Wednesday May 7, 04:04 PM
What The Investment Gurus Are Buying
By Padraig O'Hannelly
Having considered the bear and bull arguments last week, I think it's worthwhile looking at where the investment gurus are putting their money.
The obvious place to start is with Warren Buffett; he's been increasing his investments
in consumer and industrial companies. In recent months he spent $4.5bn acquiring a 60% stake in the family-owned Marmon Holdings, a portfolio of 125 manufacturing and services businesses in sectors such as transportation, utilities, and infrastructure.
Buffett was also involved in the giant merger of privately-held Mars, and Wrigley (NYSE: WWY), providing debt as well as equity to that deal -- admittedly the equity was at at discount to the price paid by Mars.
While he expects more losses for banks generally, he thinks the worst is behind us as regards the credit crisis, and sees certain banks as good value for long-term investors. His Berkshire Hathaway vehicle has stakes in Bank of America (NYSE: IKJ - news) (NYSE: BAC), Wells Fargo (NYSE: WFC), and US Bancorp (NYSE: USB - news) (NYSE: USB). Also selectively bullish on financials at present are two 'star' fund managers: Anthony Bolton of Fidelity, and Bill Miller at Legg Mason (NYSE: LM - news) .
Companies with non-dollar revenues are priorities for Buffett at the moment, and he is rumoured to be interested in picking some of Royal Bank of Scotland (LSE: 91ID.L - news) 's (LSE: RBS (LSE: RBS.L - news) ) insurance businesses.
Regarding China, it's worth noting that Buffett sold his remaining stake in PetroChina (NYSE: PTR) late last year at a considerable profit, and those shares have fallen sharply from their November (Frankfurt: A0S9N7 - news) high.
Taking advantage of this fall, 'Investment Biker' Jim Rogers was reported to be buying into PetroChina in March. Rogers is still very bullish on both China and commodities, and recently resumed purchasing Chinese shares after the steep correction in that market. Political developments in Taiwan have also led him to start investing there.
Rogers' former partner, George Soros, is more cautious on China generally, but regards the currency as undervalued.
It's worth noting that Soros bought silicon chip-maker AMD (NYSE: AMD - news) (NYSE: AMD) last year, and you can now pick them up for half the price he paid.
Followers of Jim Slater will be interested to see that he recently acquired a 5% stake in small-cap medical technology company Advanced Medical Solutions (LSE: AMS.L - news) (LSE: AMS). AMS specialises in the treatment of wounds. (If you want to follow Jim Slater's lead, you could buy shares through The Motley Fool Share Dealing Service.)
As usual, the great minds have different opinions on the state of the investment world, so it's important to do your own research before buying or selling.
Why not check out what our in-house guru is buying, by taking a 30-day free trial of Maynard Paton's Champion Shares service.
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