We need to find a fairer way of providing Goods and Services to the rest of the people on Earth.Cryptocurrencies and/or Gold Standard of money....maybe the answer to fight hyperinflation caused by too much printing of paper/fiat currencies by Governments and Central Banks all over the World. (https://nomorefiatmoneyplease.blogspot.com)
REUTERS/Patrick T. FallonTesla Motors CEO Elon Musk reveals a Tesla Energy battery for businesses and utility companies during an event in Hawthorne, California, April 30, 2015.
Late Thursday night in Los Angeles, Tesla announced "Tesla Energy," described by the company in a statement as "a suite of batteries for homes, businesses, and utilities fostering a clean energy ecosystem and helping wean the world off fossil fuels."
The statement continued: "Tesla is not just an automotive company, it’s an energy innovation company. Tesla Energy is a critical step in this mission to enable zero emission power generation."
Tesla CEO Elon Musk made the official announcement onstage at the company's design studio in Hawthorne, California, just south of LA.
"We have this handy fusion reactor in the sky, called the Sun," he said, stressing that solar power is the best way to end the world's addiction to fossil fuels and head off a disastrous future in which we are overwhelmed by CO2 in the atmosphere.
What's the problem? The Sun doesn't shine at night. So you need to store the power gathered by solar panels. But existing batteries, as Musk quipped, "suck."
The "missing piece," according to him, is Tesla's suite of batteries. And they will not suck.
Screenshot via Tesla
The home battery, called the "Powerwall," is intended to store solar energy and enable customers to bank grid electricity from nonpeak periods and use it during peak times, saving money. It looks "like a beautiful piece of sculpture," Musk said. You can order it now, it's wall-mounted, and it comes in different colors.
"The Tesla Powerwall is a rechargeable lithium-ion battery designed to store energy at a residential level for load shifting, backup power and self-consumption of solar power generation," Tesla said.
"The Powerwall consists of Tesla’s lithium-ion battery pack, liquid thermal control system and software that receives dispatch commands from a solar inverter. The unit mounts seamlessly on a wall and is integrated with the local grid to harness excess power and give customers the flexibility to draw energy from their own reserve."
Screenshot via Tesla
There will be two versions, according to Tesla:
The Powerwall is available in 10kWh, optimized for backup applications or 7kWh optimized for daily use applications. Both can be connected with solar or grid and both can provide backup power. The 10kWh Powerwall is optimized to provide backup when the grid goes down, providing power for your home when you need it most. When paired with solar power, the 7kWh Powerwall can be used in daily cycling to extend the environmental and cost benefits of solar into the night when sunlight is unavailable.
Tesla’s selling price to installers is $3500 for 10kWh and $3000 for 7kWh. (Price excludes inverter and installation.) Deliveries begin in late summer.
There will also be a battery application for businesses and one for utilities. Both will operate on a larger scale than the "Powerwall" home battery. They will be called "Powerpacks."
Partnering with Tesla on this technology are Amazon, Target, and Southern California Edison, among others.
Musk said that with 160 million Powerpacks, the entire United States could be transitioned to renewable energy.
To demonstrate his point, he revealed that Tesla's entire event was being powered by solar energy stored in Tesla batteries.
Screenshot via Tesla
Musk said that initially the Powerwall and Powerpack will be made in Tesla's Fremont factory, but as the product line scales, it will be made in the massive $5-billion Gigafactory that the company is building in Nevada.
And there will be many more Gigafactories, Musk said.
The presentation was relatively short, and Musk left the stage after thanking everyone for coming. From the looks of social media activity before the event, the party will continue into the Southern California night.
A look at what promises to be a memorable annual meeting.
Saturday is the day. That is, Saturday is the day.
That’s right, I’m talking about the Berkshire Hathaway annual meeting, which brings tens of thousands of investors to Omaha to hear what CEO Warren Buffett and his brilliant co-pilot Charlie Munger have to say about Berkshire, the economy, the stock market, and… well, just about anything else under the sun.
There are certain things that Buffett-watchers can expect every year from the meeting, but every year’s meeting is a bit different. And this year promises to be particularly memorable, as it marks the 50-year anniversary of Buffett and Munger at the helm of Berkshire.
