The financial damage is massive and the question boils down to how far the contagion can spread throughout Europe (and elsewhere).  Austerity measures throughout Europe are now backfiring.  France put in Hollande as a move back to the left as Sarkozy’s austerity measures were just going to be too great for the population to want.  Inflation before cutbacks!  Live well today, let the kids figure it out when hey get older!  Hell, even The Netherlands could not agree on a budget and they have their act together financially just about as well as any of the top nations.  Angela Merkel’s party suffered a regional election loss in recent weeks as well.

Greece will not likely be the only casualty here.  Portugal, Spain, and Ireland are all at risk.  Sinn Fein has been making policy statements about austerity and the Euro inclusion and went as far as issuing a video to call for a NO vote in the Austerity Treaty referendum.  Spain has a serious capital shortfall in its banks if the reports over the size of the property value losses versus face value of loans is even only one-third true.  Portugal is just totally irrelevant to Europe, but it is upside down and at risk.  And Italy is just simply “too big to bail” with its debt and spending issues that lie ahead.

The fallout is running top to bottom… safe havens to PIIGS… We are seeing all the new 52-week lows come into play in some positions while many others are still above those recent lows.

iShares MSCI Germany Index (AMEX: EWG) is down 2.2% at $19.87 against a 52-week low $16.96; iShares MSCI France Index (AMEX: EWQ) is down 2.4% at $18.61 against a 52-week low of $17.88. The there is “the Euro currency ETF” via the CurrencyShares Euro Trust (AMEX: FXE) with a drop of 0.9% at $125.03 (new 52-week low) as the Euro is at the lowest point since July 2010.  iShares MSCI Italy Index (AMEX: EWI) is down 3.8% at $10.26 and only one-penny above the $10.25 52-week low.

Ireland… The Bank of Ireland (NYSE: IRE) is down 2% at $4.90 against a 52-week low of $3.99. The New Ireland Fund, Inc. (NYSE: IRL) is down 1.1% at $7.79 against a 52-week low of $6.49.

Greece… National Bank of Greece SA (NYSE: NBG) is flat at $1.52 against a 52-week low of $1.45; Global X FTSE Greece 20 ETF (AMEX: GREK) is down 3.5% at $9.99 at a new 52-week low (prior $10.25 low). The election in mid-June will likely be the key determining factor here.  If not, the situation is still not over and Greece is going to be an ongoing flight risk.

Spain… iShares MSCI Spain Index (AMEX: EWP) is down 3.3% at $22.81 and under the prior 52-week low of $22.87.  Banco Santander, S.A. (NYSE: STD) is down 3.5% at $5.58 against a 52-week low of $5.52 and Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) is down 4% at $6.02 against a 52-week low of $5.96.

Vanguard MSCI Europe ETF (AMEX: VGK) tracks the  MSCI Europe Index, which is made up of approximately 460 common stocks of companies located in 16 European countries-mostly companies in the United Kingdom, France, Switzerland, and Germany.  It is down 2.6% at $39.85 against a 52-week low of $38.40.  The SPDR EURO STOXX 50 (AMEX: FEZ) tracks the STOXX Europe 50 Index and it is down 2.9% at $26.93 against a 52-week low of $26.10.

This is sort of funny on the surface if you don’t think about the financial and human tragedy that is unfolding.  It is not exactly as though the global economy rose this much when they launched the Euro.  Little reward, massive pain!

Sadly, Europe is starting to feel like Latin America of the 1980s and early 1990s all over again.

JON C. OGG

The question here is simple… Are junk bonds being sold off by too much?

In many cases the high yield junk bond sector is like investing in equities.  Unlike Treasury bonds, for now at least, junk bonds carry credit risks that the bond market does not.  The difference is that you can easily find dividend yields of 7%, 8%, and even higher.

iShares iBoxx $ High Yield Corporate Bond (AMEX: HYG)- was down 1.4% at $87.59 against a 52-week $77.90 to $92.67.  The indicated yield here is 7.25% based on the last payment.

