Buffett's Encouraging Word

Berkshire Hathaway's Warren Buffett says Korean shares still attractive

Warren Buffett, chairman of Berkshire Hathaway Inc., a huge investment conglomerate in the United States, said Korea is still an attractive stock market and he plans to invest more in Korean shares when he finds what he considers good companies for investment.
The investment guru made a brief stop in Daegu on Oct. 25 to visit Taegutech, a local firm, on his way back from China. He and his entourage flew into Daegu on a private business jet and stayed for about six hours.
During an hour-long interview with the media at Taegutech's marketing center, he said the Korean stock market is undervalued compared to other stock exchanges in the world, which makes it more attractive for investors.
He said he and Berkshire Hathaway first made investments in Korean shares four years ago in such companies as Hyundai Steel, Kia Motors, Shinyoung Securities and POSCO.
The world's third richest man, after Microsoft's Bill Gates and Carlos Slim of Mexico, said at one time his own stock portfolio included many Korean shares, but he sold many of them at good prices.
Buffett and his firm bought shares in some 20 Korean companies. In the case of POSCO, Buffett invested some $500 million to buy 34 million POSCO shares or 4 percent of total outstanding shares of the steel giant.
He said he purchased POSCO shares for 150,000 won per share a long time ago and has made a considerable profit, with shares now trading for around 600,000 won. The other positive factor is a more favorable exchange rate of the U.S. dollar to the Korean won compared to the time of his purchase. It was 1,150 won per dollar when he bought the shares and it now stands at around 920 won per dollar. He said he plans to buy more POSCO shares if the price falls.
Buffett said Korean stock prices rose substantially lately, but they still are very attractive to investors, although he has sold many of his holdings.
He said he has been searching for companies in which to invest. Those companies should be large, competitive and led by capable and honest managers. Their businesses should also be rational. He said the Korean economy would continue to expand over the next 10 years and with its stock market still low in terms of PER and an industrious population of 50 million, it remains an attractive country for investment. nw