Berkshire Hathaway (BRK.A, BRK.B - option chain) shares are rising today after the company reported earnings over the weekend, posting a fiscal-Q4 profit of $4.38 billion, or 2.66 per share, on revenue of $36.17 billion. Chairman Warren Buffett also updated investors with his highly anticipated annual letter, which predicted "major acquisitions" for the company. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BRK.B.

BRK.B opened this morning at $86.46. So far today the stock has hit a low of $85.55 and a high of $86.99. As of 12:10, BRK.B is trading at $86.65 up $1.78 (2.1%). The chart for BRK.B looks bullish and S&P gives BRK-B a 3 STARS (out of 5) Hold ranking.

General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F) and Chrysler appealed to Congress for a bailout Tuesday. GM said it wouldn't last till New Year's without an immediate $4 billion and is asking for as much as $18 billion to keep afloat and survive. Together they asked for $34 billion. Meanwhile, November auto sales plunged 37% with Ford's U.S. sales declining 31%, GM's falling 41% and Chrysler LLC's dropping 47%. Overseas rivals didn't do better. GM shares traded 5.2% lower and F's 1.9% higher in pre-market (7:51 and 7:55 am respectively).

Research In Motion Ltd. (NASDAQ: RIMM) lowered its financial earnings per share, revenue and new subscriber accounts guidance for its third-quarter, saying it has added fewer new subscribers than expected as the economy slowed. This news will likely have an effect on Apple Inc. (NASDAQ: AAPL) as well. RIMM shares already hit a low Tuesday following an estimate cut from JPMorgan. RIMM shares traded 5.6% lower in premarket action (7:58 am). AAPL shares were down 2% in premarket trade (8:09 am).

Bank of America (NYSE: BAC) could end up cutting 30,000 jobs as it absorbs Merrill Lynch (NYSE: MER), three times as many as previously estimated, sources told CNBC, as BAC's CEO is trying to increase cost cuts. The majority of the layoffs are likely to come from Merrill's side of the business. BAC shares were 3% lower in premarket trade (7:59 am).

Constellation Energy Group Inc. (NYSE: CEG) finds itself in the midst of a bidding war as Electricite de France SA, the world's biggest operator of atomic reactors and which owns 9.5%, offered to pay $4.5 billion for half of CEG's nuclear business to expand in the U.S. CEG agreed earlier this year to be bought by Warren Buffett's Berkshire Hathaway Inc.'s MidAmerican Energy Holdings Co. for $4.7 billion. CEG shares gained over 25% in premarket trading (8:00 am).

When I first heard that Alice Schroeder was writing a biography of Warren Buffett, I was excited. Buffett knows Ms. Schroeder well, and had given her extensive interviews and unprecedented access to his records -- this was sure to be the definitive tome on one of the richest and most ethical people in the world.

The result of the collaboration is the 838 page tome The Snowball: Warren Buffett and the Business of Life. It's an exhaustive look at Buffett's life and career but it's also, frankly, exhausting. The problem is that the book is just too darn long, with seemingly hundreds of pages devoted to Buffett's friendship with Washington Post matriarch Katherine Graham, and huge amounts of pop psychology discussing his complex relationship with his wife. There is even a detailed discussion of Buffett's colonoscopy and the polyps that were found -- minutiae that only diehard value investors will appreciate.

There is some fascinating material here, especially in the beginning: did you know that The Oracle of Omaha was a bona fide juvenile delinquent, stealing golf clubs from Sears every weekend? But funny anecdotes like that aside, Warren Buffett's personal life is just not interesting enough to be a major component of a biography. He plays bridge, eats hamburgers, and pals around with Bono. The most interesting story is the business story, and you can get a more interesting look at that in Roger Lownstein's Buffett: The Making of an American Capitalist.

Mark your calendars: September 29th, 2009 will mark the debut of the long-awaited official biography of Warren Buffett: The Snowball: Warren Buffett and the Business of Life.

The list price is $35, but Amazon has it for $23.10, giving it a price/pages ratio of .023. This compares favorably with The Warren Buffett Way, which has a price/pages ratio of .037. Buffett would be pleased with the value proposition here.

The USA Today reports that the author, former insurance industry analyst Alice Schroeder has spent "thousands of hours" with Buffett, and also interviewed his friends extensively, and was given broad access to his records.

There are only a few topics that I'd be able to read 976 pages about without losing interest: I suspect that Mr. Buffett is one of them.

This Bud may not be for Anheuser-Busch Cos. (NYSE: BUD) for much longer.

InBev, the Belgian mega brewer, has told the King of Beers that it won't wait forever for it to make up its mind about whether to accept its unsolicited $46.3 billion offer. In the third and probably not the last letter to Anheuser-Busch CEO August Busch IV, InBev CEO Carlos Brito points out that his company's offer, which represents an 18% premium on its all-time high in 2002, is a generous one.

"The market reaction to our proposal has been extremely positive," Brito writes. "We believe this confirms our view that our proposal is the best way to achieve this transformational combination for all constituents."

InBev has already lined up financing for its $65 per share offer and has even paid about $50 million in commitment fees to its bankers. Budweiser's long-time headquarters in St. Louis will be maintained as will its senior management team. It does not get any better than this for a company about to be acquired.

After five months of tracking my 2008 picks, it is rewarding to finally have a breakthrough -- topping the three major stock indices and Berkshire Hathaway (NYSE: BRK.B) too. It has been painful to have to report each month that I was being bested. However, since I have not seen anything contradicting my original rationale for my eight picks I stood my ground.

This past month saw great improvement. For the first time since I posted the original story Chasing Value: Final list -- 8 stocks for 2008, five of the eight stocks are up:

Moving into positive territory by pennies was Loews Corporation (NYSE: LTR). Among its holdings is a 51% stake in Diamond Offshore Drilling, Inc. (NYSE: DO) that has been doing well as the world remains desperate for more oil and natural gas.

Bunge Limited (NYSE: BG) was the other stock to cross the line into the black, while Valero Energy Corp. (NYSE: VLO), although improving, remains my worst performer. It is still down almost 28% after five months.

The gap between the Dow Jones Industrial Average, Standard & Poor's 500 Index and the technology heavy NASDAQ Composite Index narrowed substantially so that the three are tracking each other very closely. Stocks like Apple, Inc (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) continue to gain significantly and their outlooks have not been shaken amid overall pessimistic economic forecasts.

Berkshire Hathaway's (NYSE: BRK.A) recent high-profile investments in places like Europe and Israel have led many Oracle of Omaha-watchers to speculate that Warren Buffett is bearish on America.

Not so, says Mr. Buffett. Speaking at a business school in Switzerland, he told members of the media that "We buy ... when other people have a reason to sell. We love buying companies in the U.S."

The Wall Street Journal reports (subscription required) that Buffett also said he would consider future investments in Eastern Europe, but that it is difficult to find acquisition targets that are large enough to be meaningful for Berkshire. He also doesn't feel that the weakened U.S. dollar would make investing in Europe difficult.

There's nothing too surprising here. Buffett has generally pursued a bottoms-up investment philosophy throughout his career (with some style-drift in recent years as Berkshire's cash pile has grown). He looks for strong companies with good management and predictable future cash flow, and I don't think he would write off any region where he can find that because of supposed macroeconomic concerns.

Just days after the fifth anniversary of George W. Bush's landing on an aircraft carrier in front of a "Mission Accomplished" banner, the Weapons of Mass Destruction (WMDs) have finally been located. But not in Iraq or Iran or Syria.

These WMDs are of the financial variety. The ones against which Berkshire Hathaway Inc.'s (NYSE: BRK.A) CEO Warren Buffett railed in his 2003 annual report. There he called derivatives "financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal." And Reuters reports that these are the very financial WMDs that cost Berkshire $1.7 billion in charges in the first quarter of 2008.

This proves that George W. Bush was right and so was Warren Buffett. But Berkshire shareholders are also smarting due to a 64% drop in its net income and a 24% tumble in its revenues.

During May sweeps season on daytime television, Walt Disney (NYSE: DIS)'s ABC network may very well have gotten the most timely financial subplot of them all. Oh yes, and don't forget "weird." Erica Kane, Susan Lucci's storied character on All My Children, will be aided by a knight in shining Berkshire Hathaway stock -- billionaire guru Warren Buffett. She's in prison for insider trading; who better to call than the world's richest man? I can't think of anyone, except maybe a lawyer (n.b.: NOT the one who represented Martha Stewart).

According to the New York Post, Buffett excuses himself during his meeting with Erica Kane to take a call from Bill Gates (his longtime friend and constant rival for world's-richest-man title).


This is the third time Buffett has appeared on All My Children, having previously appeared on the show in 1991 and 1993 (the show's spokespeople evidently got the record confused and have been pointing to one episode in 1992). In October 1991, Warren and then-ABC chairman Thomas S. Murphy appeared as themselves to give Kane advice on her cosmetics business. They reprised that role in August 1993. While it may seem a little strange for a billionaire financial genius to watch the soaps, Buffett is evidently a fan of the show and is friendly with All My Children creator, Agnes Nixon. According to show spokesman Mike Cohen, Buffett has been waiting to come back to the show. For 15 years.

When Warren Buffett announced his offer to back $800 billion worth of municipal bonds backed by MBIA (NYSE: MBI), Ambac (NYSE: ABK) and FGIC, the offer was blasted as being something less than helpful. Buffett himself admitted that "When I go to Saint Peter, I will not present this as some act that should get me in. We're doing this to make money."

Now, speaking on CNBC, Buffett said that offer is "not on the table."

The offer was seen as less than generous in that it offered no help for the most risk mortgage-backed debt and charged large premiums.

Given that, it's hard not be a little frightened by Buffet's decision to withdraw the offer. It's possible that he simply withdrew it because it was unpopular and poorly-received.

But if an offer that was seen as a gimme for Berkshire Hathaway (NYSE: BRK.A) is no longer appealing to Buffett -- that means things for the bond insurers could be considerably worse than previously thought.

And most people already thought things were pretty bad.

Bloomberg News reports that Warren Buffett offered to reinsure $800 billion worth of municipal bond liabilities for MBIA Inc. (NYSE: MBI) and its other bond insurance peers. Why is Buffett doing this? He sees distressed companies in desperate need of capital and he thinks he can provide it at a bargain price.

The bond insurers are under severe pressure because they stretched outside of their comfort zone thanks to their desire to make more money by insuring subprime-linked securities. Those bad bets now threaten their credit ratings and their future. But the risk in their municipal bond portfolio is probably much less severe. So Buffett sees a chance to profit from their distress to take a relatively low risk bet that the non-payment of municipal bond principal and interest will cost him little.

Buffett's Berkshire Hathaway Inc. (NYSE: BRK) would put up $5 billion as part of the plan. The bond insurers lend their AAA rating to $1.2 trillion of municipal debt, the rankings of which would be thrown into doubt if they were downgraded. If the debt was reinsured by AAA rated Berkshire, the municipalities would also retain the top rating.

So the deal would work out great for Buffett and the municipalities while the bond insurers will give up some of their future profits to Buffett who is using his higher credit rating to extract value for his shareholders. And if the bond insurers can forestall a ratings downgrade, it will be beneficial to their shareholders as well.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

A few days behind schedule, but here is my list of eight stocks. Included in the list there are two holdovers from the 2007 list of seven stocks. I do not see any value in creating an entirely new list when I have done well over the years riding the winners. This is particularly true if the reasons you bought the stock in the first place remain valid.

These eight picks for the year will be tracked monthly with updated results. The initial share prices are from December 28, 2007. They are focused on defense, energy, food, gold, metals, mining, oil, power, and every one pays a dividends. The following are my "Quick Takes" in alphabetical order with links to the complete stories.

Anglo American plc (ADR) (NASDAQ: AAUK) is a world-class player in precious metals, diamonds, and commodities, which are all growing in demand. When the world economy is booming, all of its mining products are sought after, and when the market runs scared, gold goes up. It pays a dividend yield of 1.9% and is trading almost 25% off its 52-week high. For full story: Chasing Value: Anglo American diamonds and gold are your best friend. The closing price on December 28, 2007, for AAUK was $30.79.

Wall Street seems bent on finishing 2007 on a high note and after yesterday's big selloff following Pakistan's former prime minister and opposition leader Benazir Bhutto's assassination, futures are up this morning, indicating U.S. stocks could start higher.

Yesterday, U.S. stocks tumbled on the assassination news -- fearing further unrest in one of U.S.'s allies in its war on terror in Afghanistan and due to weaker-than-forecast rise in durable-goods orders. The positive consumer confidence report couldn't offset the news. The Dow industrials dropped 192 points, or 1.42%, the Nasdaq Composite fell 47 points, or 1.75%, and the S&P 500 lost 21 points, also 1.42%.

News that could be moving the market this morning include talk of big bank asset sales and later some data that is due out:

With four more trading days left this year, some investors will be back after the holiday, ready to adjust final positions, others may have taken the rest of the week/year off and trading could be light. Stock futures are somewhat higher this morning, indicating a similar start for U.S. markets. The focus this morning seems to be on retail and holiday sales results, but surprisingly enough, there is also some deal news.

On the shortened trading day Monday, stocks fared well with the Dow industrials ending up 98 points, or 0.78%, the S&P 500 adding nearly 12 points, or 0.81%, and the Nasdaq composite rising 21 points, or 0.8%.

There only economic indicator reported today is the Standard & Poor's Case-Shiller index of single-family home prices, due out just before the market open.

The weekly crude inventories, normally released Wednesday, will be released Thursday. Oil prices rose Wednesday ahead of the report with traders expecting a new decline in its oil inventories to 1.2 million barrels of crude oil supplies due to a decline in imports.

Christmas is as good a time as any to announce a deal I suppose, and buying a conglomerate consisting of 125 manufacturing and service companies is probably Warren Buffett's preferred means of celebrating.

For $4.5 billion, Berkshire Hathaway (NYSE: BRK.A) will get 60% of Marmon Holdings, with plans to acquire the rest over the next 5 or 6 years at a price to be determined by the company's future profitability. According to the press release, the company's operations are pretty diverse: