George Soros and Warren Buffett are regularly consulted on the state of the market and for tips on how best to play it. Millions of investors attempt to imitate their wild successes, looking to their portfolios like a treasure map. The two investors adopt different investment styles, though both end similarly; with a lot of zeros. Below are a few stocks in each investors portfolio that tend to represent their investing style. Buffett tends to lean toward long-term consumer staples and strong brand names while Soros relies heavily on market trends, famously shorting the British pound for a profit of $1 billion.
In Buffet’s corner, he is heavily invested in the financial goliaths. Among his investments in this area, which includes American Express (AXP) and US Bancorp (USB) is Well Fargo (WFC) , Wells Fargo is no more impressive than either of the other stocks here, but could be potentially attractive merely because of how badly it is doing. Investors were fretting that the bank’s stock would sink as low as $50. Instead, it slid all the way down to $40. Given his investment style, and the fact Wells Fargo was a relatively recent purchase, Buffett seems intent to wait the bank out until it improves. Analysts are mixed on the subject, but many are of the opinion that banks, some close to 80 percent beneath their decade-long highs are being undervalued. If that’s the case, and investor attitudes changes, Buffett would be positioned for success. American Express represents a similar opportunity. When the financial markets are doing well, American Express follows suit. It makes sense to hold onto this stock until it feels like economic tides are changing.
When that happens, Buffett has some support in his portfolio. He regularly discusses his investment in Coca Cola(KO) as representative of his overall investment strategy. Coke’s brand strength, and his ability to understand the product they are producing make Coke an attractive buy for Buffett and many investors looking for a balanced portfolio. Demographically, if the number of people globally that can purchase soda rises, so will Coke’s sales.
Next onto Soros’ portfolio. Below, are three stocks that he has initiated positions on in the first quarter of 2011. The decision to focus on Soros’ more recent purchases is directly tied to his investing tendency to follow recent patterns.
Among the companies that Soros has favored recently is Baidu (BIDU). Baidu is often lauded as the Chinese Google (GOOG) and is familiar to many investors who have been following strong tech IPOs. It’s not EXACTLY like Google though because it promotes the censorship of the Chinese government. Google once held this role, but chose not to censor the content on a longer timeline. The result led to Baidu gobbling up marketshare and becoming a 75 percent internet search provider for the company. Soros own 139,700 shares ($19 million) of Baidu, which may continue to grow in strength and size alongside the Chinese middle class. Baidu has proven especially popular among high profile investors including Jim Cramer and several hedge funds including, Fisher Asset Management, Discovery Capital and others.
Despite the demographic trend that could be observable in Baidu, it was not Soros’ largest purchase for the year. In fact, that was Motorola Solutions Inc (MSI). The stock hadn’t been of tremendous interest, having been rated a hold, but Soros’ took a position regardless. It has been on an upward trajectory since the initial buy with equities research analysts at Goldman Sachs (GS) set a “buy” rating and a $57 price target on the stock. Citigroup (C) analysts also raised their price target from $40.00 to $47.00 in a research note in late April. It is already trading about that, at slightly more than $47.00. They seem primed to push higher as well. The company announced yesterday that it opened a key office for the Middle East and North Africa (MENA) region in Cairo, Egypt. This expansion in Egypt will help Motorola continue to deliver its communication products to an audience that has, in recent history, exposed its desire to communicate globally.
Both investors display impressive earnings, so it’s difficult to say if one investment strategy is better than another. Perhaps deciding on the guru to look to just depends on the type of understanding a person has and the length of the positions they’re interested in initiating.
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