What a little Buffett will do for you
Posted
Feb 19 2008, 03:30 PM
by
Matt Koppenheffer
Rating:
For most investors, the big news coming from Berkshire Hathaway and Warren Buffett last week was the $800 billion that Buffett offered to insure municipal bonds. With the traditional muni bond insurers like Ambac and MBIA struggling with the ongoing credit and mortgage crisis, there has been real concern over the future of muni bonds and the municipalities that depend on them for capital.
But that wasn't all that was happening at Berkshire. Last week the company also announced that it had taken sizeable positions in Kraft Foods, GlaxoSmithKline, and Trane.
When you're an investor as successful as Mr. Buffett, you're bound to find people following the big moves that you make, and that's nearly always the case with announcements like these. Of the three, Kraft saw the most action as shares jumped nearly 7%.
On The Motley Fool's CAPS service, investors didn't miss the significance of the announcement. One of CAPS' top investors, Gtrinvestor, gave Kraft a thumbs up noting:
[Kraft is a] defensive stock that is the same price as it was 2 years ago (and 5 years ago for that matter). Clearly management needs to make some improvements here, but the stock only has a forward P/E of 14, which is not tremendously high for a defensive food company like Kraft. … And to top it all off, Buffett just bought a huge chunk of this company, so you're hitching your train to a pretty decent investor as well.
Meanwhile, on the Glaxo page, PearlandTX, another top CAPS investor, wasn't shy about calling the company an outperformer and saying:
This is purely a "following Warren Buffett" pick. News release today showed that Berkshire Hathaway made a large investment in [Glaxo] at the end of 2007.
Want to get in on the action yourself? Head over to CAPS and join the 83,000-plus investors that are already adding to the community intelligence.
