Best companies you want to invest in

[scottleey]

What I am asking here is the kind of companies you think Warren Buffett would like to buy for a fair amount of time at a fair value price.

For example, he'd always talk about Coke, See's Candies and Wells Fargo.

Please share your ideas, which may not be at the right price now or may not be significant growers but decent growers with the least risks. Please explain how the business has a sustainable competitive advantage and how you think about the business. Some numbers will be appreciated but a paragraph long is enough.

[violinist]

Home work?

[dzwm87]

I also wish to know but may I say, there is no short cut to getting the best ideas. Actually, if you stick around here long enough, you should be able to pick out some of the better companies.

[zf87]

Well, I just share my criteria for screening company here. The company which I would like to invest should have:

1 low debt, ideally, no interest bearing debt.
2 high net profit margin, ideally>10%
3 dividend on yearly basis, ideally with a increasing amount
4 price not expensive comparing to earning, ideally P/E or EV/E <7
5 price not expensive comparing to asset, ideally P/B<1.5
6 an audit of good global reputation, ideally the big four
7 good management team, ideally with a long term conservative strategy and interest in line with the minority shareholders.

If price is not a factor, points 4 and 5 may be removed.

[cif5000]

Home work?

Haha...sounds like it. Lucky never ask you to write on foolscap paper and draw diagrams. And also very confusing leh...what I would buy or what I think WB would buy???

What WB/BRK would buy - just do a screen on the market cap and you will find only a handful. Take away the GLCs and tycoon-controlled and what's left?

Unless we are talking about WB when he's still a "young" boy...

[Wildreamz]

If you really want to know what THE Warren Buffett is buying today, and is still buying:

http://www.gurufocus.com/StockBuy.php?Gu...en+Buffett

You can even see his average purchase price.

If you want to know why HE thinks these companies are trading below fair value:

http://www.berkshirehathaway.com/letters/letters.html

lol, not sure if helpful, but much better than us second guessing his thoughts. You could closely emulate his returns by buying into the companies he already bought.

Note that the types of company he buys today is largely influenced by the sheer size of Berkshire Hathaway and the risk profile of the shareholders of the company today. If Warren Buffett "only" has 3 million dollars today and is only 30 years old, I think his portfolio would look VERY different.

[yeokiwi]

*cheeky mode on*

When is the submission date?
Can do together with other members?
Got past year papers?

*cheeky mode off*

Paiseh, I missed my school life very much...

WB is so widely followed and his selected listed stocks are so widely covered until there aren't any much advantage to follow him if your investment fund is small. (but paiseh, maybe yours is big)
For small investment fund, you can get better returns by looking for gems in small caps.

[scottleey]

Hahaha Sorry I never make it clear! Just wanted to bounce some ideas!

All I was asking for are the Buffett-like of businesses that you see around in US or Singapore.

ie the higher ROIC with good sustainable competitive advantage businesses. Somehow I just can't seem to realise them especially in Singapore.

[felixleong]

I think there are some warren buffett like companies in Singapore
Sheng shiong, Challenger, Osim and ARA are example of companies with
strong brand, high ROE and wide/deep moats

they will never be as great as coke but they are still pretty decent

[AlphaQuant]

ie the higher ROIC with good sustainable competitive advantage businesses. Somehow I just can't seem to realise them especially in Singapore.

There are 26 letters of the alphabet, and within this forum there is a thread for each letter, and multiple firms within each thread. If you take the time and read through each thread i think you will have a different opinion on "Somehow I just can't seem to realise them especially in Singapore."

I think the concept of a "buffett-firm" or "sustainable competitive advantage forever" a complete fallacy, esp in the world today. Creative destruction is here to stay and i find it hard to believe some brands will stay on top of the game forever. I think the spirit of Graham is to find value, apply a margin of safety in your price, ride out the business cycles and let strong management unlock value. Personally i like to add to "diversify your basket" from the POV of a practitioner in finance who has gone through a couple of crisis.

The strong value investor is the bloke who has the brains and guts to define "value","MOS","strong management" himself; the woeful investor is the one who spends his time looking for textbook answers and regurgitating blindly.