Investment Propaganda

[GRG55]

Re: Investment Propaganda

ok if i butt in on your love fest?

buffett 2008 = rockefeller 1929

if the whole market falls another 50%, that’s bad for buffett no matter how good an investor he is.

at this point the “big men” come out to give the market confidence. it never works... the system is structurally flawed (over-indebted) but what the f*ck, it’s worth a try...

as the itulip front page sez...

“It's almost worth the Great Depression to learn how little our big men know.”
- Will Rogers

As I posted earlier, maybe he and his shareholders were just lucky to be in the right place at the right time in history...:p

...Then again, maybe it's simpler than that. Buffett and Berkshire's shareholders were lucky to be in the right place at the right time and rode the 25 year FIRE economy for all it's worth [the tech bubble phase excepted]. ;)

[Supercilious]

Re: Investment Propaganda

You can get a "good deal" for a whole lot less than $5 B or even $10 Mill. There are now distressed sellers all across the spectrum, for just about everything [Vancouver real estate apparently excepted. For now ;) ].

I know, but I want a good deal on Goldman Sachs... now please don't tell me that I have to pay first a bunch of Congressmen and politicians in the White House. I don't want to spend my money on prostitutes.

In the countries where prostitutes are allowed to make the law usually the situation is FUBAR.

[GRG55]

Re: Investment Propaganda

I know, but I want a good deal on Goldman Sachs... now please don't tell me that I have to pay first a bunch of Congressmen and politicians in the White House. I don't want to spend my money on prostitutes.

In the countries where prostitutes are allowed to make the law usually the situation is FUBAR.

...I saw her today at the reception
A glass of wine in her hand
I knew she was gonna meet her connection
At her feet was her footloose man

You can't always get what you want
You can't always get what you want
You can't always get what you want
But if you try sometimes you might find
You get what you need...

--Jagger/Richards; from "Let it Bleed", 1969

[LargoWinch]

Re: Investment Propaganda

Nobrainer.

I removed that from my investing vocabulary long time ago.

But again, it is always nice to close your eyes before jumping in the lake.

When my eyes are finally open, I always hope to see mermaids, but I too often see sharks...

[Master Shake]

Re: Investment Propaganda

Buffett drove a tough bargain & got a great deal on a specific; this is what we all should strive to do. Unfortunately, most of us lack comparable
resources &/or skills.

OTOH, Buffett has clearly become a pimp for the developing economic,
political & social order(he's a 'transnational progressive', in the vernacular). This has emerged in the past dozen or so years & is a fascinating contrast to his Congressman father. His shilling, in a disingenous manner for the Paulson/Bernanke plan is in line with this & confirm his disinterest in what's best for the nation and taxpayers generally.

Buffett's opinion on matters other than specific stock/investment selection should be given no more weight than those of others who
have shown exceptional ability at one rather narrow skill, i.e., Brett
Farve,Oprah, Renee Fleming, etc., etc. In fact, they should be evaluated
in light of the political, cultural & (broad)economic views his actions(not
rhetoric) associate him with.

Well said.

[flintlock]

Re: Investment Propaganda

I'd caution you all to keep in mind Buffett is a 78 year old man worth approx $62 billion. A 5 billion dollar bet at this point in his life isn't going to make or break him, and if it does help give confidence to the market, makes him feel like a good citizen and puts one last W in the win column for him. Its not like he has 10-20 years to sit around waiting for an economic recovery. He's trying to speed up the game a bit before his time is up.

[Supercilious]

Re: Investment Propaganda

...I saw her today at the reception
A glass of wine in her hand
I knew she was gonna meet her connection
At her feet was her footloose man

You can't always get what you want
You can't always get what you want
You can't always get what you want
But if you try sometimes you might find
You get what you need...

--Jagger/Richards; from "Let it Bleed", 1969

Good point GRG55 ...

[Jim Nickerson]

Re: Investment Propaganda

I'd caution you all to keep in mind Buffett is a 78 year old man worth approx $62 billion. A 5 billion dollar bet at this point in his life isn't going to make or break him, and if it does help give confidence to the market, makes him feel like a good citizen and puts one last W in the win column for him. Its not like he has 10-20 years to sit around waiting for an economic recovery. He's trying to speed up the game a bit before his time is up.

I fleetingly thought about this earlier and let it go. If Buffett put up $5 Billion was it his money or was it BRKA's money? If you are correct that he is worth 62$billion, then $5B is only an 8.06% bet. If the $5B came out of BRKA, I would guess it is even a smaller percentage of its portfolio.

Can anyone state with certainty whose money exactly it was, and what percentage of an investment allocation $5B represents?

[Slimprofits]

Re: Investment Propaganda

Can anyone state with certainty whose money exactly it was, and what percentage of an investment allocation $5B represents?

Jim, quite a few of the news reports state that it is BRKA making the investment.

[Jim Nickerson]

Re: Investment Propaganda

Jim, quite a few of the news reports state that it is BRKA making the investment.

babbitt, speaking for myself and perhaps you also, $5B is a fair amount of money, right? But for BRKA, I can only guess that it is not that big of an investment. Who's the guy that is always labeling Buffett as Sir Warren, I bet he knows exactly how big a bet the $5B is.

