Witmer's fund is 50% cash at the moment - 'about as high as we go' - an indication that the market is fully valued in her opinion. In the past when their fund has been at 50% cash, 'something happens within six months to a year to bring the market down.'
Witmer shared a long idea: Texas Industries (NYSE:TXI) is a stock her fund owns, for these reasons:
It basically has three assets: an excellent cement plant south of Dallas that makes about 2 million tons a year of cement; an aggregate quarry in the south of Oklahoma that lies right on a train line, supplying the Dallas area with rock; and then they own what we call 'the right to pollute' in Southern California - an old cement plan that they're replacing with a new, more efficient plant... their current earnings are about $3.80 a share, but with the new plant and some other improvements we see them earning $5.50-$7 a share starting in '08.
To view a video of the Barron's interview by Michael Santoli with Ms. Witmer, click below: