DealBook: Barclays Chief Declines Annual Bonus

Your Money Adviser: Annual Enrollment for Medicare Opens

Traditional Medicare covers hospital stays and outpatient visits on a fee-for-service basis, and you don’t need to do anything if you’re satisfied with your coverage. But if you buy an additional Medicare Part D prescription drug plan, or if you have chosen coverage through a private Medicare Advantage managed care plan, it’s wise to pay close attention, because details can change significantly from year to year. Premiums may go up, drugs may be dropped from the menu of covered medicines and doctors you like to visit may leave your network.

“The decisions you make in open enrollment can impact you for the entire year, or even longer,” said Nicole Duritz, the vice president of health education and outreach at AARP.

Medicare Advantage plans often carry low or even no premiums and most include prescription drug coverage, so they’re often attractive to people on fixed incomes. They usually restrict care to a network of doctors, however. Offerings vary widely from state to state, and even within states. About 14 million people, or more than a quarter of Medicare beneficiaries, are enrolled in the plans.

The federal Department of Health and Human Services says the average Medicare Advantage premium for 2014 is expected to be $32.60 a month, up $1.64 over this year. But premiums vary and it’s possible some plans may have much larger increases. The federal government has been cutting payments for the plans to bring costs into line with those for traditional Medicare.

Fred Cicetti, a 72-year-old retiree in Lincoln Park, N.J., said he was dismayed to learn that his insurer had discontinued his no-premium Advantage plan for 2014; a plan being offered with relatively comparable coverage came with a premium of $153 per person. That meant more than $300 a month to cover himself and his wife.

By calling around, he was able to find another plan with roughly the same coverage through a different insurer, with a premium of about $70 a month. “We found a solution that works for us,” he said. “But people really have to dig.”

If you have traditional Medicare and buy a stand-alone plan for prescription drug coverage, there are more choices this year, according to an analysis from the nonprofit Kaiser Family Foundation. Medicare beneficiaries will, on average, be able to choose from 35 drug plans, up from 31 last year, the report found. Most plans now use “preferred” pharmacy networks, so you’ll pay more if you buy your medicine elsewhere.

Most people don’t change drug plans, even though those who do switch often save money, a separate report from the Kaiser Foundation found. “People do tend to stick with the plan they’ve selected,” said Patricia Neuman, a Medicare policy expert and one of the study’s authors.

That may be because it is time-consuming for seniors to sit down with all their medications and calculate what their costs would be under a new plan, compared with their current plan, she said. “A lot of people think the juice is not worth the squeeze,” she said.

The federal government estimates that the average monthly premium for Medicare drug coverage in 2014 will be $31.

Here are some questions about Medicare open enrollment:

¦ Will the current federal government shutdown affect Medicare open enrollment?

The federal Centers for Medicare and Medicaid Services, the government agency that oversees Medicare, says open enrollment won’t be delayed.

¦ Where can I review my Medicare options?

Go to the Medicare Plan Finder at Medicare.gov. (Don’t go to the new federal health care exchange created by the Affordable Care Act; that’s for people under 65 who want to shop for private insurance coverage, not for people on Medicare.)

¦ What if I’m confused about my choices?

You can call Medicare at 800-633-4227. Or if you prefer help in person, try the State Health Insurance Assistance Program, known as SHIP. A list of programs by state is available on the program ‘s Web site.

March Home Prices See Best Annual Rise in Seven Years

The data on Tuesday also suggested the two segments could act as buffers as the broader economy faces the pinch of belt-tightening in Washington.

The S&P/Case Shiller composite index of 20 metropolitan areas climbed 10.9 percent year over year, beating expectations for 10.2 percent. This was the biggest increase since April 2006, just before prices peaked in the summer of that year.

Prices in the 20 cities gained 1.1 percent in March compared to the month before on a seasonally adjusted basis, topping economists' forecasts for a 1 percent rise.

The housing market turned a corner in 2012, several years after its far-reaching collapse. The recovery has picked up since as inventory has tightened, foreclosures eased and historically low mortgage rates have attracted buyers.

A Reuters poll showed the recovery in the housing market likely has momentum through the rest of the year, with economists ratcheting up their forecasts for price gains in 2013.

Separate data showed consumer confidence picked up in May to its highest in more than five years in the midst of a stock market rally and lower gasoline prices.

Housing and the consumer have shown strength even as there have been hints that tighter fiscal policy is starting to bite in the broader economy. Across-the-board U.S. government spending cuts of $85 billion went into effect in March, while the payroll tax holiday expired at the beginning of the year, raising taxes for many Americans.

The data suggested both areas were performing better than the overall economy, said Sam Bullard, senior economist at Wells Fargo in Charlotte, North Carolina.

