The Killer Combo --- FXI and BRK-B

Yesterday, I wrote an article about BRK-B and FXI each being great investments.   Today, I will make the case as to why this duo can and will make you very rich in the short term -- and this is not a sales pitch or anything of the kind.  I own shares in both, but I have nothing to gain by telling you.  These are stocks that do not need any help from new investors.  They are blow aways individually and a killer combo together.

Neither position is a great discovery.  Investors know very well and Warren Buffett (BRK-B) is the best there is and that Berkshire Hathaway has been beating the averages for years.  They know too that China is on a roll like never before.  Its market is red hot and the ETF, FXI is doing a superb job of mirroring China's staggering growth.  BRK-B, the more afforable of Berkshire Hathaway shares, has seen a 52 week advance of over 25%.   FXI has done still better, with well over 125% growth in the same period -- 30% in the last weeks. 

But each position also has some inherent risks.  BRK-B will continue to do well as long as Warren Buffet is alive.  But he is getting on in years -- 77 this year -- and all expect the stock to take a deep dive when he dies.  But, Buffett is in good health right now and longevity tables give him another 8 years or so.  China is clearly a bubble and will come down hard  -- even for a short time -- at some point.  But China also has an Olympics to pull off in August 2008.  And, China is a controlled society.  Most agree that China will not let the bubble burst until after the Olympics -- it does not want to be embarrassed. 

So the major risks in both these great stocks can be pushed out in time:  BRK-B for a half dozen years and FXI for at least 300 days.  There is, thus, less immediate risk in each than some think.  And, when looked at together, they support each other and make owning both a better bet than holding either one alone.  Failure in one, should the worst case scenario come to be, will be compensated for by the other.

I plan to add to my positions in both -- big time -- and to stay long in this combo at least until August 2008.  I also plan to build wealth by so doing between then and now.


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  • Mark Freedman is broke

    January 29, 2009

    Long FXI and Berkshire left you destitute.

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