SPDR Barclays Capital High Yield Bond (AMEX: JNK) was down 1.3% at $38.19 against a 52-week range of $34.09 to $40.89.  It had a 7.2% indicated yield based on its last payment.

PIMCO High Income Fund (NYSE: PHK) was down 0.9% at $12.64 against a 52-week range of $10.52 to $14.88 and its yield was about 8.3% based on the last dividend.

Other closed-end funds were down 3% and more on Thursday:

Invesco High Yield Investments Fund, Inc. (NYSE: MSY) was down close to 3% at $6.07 against a 52-week range of $5.25 to $6.83 and with an 8.8% yield.

Western Asset High Income Opportunity Fund Inc. (NYSE: HIO) was down over 3% at $6.11 against a 52-week range of $5.34 to $6.58 with a yield of close to 8.4%.

BlackRock Corporate High Yield Fund V, Inc. (NYSE: HYV) fell by over 3.3% down to $12.02 against a 52-week range of $10.10 to $13.13 with a yield of 8.6%.

When you get a free fall on these you often cannot ever catch the ultimate bottom all at once.  In fact, the performance of these during the recession and during certain times of panic selling as we have seen in each of the last two summers has been dismal.  The trick is the timing.  Rewards usually await for those who catch junk bonds after they start to bottom out.

JON C. OGG

GSV Capital Corporation (NASDAQ: GSVC) owns Facebook shares and has for some time at what may be as much as a 50% profit.  The closed-end BDC has also raised capital on more than one occasion each time the stock popped up. Shares were at $19 earlier this week and the stock closed at $16.10 on Thursday.

Firsthand Technology Value Fund (NASDAQ: SVVC) was at $30.00 earlier in the week and it is already under $27.00 against a 52-week range of $14.12 to $46.50.  This one recently raised  $127.7 million via a secondary offering and it plans to invest the cash in portfolio companies.

The one ETF we would be watching is Global X Social Media Index ETF (NASDAQ: SOCL), but only AFTER the Facebook IPO for a few days.  This ETF will ultimately include Facebook with likely a max of 10% weighting at the onset of the inclusion date.  Keep in mind that it does not own Facebook shares before the IPO.

Zynga, Inc. (NASDAQ: ZNGA) has still been trading as a busted IPO but it and Facebook have very deep revenue ties due to the social gaming.  Here is where you can spend real life money on virtual farm animals!

As a reminder, Goldman Sachs Group Inc. (NYSE: GS) owns (with affiliates) over 65 million shares and it is selling more than 28 million shares.  Microsoft Corporation (NASDAQ: MSFT) also owns 32.7 million shares, but those are of the Class B shares.

Tree Top Industries, Inc. (OTCBB:TTII.OB) rallied on news that it owned no less than $100,000 worth of Facebook shares.  The company calls itself a mini conglomerate based on Teledyne’s business model.  Oh boy!

Facebook is the new F-word on Wall Street.  Starting next week and the week after that, the financial media is going to have to find something new and hot to talk about all day long.

JON C. OGG

Apple Inc. (NASDAQ: AAPL) was a large gain by Appaloosa Management, with a gain of more than 500,000 shares up to 685,000 shares worth some $303 million. This of course was worth more in April. Farallon put up a new position of just over 192,000 worth some $116 million. Janus only lowered its stake by 0.5% and Apple is still its largest holding at over $3.8 billion, while Vanguard lifted its stake by about 5% worth over $23 billion.

Caesars Entertainment Corporation (NASDAQ: CZR) was a strange position on the surface, but easy to explain later. Paulson & Co. was shown to have lifted its stake to 12.37 million shares from NO SHARES at the end of 2011. The problem is that Paulson owned Caesars shares already before the IPO but it was not public before the end of 2011.

Computer Sciences Corporation (NYSE: CSC) was a 2.4 million share stake by Greenlight Capital (under David Einhorn) worth $72 million, and that was a new position. With an activism flare, maybe this can light some fire under what has been a dead tech-value stock. Another firm, Highbridge Capital Management LLC, added more than 1 million shares as a new position in the first quarter.

