The “Oracle of Omaha,” Warren Buffett, is rumored to be buying a German solar energy company and more shares of an American railroad. Bloomberg’s Nicholas Comfort wrote earlier today:

Solarworld AG rose from a two-year low in Frankfurt amid speculation billionaire investor Warren Buffett may take a stake in Germany’s third-largest solar company.

Solarworld climbed 1.77 euros, or 9 percent, to 21.51 euros as of 4:09 p.m. local time, valuing the Bonn-based company at 2.4 billion euros ($3.28 billion). The stock slumped 28 percent in the previous three trading days, falling to the lowest since October 2006.

Closer to home, the website GuruFocus.com posted the following yesterday:

Warren Buffett is selling puts on Burlington Northern Santa Fe (BNI), a filing of Berkshire Hathaway revealed today.

As of Oct. 6, Warren Buffett sold 1,309,524 shares of put options on Burlington Northern Santa Fe (BNI) at $7.02 an option, exercisable before 12/08/2008, with a strike price of $80 a share.

As BNI stock prices declines to where Warren Buffett bought them last year, it seems that Warren Buffett is trying to buy more Burlington Northern. Buffett started to buy Burlington Northern in 2007, he continued to add to his position until the first quarter of 2008. The share of BNI were traded at $110 a share in June. It declined to around $80 lately with the general market.

Buffett owns more than 67 million shares as of June 30, 2008, that is more than 18% of the company. His average purchase price is about $80 a share.

BNSF Locomotive

Sources:

“Solarworld Shares Climb Amid Speculation Buffett May Buy Stake”
Nicholas Comfort
Bloomberg, October 9, 2008

“Warren Buffett Sells Put Option On Burlington Northern Santa Fe, Berkshire Hathaway Filing Reveals”
GuruFocus.com, October 8, 2008

With all the turmoil going on in the financial markets these days, how is legendary investor Jim Rogers playing his cards? From India’s NDTV this past weekend:

NDTV: Will you buy when there’s blood on the street?
Jim Rogers: If the US and other world stock markets did have a selling climate then I would go for it.
NDTV: But what will you buy in terms of equity asset class?
Jim Rogers: Well, it depends on what goes down the most. I would probably buy stocks of airlines, water treatment, agriculture, and other recession proof companies. The way you are going to get rich in the side market is define by the companies that come through hard times with good results. Those are the companies when you have next bull market that you make a fortune.

The Globe And Mail’s (Canada) Brian Milner also talked about Rogers’ recommendations last Friday:

As for his own investing strategy in these tumultuous times, Mr. Rogers said he is “mainly watching” and recommends that other investors do the same.

But that doesn’t mean he’s sitting on his cash.

Recently, he has been adding more agricultural products, has resumed selectively buying Chinese stocks, invested in the Japanese yen and Swiss franc (he likes the Canadian dollar, too, but doesn’t own it) and shorted the long U.S. government bond. He has also bought some Asian and European airline stocks, as well as Canada’s WestJet Airlines Ltd.

2,000 Yen Banknote

Finally, Peter Koven of the Financial Post (Canada) wrote that same day about whether or not the Singapore-based investor believed the commodities’ boom was still alive:

Mr. Rogers, who famously spent three years driving around the world, argued that most people still “don’t know anything” about commodities despite the boom of the last five years (even saying that less than 100 of the world’s 70,000 mutual funds are focused on them). He pointed out that other resource booms have lasted 15 to 23 years, and there is no reason to think this one will be any different. He figures it could run to around 2018 or 2020.

Of course, the main reason he cited is China. He said the 21st century belongs to the Chinese the way the 20th belonged to America, and practically pleaded with the audience to teach their kids Mandarin. He added that three billion people in Asia want to live like we do, and this will continue to constrain supplies well into the future.

Source:

“Commodity bull run not over yet: Jim Rogers”
NDTV (India), October 4, 2008

“U.S. bailout ‘welfare for the rich’”
Brian Milner
Globe And Mail (Canada), October 3, 2008

“Jim Rogers: Commodities have another decade or longer to run”
Peter Koven
Financial Post (Canada), October 3, 2008

MarketWatch’s Sam Mamundi wrote this morning:

The investment vehicle of legendary investor Warren Buffett increased its stake in transport outfit Union Pacific Corp. by almost double in the second quarter.

Berkshire Hathaway also added stakes in Bank of America Corp. (BAC), Lowe’s Cos. (LOW), and NRG Energy Inc. (NRG), according to filings released this morning.

Berkshire Hathaway (BRK.A) grew its Union Pacific (UNP ) stake from 4.453 million shares at the end of the first quarter to 8.906 million at the end of the second quarter. Union Pacific stock is up 23.6% this year…

Berkshire addition of NRG Energy Inc (NRG ) totaled 3.24 million shares in the second quarter, worth $139 million. While NRG’s stock is down 18.7% this year, the energy sector is considered a good investment by money managers right now.

The two sell-offs in Berkshire’s portfolio in the recent quarter were both related to acquisition deals. Trane Inc. was sold off in an acquisition by Ingersoll-Rand Company Ltd (IR). Similarly, Berkshire eased its stake in Anheuser Busch Cos. from more than 35 million shares to less than 14 million shares in the wake of Anheuser’s merger with InBev which had yet to be consummated as of the second quarter.

MarketWatch’s Greg Morcroft also reported this morning:

Shares of Lehman Bros. Holdings Inc. rose more than 6% at one point Friday as news that famed investor George Soros’ hedge fund boosted its stake in the company brought out buyers.

An analyst report from David Trone at Fox-Pitt Kelton also lent support to the shares. He said that Lehman’s upcoming losses should be smaller than the second quarter’s as hedges in place at the firm appear to be working.

Soros Fund Management has raised its stake in Lehman Brothers (LEH) to 9.47 million common shares at the end of June 30, up from 10,000 shares at the end of March 31.

The fair market value of the stake is estimated at $187.7 million, according to a regulatory filing by the fund Thursday.

Reuters’ Karen Wutkowski noted yesterday:

Billionaire investor Eddie Lampert cut his stake in Home Depot Inc (HD.N) by 13 percent to 19.7 million shares as of June 30, according to a disclosure document for his fund RBS Partners.

The fund also increased its stake in AutoZone Inc (AZO.N) to 22.9 million shares from 22 million shares the prior quarter, according to a filing with the U.S. Securities and Exchange Commission. It cut its stake in KB Home (KBH.N) to 358,000 shares from 605,000 shares.

Sources:

“Buffett’s Berkshire doubles Union Pacific stake”
Sam Mamudi
MarketWatch, August 15, 2008

“Soros buy puts shine on Lehman shares”
Greg Morcroft
MarketWatch, August 15, 2008

“Lampert cuts Home Depot stake, ups AutoZone holdings”
Karey Wutkowski
Reuters, August 14, 2008

Last week, Greg Brown of the Internet news site NewsMax.com interviewed legendary investor Jim Rogers. During the conversation, which appeared on the NewsMax site on Friday, Brown pointed out that Rogers “correctly called the horrendous decline in financial stocks, including the Fannie and Freddie mess.” The CEO of Rogers Holdings talked about this issue, and more, saying:

Well, we’ve had a wave of failures, yes. And we’re going to have more, I assure you, they’re going to be more coming over the next few years…

Washington is making mistake after mistake after mistake…

We’re going to have one of the worst decades we’ve had in a long time.

Investment Strategy

I think the stock market is going to be a bad place to be for some time…

These days, I’m more or less watching. I have bought some airline stocks recently. I have bought some agricultural products recently. I have bought some Swiss francs, and some Japanese yen recently. Some Chinese renminbi recently. That’s about all I’ve done to buy in the last few, in the recent past.

U.S. Dollar

The United States dollar is now a terribly flawed currency…

They’re on official record of saying they’re going to debase the U.S. dollar. That’s never been good for any country in history. But our central bank is doing their best to drive the value down.

Inflation & Interest Rates

In my view, there’s more inflation coming. They are debasing the dollar, and that’s going to make the long-term interest rates, and medium-term interest rates, go higher. The central bank might be able to control short-term interest rates for a while, but in my view, all interest rates will be going higher over the next few years, because of inflation, and debasing the currency, and several reasons.

Economic Outlook

Well, these are perilous times, in the economy, in the world economy, quite largely because of mistakes that we’ve made in the United States, unfortunately. Ten years ago we had the Asian crisis which affected the world markets. This time, I’m afraid, it’s going to be the American crisis, which is affecting world markets. So be very, very careful about anything you buy anywhere. Certainly in the U.S. including the currency. I think everybody should learn about international diversification, because, I’m afraid, things are going to be better outside of America than inside America. I don’t particularly like saying that, but one has to accept facts, and face facts, if one’s going to survive.

You can listen to the 7 minute 28 second video here.

Source:

“Jim Rogers Interview: Washington is Making ‘Mistake After Mistake.’”
NewsMax.com, July 18, 2008

Legendary investor Jim Rogers recently spoke to Commodity Online (India) and shared his investment outlook for China and India. According to the commodities portal this morning:

Global market meltdown, recession and bankruptcy fears and dipping profits of companies are wrecking major economies in the world these days. But ace commodities investor Jim Rogers continues to be very be hot on China.

“China is a country I am very hot on. I believe that Chinese economy will overtake the US economy, and China has the best investment potential in the world today,” Rogers, author of such famous books like Hot Commodities and A Bull in China, told Commodity Online.

The CEO of Rogers Holdings pointed out that three billion people living in Asia, most of them in India and China, will drive demand for commodities in the coming years, and added:

Asia is fuelled by massive investment and growth. And in Asia, China is the hottest destination. So I continue to look for investment opportunities in China.

Photo By Benjamin Earwicker, stock.xchng

However, the former partner of George Soros does not share the same level of optimism for India when talking about its investment potential. He said:

I am excited about India as a travel destination. For an investment proposition in India, I would think twice.

According to Commodities Online’s George Iype, Rogers’ caution stems from existing political/bureaucratic hurdles, such as the Indian government’s decision to prohibit futures trading in specific commodities, as well as serious infrastructure challenges. The Singapore-based investor noted:

Plus, the infrastructure in India continues to be bad compared to China. In China, truck drivers drive at the speed of 70 kilometers per hour. In India, they can drive only at a speed of 20 kilometers because the roads are so bad.

Source:

“Jim Rogers: Hot on China, cold on India”
George Iype
Commodity Online (India), July 18, 2008

Legendary investor Jim Rogers appeared on CNBC’s “Worldwide Exchange” yesterday. While the CEO of Rogers Holdings talked about how the U.S. government should not bail out U.S. mortgage giants Fannie Mae and Freddie Mac and how high oil prices are here to stay unless the world finds a lot of new supply quickly, he also talked about what he’s investing in:

CNBC: So, you’re buying oil Jim?
ROGERS: No, I’m not buying oil now. Oil is at an all time high. I don’t like to buy things at all time highs.
CNBC: So, what are you buying then?
ROGERS: Well, I’m buying airlines. I’m buying…
CNBC: You’re buying airlines?
ROGERS: Yes.
CNBC: But oil prices are going up, you’re buying airlines?
ROGERS: Yes. Yes.
CNBC: Why?
ROGERS: If you fly a lot, you’ll see that there’s nobody, you can’t get a seat, the rates are all going higher and higher. All the airlines are taking the planes, the high-cost planes, out of production, or out of use, and it’s getting very, very tight out there. The capacity is coming down and the demand is still here. Maybe we’re all going to start taking the boat to Europe again. Maybe we’re all going to take the boat to America. But, unless that happens, airlines will probably have a much better future.
CNBC: Are you still buying Chinese stocks, because I know you’re pretty bullish in a Chinese equity market?
ROGERS: Well, I’m waiting for what I hope is going to be a selling climax.
CNBC: Isn’t there one now?
ROGERS: We might get one. Chinese shares were down 20% last month alone. It looks like a selling climax developing. And if it continues, and if we have a selling climax, I plan to buy Taiwan and China. Taiwan I’ve never bought in my whole life, and I’m 65-years-old. But, I think for the first time in my life there’s going to be peace, and if there’s really going to be peace, then Taiwan is a wonderful place to invest.

You can view the 8 minute 36 second CNBC interview here.

Source:

Jim Rogers Interview
CNBC, July 15, 2008

Looks like legendary investor George Soros went on a shopping spree in the Indian stock market recently. According to The Economic Times (India) website:

Billionaire global investor George Soros has turned contrarian on the Indian stock market, which has seen stocks being beaten down over the past few weeks. His hedge fund Quantum, which was reported to have posted earnings of over 30% last year, went on a buying spree at a time, when most funds were dumping stocks in a sliding market.

On July 4, Quantum Fund bought a 3.8% equity in Jain Irrigation Systems, and close to 1% of the holding of Jai Corp for a value consideration of Rs 167 crore. Since February, the fund has made investments valued at close to Rs 600 crore, or $ 140 million, in various companies, including Indiabulls Financial Services, Indiabulls Real Estate and Kalindee Rail Nirman.

Bombay Stock Exchange
Mumbai, India

The Times’ Vijay Gurav discussed the Fund’s latest acquisitions in detail. Gurav wrote:

Among his latest acquisitions in India, Mr Soros bought a fresh stake of 3.8% in Jain Irrigation for Rs 121 crore. The stocks were bought at Rs 442.9 per share against the current market price of Rs 483…

Mr Soros also picked up a small stake of 0.9% in Jai Corp at Rs 282 against Friday’s closing of Rs 372. The scrip, in fact, has vaulted 27% in one week, outperforming the market by a wide margin…

Two Indiabulls group companies — Indiabulls Financial Services and Indiabulls Real Estate — are notable examples of Quantum’s recent acquisitions. The fund held 2.2% and 3.6%, respectively, in the two companies as of March 31, 2008. It also owns a 7.1% stake in Kalindee Rail Nirman, of which 6.8% was bought for Rs 32 crore in February.

Source:

“George Soros’ hedge fund Quantum on buying spree”
Vijay Gurav
The Economic Times (India), July 14, 2008

Recently, the Gulf News (UAE) spoke to Mark Mobius, President of the Templeton Emerging Markets Fund, about global stock markets. Here’s what the legendary emerging markets investor had to say:

Market Outlook

GN: How long in your opinion will the bear market last?
MOBIUS: I believe the bear market that started in August 2007 is now in recovery phase but will not be immediately followed by a strong bull market.:

GN: Is it a good time to invest in equities? If yes, then why; if not, then when will the time come?
MOBIUS: Timing the markets is a very unforgiving exercise and I wouldn’t recommend it to anyone. We at Templeton simply continue to try to buy stocks that are cheap at a given moment. The mere fact that we only have no more than five per cent in cash in most of our funds indicates that we are optimistic and that we are prepared for a market bounce.

Emerging markets valuations have also come up quite significantly in the past few years, but so have earnings, so emerging market equities continue to offer good price-earnings characteristics…

Emerging markets this year are expected to experience an average gross domestic product (GDP) growth of seven per cent, while developed markets are expected to grow at an average of a little more than two per cent…

I would suggest that investors take a long-term view to investing, carefully evaluate their options and of course, diversify their holdings. History has shown us that the best time to buy is when everyone is despondent and selling.

Where To Buy

GN: In which countries, in your opinion, do equities have the biggest growth potential and why (are people talking a lot about Brazil recently)?
MOBIUS: Some of the fastest growing nations in the world today are the BRIC (Brazil, Russia, India and China) countries. The Chinese and Indian consumers are the world’s new consumers and they along with consumers in Brazil, Russia, Turkey, the UAE, Egypt, Mexico, Poland and many other emerging markets are becoming an important force in world consumption. Despite the current political volatility, we have liked Turkish investments for some time, because we are able to find there plenty of well-run companies operating in a growing domestic market. Returns on capital are high, valuations are low, and the country’s economy is moving closer to the European Union.

In emerging markets in general, we will continue to focus on energy, telecom, transportation and banks.

Where To Avoid

GN: Which countries should be avoided at present as far as investment in equities is concerned?
MOBIUS: …we have minimal exposures to markets such as the Philippines and Chile due to size and liquidity issues. In the case of the Philippines, the country’s high fiscal deficit and poor corporate governance practices also raise concerns. We believe that acceleration in the implementation of financial, economic and structural reforms is vital to tackle the country’s problems. The government also needs to clean up the country’s widespread corruption and nepotism problems. We have just returned from a trip to the Philippines and found a much improved investment environment. However much still needs to be done. We exited Venezuela as soon as Chavez came to power since we saw the potential risks.

Natural Resource Sector

GN: Do you think the present bull market in natural resources has a chance to last and if yes, which natural resources will increase the fastest? Do funds managed by you take advantage of the natural resources bull market and if yes, then which specifically and how?
MOBIUS: Coming back to commodities, our funds have lots of exposure to commodities-linked companies that are benefiting from high prices and high global demand, including Vale do Rio Doce in Brazil and Gazprom in Russia. We also have exposure to the rapid rise in Chinese oil demand, through Petrochina.

In general, Russia is a big commodity play. The big run-up in the market prices of some of our Russian oil and gas holdings has automatically resulted in Russia accounting for a larger share of some of our portfolios than before. We are conscious that the Russian stock index is exposed to a correction in energy prices, but the Russian commodity-related stocks in our portfolio will continue to make good profits and record substantial margins, even allowing for price corrections.

In general, we remain optimistic about the energy sector because of geopolitical and short-term constraint reasons. While we do not project the average crude oil prices to maintain their recent lofty levels, demand growth still looks strong and makes the tight supply and demand situation even tighter.

Source:

“Where to make your stock market moves?”
Gulf News (UAE), June 14, 2008

On May 24, Bloomberg interviewed emerging markets investor Mark Mobius, who predicted a bright future for Thai stocks. Mobius, who heads the Templeton Emerging Markets investment trust, said:

Thai stocks have a good chance to rise further because the new government has policies which are very positive toward businesses.

At a Thai stock market conference in Bangkok on May 24, Mobius said:

The government’s higher spending on infrastructure projects will increase public and private investments. Thailand is a very vibrant exporter of agricultural commodities and manufacturing products.

Bloomberg’s Anuchit Nguyen wrote Monday:

In addition to bank and energy stocks, Templeton prefers consumer-related companies in Thailand as rising personal income increases sales at retailers and distributors, said Mobius. He also said he likes shipping lines and electronics makers, declining to name any companies.

Bangkok, Thailand

The executive chairman of Templeton, who oversees about $47 billion of emerging-market equities, is bullish on Thai stocks despite political instability. Mobius said that Thailand’s politics:

…may appear quite chaotic and unstable. However, having been through many changes in government in Thailand, we find that it’s a good opportunity to buy inexpensive stocks whose prices have dropped on perceived political instability.

Source:

“Mobius Says Thai Stocks May Extend Gains on Spending (Update1)”
Anuchit Nguyen
Bloomberg, May 26, 2008