Posts tagged Warren Buffett
What We’re Reading ~ 7/30/10
Jul 30th
Goldman Sachs defends its fund of funds offering [Absolute Return + Alpha]
New actively managed long/short ETF [FINalternatives]
Vistaprint (VPRT) is a busted growth story [CNBC]
Performance wise, it’s been a tough year for the Tiger Cubs [Institutional Investor]
Soros Fund Management eyes Bombay exchange stake [FINalternatives]
How a portfolio manager climbs the ‘wall of worry’ [WallStCheatSheet]
On Hugh Hendry, London’s contrarian fund manager [DealBook]
Merger arbitrage funds eye takeover revival [FT]
Opportunities in post-bankruptcy equities? [Barron's]
Market thoughts from hf managers Gerstenhaber, Arbess, & Ramsey [Bloomberg]
Profile of Li Lu, possible successor to Warren Buffett [WSJ]
An interview with Lee Partridge on a diversified approach to diversification [FuturesMag]
List of leveraged buyout candidates [WSJ]
Has Google (GOOG) lost its gusto? [Fortune]
Wyly Brothers charged with fraud [SEC]
Index Funds Advice from Warren Buffett
Jul 28th
Warren Buffett loves index funds. Well, not for himself as much as the rest of America. To be honest, I’m not sure that he owns any. All I know is that he recommends them to people all of the time.
Now you may be asking, how can he be offering advice on something he doesn’t even own? Well, here is how he can say that.
He is primarily giving this advice to individual investors who aren’t interested in stock picking. He’s also giving this advice to people who don’t have the resources or expertise to have sophisticated investment strategies.
This is the reason he recommends these. All index funds track a particular index. For example, a Dow Jones Index Fund tracks the DJIA.
The Dow has proven itself to grow over time. That’s huge when many mutual funds are falling prey in the market. It’s also significant because so many investment strategies that are set to beat the market rarely actually do. This way, you are not trying to beat the market. You are trying to grow with the market. There’s a huge difference.
The financial statistics tell us that this is actually one of the best ways to earn a reasonable return over time. Many other investments can’t promise you that nor give you reasonable arguments based on hard historical data that it will grow.
The other reason he recommends index funds is because investors then don’t have to go out and do stock picking. That can be a very arduous, tedious, and time consuming project for most people. That’s not to mention that most people don’t want to or can’t do it properly.
If you want to check out a good fund, check out the S&P 500 Index Fund. Well, there are several of them. The S&P 500 is said to be a more accurate picture of the US economy and stock market because they use more companies in their roster.
What to Invest When You Are Young
Jul 27th
It commenced as a decade of promise. America said goodbye to the 90′s with rousement and promise for a new century that gave hope to continued prosperity, advances in technology, and a intensity of our country’s global investments and succeeding role as the economic and military authority of the free world.
Ten years later, America limped out of the 2000′s happy to hinge the page on one of the worst decades in memory. Terrorist attacks in 2001. Wars in Iraq and Afghanistan. An unstabilized Middle East. Alarmed of nuclear armament from North Korea and Iran. Plus a financial crisis that rocked the markets of the world and plumped us into a deep recession that could take many years to recover.
In order to secure America’s financial future each individuals’ finances must be solid and built upon a firm foundation. Building up your own financial security is the right thing to do. The young is all of America’s future. I would strongly advise each young person to take their lives into their own hands. Build like it is going to be a forever thing. Don’t let a set back stop you, just brush yourself off and go again. If you can invest, invest and invest early.
Investment in $1. share plan could pay off in the end. I would choose a discount broker that I trusted and start to buy beaten-down shares. Investing should make me feel good about my future. We all cannot be Bill Gates or Warren Buffett but if you have the chance to listen to either, I would advise you to do so. Warren Buffett has made billions in mispriced securities, known as “value” stocks. Like Unitedhealth Group, Legg Mason Value Trust, shares sell for $22. but are valued at $60.
