Jubak’s 11/11 article makes note of Buffet’s fascination with the utility sector and also points out his huge advantage over the common investors when he negotiates deals. Until the credit market settles down, utilities probably won’t have access to the capital they need to expand (2009? 2010?). When they do continue new projects, buy the utilities and their suppliers.
Jubak also recommends purchasing natural gas pipelines for yield in this tough market. He recommended OKS earlier and is now recommending ETP (yielding just under 10%). His target price is $42 for Dec 2009.
He is also holding firm on TC, especially given China’s announced stimulus package (TC mines molybdenum, used in steel). Even with molybdenum prices plummeting, TC has long term contracts fixed at higher molybdenum prices. In addition, their book value is $6.49/share and is currently trading at only 2x cash. His target is $9.90 for Dec 2009.