A tale of two investors – Bet on China or the U.S.?
moneyrelations :: Dec.27.2007
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A couple of financial heavy weights made news over the Christmas holidays.
First off, Mr Warren Buffett announced that Berkshire Hathaway is buying a 60% stake in the Marmon Group for $4.5 billion with the remaining 40% by 2014 based on future earnings.
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Yeah, I never heard of them either.
| Apparently, Marmon is a privately held industrial conglomerate made of 125 businesses. While it has reaches in China and Europe, it is an American company and Buffett is betting on America for the long haul – ten to twenty years into the future. This is from a guy who is 77-years old!
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| And in other news from Fortune Magazine, commodities investment guru Mr Jim Rogers thinks that the United States is in a recession. We just don’t know it because the government is lying. He’s a bear on America and believes that it is China’s century. He believes this so much that he’s moving to Singapore to be closer to the action – and his little girl is learning Chinese.
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So is it going to be China or the U.S. as the dominant economy in twenty years? Who knows. But look at these two highly successful investors having the foresight to make their moves now.
In the news, Investing, Warren Buffett ::
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China or US? It does not really matter in this global economy. The key is to find companies to invest in that are exposed to the world and are well run and let the company adjust its operations to the most profitable geographies
nice blog…
china will be on top of the heap, what do think about the SEMIs & Tech?
I’m a tech junkie
AMAT received the “kiss of death” from S&P
S&P UPGRADES OPINION ON APPLIED MATERIALS TO BUY FROM HOLD, ON VALUATION
SNPMarketScopeResearchNotes2007-12-26
Our upgrade is based on our view of AMAT’s favorable end markets and our belief that it will capture a significant share of the solar equipment market over the next twelve months. While we have a negative view on PC memory equipment spending
keep up the good work
@ Arohan,
That is the crux of the situation, isn’t it? So far, I haven’t been that adept in picking these companies although I am starting to pick up multinational blue chips. Problem is, they are slow growth and share price is at a premium. I might just do a geographical asset allocation and add more to emerging markets ETFs – although it’s not the BRIC I am interested in… I’m looking more into places like S. Korea.
@ justpassingby
Oh boy, a solar power play
It’s quite funny because I got out of Timminco, a Canadian silicon company that produces solar cells. I had doubled my money but it looks like I easily could have quadrupled it. Still, I can’t complain because I don’t know anything about solar cells.
I think the solar energy market is huge and it’s a good story. Too bad I just can’t understand it enough to offer an opinion.
Good luck to you though if you are in that sector.
Thanks for your answer, you are bullish on s.korea. Any special reason that you are bullish on it??? Here’s my picks for 2008 – AMAT, FCX, XOM, CDE
HNY!
Hi JPB,
Thanks for the picks. Mining and oil… why am I not surprised?
Regarding S. Korea, two words… Warren Buffett. He just did a tour of Asia and he still likes it. Also, the Economist did a good write up about emerging markets.
S. Korea just held its elections and I’m waiting for the dust to settle to see how the wind blows.
Kind of an intriguing if you can spare the change.
Boobus Americanus
What would happen if the Fed was a responsible central bank ?
– the $$$ would still be around 1,00 euro
– a starter house would still cost 100,000 in most parts of the country
– paying up with 20% house downpayment would be no problem for most people and there would be no need for garbage mortgages or going over 30% of income for housing expenses
– one could still get go out and eat for $20
– one could still get a fair hotel room $100
– gallon of gas would still be at $1.25
– most people would work, save and invest instead of spending a full day figuring out how not to get wiped out in chronic inflation or worrying how to cope with skyrocketing cost of living
– crime would be lower and so would fraud and corruption
– 2001-2004 would have been quite a deep recession, but the economy would be on the upswing right now, having cleared the excesses of the 90’s
What is so horrible about this picture above, that the Fed so desperately wanted to avoid it and in order to do that, created hyperinflation in housing, destroyed foundation of the economy, destroyed the currency, enslaved millions of people in debt, destroyed the middle class, slaughtered savers and retirees with negative interest rates and created massive distortions, corruption, lying and fraud in the economy
http://money.cnn.com/2007/12/27/news/international/bc.apfn.as.fin.china.us.dollar.ap/index.htm?postversion=2007122707
But Jen, what about Jim Cramer’s rant?
Look, I wouldn’t pretend to know anything about the American economy.
Sure, they need to suck it up and clean up the mess they created and I’m looking at Wall Street banks and their fancy commercial papers and SIVs. However, who ultimately pays the price with the loss of their homes and jobs? Not the rich CEOs with the million dollar bonuses. It’s the common folk and immigrants who couldn’t otherwise afford housing (which led to the hyperinflation). Oh and the flippers too.
So you want the chicken or the egg?
What’s done is done and irresponsibility reigns. But if they don’t cut interest rates now, complete blood and massacre would occur.
It’s a lose/lose situation but they need to keep the economy going and bide for time.
At least that’s the way I’m reading it. Educate me and tell me I’m wrong
Not sure about Cramer and his investment record. He may be annoying at times but not nuts. He’s definitely worth listening regarding to stocks, since he does provide valid observations. I’ve listened to him about homebuilders and he was definitely knowledgeable and conservative (KBH was probably the only homie worth owning – hugely delevered). Ignore his crazy outbursts and theatrics. I would not use him as a primary source of investment ideas IMHO
I don’t believe Cramer’s investing performance of 24% compounded over 13 years. Never see any reference to audited statements. And from what I’ve read Mr. Cramer, given that he IS a good investor (playing with mad money), some or a lot of his gains are also attributable to some sort of gaming the system
Even though I track Cramer on my blog for search engine optimization purposes, I never really backtracked his investment record. I do know that people short his recs
But to be fair, it’s hard to do his show day in and day out. His analysts have probably thrown him to the wolves at times. But ultimately it is his reputation to get it right…