Graham and Doddsville -- Value Investing In The New Era Message Board

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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era

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To: porcupine --''''> who wrote (263)	4/27/1998 1:18:00 AM
From: porcupine --''''>	Read Replies (2) of 1722

This week's Barron's, 4/27/98, p.40, contains an interview with fund manager Kurt Feuerman entitled "Power of Concentration". Feuerman rejects portfolio diversification, which is uncritically accepted by academia and most of Wall Street (but not in Omaha). Feuerman makes it a rule to contact management before he invests in a company. However, he makes an exception for "a unique situation": Berkshire. He says, "...We don't have to call Berkshire up, and even if we did, it wouldn't do much good." He continues: "....I own American Express and once asked Harvey Golub how often he spoke to the Great One. He said, 'Every week.' That made me feel good about American Express and great about Berkshire." However, Feuerman doesn't "get it" when it comes to tobacco stocks. In our view, there's no margin of safety in an industry that will eventually become a political football in every country in the world. But, we agree with him that GM is another IBM story: Shareholders looking for growth are getting bought out by shareholders that want to own the ever rising per share free cash flow.

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