"There are some individual circumstances that are helping to propel both of these a little bit stronger than what the actual underlying strength would suggest," said Bullard, pointing to the effect of higher stock prices on consumers, and investor demand for homes in beaten-down regions lifting prices.

Economists expect the pace of growth likely cooled in the second quarter, partly due to tighter fiscal policy, but the second half of the year is seen regaining traction. Investor attention has turned to when the Federal Reserve might start to slow its economic stimulus efforts.

The data lent support to equities where Wall Street rose after comments from central banks around the world reassured investors supportive monetary policies would remain in place. U.S. Treasuries yields rose to their highest levels in over a year.

Housing-related shares rose following the Case-Shiller report before giving up some gains in the afternoon, with the S&P homebuilders ETF up 0.4 percent. The ETF is up nearly 20 percent for the year, outpacing the more than 16 percent surge seen in the benchmark S&P 500 index.

Home prices in Phoenix continued their sharp ascent, rising 22.5 percent from a year earlier. Other standouts included San Francisco, up 22.2 percent, and hard-hit Las Vegas, up 20.6 percent.

Fitch Ratings on Tuesday said the recent home price gains seen in several markets are outpacing improvements in the underlying fundamentals and could stall or even reverse. Many of these areas are in California, Fitch said, citing Los Angeles as an example.

Los Angeles prices rose 16.6 percent from a year ago, the Case-Shiller report said.

For the first quarter of this year, the seasonally adjusted national index rose 3.9 percent, stronger than the 2.4 percent gain seen in the final quarter of last year.

"Low inventories and gradually improving housing demand have combined to push housing starts higher and support home price appreciation," said Michael Gapen, an economist at Barclays in New York.

"We see these factors as remaining in place and expect residential investment to add to GDP growth in the coming quarters. We also expect rising real estate wealth to support household balance sheets and underpin consumption, helping the broader economy to offset a substantial fiscal drag in 2013."

The Conference Board, an industry group, said its index of consumer attitudes jumped to 76.2 from an upwardly revised 69 in April, topping economists' expectations for 71. It was the best level since February 2008.

In a sign of confidence among high-end consumers, jeweler Tiffany & Co reported better-than-expected sales for the first quarter.

Consumer activity accounts for about two-thirds of the economy and while improved sentiment does not necessarily translate into more spending, the improvement was encouraging.

Still, even with the gain in confidence in May, second-quarter consumption growth is likely to have slowed to a 2.5 percent annualized pace from 3.2 percent in the first quarter, according to Capital Economics.

The expectations index rose to 82.4 from 74.3, while the present situation index climbed to 66.7 from 61.

Consumers' assessment of the labor market improved. The "jobs hard to get" index slipped to 36.1 percent from 36.9 percent the month before, while the "jobs plentiful" index gained to 10.8 percent from 9.7 percent.

(Editing by Chizu Nomiyama)

DealBook: Buffett Picks Douglas Kass as His 'Bear' for Annual Meeting

John Van Beekum for The New York TimesDouglas Kass, the founder of hedge fund Seabreeze Partners Management.

Warren E. Buffett has found his bear.

In his annual letter to shareholders, published on Friday, Mr. Buffett said that he wanted to “spice things up” by finding a money manager with an unfavorable view of Berkshire Hathaway to participate in the company’s annual meeting.

“The only requirement is that you be an investment professional and negative on Berkshire,” he wrote.

On Monday, Mr. Buffett said Douglas A. Kass, a hedge fund manager who has shorted Berkshire stock and thus bet that its price will fall, would be added to the panel of analysts at the company’s yearly gathering on May 4. He will be among those who question Mr. Buffett and Berkshire’s vice chairman, Charles T. Munger, on stage, when more than 18,000 devotees are expected to descend on Omaha for the three-day meeting, often described as the Woodstock for capitalists.

Mr. Kass, the owner of Seabreeze Partners Management in Palm Beach, Fla., is a well-known stock picker by virtue of his writings for a financial Web site, TheStreet.com, and frequent appearances on CNBC.

“I am going to Disneyland — I mean, Omaha!” Mr. Kass, 63, wrote on TheStreet.com. “I will be Daniel in the Lion’s Den, wading in a sea of Warren Buffett’s strongest admirers.”

Mr. Buffett, famous for his swift decision-making when it comes to closing deals and buying stocks, wasted no time in picking his “Berkshire bear.” But also credit Mr. Kass for taking the bull by the horns, so to speak.

Mr. Kass said he had read the Berkshire letter as soon as it came out on Friday, just as he had done each of the last 40 years. After seeing Mr. Buffett’s solicitation, he began preparing a proposal. Mr. Kass has credentials as a Berkshire bear, having written a piece in March 2008 for TheStreet.com, “Kass Katch: 11 Reasons to Short Berkshire” that laid out his rationale for betting against the company. (Berkshire’s stock is up about 16 percent since Mr. Kass wrote the column, but it did have down years in 2008 and 2011).