So what exactly should we expect from this year’s edition of the Woodstock for Capitalists? Let’s see…
1. What do you think about the stock market?
I’m guessing the question won’t come in quite that form, but there will be some question during the hours-long Q&A session with Buffett and Munger that gets to their views on the current state of the stock market. We can expect the response to be a combination of their traditional wisdom that emphasizes how investors are buying a piece of a business (not a piece of paper), that long-term ownership is the way to go, and that low-cost index funds are the best bet for many investors.
But this ain’t the normal mealy mouth corporate-speak annual meeting, so don’t be surprised if Buffett and Munger offer direct views on the state of the market. After all, in Berkshire’s annual letter in 1999, Buffett was very clear about his view that valuations were inflated:
Our reservations about the prices of securities we own apply also to the general level of equity prices. We have never attempted to forecast what the stock market is going to do in the next month or the next year, and we are not trying to do that now. But, as I point out in the enclosed article, equity investors currently seem wildly optimistic in their expectations about future returns.
And then, in the 2008 letter, he was equally clear about the bargains that he and Charlie were seeing:
Additionally, the market value of the bonds and stocks that we continue to hold suffered a significant decline along with the general market. This does not bother Charlie and me. Indeed, we enjoy such price declines if we have funds available to increase our positions. Long ago, Ben Graham taught me that “Price is what you pay; value is what you get.” Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.
2. What’s up with that new number?
Buffett and Munger’s benchmark of choice for many years has been the change in Berkshire’s per-share book value versus the one-year change in the S&P 500 index. This year, a new number appeared on the first page of Berkshire’s letter: the one-year price change in Berkshire’s stock.
On the one hand, this shouldn’t be all that surprising. For years now, both Buffett and Munger (more so Munger), have explained that the changing nature of Berkshire’s business – that is, away from an insurance-heavy operation to a more diversified conglomerate – make the per-share book value calculus less meaningful.
In this year’s letter, Buffett noted that:
Market prices, let me stress, have their limitations in the short term. Monthly or yearly movements of stocks are often erratic and not indicative of changes in intrinsic value. Over time, however, stock prices and intrinsic value almost invariably converge.
At the same time, going by the “classic” benchmark, Berkshire has underperformed in five of the past six years. I’d be surprised if somebody didn’t try to call out the duo on the apparent convenient timing of the new performance gauge.
3. You bought what at Berkshire?
One thing that Berkshire investors that attend the meeting can expect every year is a cornucopia of Berkshire-subsidiary products on offer, from Dairy Queen Dilly Bars to NetJets private-jet leases. Seriously, Berkshire investors get their shop on. Here’s what Buffett had to say about last year’s Berkshire rendition of Supermarket Sweep:
Last year you did your part as a shopper, and most of our businesses racked up record sales. In a nine-hour period on Saturday, we sold 1,385 pairs of Justin boots (that’s a pair every 23 seconds), 13,440 pounds of See’s candy, 7,276 pairs of Wells Lamont work gloves and 10,000 bottles of Heinz ketchup.
My personal goal is to buy something that will make my wife say…”You bought what at Berkshire?”
4. Kraft…
Buffett likes his “elephant hunting” and he did some for Berkshire in late March. Pairing up once again with Brazilian private equity firm 3G Capital, Berkshire agreed to buy Kraft Foods for around $50 billion. The Economist was none too impressed with the deal,writing:
Warren Buffett says he likes to buy companies that are easy to understand and are performing well. His latest deal, the $50 billion acquisition of Kraft Foods that was announced on March 25th, passes only one of those tests.
The article continues to clarify that while Kraft’s business is easy enough to comprehend, its recent performance hasn’t been terribly tasty.
My fellow Fool Alex Dumortier wasn’t as pessimistic, noting the incredible success that 3G has already had with the last team-up acquisition, H.J. Heinz. To be fair, The Economist did note that 3G “is the closest thing the consumer-goods industry has to a miracle-worker.”
The bottom line, though, is that the price tag for Kraft wasn’t especially cheap and the business isn’t thriving, so a “what’s up with that” question is bound to come.
5. “I have nothing to add.”
Charlie Munger is famous for curtly quipping “I have nothing to add” during the meeting when… well, when he has nothing further to add. On our live chat we will be sure to let you know every time Munger delivers his well-known line.
