So Warren Buffet recently bought preferreds in both Goldman Sachs and GE. Both stellar companies adversely affected by the current financial environment. Preferreds with guaranteed 10% annual dividend. All bought at below current market price. With warrants to buy more at same price.
Why? Because Warren Buffet’s buy-in is considered the gold standard in investor confidence.
So while others who invested in investment banks and hedge funds are getting wiped out, investors in commercial banks are all getting haircuts, and even investors in relatively-safe money market funds are losing principal, those who had the “prescience” of investing in Buffet’s Berkshire Hathaway are getting a windfall.
Buffet has steered clear from the asset bubbles of the recent past, while always emerging as the favourite ‘white knight’ to ‘fallen angels’ who have the makings of becoming a ‘phoenix’ in the next upturn. Opportunities that have always benefited him and his investors.
Probably echoing the desire of everyone else right now, I wanna be like Warren Buffet.