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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: re3 who wrote (75787)	2/13/2000 11:43:00 AM
From: Freedom Fighter	Respond to of 132070

Ike, I don't know too much about that sector, but I can tell you the way Warren thinks. He is usually looking for a company with a sustainable business advantage that allows it to earn higher than average returns on invested capital. (cost, brand, size, business model etc) He also wants its prospects to be fairly well defined. Only a small percentage all businesses fall into that category. But really, those are the only types of businesses that you can value with some degree of precision. I'm sure for example, he thinks CSCO, ORCL, SUNW, MSFT and other techs will be earnings more a couple of years from now than they are right now. But that industry changes so rapidly that I think noone knows how much they will be earning 10 years from now. In order to value them, you sort of have to be able to make a very informed decision about that future. He can't, so he doesn't play. The natural resources area may be cheap (I don't know), but my guess is that there are very few businesses in that area that have any real sustainable advantage. So even if they are cheap, he probably won't play unless they get ridiculously cheap. He would just play the bounce and get out. He calls that cigar butt investing. It's a last resort. He wants to buy and hold. It's a style and size thing. He has to move billions around. Wayne