And for a fun Berkshire-inspired game that even the kids can enjoy: Eat a See’s Candy (or two) for every “I have nothing to add.”
6. …but then, there’s plenty to add.
Though Munger’s “I have nothing to add” is well known, it’s likewise known that when he does have an opinion on something he’s not afraid to share it. We can certainly expect that there will be plenty of this during the meeting as well.
Charlie on ethanol (2008): “The policy of turning American corn into motor fuel is one of the dumbest ideas in the history of the world.”
Charlie on gold (in a 2012 CNBC interview): “Gold is a great thing to sew into your garments if you’re a Jewish family in Vienna in 1939, but I think civilized people don’t buy gold, they invest in productive businesses.”
7. So, um, what up with Clayton Homes?
When you’re as large as Berkshire, you’re bound to find yourself in the crosshairs of controversy. That’s doubly so when you’re run by a CEO who says things like “we can afford to lose money — even a lot of money. But we can’t afford to lose reputation — even a shred of reputation.”
In the past, Berkshire has come under fire in the annual meetings for the disruption of salmon spawning by a dam owned by Berkshire subsidiary Mid-American Energy, as well as its ownership of PetroChina stock, which a shareholder proposal described as “the dominant international player in Sudan’s oil sector.”
This year, the heat will likely come from concerns over Berkshire’s manufactured-housing company, Clayton Homes. In early April, The Seattle Times published an article titled “The mobile-home trap: How a Warren Buffett empire preys on the poor.” The article alleges that while Buffett rails against shady mortgage practices, the company that he owns – and praised in this year’s shareholder letter – is “trapping many buyers in loans they can’t afford and in homes that are almost impossible to sell or refinance.”
8. The Berkshire movie
Every year, the meeting begins with a movie. That’s right, a movie. Well, it’s really sort of half-movie and half-advertisement for Berkshire brands and holdings (Coca-Cola KO0.47% and Geico always seems to have prominent placement). What the movie lacks in plot and clear structure, it makes up for in cheap laughs and cameos.
Who will pop up in this year’s iteration? I’ve got my fingers crossed for Left Shark.
9. Tell us more about this car thing
Could it be that Jay Leno now has an Omaha billionaire that he can talk cars with?
In early March, Berkshire closed on the acquisition of Van Tuyl Group — one of the U.S.’s largest auto dealerships — and promptly renamed the group Berkshire Hathaway Automotive. Prior to the acquisition, Van Tuyl reportedly had $9 billion in annual sales, but Buffett wants to see the new subsidiary grow further. In late March he went on CNBC and said:
We’ve heard from a lot of dealers and we’ll hear from more, I’m sure. I’d be very surprised if five years from now, we’re not a whole lot bigger.
Berkshire also purchased $560 million in Axalta stock from Carlyle Group. While Axalta is a diversified coatings business — which fits in with Berkshire’s vast industrial holdings — its primary market is transportation. Axalta holds the No .1 worldwide position in supplying coatings for auto-repair shops and is No.2 when it comes to manufacturers of cars and light trucks.
And lest we forget, it was just in 2011 that Berkshire coughed up $9 billion to buy Lubrizol.
What’s next for Buffett’s burgeoning auto-empire? I’d certainly be interested to hear what the Oracle sees ahead for the industry.
10. Zombies in Omaha
The crowd at the CenturyLink Center in Omaha is expected to top 40,000 this year for the 50thAnniversary meeting. Any shareholder can attend the meeting, but none can purchase preferred seating. What does that mean? The same as every year: Investors will line up bright (technically, it will still be dark) and early to try to secure the best seats and the best views of Buffett and Munger.
This means that if you happen to be in Omaha on the weekend of May 2, but aren’t part of the Berkshire hoopla, don’t fret, those aren’t actually zombies wandering around Farnam Street and Dodge, they’re just exhausted Berkshire investors.
11. Entschuldigung Herr Buffett, aber was ist nächste für Sie in Deutschland?
As the Geschäftsführer for The Fool’s German-language website (Fool.de), I have a special interest in this one.
On February 20 of this year, Berkshire announced that it was acquiring German motorcycle-gear business Detlev Louis Motorrad. Buffett called the deal a “door opener” and crowed that “I like the fact that we have cracked the code in Germany.” Wie cool.