“I have worshiped at the altar of Warren Buffett since the late 1970s,” Mr. Kass wrote. “Indeed my writings over the last seven years have often been punctuated with Buffett-isms.”

Yet Mr. Kass said that despite his idolatry of Mr. Buffett, 82, the Berkshire business faced a number of headwinds. He cited Mr. Buffett’s advanced age, explaining that “there will never be another Warren Buffett.” He also said that Berkshire’s large size could impede returns, pointing out that even Mr. Buffett had written that the company’s asset base was too large to make outsize gains in the future. Both criticisms are even more potent today than they were a half-decade ago.

While Berkshire’s book value — Mr. Buffett’s preferred performance metric — has soundly outperformed the broader stock market over its 48-year history, the Standard & Poor’s 500-stock index has outperformed Berkshire in three of the last four years and five of the last 10.

So on Saturday, while watching the Kansas-West Virginia college basketball game, Mr. Kass completed his application. He included his bearish article on Berkshire from The Street, as well as a presentation he gave last year at a value-investing conference, in which he advocated shorting the United States bond market.

He also included his résumé, which highlighted that he began his career as a housing analyst at the investment bank Kidder Peabody and later worked for the billionaire investor Leon Cooperman, who runs the hedge fund Omega Advisors.

Mr. Kass, who said he had never met Mr. Buffett, also supplied him with a list of references of other prominent investors who know Mr. Buffett, including Howard Marks, the chairman of Oaktree Capital Management, and Mario Gabelli, the chief of Gamco Investors.

On Monday morning, in a live CNBC interview, Mr. Buffett made the surprise announcement that he had selected Mr. Kass.

“Think of tough questions,” Mr. Buffett challenged Mr. Kass on the air. “See if you can drive the stock down 10 percent.”

Mr. Kass was in his Palm Beach office, preparing for the trading day with CNBC playing in the background, and he heard Mr. Buffett make the announcement.

“I was as shocked as everyone else,” said Mr. Kass, who grew up in Rockville Centre, N.Y., on Long Island. “I am flattered, honored and surprised.”

He will join two Berkshire bulls, the insurance analyst Cliff Gallant of Nomura Securities and Jonathan Brandt of the money management firm Ruane, Cunniff & Goldfarb, on stage at the CenturyLink Center in Omaha in two months.

And even though Mr. Kass will be the stick in the mud at the celebratory weekend event, he acknowledges that deep down, he remains an unabashed fan of Mr. Buffett.

“I can’t wait to take a picture with him,” Mr. Kass said.

This post has been revised to reflect the following correction:

Correction: March 4, 2013

An earlier version of this article misstated Doug Kass's investment position in Berkshire Hathaway. He is shorting the stock; it is not the case that he was "not currently" short the company's shares.

DealBook: Buffett’s Annual Letter Plays Up Newspapers’ Value

Cliff Owen/Associated PressWarren Buffett, the billionaire investor and chief of Berkshire Hathaway.

Over the last half-century, Warren E. Buffett has built a reputation as a contrarian investor, betting against the crowd to amass a fortune estimated at $54 billion.

Mr. Buffett underscored that contrarian instinct in his annual letter to shareholders published on Friday. In a year when Mr. Buffett did not make any large acquisitions, he bought dozens of newspapers, a business others have shunned. His company, Berkshire Hathaway, has bought 28 dailies in the last 15 months.

“There is no substitute for a local newspaper that is doing its job,” he wrote.

Those purchases, which cost Mr. Buffett a total of $344 million, are relatively minor deals for Berkshire, and just a small part of the giant conglomerate. Mr. Buffett bemoaned his inability to do a major deal in 2012. “I pursued a couple of elephants, but came up empty-handed,” he said. “Our luck, however, changed earlier this year.”

Mr. Buffett was making a reference to one of his largest-ever deals. Last month, Berkshire, along with a Brazilian investment group, announced a $23.6 billion takeover,of the ketchup maker H. J. Heinz.

Written in accessible prose largely free of financial jargon, Berkshire’s annual letter holds appeal far beyond Wall Street. This year’s dispatch contained plenty of Mr. Buffett’s folksy observations about investing and business that his devotees relish.

“More than 50 years ago, Charlie told me that it was far better to buy a wonderful business at a fair price than to buy a fair business at a wonderful price,” Mr. Buffett wrote, referring to his longtime partner at Berkshire, Charlie Munger.

Mr. Buffett also struck a patriotic tone, directly appealing to his fellow chief executives “that opportunities abound in America.” He noted that the United States gross domestic product, on an inflation-adjusted basis, had more than quadrupled over the last six decades.

