In The Name of Warren Buffet and Dien Rice and the Holy Spirit of Investing for Handicapped...

Hi Simon,

> Actually I think that the more adaptations
> of he sacred formulas we have, the better we
> understand them and actually make them WORK.

> My questions to Dien Rice.

> How many stocks in your lucrative portfolio
> are actually the stocks of the companies
> that help handicapped, sick, needy...?

> In your previous posts you mentioned only
> one such company.

> I am positive that there are far too many.

My approach is to follow something Buffett said, which is, "Put all your eggs in one basket, but WATCH THAT BASKET!"

So I don't follow the usual advice of diversification.... I agree (with Buffett) that it is good to diversify if you don't know what you're doing.... But if you DO know what you're doing, then it's better to focus your money in the most lucrative places you can find....

I do happen to have a lot of my money in a few companies that deal with health care and medical technology (such as Resmed).... One reason is that I do feel good knowing that these companies are advancing our health care technology, and really helping to save people's lives. The other reason is also that demographics suggests that health care will be good for the long term....

However, I'm happy to own non-health-care stocks too.... I've looked at technology companies before, but either they weren't making any money, or where they were, I thought their share price was too inflated. Now, things have changed, and some solid tech companies may have been oversold and may be good value....

Right now, I'm moving my pension money from a normal pension fund (or a "superannuation fund" in Australia) to a family pension fund which myself and my brother Thomas will control. So I'm looking at what to invest in right now, but haven't really done very much analysis of this yet.

Some of the companies we'll be looking at (which seem to pass "Step 1" mentioned below in the forum, solid growth in EPS for at least 5 years) are Tiffany's (TIF), Pre-Paid Legal (PPD) (though they have a worrying court case), Oracle (ORCL) (though their EPS growth is not as predictable as I'd like), Microsoft (MSFT) (it looks like they'll probably win their appeal), Lehman Brothers (LEH), and others.... These are generally quite big companies, I'm sure there are some smaller companies I'll find too to consider investing in (smaller growing companies often have much faster yearly growth in EPS). As we've only just started the analysis, there's still work to do before we decide precisely what we'll invest in.... We may still find things "wrong" with the stocks mentioned above....

> If yes, are you willing to use a
> stock-picking service BASED on the principle
> that the above mentioned companies are MOST
> likely to grow and succeed?

I like to use anything which has a proven track record in working! Though sometimes it can take a while to figure out what that is.... :)

What are you suggesting? I know there's a great suggestion lurking there, Simon.... :)

- Dien