Billionaires For Rent…..Cheap! – Berkshire Hathaway Inc. (BRK.A), Loews Corporation (L), Sprott Resource Corp. (SCP)

Page 1 of 2

Wouldn’t it be great to have a self-made billionaire manage your money right alongside his own? Would it be even better if they didn’t charge you for the service and even offered a discount if you hire them now? If you choose your investments correctly, you can come pretty close to exactly that situation today.

Berkshire Hathaway Inc. (NYSE:BRK.A) or -Berkshire Hathaway Inc. (NYSE:BRK.B), Loews Corporation (NYSE:L). and Sprott Resource Corp. (TSE:SCP) are publicly traded companies run by successful billionaire investors who keep large portions of their own wealth invested in the shares of the businesses they run and we can place our money right alongside theirs, receiving the same expert management services they insist upon for protecting their own wealth.

Berkshire Hathaway Inc.There is probably not an investor in the world that is not familiar with Warren Buffett and Berkshire Hathaway, his holding company. While Mr. Buffett’s original success was primarily driven by investments in the insurance industry, Berkshire Hathaway Inc. (NYSE:BRK.A) has become a multi-dimensional holding company with interests in multiple businesses and spanning a wide range of industries. While the returns have slowed in recent years, it is hard to argue with a 40-year track record of success that makes a good case for a strong buy and hold investment that will produce market beating returns over an extended period of time. Berkshire currently trades at 1.36 times book value and 12.4 times cash flow. It is not currently a cheap stock, but 12.4 times cash flow is not ultra-expensive and Warren Buffett IS the most successful investor of the last 40 years as well.

Loews Corporation (NYSE:L). might well offer a superior opportunity compared to Berkshire Hathaway at the moment based its performance over the last 20 years and its current valuation in the market. Loews is not as well known to the general public as Berkshire, but it is a very similar business model and was built by purchasing distressed assets far below replacement value and holding them until the market was willing to pay fair value for them again. The business is led by billionaire investor Lawrence Tisch and he and his family keep a large portion of their wealth in the shares of the business. Right now, the price to book ratio on Loews is 0.87 which means that you will receive a 15% capital gain if the price were to simply rise to book value. If Loews were to rise to the same premium to book value currently bestowed upon Berkshire’s share price, people who invest today would enjoy a 56% return on capital. Loews currently trades at a price to cash flow ratio of 8.4 to 1, which is very low for such a well-run business, and almost 50% below that of Berkshire. While Loews Corporation (NYSE:L) and Lawrence Tisch do not have the brand recognition of Berkshire Hathaway Inc. (NYSE:BRK.A) and Warren Buffett, there is not a great deal of difference in performance over the last 15 years. Lawrence Tisch has a long track record of acquiring valuable assets that are currently out of favor at distressed prices and then waiting for the market to recognize the real value. I am happy to place my money alongside his anytime I can do so and getting the opportunity at a substantial discount to fair value is just gravy on my potatoes.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!