Todays stock market all rides on so much that you personally don’t have any control over, it is a gamble. Life is a gamble day to day, so invest. There are a few items that hold their value and even grow in value during a market crisises. They are precious metals such as gold, silver, copper, and platinum are very good investments. Eight gold ETFs/stocks to watch are GLD, GDX, IAG, GOLD, ABX, GG, TRE, and EGO. If you aren’t much of a spectator then go ahead and invest.
Gold dealers such as Bullion Direct and GovMint sell American gold buffalo, Canadian gold maple, American Gold Eagle coins if you wish to own gold directly. When you buy bars or coins from these dealers, they transfers the bullion right to you. With the ETF’s, on the other hand, you get paper work that the physical gold is deposited in a deposit box under your name.
Exchange Traded Funds (ETF) have been really popular in recent years. Everyone on Wall Street is getting into the action, The NewYork Stock Exchange, the Nasdaq, the AMEX, and the Comex. Also the indexers’ Dow Jones and the rating services Standard & Poor’s and Morningstar are in the move. Even giant mutual fund companies such as Vanguard and Charles Schwab see the advantages of EFT’s and are offering new ones rather frequently. Many of the exchanges are offering EFT’s through Rydex, Powershare, Streettracts, and iShare. Check the holdings before investing to make sure the fund meets your investment needs.
Fairness is not in the investment language. Some people’s IRA, 401(k), or dividends just dwindle away, yet others have so much money with little effort. If you really want to invest in stocks, please, take time to learn at least the basics and always go with your gut feeling. Trust your own self when it comes to your money you know best. I think right now would be the time to buy stocks and bonds while their prices are down. Buy low sell high is what I have always heard.
Finally, one way to make your retirement golden with a guaranteed income in any market, is an annuity with an insurance company. Invest your money as the years go by and in the end you’ll have a guaranteed income. Another great investment is invest in yourself, your education, a home, and your deepest desires. I have faith in America’s young they came from a good stock.
Have you started to invest yet?
Photo credit: Andy Kennelly
Original Post on The Sun’s Financial Diary
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What to Invest When You Are Young
Related posts:
- “How to Invest When You’re Young”
- A Few Options to Invest in Gold
- Young & In Debt
- American Express Launched ZYNC Card for Young Adults
- Pay Ourselves First: The Way We Save and Invest
What We’re Reading ~ 7/23/10
Jul 23rd
How the Masters of the Universe Melted Wall Street Down: Chasing Goldman Sachs [Suzanne McGee]
Tail risk, smooth returns, and investor democracy [Abnormal Returns]
Debt is still the problem & deflation is the painful solution [Pragmatic Capitalism]
On trading and poker [ChrisPerruna]
The bullish case on Lorillard (LO) [ValueHuntr ~ our readers receive a 15% discount to their Value Edge newsletter]
An interview with Jack Schwager, author of the popular Market Wizards books [CapitalIdeasOnline]
Hedge funds’ hottest assets: the ladies of investor relations [NY Mag]
Why don’t we all just do what Warren Buffett does? [CXO Advisory]
Google: growth, pricing power and valuation multiples [AboveTheCrowd]
Metrics for analyzing restaurant companies [StreetCapitalist]
Vitaliy Katsenelson’s presentation on China [My Investing Notebook]
The top six game changing hedge funds [Big Think]
A chart of current deal spreads [Merger Arbitrage Investing]
The $4 trillion question [Big Picture]
Chart: possible Elliott Wave projection on the S&P 500 [Steve Puri]
Julian Robertson weights reopening Tiger Management to outsiders [WSJ]
Paulson & Co looks to launch retail fund [FT]
Today’s market is missing valuation, fundamental metrics [Minyanville]
Phil Falcone’s mobile venture will spend $7 billion on network [Bloomberg]
The Bullish Case on Becton Dickinson (BDX) From East Coast Asset Management
Jul 21st
East Coast Asset Management is out with an in-depth presentation on Becton Dickinson (BDX). They lay out the bullish case for the company and assume that if you hold it for three years that an internal rate of return (IRR) on BDX if purchased now would be 17.6% annualized. This is not the first time we’ve covered commentary from this firm as we previously highlighted their deflation-reflation continuum debate. We’re excited to bring you their latest market commentary as well as their presentation on Becton Dickinson. So, how do they come to this conclusion on BDX?
