Buffett May Take Stake in Countrywide -- WSJ

Warren Buffett, who has built his reputation on value investing and bargain hunting, may feel the time is ripe to make a move in the wake of steep sell-offs resulting from the turmoil generated by the subprime crisis. According to the Wall Street Journal, the billionaire investor and chairman of Berkshire Hathaway, who is sitting on $50B in cash, may buy parts of Countrywide Financial Corp., one of the lenders hardest hit by subprime worries. Investors, the report said, believe Countrywide’s strong brand name and high-quality mortgage assets may be attractive to Buffett, as Berkshire’s insurance unit already doubled its investment in mortgage-backed securities rated “AA” or higher during the second quarter. “This is Berkshire Hathaway's market,” said Thomas Russo, a partner at investment fund Gardner Russo & Gardner and long-time investor in Berkshire told the Journal. Given the now difficult market for private-equity deals, the Journal also speculated that Buffett could make a move for Texas utility TXU Corp. if its deal with Kohlberg Kravis Roberts falls through. Or, it said, he could choose to increase his holdings in companies he already owns. He has been increasing his holdings in financial services companies, and earlier this month disclosed an investment in Bank of America. Berkshire is also a long-time shareholder in Wells Fargo. In addition to the cash stash, Berkshire holds some $74B in stocks and $27B in bonds, which Buffett has said he would happily redeploy for better returns. Buffett, as always, refused to comment, as did Countrywide and TXU.

Sources: Wall Street Journal, Reuters
Commentary: A Peek at Berkshire Hathaway's Holdings: Focus On Dow Jones, BoA • Cash-Rich Companies May Sop Up Oversold Value - Barron's
Stocks/ETFs to watch: BRK.A, CFC, TXU, BAC, WFC

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Comments

[kurt walter:]

Who cares? I am tired of Warren Buffett.

2007 Aug 21 04:49 PM