"I have found Warren Buffett’s successor"

I got an email solicitation from Louis Navellier the other day, one of dozens we all get every day from various investment advisors, and to those who signed up for a trial of his Emerging Growth investment advisory service he promised something special:

The name of the company that might be the next Berkshire Hathaway.

The promise, as always with these letters, was dramatic — “Imagine investing in Dell back in 1990″ as he recommended, you’d have turned $100,000 into $4,000,000. Of course, these letters always cherry pick their best ideas from the past 20 or 30 years, or the best ideas they might have had had the service existed, to prove their brilliance. The idea that you could have invested in Starbucks or Dell or Berkshire Hathaway before they grew is extraordinarily compelling, probably compelling enough for many folks to take the free trial of a newsletter.

But you don’t have to take a free trial of any newsletter to find out what stock he’s promising info on in this email, I’ll tell you.

That’s why this blog exists.

Here are the clues/teases provided that we had to work from:

• The “next Buffett” is named Bruce. He’s 41.
• His company was formed in 1895 to invest in latin american mines.
• Today, they buy “ports, pipes, railroads, timber and hydroelectric dams.”
• “A few days ago, he walked away from a deal to buy a bankrupt outlet mall business.”
• Operating cash flow per share grew 35% last year, and 45% in 2005.
• “The company is virtually unknown to individual investors and brokers, although pension funds looking for income love the stock.” (I’d dispute this)
• The stock has tripled in the last three years.
• The company provides exposure to power-transmission in Chile, timber in Canada, and shopping centers in Brazil.

So what do we have? The stock gumshoe tells you: this company is undoubtedly Brookfield Asset Management (BAM).

BAM, the Canadian asset manager that does indeed own all those things, and does indeed have a CEO named Bruce Flatt. It walked away from an offer to buy Mills Corp, operators of giant outlet malls (they were outbid).

Whether or not he’s the next Warren Buffett, and whether BAM is the next BRK … well, that’s a question you’ll have to answer on your own.

On my other blog, by the way, I have written about BAM before — and I’ve been tempted to buy for many of the same reasons Navellier is touting the company, but I haven’t caught it at a price I’ve been comfortable with yet.

So there you have it — make your decisions about choosing an investment newsletter or advisor based on their track record, their portfolio, their writing style, or the deal they offer you … but don’t sign up to get the name of a company they’re teasing you with in an email — that’s what the Stock Gumshoe is for!

I don’t currently own shares in any company mentioned in this writeup. I don’t have anything against Louis Navellier or any of his services, and I don’t subscribe to any of them.
             ——————–
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The author will always disclose any direct long or short equity, debt or option position in any stocks written about as of the day of publication, and will not trade in any stocks mentioned for three days (72 hours) after publication. Full disclaimer is at the bottom of the page.

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1. An interesting thing about BAM is that they are also touted by Porter Stansberry & Assoc in one of their reports about the “Secret Investment Societies”. I got in about a 6 weeks ago about a shade under $27. It now has been trading between $33-$34. I am up over 25% in those 6 weeks.

   [Reply]

   Posted by Michael Taylor | May 6, 2008, 10:19 am