Master Series

Buffett NRG Energy average cost

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From gurufocus, we can see investor gurus like Buffett’s buy and sell actions, usually 45 after the close of a quarter. NRG Energy is an interesting one, because it’s going to build the first nuclear power plant in the US for 30 years, and the offer Exelon put up last Oct. (0.485 share of Exelon for each share of NRG). More interestingly, Buffett’s Berkshire started buying NRG since last year. Here is the transactions:

2Q 08: $42.40 * 3,280,100 = 139,076,240
3Q 08: $35.50 * (5,000,000 – 3,280,100) = 61,056,450
4Q 08: $21.50 * 2,200,000 = 47,300,000

By my calculation average cost Buffett paid for NRG is 247,432,690/7,200,000 = $34.3657

Buying a stock Buffett was buying gives one some comfort because Buffett usually did his homework, and adhere to his rules (business; moat; management; price etc). Buying a stock at discount of the price Buffett paid offers some margin of safety. BTW, NRG closed at $18.33 today, about 50% of the Buffett price 🙂

The main downside of NRG is more than 50% of shareholders already accepted the tend offer from Exelon (they surrendered). Exelon extends tend offer till June 26. So hold on the stocks, just like the Oralce of Omaha does.


NRG, China Pacific, RIM, SanDisk, Thai natural gas car

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BUffett under water
Exelon put a bid for NRG yesterday, a bigger power (utility) for another smaller one, not all that interesting or surprising considering current market condition: the drop of share prices and the freeze of credit market (note the utility companies usually rely on bond market to finance its cap ex). But I saw a small twist: Buffett is still under water on his NRG share purchases, even after the Exelon bid. According to SEC filing, Buffett’s Berkshire Hathaway, bought 3,238,100 shares of NRG at $42.4 per share, in 2Q 2008 (source: gurufocus).

Rouge trader at Citic Pacific
According to Bloomberg, the rouge trader in Citic Pacific, a subsidiary of all-mighty China Citic Group, is going to lose 2 billion USD on un-authorized currency trade. Adding to the injury, the daughter of Citic Chairman Larry Yung (wiki), appears to be involved in the scandal. How many poor Chinese kids can go school with that money???

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