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B R E A K F A S T W I T H T H E F O O L Monday, November 13, 2000 benjamin.rogers@enron.com _________________________________________________________________ REGISTER TO BECOME A FOOL -- GET FREE STUFF! http://www.fool.com/m.asp?i=191755 _________________________________________________________________ Sponsored By: InvestorPlace.com Cisco. Intel. Oracle. Microsoft. Is now the time to buy or sell these and other top technology holdings? Find out now FREE in tech expert Mike Murphy's JUST-RELEASED FREE REPORT! http://www.lnksrv.com/m.asp?i=191756 "They seek to change others because they cannot change themselves." -- Scott Turow BUFFETT'S BERKSHIRE BAGS BETTER Q3 Holding company Berkshire Hathaway bests last year and moves farther into household names. By Tom Jacobs Holding company Berkshire Hathaway (NYSE: BRK.A) announced Q3 earnings Friday of $523 per Class A share, 90% over last year's $276. While earnings from operations jumped from last year's $103 to $197, Berkshire also reaped substantial investment gains. Class A shares closed Friday unchanged at $62,200, while the Class B shares (non-voting shares worth 1/30th of each Class A) for the commoners finished up $11 at $2043. Warren Buffett and Charles Munger steer Berkshire, whose wholly owned businesses include insurance, aviation, newspaper, candy, shoe, jewelry, and home furnishing companies. Berkshire also maintains large stock holdings in energy and name-brand U.S. stocks, such as Gillette (NYSE: G) and Coca-Cola (NYSE: KO). Because of Berkshire's holdings and insurance business, not many analysts follow the company -- The Motley Fool has one -- and the quarterly numbers are not as simple as they seem. For one thing, Berkshire's numbers vary considerably quarter-to-quarter, and much of the insurance business action occurs in the fourth quarter. http://www.lnksrv.com/m.asp?i=191757 http://www.fool.com/m.asp?i=191758 A big factor for an insurance business is float -- money paid in premiums that the insurer invests in hopes of a greater gain against future payout for claims. Berkshire's float increased by a healthy $1.3 billion in Q3. But underwriting losses at its General Re unit -- which have plagued Berkshire in the last several years --continued, with another $135 million loss on a contract there. However, Buffett believes that the loss will mean future investment benefits, stating, "From time to time we will have such transactions in the future and we will post you of their effects upon our current earnings. When priced properly, this pain-today, gain-tomorrow business is welcomed by us and benefits our shareholders." I'm one of those, and you gotta love words like that from a CEO. Buffett observed that advertising spent for Berkshire's GEICO insurance unit has not realized more than a nominal gain in policyholders. GEICO plans to cut back advertising for now, and Buffett believes that increased rates will lead to some improvement in profitability next year. The quarter saw more Berkshire moves into home furnishings, with proposed purchases of Shaw Industries (NYSE: SHX) and Benjamin Moore Paint. Berkshire shareholders tend to be rabid about their company and are already debating the numbers. http://www.fool.com/m.asp?i=191759 _________________________________________________________________ NEWS TO GO Fresh pork and processed meat producer and marketer Smithfield Foods (NYSE: SFD) offered to acquire all outstanding stock of No. 1 U.S. beef producer IBP (NYSE: IBP). The other white meat maker would pay $4.1 billion in stock and assumed debt for what's for dinner. This means Smithfield pays $25 per IBP share, 20% above IBP's Friday close of $20.88. The Internet Corporation for Assigned Names and Numbers meets this week in Marina del Rey, California, with its 800 members leading up to adding as many as 14 new domain names to join existing Internet suffixes .org, .com, .net, .edu, and .gov. New names would mean competition for VeriSign (Nasdaq: VRSN) ) whose Network Solutions purchase gave it control over the database for .com, .org, and .net. -- with full pricing and registration power. ICANN received 44 complete applications at $50,000 a crack. Some names reported include .web, .biz, .ecom, and .info for general topics; .nom, .per, and .i for personal home pages; and .health, .museum, and .union for specific content. (And .tom9 for -- just kidding!) ICANN has taken some heat for rejecting .kids and .xxx for porn sites, but ICANN staff held firm, saying that defining kids' sites would be problematic, and that porn sites couldn't be forced to take an .xxx suffix. The board's 19 members will act Thursday and it's reported that the new domains will be operational in Q2 2001. Netpliance (Nasdaq: NPLI) announced Sunday it would cut 38% of its