Nadav Manham

Buffett: I Was Wrong on Anheuser-Busch

Thank you Owen, I think you're very likely right. I consider myself a Buffettologist but I'm not an expert in his risk arbitrage moves. As I think back, I remember that he only invests in announced deals, which kept him out of a lot of activity during the 80s. He also made a good living as a "white knight" during that period to managements faced with hostile takeovers. It's a short step from that to realize that he knows a lot about how managements can behave under these circumstances, even those who seem defenseless. Buffett can evaluate a lot, but he probably can't evaluate management irrationality, especially when it's mixed up with patriotic nationalism and King Lear-like family psychodrama.

If anyone's interested, Buffett goes into some detail about one of his arbitrage investments (Arcata) in his 1988 letter to shareholders:

www.berkshirehathaway....