Singapore Profit

Warren Buffet, at the annual Berkshire’s meeting with the shareholders, spoke about the future of his fund. He predicted that the US currency is going to depreciate against other major currencies, so the best thing was to invest in companies that had substantial earnings in other currencies. Some of the US MNCs earn more from overseas businesses than just in US, so such companies would be able to ride through this period of time.

As investors, they should not predict the economic cycle. Rather, they should focus on evaluating individual businesses, or buy index funds managed by reputable companies.

For smaller investors, they could buy specialized bonds that are being offered at a low rate, or small caps.

His company was still looking at buying entire private businesses in India and China. This showed that he still feel that these two Asian giants still had prospects. I would not jump at saying all the companies are doing well.

What does he exactly do for his fund?
He buys over businesses where they are turning in profits. The managers will still be working there. They are already capable and they have a passion for what they do. Warren Buffet does not need to micromanage these firms and can continue to ride on the profits.

What does this mean for normal investors who cannot afford to buy private firms?
They need to check the CEOs’ philosophies and management styles. Read up about them in publications such as Pulses, The Edge and The Business Times, especially when there are interviews about them. Go to the showrooms or offices, like what one of my trader friend does (thought an investor and a trader are different).

For more of Warren Buffet’s insights, take a look at Buffet Goes To Wharton.

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