DaVita Inc. (NYSE: DVA) was a key addition of Warren Buffett’s Ted Weschler who grew his stake to 6,000,000 from almost 2.7 million shares. This was a doubling of the stake, but we would note that this stock has slid 10% since the end of the quarter. The overall position may be closer to break-even here, but this has a huge portion of the kidney dialysis market as of today.

Dollar General Corporation (NYSE: DG) was a surprise for us considering that we thought Warren Buffett’s new manager Todd Coombs would have added to this position rather than cutting it. Maybe the valuation premium just became too much. The March 31 stake was 3.63 million shares versus the 4.497 million shares at the end of 2011.

El Paso Corporation (NYSE: EP) saw more than one move higher. Farallon Capital added another 50% or so to end with 22.49 million shares worth $235 million in the first quarter; Paulson & Co. doubled its stake in the first quarter to 8 million shares worth over $118 million.

Encana Corporation (NYSE: ECA) is a standout because it looks small, but it is a good whale watching stock. BP Capital’s T. Boone Pickens initiated a new position of more than 1.13 million shares worth some $22.3 million.

Express Scripts Holding Co. (NASDAQ: ESRX) was a very large gain by Farallon Capital, where the position rose to over 5.65 million shares as of March 31 from only 1.17 million shares at the end of 2011. Paulson & Co. also doubled its stake in the first quarter to 3.24 million shares worth over $87 million shares. With the merger now closed, others have been looking at this despite Walgreen’s issues.

General Motors Co. (NYSE: GM) was another new position of 10 million shares worth more than $250 million. Frankly, we might have guess that Ford would have been chosen. Is it possible that this was a “politically motivated or influenced” as Buffett is such a supporter of Obama? That admittedly seems like a stretch, but if we were looking for auto exposure it would have probably been with Ford.

SIRIUS XM Radio Inc. (NASDAQ: SIRI) saw SAC Capital grow from only over 3 million shares at the end of 2011 to 98.2 million shares worth almost $217 million in the first quarter, SAC wheels and deals in shares all the time, so they could have been in and out of a lot more or less shares before, during, and after that point.

Skyworks Solutions Inc. (NASDAQ: SWKS) scored a new large stake in the first quarter by Maverick Capital. The new holdings came to over 5.8 million shares worth some $161 million at the end of the quarter, likely as an “Apple play.”

United Continental Holdings (NYSE: UAL) was hard not to miss in the whale hunting as well as Appaloosa grew its position by 500% or so up to over 7.9 million shares worth over $146 million.

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Also, keep in mind that portfolio managers Todd Combs and Ted Weschler are still new and those new positions of under $200 million $300 million are likely tied to them.

24/7 Wall St. has gone through line by line of each position to see which stocks have been bought and sold as new positions, as well as having added in whether or not the number of shares grew or shrank on each since the prior quarter. We had added some color in on some of the positions if applicable.

Be advised that the number of subsidiaries that this filing covers is 14 entities rather than 18 entities in the prior quarter. There is also a note in the 13F filing showing that the SEC has granted “Confidential Treatment” on some Berkshire stock holdings and that likely suggests that Buffett is still acquiring a position he does not want the public to know about yet. This filing does not signal the half-dozen or more European shares that Buffett said he bought so that remains an outstanding issue as well.

The value of the stock portfolio was $66,151,587,000 at the end of 2011 and this was listed as $75,300,250,000 at the end of March 2012.

American Express Co. (NYSE: AXP) was over 151.6 million shares, SAME AS last quarter.

Bank of New York Mellon Corp. (NYSE: BK) is now 5.6 million shares, HIGHER THAN the 1,793,915 shares last quarter.

CVS Caremark Corporation (NYSE: CVS) is the SAME SIZE at 7.106 million shares after having been a new holding in a recent quarter and having been raised one quarter ago.

Coca Cola Co. (NYSE: KO) was right at 200 million shares, SAME AS BEFORE.

ConocoPhillips (NYSE: COP) is roughly 29.1 million shares, roughly the SAME AS BEFORE but it is still lower than previous quarters in past reports.

