This quote, while probably made more popular in modern times through the movie, "The Godfather," was actually said by the French novelist, Balzac. It is still telling today in value investing.
In late September of 2008, when the financial crisis was at its peak, Warren Buffett made a five billion dollar investment in Goldman Sachs through preferred stock with a 10% dividend. Additionally, Buffett also got five billion dollars of warrants to purchase Goldman stock at $115 a share. Berkshire has profited handsomely from this wise move as Goldman stock has skyrocketed to close under $185 a share.
When Buffett took a large stake in Goldman, his interests became clearly aligned with Goldman and this week the 85 Broad Street institution reported record quarterly results in a terrible economy. So how did Goldman do so well? This clip by Dylan Ratigan does a wonderful job explaining it:
http://myprops.org/content/Video-Ratigan-Goldman-Sachs-magic-trick-306924/
As investors it is important to recognize how to find outsized returns. Mr. Buffett always waits for his fat pitch before making his investment. It is safe to assume that Mr. Buffett sleeps well at night with his Goldman Sachs position knowing it has been a home run.
In late September of 2008, when the financial crisis was at its peak, Warren Buffett made a five billion dollar investment in Goldman Sachs through preferred stock with a 10% dividend. Additionally, Buffett also got five billion dollars of warrants to purchase Goldman stock at $115 a share. Berkshire has profited handsomely from this wise move as Goldman stock has skyrocketed to close under $185 a share.
When Buffett took a large stake in Goldman, his interests became clearly aligned with Goldman and this week the 85 Broad Street institution reported record quarterly results in a terrible economy. So how did Goldman do so well? This clip by Dylan Ratigan does a wonderful job explaining it:
http://myprops.org/content/Video-Ratigan-Goldman-Sachs-magic-trick-306924/
As investors it is important to recognize how to find outsized returns. Mr. Buffett always waits for his fat pitch before making his investment. It is safe to assume that Mr. Buffett sleeps well at night with his Goldman Sachs position knowing it has been a home run.
