Warren Buffetts Investment in Goldman Sachs

Warren Buffett, CEO of Berkshire Hathaway, continues to use his firms enormous cash reserves to make purchases into some of the most valued, but down trodden, American companies.Buffett declared another deal this week, the first week of October, 2008: Hes purchasing 5 billion worth of perpetual preferred stock in Goldman Sachs NYSE:GS, plus an option to buy at a greatly discounted rate for the next 5 years..Buffett will get a 10 dividend and the stock is callable after three years at a 10 premium.

As arguably the worlds greatest living investor, Buffetts investment moves are always watched by the public and news media.When Buffett invests in a firm, like Goldman Sachs, its a very valuable endorsement.This time its an endorsement of not only this company but the free market system.

To determine why Buffett found this a good investment, I looked at many criteria as found in the book Buffettology, written by Buffetts former daughter-in-law, Mary Buffett and the website validea.Given Buffetts new investment in Goldman Sachs, I thought it would be worthwhile to look in detail at the common stock.

GS earns high marks based on my Buffett strategy, earning a score of 79 out of 100.Lets look at what the Buffett strategy likes about Goldman Sachs to shed some insight into one way Buffett may have looked at this investment.First off, Goldman Sachs is a large global bank holding company that engages in investment banking, securities and investment management.Goldman Sachs was founded in 1868, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street.1 Goldman Sachs has offices in most major world financial centers.

The firm acts as a financial advisor and money manager for corporations, governments, and wealthy families around the world.Goldman offers its clients mergers & acquisitions advice, underwriting services, asset management, and engages in proprietary trading, and private equity deals.It is a primary dealer in the U.S.Treasury securities market.In short, it has a "big moat", a Buffett criteria.

Thats the qualitative side of it.Now lets look at the quantitative side, which is where my Buffett model comes into play.GS has the steady, reliable earnings history that Buffett likes to see.Buffett likes companies to have solid, stable earnings that are continually expanding.This allows him to accurately predict future earnings.Annual earnings per share from earliest to most recent were 5.67, 5.57, 6.00, 4.26, 4.03, 5.87, 8.92, 11.21, 19.69, 24.73.Buffett would consider GSs earnings predictable, although earnings have declined 3 times in the past seven years, with the most recent decline 6 years ago.The dips have totaled 36.2.GSs long term historical EPS growth rate is 14.4, based on the 10 year average EPS growth rate.

Consistent profitability is not enough.In addition, Buffett likes to see a high return on equity ROE.Over the past 10 years, GS has an average annual ROE of 19.3.Thats plenty good for meeting this models 15 minimum requirement.The ROE for the last 10 years, from earliest to latest, is 37.7, 24.3, 17.5, 11.1, 10.0, 12.8, 17.1, 17.5, 22.7, 22.6, and the average ROE over the last 3 years is 20.9, thus passing this criterion.GSs management has proved it can earn shareholders 21.4 return on the earnings they kept.This return is more than acceptable to Buffett.Essentially, management is doing a great job putting the retained earnings to work.

Share buybacks are also important and GSs total shares outstanding have fallen over the last five years, although the half-billion share secondary offering on Thursday will no doubt alter that trend.

So, for the most part, the firm gets high scores on a fundamental basis, but there are two measures where it falls short.One is the Capital expenditures and another is return on assets.Both are likely to improve and Buffett has required key management to hold their shares during the time Buffett remains invested.

After the business analysis is done, he then moves onto the question, "Is the price right" Consider this: GSs stock is currently at 128, down from a high of 225 a year ago.We know that Buffett wants to invest when others are most "fearful" and at a price that gives him a reasonably good chance at making a profit over the long run.

Buffett gets a great deal with these preferred shares, but I think long-term investors may be presented with a wonderful buying opportunity here in the common shares as well.While this is a favorable piece on GS, it is more about providing you with insight into how to evaluate stocks for your own investment success.
About the Author

Dr Barry Lycka is founder of

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Get Rid of Your Clutter with File Folders

Is your home or office filled with clutter This article will provide you with some useful information that will help you develop an organized filing system with file folders.Specifics may vary from person to person; however, the following information includes helpful and important guidelines from which everyone can benefit.

You have been there before.You come home from work, toss the mail on the kitchen counter and a big pile of papers slide onto the floor in a big heaping mess.As the kids come home from school, they lave their homework, permission slips and progress reports on the counter that you just finished straightening up or neatly piling again.You had good intentions You sorted the papers and created more piles.But now, your kitchen counter is covered with a dozen different piles of paper and you still dont know which papers are in what file.Now its time to make dinner and you dont even have room to cut carrots.What a nightmare

Instead of letting the papers work your life, work with the papers because theyre never going to stop showing up By creating a small filing system, youll be able to free up your counter space so that you can reclaim your kitchen.

Plus, it will look better, too

Ok, a good place to start is with the piles you already have.

Chances are, whatever you have there is what youll have next month and the month after that.So, sort those papers into categories that make sense to you bills, magazines, homework, etc..Dont stop until each paper is in a category.Also, you should keep in mind that these files are active files, meaning that you will access them frequently.If you dont plant on accessing them every day or once a week, you should store them elsewhere.

