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Two Safe Ways to Profit From the "Alibaba Shockwave Effect"

In the mid-1990s, I was fortunate to meet and start working with an Upstate New York money manager named Anthony M. Gallea.

The relationship began when I attended and wrote stories about some of the investment seminars he periodically held for prospective and existing clients. He then became a “source” for some of the investment stories I periodically wrote for Gannett Newspapers. And we ultimately collaborated on a pretty successful book about “Contrarian Investing” that was published by Prentice Hall.

Along the way, Tony shared some pretty important snippets of investing wisdom…

  • This Energy Play Has Warren Buffett Playing Catch-Up

    It's absolute gospel in the world of investing to study and understand the moves that Warren Buffett and Berkshire Hathaway are making - and then to follow them for profit.

    And with good reason: Buffett's track record speaks for itself - and he augments his capital-markets genius with the homespun, down-to-earth personality that's cemented his spot as a hero to the masses.

    One of Buffett's newest forays has taken his Berkshire investment vehicle into the energy sector.

    But he wasn't the first to get there. We were. And it's paying off in a big way...

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  • Five Investor Highlights from Warren Buffett’s Berkshire Hathaway Meeting Buffett mug

    Warren Buffett's Berkshire Hathaway meeting for shareholders this weekend let investors - not just Berkshire (NYSE: BRK.A; BRK.B) investors - get some nuggets of wisdom from the 83-year-old billionaire.

    Here are Buffett's five best insights from the event...
  • Why Warren Buffett Is Wrong About Investing in Bitcoin Buffett mug

    Warren Buffett didn't get to be a billionaire by being wrong, but it's clear from what he's been saying about investing in Bitcoin that he just doesn't get the digital currency.

    Last Friday on CNBC, Buffett, the chairman of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B), unleashed his second dismissal of Bitcoin this month.

    "Stay away from it," Buffett said during a panel discussion. "It's a mirage, basically."

    To continue reading, please click here...
  • How Warren Buffett Led Berkshire Hathaway (NYSE: BRK.A, BRK.B) to Record Profit in 2013 Buffett mug

    Buoyed by a recovering U.S. economy, Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) posted a record profit in 2013 and is upbeat about the future.

    Run by the iconic Warren Buffett since 1965, Berkshire has grown from a textile manufacturing company to now include 80-plus businesses that run the gamut from insurance to railroads to utilities to ice cream. The Omaha, Neb.-based conglomerate consists of some $117.5 billion of a variety of stocks.

    To continue reading, please click here...
  • Convert These Costs into Profits It's fair to say that adding up your health, auto, homeowner's, life, and business insurance costs (to name just a few) can lead to a massive tab. And it puts a huge dent in your available investment capital. But it doesn't have to. Let’s take a look at our insurance costs compared to some other countries, their drivers, and… most importantly, how to knock them down and profit from what we save.
  • The "Painful" Truth About Diversification Portfolio diversification is one of the most widely advocated concepts in investing. Almost all financial planners recommend it. But it's also one of the most misunderstood concepts. Traditional diversification isn't a real-world way to create big wealth. Warren Buffett certainly understands this, as you'll see. So does Lynn...
  • The Winning Investment System That Gave Us Warren Buffett and Peter Lynch Light bulb So what do Warren Buffett and Peter Lynch have in common?

    Aside from being legendary investors, neither one of them has ever used technical analysis to dig up a market-beating stock pick.

    In a world bereft of charts, trend lines, and candlesticks, both of these heavy weights have relied entirely on fundamental analysis to earn their famous fortunes.

    In fact, their disdain for technical analysis is so complete that Buffett once remarked, "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer."

    Meanwhile, Lynch once observed, "Charts are great for predicting the past."

    Instead of focusing on market momentum, they simply concentrated on finding long-term value. It's called fundamental analysis.

    And over time, that singular "system" made both men very wealthy.

    To continue reading, please click here…

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  • How to Invest in Tech in 2013 If you want to know how to invest in tech in 2013, you need to understand this changing role the industry has. To avoid profit losses, read this. Read more... Read More...
  • Three Stocks to Buy to Beat Warren Buffett's Gains CokePepsi

    While many look to Warren Buffett's holdings to find the best stocks to buy, it turns out his holdings' rivals could be the better picks.

    Buffett is known not only for value investing, but also buying shares only of companies that operate in prosaic, easy-to-understand businesses. That's why the holdings of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) are spectacular.

    But in this look at how to find more stocks to buy that deliver - and even beat - the gains of Buffett's most popular holdings, some of the best bets could be companies that share a market with Berkshire's big winners.

    Take a look.

    To continue reading, please click here...

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  • What Was the Real Motive Behind Warren Buffett's Goldman Deal?

    Legendary investor Warren Buffett is set to become one Goldman Sachs Group Inc.'s (NYSE: GS) largest investors without shelling out one penny.

    Impressive as that is, what's even more striking is how the guru investor brokered the Goldman deal to his distinct advantage.

    The savvy CEO of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) amended terms of warrants--a type of security that gives the holder the right to purchase securities from an issuer at a certain price within a certain time frame-issued to Berkshire during the 2008 financial meltdown.

    At the time, Buffett's investment in Goldman was gutsy. It was viewed as a vote of confidence in the bank as the country faced economic crisis.

