How ill is Steve Jobs? The pictures of gaunt Apple boss that have financial world talking

Pictures of a gaunt Steve Jobs out in California with his wife have prompted financial analysts to ask serious questions about the health of the Apple CEO.

The National Inquirer published photos of Mr Jobs last week, outside a Palo Alto cafe with his wife Lauren.

Later on the same day, he was shown to be arriving at the Stanford Advanced Medical centre

The Inquirer claimed Mr Jobs was gravely ill, sparking a 'flash crash' drop in Apple's share price.

Speculation also ran rife that he was too ill to attend a meeting of technology giants with President Barak Obama last week - a rumour that proved false.

Nevertheless the White House had only released two images from the meeting in northern California on Thursday.

They showed Mr Obama with Facebook CEO Mark Zuckerberg, and a view of all the leaders making a toast around a table.

In that image, Mr Jobs's back is to the camera. He is the only one there who has not raised his glass fully, his elbow still resting on the table.

Mr Jobs has been battling pancreatic cancer. Fears have been steadily growing over his health after he stepped away from the day-to-day running of Apple due to health reasons.

The National Enquirer's article quoted medical experts who claimed that, based on the images, they believed Mr Jobs only had matter of weeks to live.


A smiling Mr Jobs at an Apple media event in 2010. His health is believed to have deteriorated

Mr Jobs, 55, stepped away from the company on medical leave last month. It was the third time in seven years that he has taken time out because of health reasons.

The high-tech visionary has come to embody Apple's turbulent history and some of the industry's most cutting-edge products.

The company has refused to provide any details on Mr Jobs's health, comment on the recent reports or say when he might return from leave.

Mr Jobs was not seen by a pool of White House reporters who were kept out of sight of participants at Thursday's dinner at venture capitalist John Doerr's secluded home in the affluent suburb of Woodside.

But a White House official confirmed that all those on the guest list were present.

Mr Jobs had surgery in 2004 for an unusual type of tumor on his pancreas called a neuroendocrine tumor. He had a liver transplant in 2009.

Chief Operating Officer Tim Cook is running Apple's day-to-day operations while Mr Jobs is on leave.

Analysts noted that Mr Jobs' health problems are widely known by investors, who are not likely to be shocked by Internet reports.


In the other image released by the White House, Mr Obama speaks with Facebook CEO Mark Zuckerberg

'I find it puzzling that he would be on campus and 'working' from home if he was that sick,' said Peter Misek, an analyst at Jefferies.

'Seeing him go into a cancer treatment facility shouldn't be a surprise.'

Mr Jobs had been seen in recent weeks on Apple's campus in Cupertino, California.

The company has said he will continue to be involved in major strategic decisions.

Known for his idiosyncratic style, Mr Jobs rescued the computer maker from near death in 1996 after a 12-year absence from the company he co-founded.

The launch of the iPhone, a smartphone with a touchscreen in 2007, and the iPad, a tablet computer in 2010, forged new business lines for the company that created the personal computing category and helped lead the technology industry into new directions.

White House spokesman Jay Carney said ahead of Thursday's meeting: 'This is a part of our economy that has been a huge contributor to economic growth in the last several decades and we expect will continue to be.'

Along with Mr Jobs and Mr Zuckerberg, the meeting was also attended by Google CEO Eric Schmidt, Oracle CEO Larry Ellison and other members of the Silicon Valley elite.

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Coke Takes the Fizz out of Berkshire Hathaway

Warren Buffett's Berkshire Hathaway (BRK.A, BRK.B) liquidated positions in a number of high-profile companies during the fourth quarter, but the Oracle of Omaha's huge stake in Coca-Cola (KO) appears to have caused his portfolio to lose its fizz so far in 2011.

Berkshire Hathaway is up just 2.58% through Feb. 15, according to an analysis by Bespoke Investment Group, lagging the broader S&P 500 ($INX) by fully 3 percentage points. Berkshire dumped its stakes in Bank of America (BAC), Comcast (CMCSA), Nike (NKE) and Lowe's (LOW), according to a regulatory filing made Monday, but held firm in some of its biggest plays -- which helped cause the portfolio's underperformance so far this year, according to Bespoke.

Based on data filed by Berkshire Hathaway, Coca-Cola "has no doubt hurt Buffett's returns this year," Bespoke reports. Coke, a component of the Dow Jones Industrial Average ($INDU), is not only Berkshire Hathaway's biggest holding, accounting for 23.4% of the portfolio, but has been the firm's worst-performing investment, declining nearly 4% year-to-date, according to Bespoke (see table).

Interestingly, Coke's fellow Dow component General Electric (GE) has been Buffett's best investment in 2011, adding more than 17%. Buffett's commitment to financial stocks has also paid off, Bespoke notes. Wells Fargo (WFC), Berkshire's second-biggest position, is up nearly 9% through Feb. 15, while Dow component American Express (AXP) gained 7.6%.


Buffett's biggest winners after GE were continuing bets on credit-rating firm Moody's (MCO), newspaper publisher Gannet (GCI) and Exxon Mobil (XOM) (yet another Dow stock), all of which rose more than 10%.

Bespoke Investment Group also put together a sector breakdown of Berkshire Hathaway's portfolio based on the most recent data and, lo and behold, financial stocks account for more than 45% of all holdings. Consumer staples come in second, making up more than 43% of the total pie. Note the large positions in consumer stocks (and Dow components) Procter & Gamble (PG), Kraft Foods (KFT) and Wal-Mart (WMT) in the table above.

Lastly, Berkshire Hathaway is most underweight in technology stocks. Bespoke notes that it has no exposure to the sector even though it's the biggest part of the S&P 500. "Buffett has said numerous times in the past that he doesn't invest in what he doesn't understand, and that is one reason he gives for not investing in the technology sector," says Bespoke. "In this case, he's putting his money where his mouth is."

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Underwater Homes Abandoned By Banks

It's not just homeowners walking away from underwater homes -- so are banks and their mortgage servicers.

Unfortunately for some neighborhoods, the mortgage servicers are abandoning the homes after many of the homeowners have been booted out and the home has sat vacant for months on end, according to a new study by Chicago's Woodstock Institute, which examined foreclosure filings and vacancies in the Windy City.


Bank walkaways are becoming a problem throughout the nation, with a high concentration occurring in the Midwest and certain distressed areas of Florida, according to a national study.

This is quite a concern because vacant homes have limited or no oversight, and pose a substantial risk to the surrounding community by potentially lowering property values, attracting criminal activity, and causing blight.

When properties have been devalued because of deferred maintenance, vandalism, or general declines in local property values, then servicers may determine that the cost of proceeding with a foreclosure exceeds its expected return. In these cases, a servicer may choose to charge off the mortgage on the property and consider it a loss.

However, because servicers in most cities are not required to notify borrowers and
foreclosure, homeowners are sometimes unaware that they still own the home and are responsible for paying the debt and taxes and maintaining the property.

The institute found 18,320 properties on the Chicago's vacant buildings index as of September 2010. Of these, 12,674, or 69.2 percent, were associated with a foreclosure filed between 2006 and the first half of 2010. And 1,896 of them were classified as red flag properties on the City's vacant buildings index where there was a foreclosure filing with no subsequent outcome. Starting in 2006, distressed communities that were already dealing with vacant and abandoned building issues began to experience dramatic increases in foreclosure activity.

This is not just a Chicago issue, however: About 45,000 charge-offs occurred between January 2008 and March 2010 in the U.S., with the majority occurring in urban areas in rust belt Midwestern states, according to a Fall 2010 report issued by the Government Accountability Office.

The downloadable GAO report found that 60 percent of the charge-offs occurred before an initial foreclosure filing was made, reported the Chicago Tribune. However, for charge-offs after a foreclosure filing, Detroit topped the list with 1,500. Chicago had the second-highest number, followed by Cleveland, at 499 and 497, respectively. While more than 50 perce nt of all the abandoned foreclosures GAO identified were in Michigan, Indiana, and Ohio.

"These troubled vacant homes have subjected already hard-hit communities to unsightly and potentially unsafe conditions for extended periods of time," said Geoff Smith, senior vice president of Woodstock Institute. "Local government and service providers must be empowered to counter the devastating impacts these homes have on communities, and lenders and mortgage servicers must be held accountable if they choose not to adequately maintain vacant properties under their stewardship."

Red-flag foreclosures place a significant burden on any city. It Chicago that burden amounts to an estimated $36 million, which can be $13,000 to nearly $35,000 per property. That's because the city would have administrative costs of dealing with these properties in building court, securing the properties, responding to criminal activity, and potentially demolishing these properties.

The top mortgage servicers and trustees associated with these likely abandoned foreclosures in the City of Chicago include Bank of America (314 properties), Wells Fargo (234), U.S. Bank (185), Deutsche Bank (178), and JP Morgan Chase (165).

More than 40 percent of red flag homes have been in the foreclosure process for more than a year and a half, which means their loan servicers likely have decided not to complete foreclosure. The red flags are disproportionately concentrated in Chicago's African American communities on the South and West sides. Over 71 percent of the red flag homes are located in highly African-American communities, compared to only 6.5 percent in predominantly white communities.

The concentration of red flag vacant properties in communities of color, is even greater than the concentration of typical foreclosure filings or other vacant properties. African-American communities are 11 times more likely to have a red flag home than are white communities, even though they are three times more likely to have a foreclosed property and six times more likely to have a vacant building.

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Tell-Tale Stat: Buffett's Berkshire Divests Bank of America, Nike Stakes

The past week's data-point-of-consequence for investors had to be investment decisions by Warren Buffett's Berkshire Hathaway (BRK.A).

Buffett ended positions in several stocks in the fourth quarter, including the Bank of America (BAC), Nike (NKE), Fiserv (FISV), Becton Dickinson (BDX), Comcast Corp. (CMCSA), Lowe's Co.s (LOW), Nalco (NLC) and Nestle (NSRGY), according to a filing, The Wall Street Journal reported.

Berkshire added to a holding of only one stock in the fourth quarter: Wells Fargo (WFC).

Berkshire's $52.6 billion U.S. equity portfolio now includes just 25 companies.

Market Analysis: File the above under "investment information for further reference." Of course, the Berkshire filing did not mention the reason for the sell or buy decisions. Perhaps Buffett sees a top in the stocks sold, or maybe a healthy correction? It probably was not due to market sentiment, as given the likelihood of U.S GDP growth propelling continued adequate-to-good earnings growth, this bull market has only just begun.

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Core Laboratories: The Right Technology for an Oil-Hungry World

that I rarely favor stocks already over $50, let alone $100. But there are exceptions, and Core Laboratories (CLB) is one.

Note: The $100 stock price puts Core Labs in the high-risk category, in my interpretation, not suitable for low-risk and moderate-risk investors.

Core Labs is a leading reservoir optimizer, providing an impressive array of proprietary products and services for the energy sector. And, in an oil-hungry and energy-hungry world, Core's products and services are likely to continue to be in demand.

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