Watching how billionaires invest can be a savvy strategy. These investors typically have access to extensive research, insider knowledge, and teams of experts analyzing the market. They often invest in companies or sectors that have strong long-term growth potential, and by following their lead, you might catch wind of profitable trends early on. Plus, there's a certain appeal in knowing you're aligning with the same strategies as the ultra-wealthy!
The 'Canadian Warren Buffett'
Prem Watsa, often called the "Warren Buffett of Canada," is a highly respected investor and the founder of Fairfax Financial (TSX:FFH). Known for his long-term value investment approach, Watsa seeks out undervalued companies with strong fundamentals that the market may have overlooked. His strategy often focuses on buying businesses during tough times, when prices are low but the potential for a rebound is high. This contrarian style has helped him grow Fairfax into a multi-billion dollar company, all while staying cool-headed in the face of market turbulence.
One of Watsa's trademarks is his cautious optimism. He's willing to take risks, but he also hedges his bets. Take during the 2008 financial crisis, when he made profitable moves by betting against the market. Watsa looks beyond just numbers, though. He values businesses with strong leadership, solid reputations, and sustainable models. His thoughtful, patient approach has earned him a spot among the world's most admired investors. And his track record makes him a fascinating role model for those looking to win in the market with a calm, long-term mindset.
Watsa sells off Micron stock
Watsa recently decided to slash his stake in Micron Technology (NASDAQ:MU) by over 90%, likely because of his value-driven approach to investing. Micron's stock has returned 14% year to date, and he may have viewed the company's near-term prospects as shaky because of overvaluation or industry challenges. His investing style, often inspired by Warren Buffett, involves reallocating capital where he sees greater long-term potential. So this move could indicate that Watsa is shifting away from semiconductor exposure in favour of more stable or undervalued opportunities.
As he exited much of his Micron stake, Watsa added positions in other companies. One of them was Orla Mining (TSX:OLA).
Watsa sees opportunity in Orla Mining stock
Orla Mining's focus is on gold and silver, which are typically seen as safe-haven assets during times of economic uncertainty. So Watsa likely views this as a strong bet for future gains, particularly with the mining sector's potential for long-term value.
Canadian investors should consider Orla Mining for similar reasons. The company has delivered robust revenue growth (43% year over year in the most recent quarter) and boasts a healthy balance sheet with cash reserves of $154 million. The company's operating margin of over 50% reflects strong operational efficiency.
Watsa's confidence in the company should signal to Canadian investors that Orla Mining could be a highly strategic addition to their portfolios, especially for those looking to diversify into precious metals.