    The warrants originally gave Berkshire the right to buy $5 billion worth of Goldman common shares at $115 each any time before Oct. 1. Thanks to the new $1.5 billion deal inked Tuesday, Buffett's company will receive 9.2 million shares.

    According to data from Bloomberg News, that makes Berkshire the ninth-largest shareholder in Goldman.

    The Oracle of Omaha said in a press release, "We intend to hold a significant investment in Goldman Sachs, a firm that I did my first transaction with more than 50 years ago. I have been privileged to have known and admired Goldman's executive leadership team since my first meeting with Sidney Weinberg in 1940."

    Berkshire's windfall from the investment surpasses $3 billion, making it one of Buffett's most profitable wagers in recent history.

    Goldman also benefits. The investment bank avoids a flood of sell-side shares that would have been dilutive. It also gets to include the revered name of Warren Buffett to its shareholder roster.

    "We are pleased that Berkshire Hathaway intends to remain a long-term investor in Goldman Sachs," Goldman's CEO Lloyd Blankfein said in a statement.

    To continue reading, please click here…

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  • How to Invest Like Warren Buffett Company Berkshire Hathaway

    If you want to know how to invest like the best, a good place to start is with Warren Buffett.

    Legendary Buffett, CEO and Chairman of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B), first started his Buffett Associates, Ltd. in 1956 with $105,000 - mostly contributed from family and friends.

    He now ranks fourth on Forbes' Richest Billionaires list, with a new worth of $53.5 billion.

    Part of the reason for his success: He was never swept up in the euphoria of Wall Street crowds.

    Behind the small-town-boy-turned-mogul story is a keen mathematical mind that has been honed into a highly successful stock-picking machine. Buffett began under the mentorship of the late Benjamin Graham, the father of value investing. Buffett perfected his skill through countless hours of studying annual reports of virtually every American publicly traded company over the last five decades.

    Now the Oracle of Omaha's Berkshire Hathaway empire consists of some of the most recognized U.S. brands.

    Buffett's "Big Four" investments - American Express Co. (NYSE: AXP), The Coca-Cola Co. (NYSE: KO), International Business Machines Corp. (NYSE: IBM) and Wells Fargo & Co. (NYSE: WFC) - represent the kind of businesses Buffett trusts his money to.

    "The four companies possess marvelous businesses and are run by managers who are both talented and shareholder-oriented," Buffett wrote in his 2012 Berkshire Hathaway shareholder letter. "We much prefer owning a non-controlling but substantial portion of a wonderful business to owning 100% of a so-so business."

    By taking a closer look at Buffett's career, and his favorite investments, we pinpointed three key factors to Buffett's investment formula that separate him from the common investor.

    These factors, employed at key moments in Buffett's decision-making process, reveal a sophisticated formula for stock selection, as well as exploiting opportunities when other investors overreact.

    To continue reading, please click here...

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  • What Warren Buffett's Shareholder Letter Tells Us Blue Envelope

    Warren Buffett's shareholder letter to Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) investors was full of the Oracle of Omaha's market wisdom and one-liners, plus some hints about what Berkshire will pursue in 2013.

    Here's a look at what Buffett discussed in the March 1 letter.

    To continue reading, please click here...

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  • Does the Heinz Deal Mean Warren Buffett Has Become a Doomsday Prepper? At $28 billion, the famed ketchup maker is valued at a rich 23x earnings. And Buffett won't even control management. Given Warren's long and storied history of value investing and a hands-on style, this purchase is bizarre. Unless... Read More...
  • The Debt Ceiling Isn't What Worries Warren Buffett

    Investment guru Warren Buffett isn't sweating the debt ceiling as much as he is some of the country's other issues.

    Buffett this weekend said the $16.4 trillion in debt the country has collected is not the number on which everyone should be focused.

    "It is not a good thing to have it going up in relation to GDP, that should be stabilized, but the debt itself is not a problem," the CEO of Berkshire Hathaway (NYSE: BRK.A) told CBS' "Sunday Morning" this weekend.

    Buffett said the country's debt is a "lower percentage of GDP than it was when we came out of World War II. You've got to think about in relation to GDP."

    Here's why debt-to-GDP is what Buffett watches.

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  • Play the Bakken Oil Boom Like Buffett Energy oil pumping small

    Many investors have heard of the Bakken oil field in North Dakota and Montana, but most are unaware of how important this formation is becoming to the U.S. economy.

    More germane to investors is the fact that there is still a lot of money to be made from Bakken oil in the months and years ahead.

    Just ask Warren Buffett.

    He spotted the potential of Bakken oil well ahead of most and bought a non-energy company that would benefit greatly from the boom. Three years ago he bought Burlington Northern Santa Fe (BNSF) Railway Co. for $26 billion.

    That railroad is now one of the main beneficiaries of the Bakken oil boom. (And people thought he just had always wanted to own a train set!)

    "We're the 1,000-pound gorilla in the oil markets," BNSF CEO Matt Rose told Bloomberg News. "Crude by rail is going to be really strong for us. It's been a real benefit to us to replace some of that lost coal business."

    The Bakken oil formation isn't just an investing opportunity; it's transforming the U.S. energy landscape.

    To continue reading, please click here...

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