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Berkshire Hathaway Inc. Message Board

  • rogue_trader_666 rogue_trader_666 May 7, 2012 9:44 AM Flag

    2 stocks Warren would love...

    MTG & RDN, both mortgage insurers that have been through the wringer and are coming back. Why would Buffett love them, in particular?

    1. Insurance, a business he "understands" and appreciates;

    2. Undervalued stocks, unloved by The Street (right now);

    3. Cheap to buy (right now);

    4. Great cash flow from recurring business; inexpensive borrowing (now) makes recapitalization of their older liabilities workable, lowering risk;

    5. Enormous long-term upside if you buy and hold RDN &/or MTG.

    6. Both are heavily involved in the American real estate market, a place Warren wants to be investing in - these are a proxy for that market's recovery in the mid- to long-term.

    Good luck,
    RT

 
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