Costco Wholesale (NASDAQ: COST) 4,333,363 Shares, SAME AS last quarter after having lowered it before.

Da Vita Inc. (NYSE: DVA) is now 6 million shares worth $541 million and that LARGER THAN BEFORE after having been a new position of 2.684 million shares.

DirecTV (NASDAQ: DTV) is a LARGER POSITION listed at 22.999 million worth over $1.13 billion. This one had been 20.348 million shares worth $870 million one quarter earlier and it had been a new position just two quarters ago at 4.249 million shares.

GSV said that this will raise $97.5 million in gross proceeds. As for the use of proceeds this was said to be ” to invest in portfolio companies in accordance with its investment objective and strategies, and for working capital and general corporate purposes.”

Citigroup was acting as the sole book-running manager for the share offering; and co-managers are listed as Ladenburg Thalmann, Lazard Capital Markets, National Securities, Aegis Capital, Maxim Group, and CICC HK Securities.  These underwriters have been granted a 30-day option to purchase up to an additional 900,000 shares of common stock to cover overallotments.

GSV has sold shares before.  It sold 6.9 million shares in early 2012 and it sold 1.9 million shares last September.  Raising capital to buy more shares is probably an acceptable move for a business development company, but the company might want to consider that it is going to get a reputation for selling more stock each time its shares rise.  That would not be very popular for the investing community because they can wake up and find their shares down 5% to 10% overnight.

As a reminder, GSV is a company which owns shares of Facebook, Twitter, and other companies which are soon to come public.  This was even listed as one of the ways to play the Facebook IPO.  Shares are down 8.2% at $16.73 after closing at $18.23 on Thursday.  The 52-week trading range is $9.75 to $20.89.

JON C. OGG

The first point is that the firm does not think that managing to an arbitrary target like the “25/25 Plan” makes sense.  In this manner it noted, “We would also urge the company to accelerate monetizing any assets that are not core to the E&P business (such as midstream & oil services assets) and/or any more E&P assets which are not overly reliant on depressed spot natural gas prices and where the company does not have a leading position.”

Another point is to end the unproductive communication that the company is conducting.  Here it urges management to put their heads down and get the items in #1 done.  The point is simple in that Chesapeake’s sell-side conferences, media interviews with no hope of a fair hearing, and meetings all over the U.S. with groups who may have only a casual interest but don’t mind hearing the “story” use valuable amounts of top management’s time with no apparent benefit and plenty of misinterpretation detriment. Here it even said “CHK stock has far too many renters and not enough owners, so we would suggest the current system of shareholder communications is not working.”

The largest point to note was one out of context, but it notes, “we urge the board to  be open to any offers to acquire the whole company” even though it also noted that it would not encourage any action that would generate a lowball bid versus the net asset value of the company.

Southeastern’s letter was signed by Mason Hawkins (Chairman & CEO), Staley Cates (President & Chief Investment Officer), and Ross Glotzbach (Senior Analyst & Principal).

Chesapeake shares did try to initially rally but this is still down 0.5% at $17.31 against a 52-week trading range of $16.70 to $35.75.

FULL FILING

JON C. OGG

When Team Buffett adds to a position, it is often in the new or relatively new positions already in the Buffett portfolio.  24/7 Wall St. has taken a look at the recent additional stake or new stake positions to see which shares that Mr. Buffett and his team of portfolio managers has likely added to along with some color and logic behind the move.

CVS Caremark Corporation (NYSE: CVS) was a larger position as of the end of 2011 at 7.106 million shares after having been a new holding in a recent quarter.  This was worth about $280 million at the start of 2012 and it is up more than 10% since then and the market cap here is $58 billion.

Da Vita Inc. (NYSE: DVA) was previously listed as a new position of 2.684 million shares worth $203 million at the end of 2011 but that position is worth about 12% more.  This is the leader as a kidney dialysis provider.  If the health trends remain then this one is right up Buffett’s alley.

DirecTV (NASDAQ: DTV) was most recently listed as a larger position which was listed as 20.348 million shares worth $870 million at the end of 2011.  In a prior report we had it as a new position of 4.249 million shares one quarter earlier.  The share price alone is up over 13% from the value at the end of 2011.

