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Be Smart With Your Money...Buy This Guy
By Dr. Steve Sjuggerud
Donald Trump is out...
Americans are in the midst of changing how they live... And it has happened in less than three years.
Conspicuous consumption is now out. Being "smart" with your money is in... And it may take a long time for conspicuous consumption to return.
Donald Trump is the poster boy for the excesses of three years ago. These days, he's struggling more than he'll admit, swallowed by debt.
For example, Trump won't pay the $40 million personal guarantee he owes on a Chicago condo project that isn't selling. His excuse? The financial crisis was an "act of God." I'm not kidding.
And just last month, his lawsuit against a writer was dismissed... Trump sued the author of the 2005 book Trump Nation, who said Trump's net worth was more like $200 million back then, not the billions Trump claimed. Who actually sues someone for that?
Meanwhile, Warren Buffett, the world's second-richest man, is the poster child for "being smart" with your money. He still lives in the house in Omaha he bought over 40 years ago. And he drives a pickup truck.
Trump and Buffett have handled the crisis as you might expect. Trump is getting swallowed by it because of debt. And Buffett is reveling in it...
Around the same time Trump was claiming "an act of God" and avoiding his $40 million personal guarantee, Buffett did exactly what a great investor does... He had cash when nobody else did and he put it to work.
At the height of the crisis last year, Buffett spent billions propping up Goldman Sachs, and he got an absolutely ridiculous deal. (Part of the deal was stock warrants giving him the ability to buy $5 billion worth of Goldman stock at $115 a share. Today's price is $163 a share... That gives Buffett's investment vehicle, Berkshire Hathaway, a paper profit of more than $2 billion.)
I don't want to waste your time singing Buffett's praises. You already know he may be the greatest investor who ever lived. He's made a career of making distressed loans to big businesses for a high interest rate, plus an arm and a leg.
You know the basic story. I simply suggest buying shares of his company today...
I have just one "exhibit" for you that explains why now is a great time to buy: the price-to-book ratio of Berkshire Hathaway shares.
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"Book value" is a very rough measure of the liquidation value of a company. Whenever the shares of the greatest money manager in the world trade near the liquidation value of his company, they're a buy.
They traded almost this low in 1992, and it was good for a near 100% gain in just a year. It happened in 2000 and was good for a 50% gain in just a year.
We're here again... and the shares are even cheaper this time around. So last month, in my newsletter True Wealth, I recommended buying some Berkshire Hathaway. Since the shares are around $100,000 each (Buffett has never done a stock split), I suggest you consider the "B" shares, which trade around $3,333 per share. They're basically an "A" share divided by 30.
There's another nifty way to "backdoor" into a good stake in Berkshire – at a 20%+ discount! The Boulder Total Return Fund (BTF) holds approximately 40% of its assets in Berkshire Hathaway. The rest of its portfolio is similarly high quality. Check it out at www.boulderfunds.net.
Trump is out, Buffett is in. Conspicuous consumption is out, being smart with your money is in. Buffett is the best at it. And his stock is really cheap. Consider "buying Buffett" today...
Good investing,
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