The life cycle of a company follows four distinct steps. The last two are maturity and decline, and both are generally not the stages when you want to invest. The first is introduction and covers the period when a company is in its start-up phase and progresses to introducing some… Read More

In the annual shareholder letter released Feb. 11 by Berkshire Hathaway (NYSE: BRK-B), Warren Buffett announced the need for major acquisitions to help him grow Berkshire’s profits at a “decent rate.” Given the billions in cash Berkshire generates (Buffett estimates $12 billion in annual earnings power) in any given year, Buffett declared his “elephant gun has been reloaded” and that his “trigger finger is itchy” for big acquisitions. His itch was partially scratched, recently when, on March 14, Berkshire announced it would be acquiring specialty chemical firm Lubrizol (NYSE: LZ) for $9 billion in cash and… Read More

In the annual shareholder letter released Feb. 11 by Berkshire Hathaway (NYSE: BRK-B), Warren Buffett announced the need for major acquisitions to help him grow Berkshire’s profits at a “decent rate.” Given the billions in cash Berkshire generates (Buffett estimates $12 billion in annual earnings power) in any given year, Buffett declared his “elephant gun has been reloaded” and that his “trigger finger is itchy” for big acquisitions. His itch was partially scratched, recently when, on March 14, Berkshire announced it would be acquiring specialty chemical firm Lubrizol (NYSE: LZ) for $9 billion in cash and the assumption of $700 million in debt. Buffett said he liked Lubrizol’s global leadership position in several areas, which include its lubricant additives for engine oils and related fuel additives for gasoline and diesel fuel. The buyout price-to-earnings (P/E) ratio is less than 14 based on trailing earnings and will qualify as the fourth-largest acquisition in Berkshire’s storied history. Buffett recently said he was still interested in more acquisitions and isn’t ruling out any sector or area of the world, save for… Read More

Back in November, I recommended three Brazilian stocks I thought were worth owning at the time. Since then, two of the three are outperforming the Brazilian market, with energy giant Petrobras (NYSE: PBR) up more than 20% to handily beat the iShares MSCI Brazil… Read More

Investing in the U.S. automotive industry is not for the faint-hearted. Given the well-documented woes of the auto industry, a buy-and-hold strategy would have proven disastrous during the past three decades. That’s why it’s important to closely follow and actively trade the stocks. The auto industry is… Read More

In January, I declared that Japanese companies had the most undervalued stocks in the world. A calamitous magnitude 9.0 earthquake and subsequent tsunami have inflicted severe damage on the eastern part of the country, the most disastrous of which has been severe and potentially permanent damage to the Fukushima Daiichi… Read More

Large pharmaceutical companies are facing a crisis. The industry spent a record $65 billion on research and development (R&D) in 2009, but approval rates for new drugs have fallen 44% during the past decade and continue to drop. Also in 2009, drugs launched in the previous five years accounted for… Read More

After an extended period of 50%-plus annual growth, China recently surpassed the United States as the largest car market in the world. This is just the tip of the iceberg, as only 2% of the Chinese population owns cars. In other words, the market has vast potential to grow significantly… Read More

For better or for worse, many successful investments revolve around products or services that aren’t necessarily good for consumers. The best examples include products that aren’t very healthy: cigarettes, soda and junk food come to mind, as do gambling, pawn shops and credit cards. For individuals who… Read More

Warren Buffett, the famed value investor with an estimated net worth of $47 billion, on Feb. 26, released his annual letter to shareholders of Berkshire Hathaway (NYSE: BRK-B), Buffett’s holding company and primary investment vehicle. The letter provided readers with the most up-to-date details of Berkshire’s common stock investment portfolio,… Read More

Sooner or later, every company’s growth prospects hit a wall. Companies that grow rapidly have an even tougher time, as the corporate culture is built around rapid expansion and growing market share as quickly as possible. Technology firms, in particular, face intense competition and short product-development cycles,  making it… Read More