Poor man's Buffett.They call it the "poor man's Poor man's is a common slang term used to compare one thing with another. It is not necessarily a derogatory term. It is usually used in a sentence as "X is a poor man's Y", with "X" being the person or thing one is referring to, and "Y" being the superior but similar person or Berkshire Hathaway Berkshire Hathaway (NYSE: BRKA, NYSE: BRKB) is a conglomerate holding company headquartered in Omaha, Nebraska, U.S., that oversees and manages a number of subsidiary companies. ." The low-profile Pasadena-based Wesco Financial Corp. usually scoots through corporate life just below the radar screen. No press releases, scant analyst coverage on Wall Street, no media interviews -- the usual recipe for corporate anonymity. Except this outfit is run by Chairman and Chief Executive Charles Munger, 76, local powerhouse in his own right and sidekick of legendary investor Warren Buffett Warren Buffett Known as "the Oracle of Omaha," Buffett is Chairman of Berkshire Hathaway and arguably the greatest investor of all time. His wealth fluctuates with the performance of the market, but for the last few years he has been reported to be worth over $30 billion, making . And it has a market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. of $2.16 billion. So why do market mavens apply the "poor man's Berkshire Hathaway" moniker (1) A name, title or alias. See alias. (2) A COM object that is used to create instances of other objects. Monikers save programmers time when coding various types of COM-based functions such as linking one document to another (OLE). See COM and OLE. to Wesco? Because, though Wesco has been trading at more than $300 per share (hardly in the bite-sized range), it is more chewable than the royal $64,000-plus per share of Berkshire Hathaway. And Wesco is a cousin company to the famed Berkshire Hathaway in many other regards. Its main line of business is investing, and its second line is insurance, just like Berkshire Hathaway. A review of Wesco's portfolio reveals many Buffett-like holdings, including Coca-Cola Co. and Gillette Co. And just as Berkshire Hathaway made a few acquisitions of private operating companies in the last several years -- when shopping on Wall Street became too pricey (International Dairy Queen and Benjamin Moore & Co., the paint makers) -- so too has Wesco made some corporate buys. Among them is CORT CORT Escort CORT Certified Operating Room Technician CORT Coherent Receive/Transmit CORT Crew Operations Review Team Business Services Corp., the business furniture rental folks. Buffett himself likes Wesco, as it turns out. Berkshire Hathaway owns 80 percent of Wesco stock, a $1.7 billion block. Wesco stock has fared well enough in the past year, rising from a low of around $200 a share last July to more than $300 in trading last week, in the face of a bear market. However, it should be noted that this stock hit $400 a share in June 1998. Among other features, Wesco is notable for stability: Of its seven-member board, one (David Robinson) has been a director since 1959, two others have been in place since the mid-1960s and Munger has been a board member since 1972. The company got its start in 1954, when its primary business was Blue Chip stamps Blue Chip Stamps started as a trading stamps company called "Blue Chip Stamp Co." In 1963, the United States government began an antitrust action against Blue Chip Stamp. . Contributing columnist Benjamin Mark Cole writes about the local investment community for the Los Angeles Business Journal. His new book, "The Pied Pipers of Wall Street: How Analysts Sell You Down the River," Bloomberg Press, will be published in May. |
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