Tags: gil | shidlo | Invest | Billionaire

Shidlo: How to Invest Like a Billionaire Now

By    |   Monday, 18 Oct 2010 08:12 AM

Investors might find it profitable to follow the footsteps of billionaires and their investments. Looking at their most recent investments one can detect a distinct trend, particularly into emerging markets and away from some, but not all, commodities.

Let’s start with Mexico’s Carlos Slim, the world’s richest person. He has interests in mining and just hedged three years future production in gold, silver, copper, and other metals.

Grupo Carso, controlled by Slim, announced recently that it hedged 43 percent of its gold production at $1,189 an ounce, 26 percent of its silver output at $18.71 an ounce, 61 percent of its copper production at $3.32 a pound, 39 percent of zinc at $1.08 a pound, and 28 percent of lead at $1.04 a pound.

With such speculation and volatility in commodities, then, you might follow Slim’s lead and lock in some profits.

Meanwhile, billionaire Warren Buffet recently traveled to China to try and find more companies like car-parts maker BYD in which to invest.

His investment in BYD has proved to be highly profitable. An initial investment in 2009 of $230 million in a 10 percent stake in BYD is now worth an estimated $1.5 billion, a sevenfold rate of return. Not bad.

Larry Ellison, the founder and CEO of Oracle, on the other hand is selling $217 million of Oracle shares after a big jump since he recruited former HP CEO Mark Hurd. Other Oracle insiders have also been selling shares, including CFO Safra Catz. With Oracle at a new 52-week high of over $28 it might be a good time to sell some of your investment there, too.

Mukesh Ambani, Asia’s richest man and the world’s fourth-wealthiest, has been investing via Reliance Holdings in shale gas properties in the United States with the purchase of a significant stake in Atlas Energy and Pioneer Natural Resources.

Lakshmi Mittal, an Indian steel tycoon who is the world’s fifth-richest and Europe’s No. 1, is betting on industrial expansion and infrastructure developments in India. Mittal has been trying to invest in Indian steel plants, although his original scheme for a $20 billion project is on hold due to problems with buying land. He might opt to split his investment into a couple of smaller steel plants in India.

Amancio Ortega, the world’s ninth-richest, founder and majority shareholder of Inditex, the fashion group famous for Zara retail brand, had record profits in the last quarter. With weak sales in Spain, where it is headquartered, Inditex is focusing on expanding in Asia and recently opened its first three shops in India.

Moving on to Brazil, Eike Batista, the world’s eighth-richest person, is trying to sell some of OGX Petroleo and Gas oil blocks.

With SINOPEC Group, China’s second largest energy company, paying a whopping $7.1 billion for 40 percent of Repsol’s assets in Brazil on Oct 3, no wonder Batista is trying to offload some of his oil and gas holdings. OGX is Brazil’s second-largest company in the sector after Petrobras.

Another billionaire betting on Brazil’s booming economy is Sam Zell, the property tycoon. In 2007, Sam Zell sold his company, Equity Office Properties Trust, to Blackstone for $39 billion before the market crash. His new venture, called Equity International Real Estate Fund, has major investments in Brazil commercial, retail, farms, and industrial warehouses. Zell’s fund is a major shareholder in Gafisa home builder (Brazil’s second-largest listed real estate company). In addition, he recently invested in ECISA Brazil’s largest mall operator.

Finally, Bernard Arnault, the major shareholder of LVMH the luxury group, entered Brazil in July by acquiring Sacks, Brazil’s leading online beauty retailer. This will enable beauty chain Sephora, which is owned by LVMH, to open stores as well as online retailing in Brazil. Sephora is the leading online beauty retailer in the United States.

In conclusion, if you believe that billionaires are smart investors, invest in India and China as well as Brazil, buy emerging market real estate, and sell or hedge some of your commodities, such as oil and metals.

Also, sell some of your investment in U.S. technology companies that have high valuations and buy shale gas instead.

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Investors might find it profitable to follow the footsteps of billionaires and their investments. Looking at their most recent investments one can detect a distinct trend, particularly into emerging markets and away from some, but not all, commodities. Let s start with...
gil,shidlo,Invest,Billionaire
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2010-12-18
Monday, 18 Oct 2010 08:12 AM
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