Dollar General Corporation (NYSE: DG) is one of the stocks which we think Team Buffett would have liked to own much more of.  The rapid rise in the value of the dollar store trends as a secular theme was even noticed at Berkshire.  This was the same size at the end of 2011 at 4.497 million shares but this was a new position and a larger position and it seems that the price just appreciated too fast for Buffett and friends to add many shares.  Perhaps they participated in the most recent secondary offering, but that might not appear based on the cut-off dates.

General Dynamics Corporation (NYSE: GD) was most recently a larger stake of 3.877 million shares worth $257 million after being listed as a new position just one quarter earlier before of 3.064 million shares.  These shares are hardly higher than the end of 2011, so perhaps Buffett and team have added to the stake on weakness.

Intel Corporation (NASDAQ: INTC) was a larger of 11.495 million shares worth $278 million at the end of 2011; this was a new position of 9.333 million shares last quarter.  Shares are up 16% so far in 2012, so Buffett’s stake here may have grown in size and in value.

International Business Machines Corporation (NYSE: IBM) is one that Buffett already hinted at owning more of, but perhaps that is due to IBM’s share float shrinking from its buybacks.  The most recent filing showed some 63.905 million shares worth some $11.75 billion now after having been a new position with an average cost of about $170 per share.  Buffett’s bet has been worth more than a 10% unrealized gain ($1 billion or so) on what is now one of his largest positions.

Liberty Media Corporation (NASDAQ: LMCA) was a new position of 1.7 million shares worth some $132.7 million.  If Buffett is involved much here, it is under his new portfolio managers. Shares are up about 6% this year so far but it is unknown what the real goal or strategy is here when you consider the DirecTV angle.

Visa Inc. (NYSE: V) was most recently listed as a larger position of 2.865 million shares worth $291 million at the end of 2011.  This was listed as 2.291 million shares in the previous quarter.  The company has a near-duopoly and market strength and history that it seems just like a Buffett dream.  He likes banks, but owning the toll road providers for the theme of consumers using less cash and more card swipes in the years ahead.

Wells Fargo & Co. (NYSE: WFC) is almost certainly a larger stake.  The reason for believing that is that Wells Fargo seems to be a position which grows in size infinitely and it was raised during the prior filing period to more than 383 million shares.  As of Friday’s closing bell, that stake (assuming no share count growth at all) would be worth a shopping $12.65 billion.

It is unlikely that Buffett would have added to each and every position.  He just doesn’t do that and his new team may be more interested in adding on other new targeted stocks on the books.

Again, here is the FULL BUFFETT STOCK HOLDINGS.

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Prostate cancer and the issue of Buffett’s successor are likely first.  Will this cause shareholders to call for a more focused disclosure over who will take over as CEO? Even if so, every Berkshire Hathaway investor knows that Berkshire Hathaway is Warren Buffett and Warren Buffett is Berkshire Hathaway.  Our take: Buffett is likely to divulge his successor only when it is on his terms or when the decision must be announced.

The second issue is The Buffett Rule.  Most of the Berkshire Hathaway shareholders are not exactly middle class.  They are usually the one-percenters, at least they are for the A-Shares with that super-high share price.  Warren Buffett was met with a cold stare from the audience before when he defended Lloyd Blankfein at Goldman Sachs Group Inc. (NYSE: GS) and it will be interesting to see how the audience reacts to any notion of paying higher taxes and their chief capitalist calling for Obama and Washington D.C. to increase the tax burden on the wealthy.

Read Also: Buffett’s Full Investment Holdings

While this may seem like a sideshow, the investments in International Business Machines Corporation (NYSE: IBM) and Intel Corporation (NASDAQ: INTC) almost have to be a topic to bring up.  For years Mr. Buffett has shied away from technology.  A $10 billion bet or thereabouts has only grown in value and we all know that Buffett said he would never invest in shares of Microsoft Corporation (NASDAQ: MSFT) because his close ties with Bill Gates would be construed as possessing knowledge that is too close to the situation.

