Stephen Schurr
10. The Buffett optimal holding period is five years to forever. Which companies are you most comfortable holding and why?
I don't have the foggiest idea what will be the best stocks over the next few years. I feel more comfortable answering what are the best long-term companies for the next several years. It's easier to answer what businesses will be as good in five years as they are today. That way, you make no assumption about valuation, you only make conclusions about the effectiveness of the business. One of Buffett's tenets is that there are very few companies -- a tiny, tiny number -- that look likely to have successful businesses 10, 20 years out. One business is Secom, the Japanese company. We really like the electronic-security business. You pay monthly bills. The odds are that you will not move to another provider. There's not the competition that you see in, say, cable vs. satellite or Internet access. You pay the bills. Secom truly dominates the business in Japan. It has moved into Korea and is doing well in other Asian countries. It tried in America, didn't succeed and departed. It's a great business that's well managed. We like Rayonier(RYN Quote - Cramer on RYN - Stock Picks) [in the timberland business] -- it's like owning timber at a 30% discount. Again, we're keeping in mind it's the business that will endure, not stock that will do best. In Europe, I'll choose Buderus. It's a very stable business -- appliances, a replacement-type business. I think they are successful in Europe because they deliver product at more expensive price.
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