# Buffett buying



## Glen48 (25 September 2008)

From the DR report:
"First, you can't buy the kind of stock Buffett got on any market, anywhere in the world. Berkshire Hathaway is buying $5 billion of perpetual preferred stock with a 10% coupon. These shares are senior to both Goldman's other preferred stock and its common stock. That means no other shareholders will receive any dividends until Buffett has been paid his 10%, in full, each year.

--"And that's not all... To sweeten the deal for Buffett, Goldman agreed to include a warrant (a long-term call option) that entitles Berkshire Hathaway to buy an additional $5 billion in regular common stock, at $115 per share. (Goldman's trading for about $130 now.) Thus, if Goldman can turn things around, Berkshire will receive an enormous payday down the road. It will be entitled to buy stock at $115, no matter what the price has risen to five years from now.


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## kenny (26 September 2008)

*Re: Buffet buying*

Potentially a very sweet deal. I would love to have sat in on the due diligence report prior to signing the cheque. 

Any ideas why Goldman Sachs though?

Cheers,

Kenny


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## Agentm (26 September 2008)

*Re: Buffet buying*

the power of having cash is king, plus the remarkable ability to broker deals to save things from collapse.. deserves every penny he makes.


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## Green08 (26 September 2008)

*Re: Buffet buying*

I've read a book on his methodology.  Great he has had 60 years to get to where he is.

Ordinary people trying to follow in his footsteps worries me - their lack of experience, negotiating power and ability to take a loss.  He can do these.

He has openingly admitting to making mistakes in he past. No one is infallable.  

I do admire him but watch with an open mind.


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## 2020hindsight (26 September 2008)

*Re: Buffet buying*

Does anyone know for sure that he's buying - or is he in reality doing the ole ramp-selling job on the world lol.

PS just a jest


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## pepperoni (26 September 2008)

*Re: Buffet buying*



kenny said:


> Potentially a very sweet deal. I would love to have sat in on the due diligence report prior to signing the cheque.
> 
> Any ideas why Goldman Sachs though?
> 
> ...




Buffet not a huge fan of heaps of dd ... he is all about buying cheap with a "margin for safety" or whatever it was called.

Exactly my instinctive approach to everything.

Months of dd can miss all the big issues anyway.

As for this purchase ... its bs marketing to create confidence.
And typically stingy buffet still wont pay even these market prices. The little sweetheart deal is just so wrong in so many ways.

The whole thing makes me more worried than ever.


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## refined silver (26 September 2008)

*Re: Buffet buying*



> Did You Notice? – Why is Buffett buying Goldman?
> By Eric J. Fry
> 
> It’s probably nothing at all…but the timing and speed of Warren Buffett’s investment in Goldman Sachs seems a bit curious.
> ...




Things not always quite as straight forward as they seem.


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## wildkactus (26 September 2008)

*Re: Buffet buying*

Buffet is a long time friend of Lloyd Blankfein the CEO of Goldmen, so its properly a deal for the Old Boys Network to help Goldmen boost its status in these tough times, a "Look Buffet trust's us"

It's a good deal for Buffett, 10% div when the average div from Goldmen has only been about 1.5%. and he's made about 700mil already on the current stock price in the high 120's.

OBN it pays to be in.


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## skyQuake (26 September 2008)

*Re: Buffet buying*



Glen48 said:


> From the DR report:
> "First, you can't buy the kind of stock Buffett got on any market, anywhere in the world. Berkshire Hathaway is buying $5 billion of perpetual preferred stock with a 10% coupon. These shares are senior to both Goldman's other preferred stock and its common stock. That means no other shareholders will receive any dividends until Buffett has been paid his 10%, in full, each year.
> 
> --"And that's not all... To sweeten the deal for Buffett, Goldman agreed to include a warrant (a long-term call option) that entitles Berkshire Hathaway to buy an additional $5 billion in regular common stock, at $115 per share. (Goldman's trading for about $130 now.) Thus, if Goldman can turn things around, Berkshire will receive an enormous payday down the road. It will be entitled to buy stock at $115, no matter what the price has risen to five years from now.




...and heres my alternate point of view:

Buffett is old. He's not going to try and take risks to squeeze a few percentage points from the market. Having already announced his charitable intentions, he's doing what he thinks is _right_. Its a smart gamble really, if he loses he loses some dough (probably not much given how much discount he bought it for); if he wins, he wins big. Books will be written in 2 years time about how he saved America from the brink blah blah...

When the greatest investor in the world plays a strong hand like this, the bears pause for thought. Sure they can have every single fundamental and technical indicator in their favour but they're playing against Mr Buffett.


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## fimmwolf (26 September 2008)

*Re: Buffet buying*

Government gives Paulson 700 billion and renews 0% confidence in investors.

or

Government gives Buffet 5 billion and renews *some* confidence in investors.


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## pepperoni (26 September 2008)

*Re: Buffet buying*



Glen48 said:


> From the DR report:
> "First, you can't buy the kind of stock Buffett got on any market, anywhere in the world. Berkshire Hathaway is buying $5 billion of perpetual preferred stock with a 10% coupon. These shares are senior to both Goldman's other preferred stock and its common stock. That means no other shareholders will receive any dividends until Buffett has been paid his 10%, in full, each year.
> 
> --"And that's not all... To sweeten the deal for Buffett, Goldman agreed to include a warrant (a long-term call option) that entitles Berkshire Hathaway to buy an additional $5 billion in regular common stock, at $115 per share. (Goldman's trading for about $130 now.) Thus, if Goldman can turn things around, Berkshire will receive an enormous payday down the road. It will be entitled to buy stock at $115, no matter what the price has risen to five years from now.




In retrospect i wouldnt even buy on these terms.

Nor would warren ... im sure its just more of his philanthropy.

He was reported as saying to GWB he w"would do whatever it took to help"

Wacky old tight ass would have helped more donating at market prices.

One too many burger and coke dinners.


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## kenny (28 September 2008)

*Re: Buffet buying*

Scary food for thought Pepperoni about WB giving a helping hand to an old friend. I would like to think the view that WB is acting on instinct is scary too. Both given that he presumably still has an obligation to the Berkshire Hathaway shareholders.

Or is the $5B from personal funds...?

Regards,

Kenny


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## hitnmiss (29 September 2008)

*Re: Buffet buying*

Or is the $5B from "other funds".

Hitnmiss.


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## pepperoni (11 October 2008)

*Re: Buffet buying*



pepperoni said:


> As for this purchase ... its bs marketing to create confidence.
> And typically stingy buffet still wont pay even these market prices. The little sweetheart deal is just so wrong in so many ways.
> 
> The whole thing makes me more worried than ever.




More propaganda around than during WW2.

$115 is good buying?????!!!!

Dont believe the hype.


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## noirua (5 August 2009)

*Re: Buffet buying*

"The Secret Millionaires Club", http://www.cnbc.com/id/32170276/


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## Krusty the Klown (6 August 2009)

*Re: Buffet buying*



fimmwolf said:


> Government gives Paulson 700 billion and renews 0% confidence in investors.
> 
> or
> 
> Government gives Buffet 5 billion and renews *some* confidence in investors.




I remember reading that John D Rockefeller did a similar thing to Buffett in this case back in the 1907 Bank Panic in New York. Rockefeller's actions saved the industry and economy and led to the formation of the US Federal Reserve.

Maybe Mr Buffett is a history buff.


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## greggles (4 April 2022)

Buffett is buying energy stocks at multi-year highs. A change of approach from the Oracle of Omaha, but certainly an interesting insight into how he views the future of energy production.









						Why Buffett Is Buying Energy Stocks At Multi-Year Highs | OilPrice.com
					

Legendary investor Warren Buffett is doubling down on his energy investments while trimming his tech and banking holdings despite oil and gas stocks being at multi-year high valuations




					oilprice.com


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