rh13

Buffett Saddles Up His HOG: Stay Away

Good article. Many writers do not understand the differences in the types of investments that billionaires make in different companies. Buffett's investments in Goldman Sachs and GE were very different from his investment in Harley-Davidson, and the implications for people thinking of following his lead are very different. Actually, even his investments in GE and Goldman Sachs do not carry particularly favorable implications for people thinking of buying common stock. Buffett got a guaranteed return of 10% on those, plus a windfall if the common goes up in a few years. It's a win-win for him; he either makes 10% on his money, or he makes more. You have to have a lot of money to get deals like that. His investment in Harley is different: he just makes 15% on his money. That suggests he is less interested in the Harley common stock. If you are thinking of buying the common, that should give you pause. Buffett could presumably have taken an option on the common, and he did not take one.