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By Jeremy Glaser | 05-01-2010 12:10 PM

FAM Managers: Values Still in Insurance and Banks

FAM Funds' Tom Putnam and John Fox think the market may have some more room to run and that the best values are in the insurance and banking industries.

Jeremy Glaser: I'm Jeremy Glaser with Morningstar.com. We're here at the 2010 Berkshire Hathaway Annual Meeting, talking with John Fox and Tom Putnam of FAM Funds about their impressions of the meeting, and what they think of the discussion today. Gentlemen, thanks for joining me.

Thomas Putnam: Thank you for having us.

Glaser: So, Tom, you were saying that you've been coming to the meeting for quite a few years now.

Putnam: I've been coming since 1986, as a matter of fact, so that's make this, what, about my 25th year coming here [laughs] .

Glaser: So, of the 25, where would you rank this meeting today?

Putnam: Well, they've all been good. I think this was a good meeting because of the content, especially with the Goldman question being asked first, and him kind of clarifying exactly what the transaction is. Which I think better clarifies the position that's out there, from a standpoint of the brokerage business and how the brokerage business really operates.

I think Charlie Munger said it best yesterday. You know, there's no question, probably, they didn't do anything illegal. Whether they really skirted the edges though, and it's a transaction that they should have entered into, is another question.

Glaser: There was a lot of talk today about reputation just being so important, came up a number of times. Are you at all concerned that if Goldman, more of these charges come out, that their reputation could be harmed and some of that could fall off onto Buffett, as he was so firmly in Goldman's camp today?

Putnam: I kind of agree with Warren. If it's an allegation that's not proven, or they're not convicted, then I don't think Goldman suffers. Obviously, if they're convicted, they do suffer a lot, yeah.

Glaser: There could be a lot there. He talked a little bit about the state of the economy, and that things are getting a little bit better. Have you seen that in your company's results, or in the companies that you own results, that you've seen things getting...?

John Fox: We actually absolutely have. I enjoyed sitting down and hearing, his first comments, talking about what he's seeing through the window of looking at his companies. And, Jeremy, we definitely see that, whether it's the economic data, the government data, or in the earnings reports, and the conference calls. We've been seeing it getting better for quite a few months, and really just inching forward, really every month.

Glaser: Warren Buffett is not known as a man without a lack of opinions, but one thing he didn't have a strong opinion about today was the state of the valuation in the stock market. He said it was preferable to bonds or cash. Where do you guys kind of see stock valuation at the moment?

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