manipulating the system in his infamous “pump and dump” scheme. As a stock swindler, he would motivate his young brokers through insane presentations to rile them up as they defrauded investors with duplicitous stock sales. Toward the end of this debauchery tale he was convicted for securities fraud and money laundering for which he was sentenced to twenty – two months in prison as well as recompensing two – hundred million in restitution to any swindled stock buyers of his brokerage firm (A&E Networks Television). Though his lavish spending and berserk party lifestyle was consumed by excessive greed, he displayed both positive and negative aspects of business communications.
In this essay, the author
- Describes jordan belfort as a stockbroker who was corrupted by drugs, money, and sex, manipulating the system in his infamous "pump and dump" scheme. he was convicted for securities fraud and money laundering.
- Analyzes how jordan belfort demonstrated the incontrovertible advantages of positive business communications before being cultivated with cocaine and hookers as the key to wall street success.
- Analyzes how jordan belfort's rambunctious presentation style riled up his young brokers with confidence and body language. he emphasized the four key elements of speech: voice quality, style, word choice, and adaptation.
- Analyzes how jordan belfort imitated memos and scripts to establish a point and network information to departments or individuals. the script informed brokers to target the wealthiest one percent of americans.
- Analyzes how jordan belfort was effective in business communications because he integrated three basic methods that made even the most numskull employees seem brilliant.
- Explains that fraud is the deliberate trickery of deceit to obtain a profit or dishonest advantage over someone. jordan belfort trained his employees to intentionally lie to clients to earn substantial amounts of money.
- Analyzes how jordan belfort let his emotional distractions get the better of him while conducting business in the workplace.
- Analyzes how belfort's refusal to step down was a poor excuse for business communications as it was an disregard for survival of the firm.
- Analyzes how jordan belfort exemplified most of the qualities we only wish to acquire in our lifetime. his morals of honesty and credibility became corrupted with the principles of lying and manipulation.
- Explains that belfort, jordan, is of the wolf of wall street.
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