Buffett and Lampert Seize The Day!

I love it when one of my thoughts, such as my recent article on opportunitic investing, gets confirmed by some of the world’s greatest investors. Please note that this is sheer luck on my part and I am not comparing myself to Buffett and Lampert.

Home Depot (HD), the world’s largest home-improvement retailer, gained on news Edward Lampert, the billionaire who built his fortune by investing in beaten-down retail stocks, bought a $484 million stake during the third quarter.  Home Depot is well off of its 52- week high of $42.00 as it sits below $30 .00 today.  This brings its dividend yield to a very tasty 3.0%!

 CarMax (KMX) rallied after Warren Buffett’s Berkshire Hathaway (BRK.A) disclosed a 6.4% stake in the biggest U.S. used-car dealer.  News of Buffet’s investment has CarMax stock up over 3.0% in pre-market trading…Looks like the Oracle still has a mighty influence on Wall Street!

As mentioned in the previous article on the topic of contrarian investing taking calculated risks can lead to huge profits when we are willing to look like fools in the short term.

I wonder if Buffett will see the same fortunes with CarMax over the next ten years that he saw when he invested in Wells Fargo in the 1990’s when everyone was running scared?

One comment

  1. I have been nibbling some at HD and have begun looking at DHI. When residential comes back it will be with a vengeance. The questions are when will it rebound and what carnage will occur between now and then.

    I am not sure I have ever considered KMX – will need to run the numbers on it.

    Best Wishes,
    D4L

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