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They're the comfort food of the stock market

June 20, 2006 | About:

Sure, the Dow has taken a lot of tumbles. But don't despair. You can now find good bargains in stocks -- and even better ones in bank CDs and money funds. In theory, you should add to your stock portfolio after the stock market has fallen. And that's what some bargain-hunting investors are doing now. Wallace Weitz, manager of Weitz Value fund, likes to wade into the stock market at times like this.

Some well-known large-company stocks, such as Wal-Mart, General Electric and Anheuser-Busch, are looking cheap now, Weitz says. And because they're big, dividend-paying companies with solid earnings, they aren't too scary to buy now. "They're the comfort food of the stock market," Weitz says.

Another Weitz favorite: Berkshire Hathaway, run by his fellow Omaha bargain-hunter Warren Buffett. The holding company has $43 billion in cash for new purchases. The drawback: A single share costs $90,401. Even the lower-cost B shares will set you back $3,008.

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