Thursday, January 20, 2011

Carlos Slim Says Gates & Buffet Are FOS Regarding Charity

The world's wealthiest man, Mexican Carlos Slim is rejecting Bill Gates and Warren Buffet's pleas to give his wealth to charity. Instead, Carlos rightly believes that capitalists serve society better by fighting poverty directly via creating jobs and opportunities--- not by charity. Finally, a bright light to counteract the buffett/gates nonsense. The following is an article by CNBC on Mr. Slim.

Carlos Slim, the world's wealthiest man, is bullish on Mexico and says he is staying in the country despite the dramatic rise in violence. And a mansion that he bought in New York is too big to live in-it's purely for investment.

In a wide-ranging interview, the telecom magnate also put to rest rumors about a large mining acquisition, explained his rationale for buying nearly $200 million in New York real estate, and why he is not making the pledge to give away half his wealth like Warren Buffett and Bill Gates.

A wave of violence has left more than 30,000 dead in three years in the Latin American country, as President Felipe Calderon wages an all-out war against the countrys drug cartels. As a result, Mexican executives, especially those living near the US border are said to be moving to places like Texas and Florida.

Slim says he is not one of them. Instead he is investing heavily in Mexico, buying real estate and just this month spinning off two companies that are newly listed on the Mexican Stock Exchange.

In fact, he says those choosing not to invest in Mexico are making a big mistake: They will lose. "If they are already here, they will lose market share. If they are not here they will lose a very big market. We are 110-112 million people, and growing the economy," Slim says.

On donating half his fortune to charity, which other billionaires like Buffett and Gates are doing, Slim says it's the wrong way to resolve the world's problems.

"What we need to do as businessmen, is to help to solve the problems, the social problems," he explains. "To fight poverty, but not by charity"

In addition, he says, donating the money to charity will result in huge tax deductions, depriving governments of much-needed tax revenue.

"I think it will be a big mistake that companies like Microsoft (NASDAQ: msft), Apple (NASDAQ: aapl)-the leaders of the world in technology-be sold by the founders to put the cash to fund charities. They shouldn't. It is more important that they continue manage the companies."

As for his recent purchase of a mansion on Fifth Avenue in New York for $44 million, he scoffed at the notion that someone would live there, suggesting that it was too big, because it has at least eight floors. Instead, he is going to turn it into several apartments and perhaps lease part of the building to a restaurant at the street level.

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Slim himself lives in a modest home in Mexico City and says he doesn't like owning homes outside the country because they are too much of a headache. He says he would rather stay in a hotel.

Slim said rumors that he wants to buy the Fresnillo mining company, listed in London, are completely untrue. Slim already has a mining company that he just spun off and listed on the Mexican stock exchange this month, Minera Frisco. Its products include zinc, silver, and gold.

He is very pleased with his investment in The New York Times (NYSE:NYT - News) he says, and is not interested in trying to buy the company in the way that Rupert Murdoch bought Wall Street Journal owner Dow Jones. Slim owns 10 million shares and lent the company $250 million with a 14 percent interest rate in late 2009.

He is making $35 million in interest payments alone every year. Plus, he received warrants giving him the rights to 15.9 million shares.

"It was a financial investment. We made a convertible bond, a bond with warrants. We are very happy with the formula," he says.

Slim added, "We are not asking them how the business is going. We are looking from the outside. What they are going to do? What are their plans? We are not asking about that. We know that they are doing a good job."

When it comes to his telecom companies, his next goal is broadband penetration levels of up to 70 percent in Latin America. Currently the number stands at less than 20 percent. Now that wireless penetration is nearing 100 percent or more (because some people have more than one phone), the next step is to be able to provide internet connections via smart phones on a large scale.

1 comment:

gsnethen said...

Gates and Buffett both have a very long history of creating jobs and running fantastic businesses.

They are now putting their hard-earned capital to good use funding research, creating even more jobs and focusing on solving serious problems throughout the world.

The alternative is to pass on far more money (billions of dollars) than their kids know how to manage.

American capitalism is at its best when every individual competes for wealth and success. It's not well served by handing a child billions of dollars and hoping he's going to figure out how to apply it wisely.