Brad Ferris

Goldman Sachs: Buffett's the Milkman and He Always Delivers

I don't see GS stock declining from here for a number of reasons. They have incredible intellectual capital despite the problems that the industry is facing at this time. Do they have massive exposure? Yep. Will they look to decrease that exposure promptly? Yep.

If the warrants are worthless than why on earth would Buffett had demanded them? GS didn't simply say, "Hey WEB....here are some warrants we're throwing in for free." This was part of the package that BRK offered and likely wasn't something negotiable. BRK is getting a dividend which is accounted for in the MoS calculated for the transaction. Buffett buys for the long-term and isn't concerned with making a quick buck.

While there's risk in any investment my belief is that Buffett again will come out in the end just fine. He is taking substantially less risk than other individuals (say SWF's) when they've placed large equity injections into companies and the long-term downside risk to GS is much less, IMO, than many of the other banking institutions in the US.