After 40 Years, Warren Buffett Is Selling This Long-Time Investment

Enjoy these three reads to satisfy your Foolish curiosities in investing, business, and life!

40 years and 12.3% annual returns later, Buffett says "Sell!!"

Last year, Amazon.com CEO Jeff Bezos made headlines, and sent shock waves through the publishing world, when he purchased The Washington Post. Bezos did not buy the other units owned by Graham Holdings (NYSE: GHC  ) , the current entity that formerly owned The Post, including the company's cash cow, education company Kaplan.

Warren Buffett and Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) , the largest shareholders of Graham Holdings, have now decided to divest from the new company. Reported by Fortune, Buffett is negotiating a deal to trade his shares of Graham for shares of Berkshire owned by Graham.

Apparently, The Oracle of Omaha sees greater upside for Berkshire's future than Graham's without The Post:

According to a late Wednesday filing on the SEC's website, Berkshire and Graham Holdings are negotiating a stock swap that would involve Berkshire handing its 1.7 million shares of Graham Holdings back to the company. In return, Buffett's company would get the Berkshire shares that Graham Holdings owns, currently held in part through the Graham Holdings pension plan.

But that wouldn't be the end of the deal. Berkshire holds considerably more Graham Holdings shares then Graham owns of Berkshire. According to the filing, Berkshire may end up acquiring a division of Graham Holdings to make up the difference. 

And to boot, the deal is structured to be tax free!

How large corporations provide employee health care without actually buying any insurance

This week, AOL (NYSE: AOL  ) CEO Tim Armstrong made headlines after blaming rising health-care costs for the company's decision to reduce and withhold retirement matches on employee 401k contributions. Armstrong, amid a flurry of criticism, quickly changed course and apologized. 

Perhaps more interesting, though, is this dive by Stephen Gandel into the little known logistical and financial world that large companies use to provide these health-care benefits. Like so many other things in the corporate world, it turns out that employee health-care benefits are a numbers puzzle that swings between costs, risk, and benefits.

What that means is that AOL didn't actually purchase any insurance to cover the health costs of 95% of its employees.

As odd as that sounds, AOL has plenty of company. These days, health insurance consultants regularly tell companies with over 500 employees not to buy health insurance. It's a waste of money. Instead, collect the payments that your employees would have paid an insurer. Then hire a big health insurance company to handle the paperwork. Voila, it looks like you are providing your employees health insurance, but you haven't purchased any coverage.

In terms of wages, a college diploma is the new high school diploma
Are you or someone you know thinking about skipping college after finishing up high school courses this spring? That could be a very bad idea according to new data reported by The New York Times.

According to the report, the wage benefits of a college degree are at an all-time high while, at the same time, the value in terms of wages for a high school diploma are rapidly decreasing.

The Pew report found that the wage premium for having a college degree was at a record high. The median annual wage for young college-educated workers now is $45,500, compared to $28,000 for high school graduates -- a gap of $17,500. In 1965, the gap was much smaller: $7,400. (All the figures are in 2012 dollars.)

Click through to the story above to see a chart that dramatically captures the trend.

Warren Buffett turned $11 million into $1.1 BILLION with his Washington Post investment. Here's how you can do the same
Warren Buffett has made billions through his investing, and he wants you to be able to invest like him. Through the years, Buffett has offered up investing tips to shareholders of Berkshire Hathaway. Now you can tap into the best of Warren Buffett's wisdom in a new special report from The Motley Fool. Click here now for a free copy of this invaluable report.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2838712, ~/Articles/ArticleHandler.aspx, 11/28/2014 5:09:47 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement