Sunday, March 08, 2009

Breaking! ... Buffet Broke, Sends Chain Letter For Cash

Sources have told The Garlic, that along with his folksy, annual letter to the shareholders of Berkshire Hathaway, the legendary chief executive Warren Buffett included a hand-written note, explaining he was "stone broke", asked for donations and advised the recipients to "pass along this letter", so they too could earn money.

"I was stunned," said one BH shareholder that received Buffett's letter, "that Warren Buffett was sending out a chain letter."

In a copy seen by The Garlic, Buffett wrote that, if they sent him $5, or $10, and forwarded the letter on to, at least, three others, they will receive back their money, and additionally, make anywhere from a 10-to-25% profit.

Buffett stressed that he is not looking to make back his fortune, but that he would like to have some "pocket change" and be able to visit his favorite diner for lunch "once in awhile", Gorat's Steakhouse.

In his annual shareholder letter, Buffett conceded it was a tough year;

Mr. Buffet's company, Berkshire Hathaway, reported a 62 percent drop in net income for 2008 and posted a decline in book value per share for only the second time since he took control in 1965. Shares of the company, which peaked in late 2007 at more than $148,000 apiece, closed Friday at $78,600.

With characteristic candor, Mr. Buffet, 78, took the blame for some of the declines, stating that he “did some dumb things,” lamenting in particular an ill-timed bet on oil and the purchase of shares in two Irish banks, which have fared poorly. But he also needled regulators and an assortment of unnamed chief executives as he predicted that fallout from the credit crisis would leave the stock market a shambles through 2009.


Despite its record losses, Berkshire Hathaway still has about $25 billion of cash on hand and has been buying preferred shares of General Electric and Goldman Sachs, as well as the debt of companies like Harley-Davidson and Tiffany & Company. Mr. Buffet is shopping for bargains while the share prices of most companies are sliding — his own portfolio included.


Some skepticism about these models is overdue, he added. “Our advice: Beware of geeks bearing formulas.”


“Of course it was a tough year — the toughest year of his life. But I was concerned about the impact in operating earnings and I was prepared for much worse.”

Buffett used the same phrase - "Of course it was a tough year — the toughest year of my life" - in the chain letter.

Also included in the chain letter, Buffett made a plea, to GoldenPalace.Com, urging them to contact him, so that they could discuss him being tattooed with the casino's logo again, for, of course, a paid fee.

Other shareholders interviewed by The Garlic, indicated they were only too happy to comply to Mr. Buffett's request, some even indicating they were going to send him a larger sum of money that he was asking for.

"We've done good by Warren," said another shareholder. "If the Oracle of Omaha sends me something, saying I can make a profit on it, that is all I need to hear ... I'm there ..."

In late breaking news, and with the exposure of this unprecedented Buffet chain letter, CNBC is going to have the gregarious former billionaire on their morning show, "Squawk Box", where it is anticipated, a segment will be devoted to Buffet reading the chain letter, and taking pledges of contribution, live, on-air.

CNBC would neither confirm or deny if Buffett will be reading the chain letter on-air, however, other sources say that the schedule of editor Rick Santellihas been changed, so that he can appear on "Squawk Box", to go into another rant, should pledges to Buffet seem lagging.

More, as this story develops ...

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