Carlos Slim Helu on Stock Investments

Carlos Slim Helu-Photo: Agencia Brasil

Here is an excerpt from an interview of Carlos Slim Helu, Mexican billionaire, that appeared on CNBC approximately in February 2008 as the stock market was going down.

Michelle Caruso Cabrera: In 1982, when Mexico was falling apart, people were fleeing the country. You were buying assets that nobody else wanted, and at very good prices, that turned out to be very good investments over the long-term. Do you have the same opportunity right now?

Carlos Slim:  What we do, most of our investments are in our own companies. The companies we manage are in a healthy situation, but we also manage some investment funds, mostly Mexican paper, now they are more open to invest outside, and these investment funds have a policy that when the markets are very low, they are heavy in equities.  And when the markets are very high, doesn’t matter that it goes higher, the position of equities is very low. Let’s say 35 or 40 percent in equities and when the market is very low, they go 70 or 80 percent in equities, that’s why they have moved in these parameters in some ways.

Carlos Slim versus Warren Buffet:  I think Warren Buffet invests, buys and holds for a long time, in simple businesses.    Carlos Slim does the same, buys and holds for a long time but he also believes in market timing a bit more than Warren Buffet.

So far, Carlos Slim has invested in Bronco Drilling, Saks Inc. and New York Times.  I think he figures that the market will go down more and I expect to see more investments in equities from him.  I think when Carlos Slim makes his next stock purchase, that will probably be close to the market bottom.

Warren had made an investment in Pier 1 Imports several years back, its stock price is 15 cents now.  Recently Warren Buffet took a loss for buying Conoco Phillips when its share price was too high, he did not anticipate the severity of the recession!!.   Recently he has indicated that the market is going to be in shambles.  We live in interesting times.