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Strategies & Market Trends : Buffettology -- Ignore unavailable to you. Want to Upgrade?

To: Shane M who wrote (1000)	1/22/1999 11:11:00 PM
From: James Clarke	Read Replies (1) \| Respond to of 4691

Deere is very interesting as a long term holding with an entry point next time it hits 30-31. It will get there again. And it is probably going to be a while before it goes anywhere, but it will eventually. Caterpillar is another one I cover professionally and have been under tremendous pressure to buy, but I have avoided it. I am trying to be patient and wait for it to come to my price. Things are slowly deteriorating in Cat's business. I thought CAT would have fallen apart by now, but its one resiliant stock. Everything I see in the world and hear from CAT tells me to stick to my guns and look for a price in the 30s. Its is an absolutely excellent company, one of the best managed I have ever encountered up close. They dominate their industry and have for decades. Don't let the losses in the last two recessions fool you. If you take a longer term view - go back 40 years - you find that CAT earns money in good times and bad. I don't disagree with you though that 45 is probably a decent entry point if you intend to hold the stock for the very long term. I believe both of these qualify as Buffett stocks, though they are capital intensive. Both achieve high return on equity, have "moats", and are predictable over decades (though not quarters). You can look at CAT the same way Buffett would look at Coke or Wrigley - in 10 years, the heavy equipment business won't look much different than it does now, and CAT will be the leader. There are not many other companies you can say that about. JJC