1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies

Wallace Weitz: Perception of well-being

July 18, 2006

The second quarter of 2006 was a good one for our Funds. It was also a period of considerable financial market volatility. In this increasingly risky environment, we have focused on companies that can (1) survive financial market upheaval and (2) take advantage of distress sales of assets. Happily, in this increasingly speculative market, large growth companies with very strong balance sheets (e.g. Wal-Mart, AIG) have been out of favor and available at prices that value investors are willing to pay. Thus, as we have upgraded the overall financial strength of our portfolios, we think we have also increased the upside potential for our Funds.

As for companies with the capacity to take advantage of capital markets weakness, we start with Berkshire Hathaway. Berkshire holds over $42,000 per share in cash and bonds that is available for investment and Warren Buffett is equally at home buying individual securities and whole businesses. Washington Post, Redwood Trust, Liberty Capital, IAC/InterActive, and others have excess cash and borrowing power and have stated publicly that they are interested in acquiring securities and/or businesses if opportunities arise. Many of our other companies also have significant stock buyback programs in place and could be expected to be very aggressive purchasers of their own stock in a period of general market weakness.

Read the complete article

Rating: 2.0/5 (2 votes)


Please leave your comment:

Performances of the stocks mentioned by

User Generated Screeners

bpatton23L/Cap value
AJPringAP screen102017 NO LOW
Nightdoc2Large Value
DBrizan2017 oct20CDN
DBrizan2017 oct20CDN dividend
althekearoct 17 user defined screen
althekearPE >50th percentile of INDUSTR
althekearLow EV/EBITDA
althekearLynch inspiret Oct 17
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat