Mexican tycoon Carlos Slim is now worth $53.5 billion according to the new Forbes Richest Persons in the World list. That puts him above Bill Gates and Warren Buffet, but unlike his US rivals, he remains relatively unknown outside of his native Latin America. There, he controls more than 200 companies. These range from telecoms, where he first made his fortune, in telecommunications, cigarettes, construction, mining, bicycles, soft-drinks, airlines, hotels, railways, banking and printing.
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What is most striking about Slim is his similarity to Warren Buffet. We have all heard many stories of Buffet’s frugal lifestyle. One that comes to mind is asking Ms. Graham for his change from a quarter that she borrowed for a $0.10 phone call. It appears that Mr. Slim is equally frugal in managing his finances.
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He doesn’t bother with private jets, shuns flashy offices, and for most of the 1990s made do with a plastic watch. And while he does have a laptop, he is adamant that he does not use it, saying: “I’m a paper man, not electronic.â€Â This is very similar to Buffet who once owned a private jet but eventually sold it due to his conscious beliefs. Buffet now use NetJets, a factional ownership company that is owned by Berkshire Hathaway. Buffet is still in his house purchased decades ago and still in his same, basic office in Omaha. Buffet does have a computer but only uses it to play bridge online with friends.
Both billionaires look for a competitive advantage in the company’s they select as investments. Buffet prefers investing in name brands and companies with wide moats while Slim owns several companies considered to be monoplies in Mexico. One wonders if Slim borrowed some of his investing insights from Buffet somewhere along his career.
Admirers say the hard-charging Mr. Slim, an insomniac who stays up late reading history and has a fondness for reading about Ghengis Khan and his deceptive military strategies, embodies Mexico’s potential to become a Latin tiger. His thrift in both his businesses and personal life is a model of restraint in a region where flamboyant Latin American business tycoons build lavish corporate headquarters and fly to Africa on hunting jaunts.
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As for investing, both of these billionaires follow the value investing philosophy. Mr. Slim’s strategy has been consistent over his long career: Buy companies on the cheap, whip them into shape, and ruthlessly drive competitors out of business. After turning around a soft-drink company and a printing firm in the late 1960s and mid 1970s, he made his first big move in 1981, buying a big stake in Mexico’s second-biggest tobacco company, Cigatam, maker of Marlboro cigarettes in Mexico. The company generated the cash Mr. Slim needed to go on a buying spree.
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Mr. Slim says his success comes from spotting opportunity early, something he learned in part from reading futurist writer Alvin Toffler, who wrote the best-seller “Future Shock†in the 1970s, and who sends the mogul manuscripts to review. Mr. Slim always says his inspiration to invest during the downturn came from his father, who bought out his partner in their general store during the worst days of the 1910-1917 Mexican revolution — a bet that made his father a fortune when the fighting ended.
