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Buffet warns investors 'Don't get caught up in virus headlines' – Aljazeera.com

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Billionaire investor Warren Buffett on Monday warned investors not to get caught up in the headlines, as global markets tanked over growing concerns with the coronavirus outbreak.

“It is scary stuff,” Buffett told CNBC news network. “I don’t think it should affect what you do in stocks.”

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Warren, who is chairman of Berkshire Hathaway Inc., said that investors with a 10-to-20-year time horizon will fare well in stocks. The virus outbreak has “not changed” his long-term outlook, he added.

But markets worldwide fell on Monday as concerns about the COVID-19 coronavirus outbreak spread. New cases were reported over the weekend in Iran, Italy, and South Korea. On Monday, Kuwait, Bahrain, Afghanistan, Iraq and Oman reported their first infections from the coronavirus.

The coronavirus outbreak has killed 2,600, most of them in mainland China. It has also disrupted supply chains as many factories in China remain closed. 

But Buffett on Monday said that Berkshire would “certainly be more inclined” to buy stocks than on Friday. “If you look at the present situation,” he said, “you get more for your money in stocks than bonds.”

While the United States economy is still strong, it has become “a little softer” than it was six months ago, he added. The US economy grew 2.3 percent last year but has experienced slower consumer spending and industrial production.

Buffett spoke two days after Berkshire said operating profit fell 3 percent in 2019 to $23.97bn, hurt by losses from insurance underwriting. Unrealized gains in Apple Inc and other investments boosted Berkshire’s net income to a record $81.42bn in 2019.

Berkshire, based in Omaha, Nebraska, has more than 90 operating businesses including the BNSF railway, Geico auto insurer and Dairy Queen ice cream.

Buffet did say that the coronavirus outbreak was affecting a significant number of Dairy Queens in China. Many of the roughly 1,000 Dairy Queens in China are closed, while those that are open “aren’t doing any business to speak of,” he said. Other companies like Johns Manville insulation and Shaw carpeting have seen supply chain disruptions, Buffet added.

“There’s always trouble coming,” he said. “The real question is where are those businesses going to be in five or 10 years.”

Berkshire’s stock price has trailed the Standard & Poor’s 500 over the last decade. Buffett said it will not trounce the broader market as it once did, in part reflecting its size and roughly $558bn market value.

Any long-term outperformance “will be minor, but it will be done in a very very safe manner,” he said.

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Reuters news agency

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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