Tags: John Malone | Warren Buffett | Liberty Media | Berkshire Hathaway

Barron's: Malone Investments Beat Buffett by Nearly 80 Percent Since 2004

Barron's: Malone Investments Beat Buffett by Nearly 80 Percent Since 2004

Warren Buffett (AP Photo/Cliff Owen)

By    |   Monday, 03 October 2016 10:32 AM

Warren Buffett has the reputation for being the most astute investor on the planet, but cable-TV magnate John Malone’s Liberty Media has done a better job for shareholders, according to Barron’s magazine.

“Over the past decade, Malone’s investment returns have bested those of Warren Buffett’s Berkshire Hathawa,” according to the magazine, which cites analysis by Gamco Investors.

 

“A holder of the original Liberty Media in 2004, before it split its U.S. and international assets into separate companies, would have realized annualized returns of 13 percent, compared with 7.5 percent for Berkshire and 7.7 percent for the Standard & Poor’s 500 index.”

Malone’s holdings, which now consist of nine tracking stocks bearing the Liberty name, have additional room for growth in the areas of home shopping, European cable TV, satellite radio, online travel, broadband internet and sports programming, the magazine reports. Malone is a master dealmaker with a knack for tax-efficient transactions.

“The Malone magic formula starts with good businesses that are within his core competency, then putting the right management teams in place and leveraging those companies appropriately,” Christopher Marangi, co-chief investment officer of the value group at Gamco, told Barron’s. “One of our golden rules for investing in media and cable is to be on the same side of the table as John Malone and to align our interests with his.”

Malone has a personal stake valued at $4 billion in his Liberty empire, which has a total market capitalization of about $80 billion. He essentially controls companies such as Liberty Braves (owner of the Atlanta Braves baseball team), Liberty Broadband, Liberty SiriusXM and Liberty Interactive/QVC with super-voting shares.

Buffett, one of the world’s richest men with an estimated net worth of $64.8 billion, has seen his wealth dwindle as scandal-rocked Wells Fargo & Co. lost value in the past month.
The San Francisco-based bank has dropped 14 percent from a September high of $51 after facing federal scrutiny for opening millions of phony bank accounts without the permission of customers. The stock’s decline has taken about $35 billion off its market value since the end of August.

Berkshire Hathaway owned about 10 percent of Wells Fargo as of July 1 and sought regulator permission to buy more shares.

Buffett told Wells Fargo Chief Executive Officer John Stumpf that the bank was too slow to recognize the seriousness of the problem after settling investigations into the phony account allegations, CNBC reported.

Buffett two weeks ago spoke to Stumpf for about five minutes, telling him “that he thought the problem was bigger than Stumpf thought at that point,” CNBC’s Becky Quick reported last week after interviewing Buffett. The risk to the bank, according to Buffett, was bigger than fines of about $185 million, Quick said.

“That was not a metric to use to determine the public reaction to this,” she said. “He thought the problem was deeper than that.”

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Warren Buffett has the reputation for being the most astute investor on the planet, but cable-TV magnate John Malone's Liberty Media has done a better job for shareholders, according to Barron's magazine.
John Malone, Warren Buffett, Liberty Media, Berkshire Hathaway
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2016-32-03
Monday, 03 October 2016 10:32 AM
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