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Warren Buffett: Korean Stock Market Still Attractive

Posted October. 26, 2007 09:16,   


On October 25, Warren Buffett (77), the CEO of holdings company Berkshire Hathaway, came to Korea for the first time and visited TaeguTec Co., an industrial tool and tungsten product manufacturer. In a press conference, he said “The Korean stock market remains undervalued and is still an attractive market. Even though stock prices have jumped a lot, Korea`s stock market fundamentals remain sound.”

“I started investing in Korea four years ago, when I found Korean companies’ stocks to be undervalued. I personally invested in Kia Motors, Hyundai Steel and Shinyoung Securities, in addition to Posco. At one time most of my personal investment portfolio was made up of Korean companies, but now I have sold them at reasonable prices, which had increased a lot,” he said.

He did not, however, mention the names of companies in which he currently invests. Regarding the question on his willingness to invest in North Korea, he said, “For me to invest in North Korea, there would first have to be a lot of changes in the country. In this regard, my company will not make an investment in North Korea in my lifetime.”

“I don’t invest in companies that I don’t understand” -

It is known that he and his company have invested in some 20 different Korean companies. Berkshire Hathaway has invested more than 500 million dollars in Posco (3.4 million stocks or a 4% share). “My Company has not sold a single share in Posco. We get dividends. And the strengthening won gives us additional earnings,” he said.

With respect to the Chinese stock market and its ever-looming bubble, he said, “I don’t have an opinion.”

He said he invests in companies which have a way of doing business he can understand, companies with sustainable competitiveness, companies run by competent and honest management, and companies that do reasonable business. He added that once he makes an investment he has no regrets, even when the investment is unsuccessful.

On the same day, a number of companies he mentioned in the press conference, including Kia Motors, saw a significant rally in their stock prices.

“The best investment is one for yourselves” -

Buffet came to Korea to tour TaeguTec, a subsidiary of Berkshire Hathaway. He showed humbleness unexpected of the world’s third-richest man.

At Daegu Airport, he passed his security guards and signed an autograph at the request of a college student. He also opened his wallet and showed he had $600 on him when asked by an employee of TaeguTec how much money he was carrying at the time. At a reception, he ate a hamburger and drank Coca Cola, a company in which he holds an 8% share, instead of indulging in the hotel buffet.

He still lives in a house he bought 49 years ago and he drives a Cadillac. He changes his car once ever 10 years. Since he made up his mind that he would become an investor, when he was seven, he says he has always been a “happy person.”

The world’s third richest man flew in on his private jet, Gulfstream V, reaching Deagu Airport at 10a.m. He toured TaeguTec, held talks with employees of the company and participated in a reception. He left the city soon after, ending his short six-hour stay. Before leaving he told TaeguTec employees, “The best investment you can make is one for yourselves. Efforts to enrich one’s self bring about better results than stock investment.”