workforce and refocus its business away from its poor-selling I-Opener Internet appliance, which combined the device with Internet access and Netpliance's consumer portal. Netpliance reported Friday a $41.9 million loss, or $0.69 per share, versus a loss of $6.5 million, or $0.20 per share, a year ago. The company intends to reorganize into two business units: Netpliance.net, offering next-generation services and hosted applications to broadband service providers, and Netpliance IPG, which will develop core infrastructure products to be installed in data centers, points-of-presence, and residential access devices. Though the company had $76.6 million in cash at the end of the September quarter, it's hard to see how it can expect to make headway in this area already filled with cash-rich competitors. A federal court in Delaware has ruled against GeneChip DNA array maker Affymetrix (Nasdaq: AFFX) in favor of the U.K.'s Oxford Gene Technology in a patent infringement case involving technology fundamental to Affymetrix's product technology. Two weeks ago a British appeals court ruled in favor of Affymetrix that it had a license when it purchased part of Beckman Coulter (NYSE: BEC) in 1999. According to reports, the U.S. court agreed with the British court on the Beckman Coulter-Affymetrix license transfer, so the sole issue is a 17-month period when Affymetrix paid no royalties to Oxford. Oxford sought $40 million -- which will not be tripled because the court reportedly found that Affymetrix did not willfully or knowingly infringe the patents. Affymetrix expects about $190 million in revenues from its GeneChip arrays and related equipment this year. CEO Stephen Fodor stated that "We don't think [the decision] will have a long-term effect. Our future is secure. So we're now talking about the past -- of about 17 months at the most and no trebling of damages.'' Reuters reports that chip giant Intel (Nasdaq: INTC) will announce two new Celeron processors chips, running at 733 megahertz and 766 megahertz, to further its hold on the sub-$1,000 PC market in the face of stiffening competition from Advanced Micro Devices (NYSE: AMD). AMD currently has the speediest chip on the market and is said to be undercutting Intel on price by 25%. The 766 will cost $170 per thousand and the 733 will cost $112 per thousand, giving you a pretty good idea of where the prices are in a low-cost PC box. Intel said that Compaq (NYSE: CPQ) and Hewlett-Packard (NYSE: HWP) will introduce systems using the chips. _________________________________________________________________ EDITORS' PICK Todd Lebor shares four simple yet profound investing mantras he learned from his Grandfather. http://www.fool.com/m.asp?i=191760 _______________________________________________________________ -News & Commentary http://www.fool.com/m.asp?i=191761 -Fool Community http://www.fool.com/m.asp?i=191762 -Post of the Day http://www.fool.com/m.asp?i=191763 -Latest Fribble http://www.fool.com/m.asp?i=191764 -Latest Market Numbers http://www.fool.com/m.asp?i=191765 ____________________________________________________________ My Portfolio: http://www.fool.com/m.asp?i=191766 My Discussion Boards: http://www.fool.com/m.asp?i=191767 My Fool: http://www.fool.com/m.asp?i=191768 Fool.com Home: http://www.fool.com/m.asp?i=191769 My E-Mail Settings: http://www.fool.com/m.asp?i=191770 Sponsored By: InvestorPlace.com Cisco. Intel. Oracle. Microsoft. Is now the time to buy or sell these and other top technology holdings? Find out now FREE in tech expert Mike Murphy's JUST-RELEASED FREE REPORT! http://www.lnksrv.com/m.asp?i=191771 FREE BOOK, JUST FOR FOOLS! Investor's Business Daily will send you a free copy of 24 Essential Lessons for Investment Success when you sign up for a free trial subscription of their newspaper. http://www.lnksrv.com/m.asp?i=191772 INVESTMENT OPPORTUNITIES IN STEM CELLS Get a free preview of this new report at Soapbox.com. http://www.lnksrv.com/m.asp?i=191773 FOOL DIRECT E-MAIL SERVICES Need to change your address or unsubscribe? You can also temporarily suspend mail delivery. Click here: http://www.fool.com/community/freemail/freemaillogin.asp?email=benjamin.rogers @enron.com< Have ideas about how we can improve the Fool Direct or new e-mail products you'd like to see? Try our discussion board: http://www.fool.com/m.asp?i=191774 ____________________________________________________ © Copyright 2000, The Motley Fool. All rights reserved. This material is for personal use only. Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. . MsgId: msg-25544-2000-11-13_9-30-50-3425098_2_Plain_MessageAddress.msg-09:32:05(11-13 -2000) X-Version: mailer-sender-master,v 1.84 X-Version: mailer-sender-daemon,v 1.84 Message-Recipient: benjamin.rogers@enron.com
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