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The legend leads Berkshire to new heights

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Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024.

David A. Grogen | CNBC

Warren Buffett turned 94 on Friday and his sprawling, one-of-a-kind conglomerate has never been worth more than it is today.

Berkshire Hathaway became the first nontechnology company to top a $1 trillion market capitalization this week. Berkshire Class A shares also topped $700,000 apiece for the first time ever.

Howard Marks, a great investor in his own right and friend of Buffett’s, credits three things that have allowed the “Oracle of Omaha” to lead Berkshire to new heights, even at his advanced age.

“It’s been a matter of a well-thought-out strategy prosecuted for seven decades with discipline, consistency and unusual insight,” said Marks, co-founder and co-chairman of Oaktree Capital Management. “Discipline and consistency are essential, but not sufficient. Without the unusual insight, he clearly wouldn’t be the greatest investor in history.”

“His record is a testament to the power of compounding at a very high rate for a very long period of time, uninterrupted. He never took a leave of absence,” Marks added.

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Berkshire Hathaway

In the midst of the go-go stock market of the 1960s, Buffett used an investment partnership he ran to buy what was then a failing New England textile company named Berkshire Hathaway. Today, his company is unrecognizable from what it once was, with businesses ranging from Geico insurance to BNSF Railway, an equity portfolio worth more than $300 billion and a monstrous $277 billion cash fortress.

Eye-popping returns

Generations of investors who study and imitate Buffett’s investing style have been wowed by his shrewd moves for decades. The Coca-Cola bet from the late 1980s made a lesson for patient value investing in strong brands with wide moats. Injecting a lifeline investment in Goldman Sachs in the depth of the financial crisis showed an opportunistic side during crises. Going all in on Apple in recent years spoke to his flexibility at adopting his value approach to a new age.

Buffett made headlines earlier this month by revealing he had dumped half of that Apple holding, ringing the bell a bit on an extremely lucrative trade. (While Apple is widely viewed as a growth stock, Buffett has long argued all investing is value investing — “You are putting out some money now to get more later on.”)

Decades of good returns snowballed and he has racked up an unparalleled track record. Berkshire shares have generated a 19.8% annualized gain from 1965 through 2023, nearly doubling the 10.2% return of the S&P 500. Cumulatively, the stock has gone up 4,384,748% since Buffett took over, compared with the S&P 500’s 31,223% return.

“He’s the most patient investor ever, which is a big reason for his success,” said Steve Check, founder of Check Capital Management with Berkshire as its biggest holding. “He can sit and sit and sit. Even at his age where there’s not that much time left to sit, he’ll still sit until he feels comfortable. I just think he’ll just keep doing as best he can right to the end.”

Buffett remains chairman and CEO of Berkshire, although Greg Abel, vice chairman of Berkshire’s noninsurance operations and Buffett’s designated successor, has taken on many responsibilities at the conglomerate. Earlier this year, Buffett said Abel, 62, will make all investing decisions when he’s gone.

Buffett and Marks

Oaktree’s Marks said Buffett reinforced concepts that are integral to his own approach. Like Buffett, he is indifferent to macro forecasting and market timing; he seeks value relentlessly, while sticking to his own circle of competence.

Howard Marks, co-chairman, Oaktree Capital.

Courtesy David A. Grogan | CNBC

“He doesn’t care about market timing and trading, but when other people get terrified, he marches in. We try to do the same thing,” Marks said.

Buffett, who at Columbia University studied under Benjamin Graham, has advised investors to view their stock holdings as small pieces of businesses. He believes volatility is a huge plus to the real investor as it offers an opportunity to take advantage of emotional selling.

Oaktree, with $193 billion in assets under management, has grown into one of the biggest alternative investments players in the world, specializing in distressed lending and bargain-hunting.

Marks, 78, has become a sharp, unequivocal contrarian voice in the investing world. His popular investment memos, which he started writing in 1990, are now viewed as required reading on Wall Street and even received a glowing endorsement from Buffett himself — “When I see memos from Howard Marks in my mail, they’re the first thing I open and read. I always learn something.”

The two were introduced in the aftermath of the Enron bankruptcy in the early 2000s. Marks revealed that Buffett ultimately motivated him to write his own book — “The Most Important Thing: Uncommon Sense for the Thoughtful Investor — over a decade ahead of his own schedule.

“He was very generous with his comments. I don’t think that book would have been written without his inspiration,” Marks said. “I had been planning to write a book when I retired. But with his encouragement, the book was published 13 years ago.”

Buffett’s trajectory and his ability to enjoy what he does into his 90s also struck a chord with Marks.

