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Why Warren Buffett Likes General Dynamics

October 27, 2011 | About:

Holly LaFon

262 followers

Rating: 3.8/5 (24 votes)

Comments

sabonis
Sabonis premium member - 2 years ago


when exactly did he say that GD was a take over target?

Can you provide a direct quote?

I watched a bloomberg interview with him (with Betty Liu) and she mentioned GD and he said he liked it but that was all he said. He was very tight lipped about all three companies she mentioned.

I'd really like to find out where and when he said it was one of three take over targets.

I own GD so this is kind of important to me.
gurufocus
Gurufocus premium member - 2 years ago
The author really meant to say "potential buys" instead of "take over". Sorry for the misunderstanding.
energywonk
Energywonk - 2 years ago
i will invest in most things i understand well and i love warren, but i draw the line at companies that are underpinned by killing machines. when read about these kinds of strategies i lose a lot of respect for buffett and realise he is not the folksy old grandpa he is made out to be. he is a ruthless amoral capital allocator. sorry warren thumbs down for this one.
dealraker
Dealraker - 2 years ago
So Warren says this huh?

Prove it.
AlbertaSunwapta
AlbertaSunwapta - 2 years ago
Hilarious, "a ruthless amoral capital accumulator" that is giving to charity the bulk of his wealth, and doesn't object to paying more in taxes to show that he and other capital accumulators are doing their share to turn around the US's fiscal problems.

As for killing machines, shouldn't one necessarily then include cancer, obesity, and accident causing companies too? Ie utilities, fast food companies, automakers, etc. Even the pollution caused in the manufacture of many high tech devices is likely leading to the creation of killing fields and rivers.

What were the three companies?
sabonis
Sabonis premium member - 2 years ago


Unless you are going to provide the direct quote of what WEB said you should take down this article.

You guys are pulling a Motley Fool when you use WEB's name to justify buying your newsletter.

If you're referring to what he said in the Bloomberg/Betty Liu interview than the whole article is BS.

He didnt name three companies, Betty Liu named them and WEB said he had looked at them and that's all. He even said he looked at the Groupon IPO but thats not the same as recommending it.

Please clarify or you are going to lose credibility.
AlbertaSunwapta
AlbertaSunwapta - 2 years ago
It's a great article that may have just started on a flimsy or mistaken premise... Don't pull it! Edit the article and title to say Might warren like gd again...

Love the motley fool comment! WB references in their articles are as honest as "healthy" on fast food packaging.

As for GD, as I've posted/indicated elsewhere, pricing for such a one major funder, one major client, decade long skewed performance company needs a huge margin of safety. Plus, I'd say that it's not a value trap when the screen is simply using the wrong numbers. Ie the housing bubble skewed home builder numbers too. Now the screens will likely eliminate them for years to come due to a few years of anomalous results that 'dumb' computers can't adjust for or smooth... Notice how rare it is for Buffett to actually buy what's on the many Buffett screens!
AlbertaSunwapta
AlbertaSunwapta - 2 years ago
Can gurufocus provide the screens for the 10 years prior to the 911 defense bailout spending. :-)
energywonk
Energywonk - 2 years ago
alberta. miniguns and abrams tanks are hardly the same thing as background radiation from utilities and heart disease from too many mcdonalds burgers. general dynamics primary purpose is to profit from war and death. i dont think many companies have that as their core strategy (although a corporation does technically tick all the boxes of certifiable psychopath). please make a valid argument. giving away 85% of berkshire does not compensate for maiming innocent afghan kids etc.
AlbertaSunwapta
AlbertaSunwapta - 2 years ago
Sadly, we're tribal, emotional and irrational by nature and nothing is going to change that. Moreover, their products aren't necessarily used and so aren't necessarily causing death, whereas many unsafe and unhealthy products and their production will certainly guarantee deaths.

Note: I don't own GD or any defense contractors (except maybe GE). However I do own a number of emerging health care companies with poor economics. These are basically lottery ticket purchases / essentially donations to great causes. Like I've said since the the 1990s tech bubble; may the next bubble be in health care and biotech rather than a repeat of the 90s where billions were handed over to games and entertainment device makers which added little social good. (At least the housing bubble added millions of long life high utility assets.) let's hope we never see a bubble in defense.
cash9flow
Cash9flow - 2 years ago


Buffett doesn't own any GD
AlbertaSunwapta
AlbertaSunwapta - 2 years ago
I'm still very interested in his current share-price-aside, "like" list. I'm not sure if GD makes the cut. As guruhl points out via the Buffett quote, GD was initially an arbitrage opportunity that later became attractive to Buffett due to changes it was undergoing.

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