A Lesson From Warren Buffett...

Warren Buffett recently purchased the market leading specialty chemical company, Lubrizol (NYSE: LZ) at a premium of $135/share. However, Buffett still managed to buy this at value, paying a mere 13x last year's earnings, and 12x forecasts for 2011. This is a classic example of Buffett investing. Brett Arends, of the Wall Street Journal, outlines nine salient theses for LZ:

1. It's lucrative niche.
2. It has a wide economic moat.
3. It's in a dull industry.
4. It has pricing power.
5. It's stable.
6. It benefits from overseas growth.
7. It has low unionization.
8. The stock was reasonably priced.
9. He likes the management.

These are all key investment drivers that every investor should start looking at when doing fundamental analysis of a company (i.e., management, economic moats, valuation).

Here is the link to the Wall Street Journal article:
http://online.wsj.com/article/SB10001424052748703328404576207040639038696.html?mod=sf2tw

Saudi 'Day of Rage'

Tomorrow marks the 'Day of Rage' (3/11/11) that protesters are planning in Saudi Arabia. Fear of more uprisings in the Middle East, specifically in Saudi Arabia, have significantly hurt the overall markets today. Oil recently spiked over $2/barrel in the matter of minutes with an AP report suggesting that Saudi police open-fired on protesters in preparation for the 'Day of Rage.' Given Saudi Arabia is the world's largest exporter of oil, this poses a serious risk for global markets, and is likely to push oil and gas prices up for the next few months.

The events in the Middle East simply prove the linkage between U.S. and foreign markets - we are truly a global economy.