What Warren Buffett knows about the basic maths behind stock market diamonds

The stock market is basically full of dirt. The majority of companies listed are like the earth beneath our feet - grinding along just about sustaining the goods and services the economy needs in order not to flatline. But in that dirt there are diamonds, undiscovered or thrown away, hard to spot with the naked eye but which once polished can gleam so brightly that investors will pay a huge premium for them.

Legendary investor Warren Buffett, famed for his love of cheeseburgers, has joked that he is well acquainted with ketchup-maker’s H.J. Heinz Co.’s products. On Thursday, it was announced that Mr. Buffett’s Berkshire Hathaway Inc. and 3G Capital Management LLC have agreed to acquire the company for US$23.3-billion, or US$72.50 a share, a 19% premium to the stock’s previous record high. This, Mr. Buffett said, was “my kind of deal.”

Brian Polino submits:It was only after traveling across the heartland of America that I recognized the true value of a durable competitive advantage. On my way to the Berkshire Hathaway (NYSE:BRK.A) Annual Meeting, it was hard not to see a Coca-Cola (NYSE:KO) distribution truck every time you scanned the road’s horizon.

Warren Buffett is known as the world's most famous "value investors", but that term is not well understood.

ByBrian Grosso:Tracking the portfolios of master investors you admire whose investment strategies align with your own can be very profitable and enlightening, but one should not follow another investor blindly into any company, no matter how great an investor they are. Warren Buffett is one famous investor I certainly admire and follow. Buffett's Strategy

Chuck Carnevale submits:As most everyone knows, Warren Buffett received much of his initial investing education from the father of modern security analysis, the venerable Ben Graham. Personally, I attribute most everything I know about investing from reading the teachings of both Graham and Buffett.

The BEA today released value added and output series by industry through 2009. A few highlights: (1) the share of the private sector value added in total GDP has declined by 1.34 percentage points since 2000; (2) manufacturing's share of GDP continues to decline in nominal terms; and (3) the share of finance and insurance barely rose in 2009. The data highlight a number of trends that are relevant to issues currently debated in policy circles.

Kevin Barker submits: Wow, nice move on Canadian iron ore explorer Northland Resources (NRSRF.PK) today, up C$0.42 or 16% in early trading. And to think they just wrote down C$12.2 million in losses for their January, 2010 quarter.Northland is our boring iron ore pick from a few weeks back. I've had to pitch them several times over the past six weeks just to get people's attention because - well, because investors just don't pay any attention to iron.