Dividends Anonymous

Voices Of Calm In the Maelstrom

Buying to Berkshire at any point earlier this year would have been a much better investment than many of the usual suspects that have been hammered as of late. Not many businessmen can negotiate terms with large corporations like GS & GE with almost all the benefit going towards them. 10% pref yield in this environment I think is well understated by the markets and Buffett has clearly shown his ability to attain value in the most difficult environments.

Even if he views the warrants for common as essentially worthless he's getting a very attractive return for the equity invested on the behalf of Berkshire shareholders.

Does Warren Buffett Think Goldman Is More Creditworthy Than GE?

He's making yet another purchase where his MoS is established and downside risk minimal. Who else could demand a 10% yield and get it with few questions asked. GE's not going to zero and Buffett is using his deep pocket and investing smarts to get a deal for Berkshire that not many could hope to replicate.

An impressive move on his part, but GE ends up with the short end of an expensive financing deal.