It will be interesting to see if Buffett addresses relatively new positions such as DaVita Inc. (NYSE: DVA) and Dollar General Corporation (NYSE: DG).  DaVita is the king of kidney dialysis and if that is not a captive market then no other market is captive.  Dollar General is one we have referred to over and over as benefitting from the secular trend of dollar stores as these stores are reaching up to grab customers from traditional retailers.

We would also expect to hear a little bit more about the investing decisions and input from Berkshire’s two new portfolio managers Ted Weschler and Todd Combs.

With extremely large stakes in Coca-Cola Company (NYSE: KO) and Wells Fargo & Co. (NYSE: WFC) and with those positions now being up near highs again, it will be interesting to see if Buffett addresses these core holdings as keys to the core holdings with higher dividends.

Berkshire Hathaway’s A-shares closed on Thursday at $121,800 against a 52-week range of $98,952.00 to $123,578.00; and the B-shares closed at $81.26 against a 52-week range of $65.35 to $82.47.

JON C. OGG

The underwriting group just got this one very wrong and left millions upon millions of expansion capital on the table for Splunk to finance its growth. The book-runners of the offering were Morgan Stanley (NYSE: MS), Credit Suisse (NYSE: CS), JP Morgan Chase & Co. (NYSE: JPM) via JP Morgan Securities LLC, and Bank of America Corporation (NYSE: BAC) via BofA/Merrill Lynch. Other managers in the syndicate were UBS Investment Bank, Pacific Crest and Cowen and Co.

Splunk has a software platform that allows companies and large organizations to harness their data via real-time operational intelligence. The company has been growing rapidly and claims over 3,700 customers, which all pay license fees based on index capacity needs. Sales almost quadrupled from 2010 to 2012, with the most recent annual sales at $121.0 million. Even before the IPO came out the stock was given a boost by JMP Securities as it initiated coverage with a “Market Outperform” rating and with a $22.00 price target. The opening price was $10.00 above that! Shares rose another 2.9% to $35.79 on more than 130,000 shares in the after-hours session.

The leading underwriters could hardly argue that they did not do the company a huge disservice here. IPOs that double or come close to doubling on an opening price and that close up higher imply that the underwriters did not know what they were doing. Sure, it gives Splunk a market value of twice what it was told, but it also means that the company raised only half of what it could have raised. Companies come public so that they can finance their growth and to create a liquidity in the company (and a liquidity event for the backers).

Almost all of the shares were sold by the company: 12,507,278 shares were sold by Splunk, and 992,722 came from selling shareholders. To make matters worse, Splunk had granted the underwriters a 30-day option to purchase up to an additional 2,025,000 shares to cover over-allotments. You can bet your assets that the greenshoe option was exercised.

The reason that the 100% premium to the premium pricing is a huge disservice is because it means that money managers, hedge funds and mutual funds who were allowed to buy shares on the IPO suddenly have a double in price on their hands. They took none of the venture stage risk, and they did none of the work to get the company public other than look at the growth rates and say, “Sure, I would like to buy 10,000 to 100,000 shares.” And they double their money overnight.

When you see moves like this, it should really point out that the OpenIPO process from W.R. Hambrecht & Co. might be at least one better way. If this does not give Facebook an even stronger leg to stand on to demand that the underwriters take huge discounts and offer a strong pricing, then nothing else does.

When Splunk first filed for an IPO it was for up to $125 million. The company sold $229.5 million in total gross proceeds (including insider shares) and that is before considering the 2.02 million shares in the overallotment option, which you know have already been exercised by the underwriters. The total implication is that Splunk probably could have raised up to $300 million to $400 million, if you discount the huge opening and closing premiums on the first day.

In 2011, Splunk had the following expenses: R&D $23.56 million; Sales and marketing $74.78 million; and G&A $19.69 million. Had the underwriters priced this one correctly, Splunk could have raised another full year’s worth of operating expenses.

Imagine if you were selling a rent house property and your real estate agent left a full year’s worth of living expenses on the table. At some point in the future, companies coming public should be able to have at least a bit more control over the IPO process.

JON C. OGG