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Thread: What a "real" investor does - and it ain't HYIP or MLM

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    What a "real" investor does - and it ain't HYIP or MLM

    671083436.jpgBuffett has 'itchy trigger finger'

    Warren Buffett said his "trigger finger is itchy" for takeovers after cash holdings at his Berkshire Hathaway Inc. climbed to $38.2 billion.

    "Our elephant gun has been reloaded," Buffett said today in his annual letter to shareholders. Berkshire needs "good performance from our current businesses and more major acquisitions," after the company reported a 43 percent gain in fourth-quarter profit on derivative bets and earnings from its Burlington Northern Santa Fe railroad, he said.

    Buffett is seeking takeovers after Berkshire's $13 billion 2010 profit increased the firm's resources and near record-low interest rates limited the returns available in fixed-income markets. Buffett completed his biggest takeover, the $26.5 billion Burlington purchase, last February. Since then he's said he'll consider deals outside the US.

    "He reloads at a rapid rate," said Thomas Russo, a partner at Gardner Russo & Gardner, who has about 10 percent of his $4 billion under management invested in Omaha, Nebraska- based Berkshire. "The hunt for new investments, and wholly owned ones, I don't think slows down whatsoever."

    Berkshire's fourth-quarter net income rose to $4.38 billion from $3.06 billion. The profit for full-year 2010 was up 61 percent from 2009. Berkshire has advanced 5.9 percent on the New York Stock Exchange this year, beating the 4.9 percent advance in the Standard & Poor's 500 Index.

    Investing Approach

    Buffett, 80, outlines his investing approach in his letters and opines about economics, executive compensation and government policies. His annual communications with shareholders have won him a following of professional money managers and the moniker "the Oracle of Omaha."

    "Commentators today often talk of great uncertainty," Buffett wrote. "Don't let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born."

    Buffett, who refers to Berkshire's stockholders as "owners," shuns quarterly conference calls with analysts and institutional investors, preferring to communicate by sending the letter and taking questions at the company's annual meeting.

    Acquisitions may help Buffett increase earnings for Berkshire as investment income at the company's insurance subsidiaries slide. Investment income produced by units including reinsurer General Re and car coverage specialist Geico fell 5.9 per cent in 2010 to $5.19 billion. Buffett said that may decline further in 2011 as investments he made during the credit crisis mature.

    Perils of Leverage

    Buffett warned in the letter about the perils of leverage and how his grandfather Ernest, a grocer, created a rainy day fund of $1000 for his son Fred and similar funds for his other children. Buffett likened the savings to the minimum $20 billion in cash Berkshire customarily keeps on hand.

    "By being so cautious in respect to leverage, we penalize our returns by a minor amount," Buffett wrote.

    "Having loads of liquidity, though, lets us sleep well. Moreover, during the episodes of financial chaos that occasionally erupt in our economy, we will be equipped both financially and emotionally to play offense while others scramble for survival."

    Buffett said Berkshire will pay about $1.5 billion to increase its stake this year in Marmon, a unit of about 130 businesses, to 80 percent.

    Goldman Sachs Group and General Electric will probably return the $8 billion that Buffett invested in 2008 for securities paying 10 percent, Buffett said. Yields in fixed- income markets have fallen in the last two years, and Buffett, Berkshire's chairman and chief executive officer, said in October that investors buying bonds after the decline were "making a mistake."

    The yield on two-year US Treasuries fell to a record low of 31 basis points on November 4 before rising to 71 basis points yesterday. The two-year note's average yield over the last 10 years was more than 250 basis points.

    The West Australian - Perth, WA, National & World News
    The only thing necessary for the triumph of evil is for good men to do nothing

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    Re: What a "real" investor does - and it ain't HYIP or MLM

    Off topic - don't mean to hijack your thread so pardon me, but LRM, would you happen to know if Clive Palmer has any mineral interests up in Alaska?

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    Re: What a "real" investor does - and it ain't HYIP or MLM

    Quote Originally Posted by A Life Aloft View Post
    Off topic - don't mean to hijack your thread so pardon me, but LRM, would you happen to know if Clive Palmer has any mineral interests up in Alaska?
    Not as far as I'm aware.

    Certainly his privately owned company "Mineralogy" doesn't have any overseas interests listed and "Resourcehouse" of which he is CEO and in which he has a controlling interest concentrates specifically on Sino-Australian projects.

    It's slogan is "Bringing the Worlds' Resources to China"

    AFAIK, Resourcehouse is, in fact, looking at listing on the HK exchange in the near future.
    The only thing necessary for the triumph of evil is for good men to do nothing

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    Re: What a "real" investor does - and it ain't HYIP or MLM

    LRM Thanks for the answer. That must explain it then. One of his Mineralogy MD-82's (beautiful aircraft and nice livery - never saw it before) landed at LGB Saturday morning and it had flown in from Anchorage. It didn't dawn on me (duh) that it had most likely been in Asia somewheres (perhaps China then, based on his business concerns), stopped in ANC to refuel and then headed down here. No clue why it came to Long Beach though nor who was/is aboard though. For some reason we don't get much info/news about Palmer over here, but everytime Donald Trump farts (who I couldn't care less about), it makes the news. lol I was just surprised to see it here instead of at LAX.
    Last edited by A Life Aloft; 03-01-2011 at 10:19 AM.

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    Re: What a "real" investor does - and it ain't HYIP or MLM

    Palmer actually owns 2 refitted MD 82s and I believe there's a 3rd on the way as well as a helicopter which he used to rescue 60 people stranded during the recent floods in his home state of Queensland.
    The only thing necessary for the triumph of evil is for good men to do nothing

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    Re: What a "real" investor does - and it ain't HYIP or MLM

    I had just read (Sun) that he owned two, did a little research on the net after seeing the one jet (didn't know at the time that he had two until I looked that up- must be nice lol) I'd actually like to read a bit more about him and plan on researching him more on the net soon when I have time. That is wonderful that he sent his crew and helicopter to do that! I think he has a third business jet but I have no idea what it is. Plan on reading more about him this weekend. Do you know what he is estimated to be worth, money wise now? I read he opened an office in Hong Kong recently. Like I mentioned, all the stories and news I see about him at a glance thus far, all come from Australian sources and not anything in the US sources. I just need to do some reading, he seems like a very interesting guy. I have no idea how he started out his career or anything, yet.

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    Re: What a "real" investor does - and it ain't HYIP or MLM

    Depends on who you ask.

    Business Review Weekly in its' annual richlist says he's Australias' 5th richest person with an estimated $3.42 billion.

    Palmer himself claims he's worth much more with some reports saying he's worth $12 billion.

    Whichever you believe, if the IPO of Resourcehouse goes ahead and goes well, he'll DEFINITELY be a whole lot richer.

    He owns 100% of the company and estimates put its' worth at between 10 and 16 billion

    Oh, and it's actually "professor" Clive Palmer.

    He's an adjunct professor of Business at Deakin University
    The only thing necessary for the triumph of evil is for good men to do nothing

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