Buffett followed up with an interview with Handelsblatt, Germany’s answer to The Wall Street Journal. In the interview, Buffett said:
We are definitely interested in buying more German companies. Germany is a great market: lots of people, lots of purchasing power and Germans are productive. We also like the regulatory and legal framework.
I wholeheartedly agree and would be very interested to hear: Also dann, was jetzt Herr Buffett?(So then, what now Mr. Buffett?)
12. Just give us a hint
Every calendar quarter, large investors like Berkshire are required to deliver a so-called 13F filing to the Securities and Exchange Commission that shows their stock holdings. Berkshire last filed in mid-February, and we’ll likely see the next filing in mid-May – conveniently after the annual meeting.
In the last 13F filing, we found out that Berkshire had shed all of its holdings in ExxonMobil XOM0.88% – Buffett later explained to CNBC, “We thought we might have other uses for the money.”
Will there be any big moves this quarter? I doubt we’ll find out at the annual meeting, but that doesn’t mean that the question won’t be asked.
13. Run like the wind
If you’re a runner, you may be familiar with the Brooks running-shoe brand. If you’re a Berkshire shareholder you may know that Berkshire owns Brooks. But did you know that for the past couple of years Berkshire and Brooks have put on a 5k race the day after the Berkshire meeting?
The runners that come out for the “Invest in Yourself 5k” are no joke — last year’s male winner finished in a blazing 15:52. For the rest of us, it’s a matter of just trying to shake off a sleep deficit and an over-indulgence in See’s Candy. But, then again, what better way to burn of a few of those candy calories than by running a few miles?
Better still: Runners get a Berkshire-ized Brooks t-shirt and a finisher’s medal with Buffett’s smiling mug on it.
14. Want another question that won’t be answered?
Buffett’s successor: Who will it be? We won’t find out at the meeting, but it’s another “not to be answered” question that I expect to hear.
15. Oh right, the Berkshire business meeting
Believe it or not, sandwiched into all of the Buffett and Munger-y goodness of the Berkshire meeting and weekend is an actual business meeting. According to Berkshire’s annual meeting info, the business meeting will be held from 3:45 to 4:15 on the day of the meeting. In the years that I’ve attended the meeting, I can’t recall the business meeting lasting more than 10 minutes.
Then again, my perception of time by that point in the day has usually been compromised by the peanut brittle.
US construction spending hits six-month low in March
US construction spending fell in March to a six-month low as outlays on private residential construction spending declined sharply, which could add to concerns about the economy's ability to rebound strongly from the first-quarter's soft patch.
PHOTO: AFP
[WASHINGTON] US construction spending fell in March to a six-month low as outlays on private residential construction spending declined sharply, which could add to concerns about the economy's ability to rebound strongly from the first-quarter's soft patch.
Construction spending slipped 0.6 per cent to an annual rate of US$966.6 billion, the lowest level since September, the Commerce Department said on Friday.
February's outlays were revised to show them unchanged instead of the previously reported 0.1 per cent dip. Economists polled by Reuters had expected construction spending to rise 0.5 per cent in March.
While there are signs the economy is regaining some speed after almost stalling in the first quarter, data on construction and manufacturing suggest a lack of strong momentum in activity.
The economy was slammed by bad weather, a strong dollar, a now-resolved labor dispute at the West Coast ports, as well as lower oil prices, which have cut domestic energy production.
In March, construction spending was weighed down by a 1.6 per cent decline in private residential construction spending, the biggest decline since June. Outlays for single-family construction fell 1.8 per cent and multi-family home building tumbled 2.1 per cent.
Spending on private non-residential construction projects rose 1.0 per cent in March.
Public construction outlays were weak, with spending on federal government projects tumbling 4.9 per cent. State and local government outlays - the largest portion of the public sector segment - fell 1.2 per cent to a one-year low.
Key UK manufacturing gauge tumbles six days before election
British manufacturing growth suffered its sharpest slowdown in more than two years last month, a survey showed on Thursday, adding to worries about the economic recovery six days before a national election.
PHOTO: AFP
[LONDON] British manufacturing growth suffered its sharpest slowdown in more than two years last month, a survey showed on Thursday, adding to worries about the economic recovery six days before a national election.