Let’s first start with the thesis behind this play. Anant Ahuja, Christopher Begg, and Jack McManus have laid out the model for East Coast Asset Management and point out that Becton Dickinson is a niche business with a diverse set of products aimed at capitalizing on the increasing amount of aging baby boomers. Shares have been under pressure due to concerns over exposure to Europe, weak 2009 sales, and unfavorable foreign exchange trends.
The stock currently trades at 8x EV/EBITDA, well below the historical 5 year average of 10.1x EV/EBITDA. They argue that the business has an intrinsic value of $90-95 per share, representing 35-40% upside in the stock. East Coast highlights that Becton Dickinson has an impressive past of shareholder value creation. Over the past five years, BDX has seen 23.5% ROIC, 22.2% ROE, EPS CAGR of 15.8%, and 37 consecutive years of dividend increases. Not to mention, the company has repurchased a consistent amount of shares, with $450 million allocated this year. Given that these are attributes Warren Buffett often likes to see in a business, it should come as no surprise that his Berkshire Hathaway added to its BDX position in the first quarter.
East Coast says that, “the market, in its predictable myopia, has oversold BD out of concerns and speculation over matters that are not implicit in the underlying metrics of the core business.” East Coast Asset Management argues that at current share prices, the company is being valued at a future free cash flow of only ~ $4.50 per share. Ahuja, Begg, and McManus wager that this is a floor in valuation as this assumption infers no capital expenditure being allocated toward growth. Their estimates fancy that the business is worth closer to $92 per share (compared to the $67 per share it’s trading at currently).
As with any investment, there are also risks involved. They try to highlight these potential headwinds by outlining a possible rise in input costs, a medical device excise tax, as well as low cost manufacturers in other emerging markets thwarting business. Despite these reasons and others listed in their presentation, East Coast Asset Management is confident that the current share price is mainly a “result of macro fears and lack of granular clarity in the short term.”
Embedded below is East Coast’s twelve page presentation on Becton Dickinson (BDX):
You can download a .pdf copy here.
For more from East Coast, be sure to check out their previous market commentary on the deflation-reflation continuum. Stay tuned as later today we’ll also be posting up their most recent market commentary. In the mean time, you can head to some of the recent hedge fund letters we’ve posted as well for investment insight.
Chasing Value: NGG, Buffett, Barron’s and Me
Jul 21st
Filed under: Berkshire Hathaway (BRK.A), Duke Energy (DUK), Chasing Value, Stocks to Buy, Southern Company (SO), National Grid (NGG)
Four weeks ago, I made the argument that National Grid (NGG) might be on Warren Buffet’s radar screen as a foreign acquisition. The strategic benefits, depressed stock price and yield all made it look like a good fit.
Ten days ago, Barron’s trumpeted National Grid, a British company traded on the NYSE, for all the same reasons, absent the merger and acquisition possibilities.
So last week I bought NGG on a dip as a value proposition and if by some miracle “my pal Warren” makes a play for it that would be a bonus. Not to mention my crystal ball would go up in value. If you might be interested in a 7.72% yield from a company with the cash flow to back it up, read on.
Continue reading Chasing Value: NGG, Buffett, Barron’s and Me
Chasing Value: NGG, Buffett, Barron’s and Me originally appeared on BloggingStocks on Wed, 21 Jul 2010 14:00:00 EST. Please see our terms for use of feeds.
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Berkshire Hathaway – Warren Buffett – New York Stock Exchange – Southern Company – Duke Energy
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