The Warren Buffett of Latin America?

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Warren Buffett and Carlos Slim took similar paths to investing success, but they share one big difference.

Text of The Warren Buffett of Latin America?

  • 1. THE WARREN BUFFETT OF LATIN AMERICA? Some key characteristics shared by the worlds greatest investorsand one big difference.

2. WHO ARE THESE GUYS ANYWAY? Warren Buffett Carlos Slim Currently, the worlds third- richest individual, with a net worth of about $63 billion CEO of Berkshire Hathaway, a conglomerate with diverse holdings, and a focus on insurance. Born and currently lives in Nebraska Currently, the worlds second-richest individual, with a net worth of about $71 billion Honorary Chairman, America Movil, and holder of controlling interest in industrial conglomerate Grupo Carso Born and currently lives in Mexico City 3. 1) THEY STARTED INVESTING EARLY Warren Buffett made his first investment at the age of 11. He bought shares of Cities Service stock for himself and his sister Doris. Later, when he was just a high school sophomore, Buffett bought a 40-acre Nebraska farm and hired a tenant farmer to work the land for him. At the age of 12, Carlos Slim opened up his own personal checking account, and purchased shares of said bankBanco Nacional de Mexicowhile he was at it. 4. 2) WHEN IT MATTERED, THEY EXCELLED IN SCHOOL Early on, Buffett struggled in school. He was forced to move from Nebraska to Washington, D.C. when his father became a Congressman. He wasnt exactly a fan of the move, and it showed. Says Buffett: I behaved pretty badly. Later, however, when he was a graduate student at the Columbia Business School, Buffett excelled under the tutelage of professor Benjamin Graham. In fact, Buffett was allegedly the only person to earn an A+ in Grahams course. 5. 2) THEY EXCELLED IN SCHOOL (CONT) Carlos Slim attended the National Autonomous University of Mexico with a degree in civil engineering. While he was completing his undergraduate studies, however, Slim was actually a student and a professor! Slim taught college courses in algebra and linear programming before he was 22 years of age. 6. 3) THEY WERE GREEDY WHEN OTHERS WERE FEARFUL In Warren Buffetts 2004 letter to shareholders, he famously wrote: Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful. [emphasis added] 7. 3) BE GREEDY WHEN OTHERS ARE FEARFUL (CONT) During his time as an investor, Buffett often eschewed market sentimentpouncing on well-known names when they were down in the dumps, and famously staying out of technology stocks during the dot-com run-up. 8. 3) BE GREEDY WHEN OTHERS ARE FEARFUL (CONT) In the early 1982, Mexicos economy collapsed on the heels of falling oil prices and rising interest rates. While many were pulling their money out of the country, Slim used it as a buying opportunity. He amassed positions in a wide range of businesses, including the Mexican subsidiaries of many well-known international brands. 9. WHILE DIVERSE, THEY EACH HAD A CORE For Buffett, that core business is insurance For Slim, America Movil is the largest piece of the puzzle Berkshire Hathaways subsidiaries include 8 different property and casualty insurance companies. The most well-known is GEICO. America Movil has an over 70% share of the cell phone market in Mexico. Slim controlled Telmex owns 83% of the landlines in use in Mexico 10. ONE AREA OF DIVERGENCE: CHARITABLE GIVING Buffett has pledged much of his fortune to charity, primarily through the Bill and Melinda Gates Foundation. Buffett also spearheaded The Giving Pledge, whereby the worlds wealthiest individuals agree to leave a substantial portion of their wealth to charity. Slims attitude towards charity is best described as ambivalent. He has devoted at least $8 billion to two of his foundations Slim claims, trillions of dollars have been given to charity in the last 50 years, and they dont solve anything. Slim, however, has also donated his time to causes, quoting Khalil Gibran saying, you give but little when you give of your possessions. It is when you give of yourself that you truly 11. NOW PUT BUFFETTS WISDOM TO WORK! The Motley Fools special free report will help you do it Warren Buffetts Greatest Wisdom