“Throughout that period, every tomorrow has been uncertain,” he wrote. “America’s destiny, however, has always been clear: ever-increasing abundance.”

The letter provides more than entertainment value and patriotic stirrings, delivering to Berkshire shareholders an update on the company’s vast collection of businesses. With a market capitalization of $250 billion, Berkshire ranks among the largest companies in the United States.

Its holdings vary, with big companies like the railroad operator Burlington Northern Santa Fe and the electric utility MidAmerican Energy, and smaller ones like the running-shoe outfit Brooks Sports and the chocolatier See’s Candies. All told, Berkshire employs about 288,000 people.

The letter, once again, did not answer a question that has vexed Berkshire shareholders and Buffett-ologists: Who will succeed Mr. Buffett, who is 82, as chief executive?

Last year, he acknowledged that he had chosen a successor, but he did not name the candidate.

He has said that upon his death, Berkshire will split his job in three, naming a chief executive, a nonexecutive chairman and several investment managers of its publicly traded holdings.

In 2010, he said that his son, Howard Buffett, would succeed him as nonexecutive chairman.

Berkshire’s share price recently traded at a record high, surpassing its prefinancial crisis peak reached in 2007 and rising about 22 percent over the last year.

The company reported net income last year of about $14.8 billion, up about 45 percent from 2011. Yet the company’s book value, or net worth — Mr. Buffett’s preferred performance measure — lagged the broader stock market, increasing 14.4 percent, compared with the market’s 16 percent return.

Mr. Buffett lamented that 2012 was only the ninth time in 48 years that Berkshire’s book value increase was less than the gain of the Standard & Poor’s 500-stock index. But he pointed out that in eight of those nine years, the S.& P. had a gain of 15 percent or more, suggesting that Berkshire proved to be a most valuable investment during bad market periods.

“We do better when the wind is in our face,” he wrote.

For Berkshire’s largest collection of assets, its insurance operations, the wind has been at its back. We “shot the lights out last year” in insurance, Mr. Buffett said.

He lavished praise on the auto insurer Geico, giving a special shout-out to the company’s mascot, the Gecko lizard.

Investors also keep a keen eye on changes in Berkshire’s roughly $87 billion stock portfolio. Its holdings include large positions in iconic companies like International Business Machines, Coca-Cola, American Express and Wells Fargo. He said Berkshire’s investment in each of those was likely to increase in the future.

“Mae West had it right: ‘Too much of a good thing can be wonderful,’ ” Mr. Buffett wrote.

He also complimented two relatively new hires, Todd Combs and Ted Weschler, who now each manage about $5 billion in stock portfolios for Berkshire. Both men ran unheralded, modest-size money management firms before Mr. Buffett plucked them out of obscurity and moved them to Omaha to work for him.

He called the men “a perfect cultural fit” and indicated that the two would manage Berkshire’s entire stock portfolio once he steps aside. “We hit the jackpot with these two,” Mr. Buffett said, noting that last year, each outperformed the S.& P. by double-digit margins.

Then, sheepishly, employing supertiny type, he wrote: “They left me in the dust as well.”

A former paperboy and member of the Newspaper Association of America’s carrier hall of fame, Mr. Buffett devoted nearly three out of 24 pages of his annual report to newspapers.

While Mr. Buffett has been a longtime owner of The Buffalo News and a stakeholder in The Washington Post Company, he told shareholders four years ago that he wouldn’t buy a newspaper at any price.

But his latest note reflects how much his opinion has turned. His buying spree started in November 2011, when he struck a deal to buy The Omaha World-Herald Company, this hometown paper, for a reported $200 million. By May 2012, he bought out the chain of newspapers owned by Media General, except for The Tampa Tribune. In recent months, he continued to express his interest in buying more papers “at appropriate prices — and that means a very low multiple of current earnings.”

“Papers delivering comprehensive and reliable information to tightly bound communities and having a sensible Internet strategy will remain viable for a long time,” wrote Mr. Buffett.

Mr. Buffett said in a telephone interview last month that he would consider buying The Morning Call of Allentown, Pa., a paper that the Tribune Company is considering selling. But Mr. Buffett said he had not contacted Tribune executives.

“It’s solely a question of the specifics of it and the price,” he said about the Allentown paper. “But it’s similar to the kinds of communities that we bought papers in.”

Mr. Buffett has plenty of cash to make more newspaper acquisitions. To cover his portion of the Heinz purchase, Mr. Buffett will deploy about $12 billion of Berkshire’s $42 billion cash hoard. That leaves a lot of money for Mr. Buffett to continue his shopping spree for newspapers — and more major deals like Heinz.

“Charlie and I have again donned our safari outfits,” Mr. Buffett wrote, “and resumed our search for elephants.”