[Slimprofits]

Re: Investment Propaganda

babbitt, speaking for myself and perhaps you also, $5B is a fair amount of money, right? But for BRKA, I can only guess that it is not that big of an investment. Who's the guy that is always labeling Buffett as Sir Warren, I bet he knows exactly how big a bet the $5B is.

Yes, for me also.

re: the guy - Are you talking about another Itulip user?

Here are some numbers from BRKA 2005 Annual report:

Our gain in net worth during 2005 was $5.6 billion, which increased the per-share book value of both our Class A and Class B stock by 6.4%. Over the last 41 years (that is, since present management took over) book value has grown from $19 to $59,377, a rate of 21.5% compounded annually.

Total assets .................................................. ........................... $198,325 (in millions)

[Sapiens]

Re: Investment Propaganda

Troubled Asset Relief Program, or TARP.

You cannot say they don't have a sense of humor, LOL! How is that for a cover?

[c1ue]

Re: Investment Propaganda

Whether it is BRKs money or Sir Warren's own - there is little real difference.

Sir Warren has historically kept 90%+ of his net worth in the company's stock - even with his recent large promised donation to Bill Gates' foundation.

As for the size of the investment - it will be the 2nd largest one ever made by BRK were it considered a stock buy.

From the 2007 annual report:

Percentage of

Shares Company Company Owned Cost* Market

151,610,700 American Express Company ................... 13.1 $ 1,287 $ 7,887
35,563,200 Anheuser-Busch Companies, Inc............. 4.8 1,718 1,861
60,828,818 Burlington Northern Santa Fe.................. 17.5 4,731 5,063
200,000,000 The Coca-Cola Company ........................ 8.6 1,299 12,274
17,508,700 Conoco Phillips ....................................... 1.1 1,039 1,546
64,271,948 Johnson & Johnson.................................. 2.2 3,943 4,287
124,393,800 Kraft Foods Inc........................................ 8.1 4,152 4,059
48,000,000 Moody’s Corporation .............................. 19.1 499 1,714
3,486,006 POSCO............................................. ....... 4.5 572 2,136
101,472,000 The Procter & Gamble Company ............ 3.3 1,030 7,450
17,170,953 Sanofi-Aventis......................................... 1.3 1,466 1,575
227,307,000 Tesco plc............................................... ... 2.9 1,326 2,156
75,176,026 U.S. Bancorp ........................................... 4.4 2,417 2,386
17,072,192 USG Corp.............................................. .. 17.2 536 611
19,944,300 Wal-Mart Stores, Inc. .............................. 0.5 942 948
1,727,765 The Washington Post Company .............. 18.2 11 1,367
303,407,068 Wells Fargo & Company......................... 9.2 6,677 9,160
1,724,200 White Mountains Insurance Group Ltd. .. 16.3 369 886
Others .................................................. .... 5,238 7,633

Total Common Stocks ............................. $39,252 $74,999

From a cost basis, only Wells Fargo was larger ($6.6B).

From an existing worth basis, the GS stake would only be basically tied for 5th (with USG at $5.063B)

However, I again note that the deal is not a stock buy, it is a preferred stake meaning an amalgamation of the better parts of both bonds and stocks: convertibility to stock should things get better, and interest cash as a bond, plus seniority over most other creditors.

I actually take this to be a negative sign for GS; if truly things were a slam dunk to turn around then Sir Warren would have bought the stock with an ever greater discount.

My read on this is that Sir Warren expects GS to survive, but does not necessarily expect the existing stockholders to be happy about it.

And how is this different than the iTulip expectations? With Brother Hank at Treasury?

[Supercilious]

Re: Investment Propaganda

Originally Posted by D-Mack
Troubled Asset Relief Program, or TARP.

You cannot say they don't have a sense of humor, LOL! How is that for a cover?

Of course they have a good sense of humor. They are laughing their way to the bank... er ... hedge funds ... the failing banks are for us ....

[GRG55]

Re: Investment Propaganda

Now here's a good example...MSM [in this case the WSJ] in the pocket as usual:

The Paulson Plan Will Make Money For Taxpayers

In 1992, hedge-fund manager George Soros made $1 billion betting against the British pound. In 2007, John Paulson's Credit Opportunities fund correctly bet against subprime mortgages, clearing $15 billion for the year and $3.7 billion for him. Warren Buffett is now hoping to make big money on Goldman Sachs.

But these are small-time deals. My analysis suggests that Treasury Secretary Henry Paulson (a former investment banker, no less, not a trader) may pull off the mother of all trades, which could net a trillion dollars and maybe as much as $2.2 trillion -- yes, with a "t" -- for the United States Treasury...

...You can slice the numbers a lot of different ways. My calculations, which assume 50% impairment on subprime loans, suggest it is possible, all in, for this portfolio to generate between $1 trillion and $2.2 trillion -- the greatest trade ever. Every hedge-fund manager will be jealous. Mr. Buffett is buying a small piece of the trade via his Goldman Sachs investment.

Over 10 years this could change the budget scenario in D.C., which can also strengthen the dollar. The next president gets a heck of a windfall. In the spirit of Secretary of State William Seward's purchase of Alaska for $7 million in 1867, this week may be remembered as Paulson's Folly.

I thought the comparisons with Soros and Buffett's "small-time deals" was an especially creative touch. :rolleyes: