Boring = Good Investments? - Look at Warren Buffet for clues!

Warren Buffet seems to like boring investments. See the "cut and paste" screenshot below. This is his list of top investments as of end 2007 from his letters. Don't you find some similarities or clues as to what kind of companies this old fogey likes?Look at the red arrows.

Below are a brief description:

Anheuser-Busch (beta:0.31)- domestic beer, international beer, packaging and entertainment.

Coca-Cola (beta:0.61) - manufacturer, distributor and marketer of nonalcoholic beverage concentrates and syrups in the world

Johnson and Johnson (beta:0.50) - research and development, manufacture and sale of a range of products in the healthcare field to consumers.

Kraft Foods Inc (beta: 0.59) - engaged in the manufacture and sale of packaged food products, including snacks, beverages, cheese, convenient meals and various packaged grocery products.

Proctor and Gamble ( beta: 0.52) - Beauty; Grooming; Health Care; Snacks, Coffee and Pet Care; Fabric Care and Home Care, and Baby Care and Family Care.

Wal- mart( beta: 0.05) - retail stores (supermarts,mega marts)

Washington Post(beta:0.65) - diversified education and media company

Notice how the betas are generally much lesser than 1? ( Beta measures the stock volatility.The smaller it is, the lesser its price will fall in a downturn compared with the general stock market. It will also generally rise less in a upturn. Cyclical industries usually have high betas above 1.)

Notice also that the customers of these companies are retail consumers which are diversified. Don't forget his holding company Berkshire Harthaway also consists of a large portion of subsidiary companies such as See's Candies which cater to retail customers.

Hmm..maybe its a good idea to start looking at such kind of stocks for investment..don't ya think?

Infrastructure-Related Equities - Comment by Hot Sexy Student

4 days ago, our hot sexy student knocked on our door. ( In case you have not been following us, we mentioned about this student some articles back. She predicted a recession or some anomaly sometime back in late 2006. Student is now currently studying in Victoria Junior College...she told us to say one in return for her continued ad-hoc advise.Yes, we are quite shameless to sometimes ask for a teenager's advise in managing money but hey, thats to broaden our perspective. You stone-headed, "know-it-all" adults!)

According to her, keynesian policies advocate pump priming by governments during times of economic duress to stimulate the economy. Such pump priming activities include spending on Infrastructure, defence related stuff and e.t.c. With that she left, leaving her sweet perfume lingering in the air and us, baffled at what she meant and what she was trying to prove. Anyway, we came to a conclusion that she was just flirting with us and left it at that.

A few hours later, we were reading THEEDGE magazine and chanced upon this article on "Emerging markets: Bear Rally or Long Bull Run".

Quote:

Building in emerging markets might slow for a while but infrastructure needs are still very much intact in the developing word, says[ Name suppressed to prevent speculation ] . A lot of government spending on railways, roads, ports and airports in emerging markets is direct budgetary spending, which won't be affected by the global credit squeeze, he notes.

There is also pump-priming through fiscal stimulus packages that invariably include big chunks of infrastructure spending. As exports slow, many developing economies in Asia, Latin Amercia, Eastern Europe and Africa are being pump-primed with increased budgetary spending on infrastructure." Unquote.

Alas, we knew what the hot sexy "oracle" meant. What services are needed for infrastructure building? Not all severly beaten construction companies are the same it seems. Think specialist. Your guess is as good as ours.

Also just something which caught our eye from THEEDGE to share. (Not that it will affect our team's strategy, of cos).

"Since 1945, the average return for US shares under Republican presidents has been 10.2% per annum versus 15.1% per annum under Democrats". So, who would you vote for?

Heres a pic that looks like our hot sexy "oracle".