Warren Buffett is Loading Up
Just last year, Warren Buffett was complaining about a lack of sensible investment opportunities. Berkshire Hathaway was sitting on a pile of cash and returns for investors were slowing. But, he made a promise to commit more capital in 2008 and it just so happens that there are some real tasty morsels coming his way this year. Even before the recent turmoil, Buffett was loading up on shares of US Bancorp, Swiss Re, and Burlington Northern.
Today, we see Buffett enter back into the investment banking arena for the first time since his ill-fated investment in Solomon Brothers in the 1980s. Buffett took a $5 billion preferred stake as well as warrants for another $5 billion in common stock which he can purchase any time he likes at $115 per share.
Why is it that in such a time of turmoil and supposed risk we’re seeing one of the most risk averse investors committing more and more capital? And, even venturing into businesses that he’s typically uncomfortable with? Panic and fear breed inefficient pricing and that attracts savvy investors. Even Warren Buffett can’t pass up a terrific deal when it’s served up to him on a platter. And, while he was able to get a tremendous below market price on Goldman Sachs, it doesn’t mean that equally discounted stocks don’t exist for us small fish out there. Your personal accounts may feel lighter than they did a few months ago, but it’s times like these that you have to swallow hard and take the lead of a man like Warren Buffett.
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Should we follow Warren with Goldman Sachs buy? Recently I read diploma thesis from one University in Czech Republic.Different investor approach had been followed for Czech Blue Chips. Buffett, Soros and others. The winner, of course, Warren Buffett.