May 13, 2008 – stlplace

Reading Time: 2 minutes

Last Updated on May 14, 2008 by stlplace

EDS logo

Who is EDS?
EDS (NYSE:EDS), Electronic Data System, the IT service company founded by legendary Texan Ross Perot with $1,000, at once time was No. 2 US IT service provider (second to IBM). Today HP (NYSE:HPQ) announced buying EDS for $13.9 billion.

Among many things, EDS was famous for its hiring of former Navy/Marine, their tough work ethic, and its college graduate “system engineer” training program. Its current vice chairman Jeff Heller (former COO) was a graduate of that program. Interestingly, EDS was also my former employer: the company I worked for was a subsidiary of EDS for a few years.

Business wise, EDS has many goverment contracts (started from Medicare), from US federal and state goverment, to UK and other European countries. Industry wise, EDS was once the IT subsidiray of General Motor (bought by GM in 1984), before its spinoff from GM on 1996.

More Buffett Munger 08 shareholder Q&A

Reading Time: 3 minutes

Last Updated on May 16, 2008 by stlplace

I quoted some questions which are relevant for little guys (like me). The full transcript can be located at gurufocus. WB: Warren Buffett, CM: Charlie Munger, MX: yours truely.

BTW, I bought one more BRK.B yesterday, at $4130, not the lowest price of the day but about 5% off the price I bought for my first share. A few things happened since April 3 the day I bought it: the CEO of General Re resigned because of AIG scandal; Mars Wrigley deal; annual shareholder meeting (BRK.A and BRK.B both ran before the meeting); the Q1 earning result was not good because of paper loss of stock index derivatives. But I don’t think those things worsened the value of BRK in anyway.

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Q9: Melbourne Auz. Berkshire has bought a lot of shares in last twelve months in listed companies. Do you expect return to be between 7-10% pa over many years? Well below achievements in past.

WB: Yes. We would be very happy if we could buy pretax returns of 10%, dividends included. We would probably settle for a little less than that. Berkshire returns will be less, no question, in future than in past. We operate now in universe of marketable stocks with caps of 10bil, but really 50bil and up in order to have an impact. This universe is not as profitable. If we find 10bil, a 5% position is 500mil. If it doubles, we make 325m, this is less than 2/10ths of 1%. We have found things to do time to time to make money. They are nice, but don’t move needle much at Berkshire. Anyone who expects us to replicate past should sell their stock. We’ll get decent returns, but not indecent returns.