Financial data company Markit said its monthly Purchasing Managers' Index for manufacturing dropped to a seven-month low of 51.9 in April from a downwardly revised 54.0 in March, the biggest one-month fall since February 2013.
The figure is still just above the 50-mark that divides growth from contraction, but lower than all the forecasts in a Reuters poll of 31 economists, which had forecast a modest pick-up in the pace of expansion.
"Today's UK PMI delivered less-than-positive news on the health of the manufacturing sector," said Rob Dobson, an economist at Markit. "Any signs of rebalancing the economy towards manufacturing and exports remain frustratingly elusive."
The figures follow official figures announced earlier this week which showed that economic growth in the first quarter was its slowest since late 2012, prompting Conservative finance minister George Osborne to warn voters not to take recovery for granted.
Economists said at the time that they did not think the first-quarter numbers meant that Britain was heading into a sustained slowdown because private-sector readings such as the PMIs had shown strong growth.
Friday's weaker manufacturing survey may now prompt economists to take a more downbeat view of growth at the start of the second quarter.
Opinion polls suggest the Conservatives are more trusted on the economy than the Labour opposition, but that has not given the Conservatives a clear lead in opinion polls before next Thursday's election.
Labour seized on this week's weak data to challenge the Conservatives' claim to be the guardians of the recovery.
Although Britain's economy grew faster last year than any other major advanced economy, wages have failed to keep pace with inflation for most of Prime Minister David Cameron's five-year term, and Labour is campaigning on what it calls a cost-of-living crisis.
Markit said slower hiring, weaker production growth, declining export orders and a slide in the prices manufacturers can charge contributed to the fall in the manufacturing PMI.
The 'prices charged' component showed the most widespread price cuts since September 2009. Hiring was its weakest since June 2013, suggesting a two-year boom in the size of Britain's labour force may be coming to an end.
New export orders fell at the fastest rate since January 2013. Companies blamed the strength of sterling, which hit its highest in more than seven years against the euro in March.
The United States, Britain's second-largest export market after the eurozone, also suffered weak growth in early 2015.
UK consumer credit booms in March, business lending jumps too
Lending to British consumers jumped in March by its biggest amount since before the financial crisis and business borrowing showed its strongest rise in at least four years, the Bank of England said on Friday.
PHOTO: BLOOMBERG
[LONDON] Lending to British consumers jumped in March by its biggest amount since before the financial crisis and business borrowing showed its strongest rise in at least four years, the Bank of England said on Friday.
The figures, which come less than a week before a national election, suggest underlying strength in the British economy despite some recent weak data.
The BoE also said mortgage approvals inched down after rising for three straight months.
The BoE said consumer credit grew by 1.24 billion pounds in March, higher than a forecast of 800 million pounds in a Reuters poll of economists.
That was the biggest monthly increase since February 2008 and compared with the same month last year, the increase was the biggest in nearly nine years.
Despite only weak rises in wages for much of the past five years, Britain's economic recovery has become increasingly reliant on spending by households.
A nascent recovery in earnings and zero inflation have helped boost confidence among consumers, although that has not translated into a clear lead in opinion polls for Prime Minister David Cameron's Conservative Party ahead of the May 7 election.
There was also a big jump in lending to business in March which was up by 2.72 billion pounds, the largest monthly increase since records began in mid-2011, the BoE.
The lending figures have been erratic and on year-on-year terms, lending to businesses in March was 0.5 per cent lower.
Mortgage approvals for house purchases numbered 61,341 in March, down a touch from 61,523 in February.
Analysts in the Reuters poll had forecast 62,400 mortgage approvals were made in March.
The number of approvals fell in most months last year, when tighter lending rules were introduced, cooling house price growth and easing concerns about a bubble in the housing market.
Net mortgage lending, which lags approvals, rose by 1.83 billion pounds, in line with forecasts.
There have been recent signs that Britain's housing market will regain strength this year. Mortgage lender Nationwide said house prices rose in April at the fastest monthly pace since last June, while the British Bankers' Association has reported rising mortgage approvals in recent months.
REUTERS/Patrick T. FallonTesla Motors CEO Elon Musk reveals a Tesla Energy battery for businesses and utility companies during an event in Hawthorne, California, April 30, 2015.
Screenshot via Tesla
Screenshot via Tesla
Screenshot via Tesla
