Serious Money: How safe were BRK, BUD, PG, SO, & UPS?

Posted Aug 19th 2008 3:07PM by Sheldon Liber
Filed under: Rants and Raves, Competitive Strategy, Wal-Mart (WMT), Berkshire Hathaway (BRK.A), Anheuser-Busch InBev (BUD), Procter and Gamble (PG), United Parcel'B' (UPS), Washington Mutual (WM), PetroChina Co Ltd ADR (PTR), Comfort Zone Investing, Serious Money, S and P 500, Stocks to Buy, Southern Company (SO)

The stock market was down yesterday and it is down again today. Bearish sentiment is roaming through Wall Street right now, so I thought I would look back on another occasion when the market was going through similar turmoil and I wrote about the following eight stocks, which I thought would be "safe havens" in such a storm.

Six of the eight did well and two did not, and of course one of those two was a disaster. Among the losers, I do not think anyone is fretting about UPS, which is still one of the few triple-A rated companies along with Berkshire Hathaway. It has been well reported that the slowing economy and higher fuel prices have been the major culprits affecting UPS's earnings. In the case of WaMu, it's demise has also been well reported, but at the time I recommended it WaMu had a stellar reputation of growth and high yield for over two decades. There is no hiding, it turned out to be a lousy pick and an ANTI-SAFE Haven

NOT SAFE:

United Parcel Service (NYSE: UPS) closed Monday at $65.30 down from $78.40; a 16.71% loss

Washington Mutual (NYSE: WM) closed Monday at $4.21 down from $45.50; a 98% loss.

Fortunately the remaining six picks have done very, very well. If you had bought the pool, the average gain over the last two years would have been 7.14%. Adding the dividends over the two years would have raised this to 13.14%.

In comparison over the same period, the S&P 500 is down about 3%, so adding back the dividends would put you at break even.

VERY SAFE:

Anheuser-Busch (NYSE: BUD) closed Monday at $67.82 up from $45.50; a 49.05% gain.

Berkshire Hathaway (NYSE: BRK-B) closed Friday at $3,924 up from $2,995; a 31.02% gain.

Petro China (NYSE: PTR) closed Monday at $124.48 up from $110.90; a 12.25% gain.

Proctor & Gamble (NYSE: PG) closed Monday at $71.27 up from $55.70; a 27.95% gain.

Southern Company (NYSE: SO) closed Monday at $37.61 up from $32.50; a 15.72% gain.

Wal-Mart (NYSE: WMT) closed Monday at $58.83 up from $43.30 a 35.87% gain.

At times some readers not familiar with my transparent posts have viewed my recounting such data as tooting my own horn too loudly. I always take great pain (and it is painful) to post my bad calls as well as the good. I revisit this old story to confirm even to myself how I'm doing and whether there is any merit to posting my thoughts on investing and to what benefit. I put my money where my mouth is and lost money on WaMu. If you did as well, I hope you benefited from the broader pool of safe havens.

For those who are interested, I recently took another stab at seeking stability and posted Serious Money: Five stable stocks for troubled times. I will be tracking these as well.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of BRK.B, PTR, SO, UPS, & WM. I have owned BUD in the past and I have never held any position in WMT.

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