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September 24, 2013 2:56 pm
Prem Watsa, the Indian-born billionaire who is leading a $4.7bn bid to buy BlackBerry, is sometimes compared to Warren Buffett, the legendary investor and one of the world’s richest men. Here’s a look at how the two match up.
PREM WATSA (aka the “Oracle of Ontario”)
Classic quote: “Trees don’t grow to the sky and markets don’t fall to the floor.”
First job: Left India for Canada with $8 in his pocket and found a job selling air conditioners and furnaces door-to-door. This funded his MBA at the University of Western Ontario business school.
Investment strategy: A value investor and a disciple of Ben Graham, Mr Watsa invests via his insurance company Fairfax Financial Holdings.
Top shareholdings: Resolute Forest Products; Dex Media; Cooper Tire & Rubber Company; IBM; Merck & Co; New York Times.
Portfolio Value: $2.5bn. Fairfax’s compound annual growth in book value per share has been 23 per cent since 1985, while the common stock price has risen at a compound rate at 19 per cent annually.
Biggest Deal: The proposed $4.7bn acquisition of smartphone maker BlackBerry.
Shrewd moment: Cemented his reputation for turning disaster into profit when he made $1.15bn betting against US real estate.
Worst moment: Buying shares in BlackBerry at an average cost of $50 in 2010. The shares closed on Monday at $8.82.
Personal Net Worth: Estimated at about $2bn. He earned $622,000 in 2012.
WARREN BUFFETT (aka the “Sage of Omaha”)
Classic Quote: “Rule No. 1: never lose money. Rule No. 2: don’t forget rule No. 1.”
First job: Running businesses as a paper boy and selling his own horseracing tip sheet, aged 13. That same year, he filed his first tax return, claiming his bicycle as a $35 tax deduction.
Investment strategy: Like Mr Watsa, a value investor and Graham disciple. Mr Buffett invests via his ownership of insurance company Berkshire Hathaway.
Top shareholdings: Coca-Cola; ConocoPhillips; DirecTV; GlaxoSmithKline; General Electric; IBM.
Portfolio Value: Berkshire’s equity portfolio was valued at $103.3bn at the end of June. Over the past 48 years, Berkshire’s book value has grown from $19 to $114,214, a rate of 19.7 per cent compounded annually.
Biggest Deal: The $26.6bn acquisition of US railway Burlington Northern Santa Fe in 2009.
Shrewd moment: Berkshire received a 10 per cent coupon and five-year warrants giving it the right to buy Goldman Sachs stock at a distress-sale price, in return for investing in the bank in September 2008.
Worst moment: Berkshire’s 1998 acquisition of reinsurance company General Re was marred by a portfolio of complex derivative securities and state and federal investigations.
Personal Net worth: $53.5bn, according to the Forbes Rich List.
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