Once you figure out your categories, this will tell you how many file folders youll need.Each category will become a label for a file folder.Youll also need something to store the file folders in - make sure you choose a container that fits If you plan on leaving the container in plain site, choose something stylish like wood or metal.If you plan on stowing it when guests come over, make sure you choose a container thats portable.

Now, you can spend some time organizing the categories within your container.You can utilize color-coded file folders to make files easier to find, and prevent re-filing errors.Colors can also serve as an alert system For instance, put all of your scheduled items in a red folder.Red draws attention so you wont forget when you see papers in that folder Things like errands to run, permission slips to sign and shopping lists are good things to put in the red folder.Put all of your bills to pay in a green folder green = money.Things like credit card bills, mortgage payments, cable bills and car payments can go in the green folder.Put your coupons in another colored folder; your events or schedules in yet another.It doesnt matter what color you choose as long as you label your file folders clearly and stick to your filing system.This will help you get rid of the clutter that claims your countertops
About the Author

Sharon Mann is President of the I Hate Filing Club, a group of nearly 100,000 office professionals who hate filing but love finding new ways to become more organized.

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Industrial Equipment Leasing Options That Help Businesses Grow

With all of the different industrial equipment financing options available, it can be difficult for businesses to decide which of these is best for them. Industrial equipment leasing options have been designed to help all kinds of companies including seasonal, those with bad credit, and those with larger needs. Selecting the right financial option will allow a business to flourish and exceed its goals. The payment plans can be fully customized to meet a unique set of needs, but here are some of the main structures businesses should be aware of before making a decision.

Traditional Industrial Equipment Leasing

Businesses choose a traditional lease program when they want to 'rent' the needed items rather than buy them. This style of solution gives the company the opportunity to make low payments that are deductible on their taxes in many situations because they are considered an operating expense. The items are paid for at a fair market price, there is no end to the term, and it can be returned easily when it is no longer needed. This option is ideal for items that depreciate quickly.

Prepaid Or Capital Industrial Equipment Financing

Although it works similar to traditional leasing, the buyer owns the items. The plan involves a series of small payments that are paid until the end of the term when the purchase price and interest has been paid in full. Then, the buyer pays a small percentage of the original price tag and sometimes a single dollar to take over ownership of the items. For businesses with less than perfect credit, payments can be made ahead of time to further lower the payments and show you can make the payments.

Postponed Payment Plans

Created the same as the previous two industrial equipment leasing plans, a postponed or deferred payment plan gives companies two to three months before making their first payment. These are ideal for new businesses and those who will need a few months before seeing the return on their investment. Businesses get a few months to get up and running before having the added strain on their cash flow.

Seasonal Programs

Seasonal industrial equipment financing is ideal for those who have seasonal income such as those in the agricultural or road construction industry. Because these businesses make their profit in a few select months, making large payments during the off-season can be extremely difficult. This plan lets businesses decide which months they will make payments, the amount of each, and the total length of the plan. Depending on the agreement, companies may have to make small payments during the off-season, which generally adds up to the interest only.

Leaseback Programs

Businesses that purchase equipment who then change their mind and wish they had taken payments have an option as well. With a sale-leaseback or leaseback option, the company sells their items to the financial institution and sets up industrial equipment leasing to buy them back for payments that generally last for three months until it is paid. This frees up cash flow and allows the company to invest in things that increase in value rather than depreciate.

Progressive Payment Plans

This is a common payment plan for those such as contractors who purchase items needed for a series of upcoming contracts that will see their profits increase as the term goes on. Instead of having a standard payment, these plans have payments that start small and gradually get bigger to match increasing profit levels and pay the financing out faster.

Master Leasing

Businesses that will require a large number of equipment pieces in a certain amount of time often choose a master industrial equipment financing plan. The agreement as a whole is configured and signed. Then, as they need and acquire the items, a separate term and term length is assigned for each purchase. This makes large investments far more manageable.

Industrial equipment financing needs to be affordable yet large enough for companies to get the equipment they need to reach their financial goals. The right industrial equipment leasing plan will give companies the freedom to pay what they need to when they can afford it to enable them to be as successful as possible.

About the Author

Christine O'Kelly writes for the industrial equipment leasing solutions provider Landmark Financial Corporation. These industrial equipment financing experts pride themselves on their quality financial options and superior service.

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Choosing the Correct Debt Management Service For You

When going about choosing a debt managment service, there are probably several different questions that might be running through your mind as you endeavour to get on top of your finances. If youre able to see past the fear of being in debt, then the questions you should be asking yourself are, which companies are not scams How much are the fees Are there hidden costs How do I check out the authenticity of a debt management company Can I cancel at any time and what will my payments be What if I cant pay

Here are a few tips on how you can help keep yourself from being scammed and paying too much.

First and foremost, you should look to find any charities or government organsisations that offer debt advice for free. For example in the UK, The Citizens Advice Bureau CAB would be a good port of call. The CAB offers a phone, online and a drop-in service. The CAB is manned with helpful staff who will do what they can to advise you on your best course of action.

You can find details of the CAB in your local telephone book as well as other companies that can help you with your debt. Put together a list of potential companies that you might do business with. From here, use the internet. Type the name of the company in and look at the results. You should also look into the FCC and the BBB to see if the companies are legitimate, non-profit and complaints that have been filed against them. If you do not have the internet, the public library usually has internet connections available to the public. You may have to join the library though or take some ID with you. Check some of the consumer websites in your country and find out what others are saying about local or national debt management companies.

Debt management is not binding as is filing a bankruptcy notice. At any time you can discontinue the agreement and begin to work on your debt without any assistance. However, when you do agree begin working with a debt management company, they will begin by doing a few things for you. First, they will call your creditors and notify them of your financial hardship. From here, they will make arrangements to pay a smaller amount of money. Usually, he or she will ask for a smaller interest rate or even remove the interest rate altogether. It should be noted that the debt management company will most likely only deal with your non-priority debts. Also, most debt management companies do not give benefits advice or financial advice so you may lose out on important information about your finances. If youre fortunate enough to have a family member or a close friend who is a financial adviser then seek their advice as soon as possible.

In most situations the creditors prefer to work with the debt management companies, simply because they are more apt to make the payments on time every month. They are also more willing to lower your payments when you are working with a debt management company.

After the debt management company has completed the negotiations with your creditors, they will then give you a new monthly amount to pay. This will be a lower single payment each month. This payment goes directly to the debt management company. Usually, they require a certified check or to have an automatic withdrawal out of your bank account.
About the Author

Alexander West holds the Financial Planning Certificate. One of his passions is learning and teaching people about finances. You can read the rest of this article, and join others and join others getting on top of their finances at

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Why New Markets Are Required For Ones Products

Before, one understand this mystery, three factors are to be known for

revealing the mathematics of any market players :

a) Demand and Supply

b) Quality at competitive rate

c) Growth for survival in tough competition

I remember, last Saturday I got a call from a senior president of a MNC

, saying that I am looking for new market but cant make as to where shall I go for and especially when the management is insisting for fast set up of new supply chain in new markets but I am afraid with global melt down of economy, since, it has broken the backbone of every company irrespective of country. I started to deal the situation with certain things which I am just reiterating so that some one can use it as to why new markets are required. Portal is best b2b Marketplace.

New Markets can be set up by adopting any of the ways as is practiced by the global players:

a) Setting up a subsidiary unit

b) Making up channel sales force

c) Making business associates

d) Making assignment based agents

e) Generating continuous leads for business deals

People may choose as per their best economy, nature of business and

longetivity of business interest. But, the gentleman was sounding over enthusiastic and even said ,.yes, Mr Becker, I know this all but my problem is still as such and repeated it as well for times .This made me to finally ask him to accompany me over tea which longed to dinner.

In our first sitting , he had a very long brain storming session and he

was only interested to know an answer to why ? Instead of knowing how to do it so , let us name it Why Session Why Session New Market means more business and new business as well. In other words means more profit and revenue irrespective of its sustainability.

Again the same question cropped as to why new market, ofcourse! for this I am paid for and companies make business out of such advises.

a) What is the meaning of new market?

b) How to explore new market?

c) Which market will be the best new market?

All the aforesaid questions have simple answer as discussed below.

It can be understood by simple formula of demand and supply. Where there is demand which is sustainable and with better prospects will be

considered as new market. The new market can be within the territory of

ones country or may even cross the barrier of international market.

If demand is more in a new market, then it is always advisable for

exploring a new market . The market can be explored with better pricing

with best quality , since the golden rule is quality should always command the pricing factor and pricing factor always follow quality factor. Since, both are incomplete without each other and compliment vice versa. As already said, the new market could be explored with new subsidiary, joint venture, partnerships, business associates, deployment of work force or even without substantial investment by way of continuous generation of business leads, may be a B2b platform or b2b portal can get business leads for you like www.made-from-india.com ,which I recently saw and seems to be a promising one for global traders and exporters. Exploring new markets can be even by way of launching your product in unexplored areas of ones country and even exporting the product to a particular country where best demand is there. The result will be more demand will always give better pricing factor. Ofcourse, such markets will be the best market to be explored since business is done for profit and the market which can give more profit will always be the best market whether it is new and unknown as well. Say, a ball pen has the best quality over the existing ball pens in its segment and usage, but unless not being sold in better market will always get less revenue over inferior ball pens which are in best market where the demand is more for ball pens and for quality.

After, listening such simple things, the gentleman said, Mr. Becker even I knew this but you made me understand the simple analogy and now I am sure to give some promising result to my management. We shall be discussing other aspects of other sessions in due course of time, meanwhile, simply understand the fact that business is for profit and it is always dominated by demand and supply.

About the Author

www.made-from-india.com has evolved itself as a trusty B2B. With a unequalled combining of understanding of applicatory requirements of Indian exporters, Suppliers and manufacturers. Get best Import-Export trade intelligence information. Also large database for buyers from all over the world as one place Made-from-India.com as it is an International trade sources. It is solid platform as B2B portal of Indian industrial resources.

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