Buffett Grabs Stake in Suncor; The Golden Age of Parachutes; Foreign Investors Scrambling for the Exit in India
Buffett Grabs Stake in Suncor (YahooFinance)
As stated in its Q213 SEC filing, Warren Buffett’s Berkshire Hathaway purchased a 17.8 million-share stake in Calgary, Canada-based Suncor. The value of those shares was assessed at $524 million at the end of Q2. In addition to now possessing a chunk of Canada’s biggest oil and gas producer, Buffett also finds himself the owner of a brand new, political hot-seat. That’s because Suncor also produces oil from tar sands, and environmentalists claim that the process by which oil is taken from the sands causes as much as 17 percent more emissions than other oil production methods. However, as an investor, there really isn’t a more “green” investor to follow than Buffett — in the sense of profits — as Berkshire Hathaway was valued at $89 billion at the end of Q2.
The Golden Age of Parachutes (Bloomberg)
If you’ve followed the recent performance of BlackBerry Ltd, then you know the company’s performance has been nothing to write home about. So it should come as no surprise that management is forming a committee to investigate selling the company. And that appears to be just fine with current CEO, Thorsten Heins. For if the company is sold, and Heins is ousted from his position, the new golden parachute approved by shareholders in July would pay him $55.6 million. If Heins is terminated without the company changing hands, he’ll have to somehow find solace with a mere $22 million. As investors, all we can do is shrug out shoulders — and short BlackBerry shares if no buyer is found so we can comfort ourselves with profits, just like Heins.
Foreign Investors Scrambling for the Exit in India (Reuters)
India’s rupee hit a record low on Friday, despite the country’s efforts to restrict its citizens from foreign investment. Unfortunately, those efforts to stem outflows of capital from the country backfired when these moves were perceived as the beginning of outright capital controls in the country. India’s economic growth is already at a decade low, and the perception that the government may be growing desperate is gaining strength, especially after last month’s extraordinary action by the Reserve Bank of India to drain cash from the system and raise short-term interest rates. Like the efforts mentioned above, the cash drain didn’t work either. So as India’s deficit grows, and foreign investors are staying away in droves, you’d be wise to follow suit.