Tags: Warren Buffet | buying | portfolio | retail stocks

Buffett Stuffing His Portfolio With Retail Stocks

Wednesday, 30 Dec 2009 08:39 AM

Warren Buffett is boosting his portfolio with retail stocks, MSN reports.

Buffett would likely recommend investors buy retail stocks for 2010, Michael Brush of MSN reported.

During the third quarter, Buffett increased his position in Wal-Mart by 19.9 million shares.

“Buffett is the consummate contrarian, and the retail sector is one of the few areas where you can still be contrarian after a market rally that's lifted most stocks this year,” said Brush, author of "Lessons from the Front Line.”

 Brush said "a lot of investors have doubts about consumer spending because of unemployment and continuing problems in housing."

While Buffett does not reveal his future stock picks, Brush checked with Validea, an investment shop which has created computer models to emulate the thought process of investors like Buffett.

The Buffett portfolio by Validea reported a gain of 41.5% in 2009, compared with a 22% increase for the S&P 500 Index.

According to the Validea portfolio, Buffett might buy stock in Wal-Mart, Aeropostale, Buckle, Coach, Jos. A. Bank Clothiers, Ross Stores and Family Dollar Stores.

Buffett likes companies with an abundant amount of cash flow and little debt.

Consumers will start to spend more now that home values and the market have risen, said Mark Zandi, the chief economist of Moody's Economy.com.

“I think consumers go from being cautious now, to doing their part for the economy a year from now," he said.

Incomes have increased for some consumers, which will spur more spending, Bloomberg reported.

“Pent-up demand is beginning to be released. Consumers are tapping into savings and beginning to spend," said John Herrmann, chief economist at Herrmann Forecasting.

"With the U.S. and global economy turning up, hours and incomes will continue to rise, supporting further gains in consumer spending,” Herrmann said.

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Warren Buffett is boosting his portfolio with retail stocks, MSN reports. Buffett would likely recommend investors buy retail stocks for 2010, Michael Brush of MSN reported. During the third quarter, Buffett increased his position in Wal-Mart by 19.9 million shares. ...
Warren Buffet,buying,portfolio,retail stocks,
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2009-39-30
Wednesday, 30 Dec 2009 08:39 AM
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