“He says that he skips to work in the morning. He tackles investing with gusto and joy,” Marks said. “I still haven’t retired, and I hope never to do so, following his example.”

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Trump CFPB cuts reviewed by Fed inspector general

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Director of the Office of Management and Budget (OMB) Russell Vought attends a cabinet meeting at the White House in Washington, D.C., U.S., April 10, 2025.

Nathan Howard | Reuters

The Federal Reserve’s inspector general is reviewing the Trump administration’s attempts to lay off nearly all Consumer Financial Protection Bureau employees and cancel the agency’s contracts, CNBC has learned.

The inspector general’s office told Sen. Elizabeth Warren, D-Mass., and Sen. Andy Kim, D-N.J., that it was taking up their request to investigate the moves of the consumer agency’s new leadership, according to a June 6 letter seen by CNBC.

“We had already initiated work to review workforce reductions at the CFPB” in response to an earlier request from lawmakers, acting Inspector General Fred Gibson said in the letter. “We are expanding that work to include the CFPB’s canceled contracts.”

The letter confirms that key oversight arms of the U.S. government are now examining the whirlwind of activity at the bureau after Trump’s acting CFPB head Russell Vought took over in February. Vought told employees to halt work, while he and operatives from Elon Musk‘s Department of Government Efficiency sought to lay off most of the agency’s staff and end contracts with external providers.

That prompted Warren and Kim to ask the Fed inspector general and the Government Accountability Office to review the legality of Vought’s actions and the extent to which they hindered the CFPB’s mission. The GAO told the lawmakers in April that it would examine the matter.

“As Trump dismantles vital public services, an independent OIG investigation is essential to understand the damage done by this administration at the CFPB and ensure it can still fulfill its mandate to work on the people’s behalf and hold companies who try to cheat and scam them accountable,” Kim told CNBC in a statement.

The Fed IG office serves as an independent watchdog over both the Fed and the CFPB, and has the power to examine agency records, issue subpoenas and interview personnel. It can also refer criminal matters to the Department of Justice.

Soon after his inauguration, Trump fired more than 17 inspectors general across federal agencies. Spared in that purge was Michael Horowitz, the IG for the Justice Department since 2012, who this month was named the incoming watchdog for the Fed and CFPB.

Horowitz, who begins in his new role at the end of this month, was reportedly praised by Trump supporters for uncovering problems with the FBI’s handling of its probe into Trump’s 2016 campaign.

Meanwhile, the fate of the CFPB hinges on a looming decision from a federal appeals court. Judges temporarily halted Vought’s efforts to lay off employees, but are now considering the Trump administration’s appeal over its plans for the agency.

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BA, ORCLE, GME, VOYG and more

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GameStop shares tank on convertible bond offering to potentially buy more bitcoin

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A Gamestop store is seen in Union Square on April 4, 2025 in New York City. 

Michael M. Santiago | Getty Images

GameStop shares slid on Thursday after the video game retailer and meme stock announced plans for a $1.75 billion convertible notes offering to potentially fund its new bitcoin purchase strategy.

The company said it intends to use the net proceeds from the offering for general corporate purposes, “including making investments in a manner consistent with GameStop’s Investment Policy and potential acquisitions.”

Part of the investment policy is to add cryptocurrencies on its balance sheet. Last month, GameStop bought 4,710 bitcoins, worth more than half a billion dollars.

The stock tanked more than 15% in premarket trading following the announcement.

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GameStop

GameStop is following in the footsteps of software company MicroStrategy, now known as Strategy, which bought billions of dollars worth of bitcoin in recent years to become the largest corporate holder of the flagship cryptocurrency. That decision prompted a rapid, albeit volatile, rise for Strategy’s stock.

Strategy has issued various forms of securities including convertible debt to fund its bitcoin purchases.

CEO Ryan Cohen recently said GameStop’s decision to buy bitcoin is driven by macro concerns as the digital coin, with its fixed supply and decentralized nature, could serve as protection against certain risks.

The brick-and-mortar retailer reported a decline in fiscal first-quarter revenue on Tuesday as demand for online gaming rose. Its revenue dropped 17% year-over-year to $732.4 million. 

The shares fell 6% on Wednesday after those results. Wall Street appears uncertain it can mimic the success of MicroStrategy.

Wedbush analyst Michael Pachter reiterated his underperform rating on GameStop Wednesday, saying the meme stock has consistently capitalized on “greater fools” willing to pay more than twice its asset value for its shares. The Wedbush analyst believes the bitcoin buying strategy makes little sense as the company, already trading at 2.4 times cash, isn’t likely to drive an even greater premium by converting more cash to crypto.

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