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USG Corp: Another Buffett 'Failure to Sell' Mistake

Wow, you really don't get it. Buffet bought the stock at an average price of 45. Now the stock is 34. It has been trading in a range between 33 and 39$, so your 70% loss it's pure fiction.

But the main point you don't seem to get is that he buys only great companies and USG is one of them. It has excellent management, it is a low cost producer, it has a moat and a brand (Sheetrock) and it is a growth story, when the housing market turns.

Berkshire got 17% of the company at 45$. So what if the stock falls to 25 or 15? Would that be a devastating loss? FOR GODS SAKE! It is a 3,5 billion market cap company and Buffett has 50+ billion of cash! He will buy the rest of the company (83%) at a lower price... so there is no loss for him.

Instead of focusing on the reasons why (the prospects of the company) Buffett did what he did, you just had to show the whole investment community what a superior investing mind you have... so instead of manufacturing some real ammo (facts) against his decision, you went on an elephant hunt with rubber bullets (your faulty perspective, logic).

From your article it is obvious you didn't read anything about this company, not even the transcripts. That's why you don't understand why Buffett bought this company in the first place.

You pissed me off, because if you at least wanted to sound scientific and provide us with a table of earnings for USG from 2000-2007, you could at least explain the stratospheric 11$ earnings in 2005 in a footnote below the table.

Where did that 11$ earnings come from and where did they go my friend? Do you know? No, you don't, because you didn't take the time to do the things properly.

You wrote a bad, obviously flawed article, because all you wanted to see was your inflating ego... instead of looking at Buffett's investment in USG from his perspective.

His investment in USG is a win/win situation.

USG Corp: Another Buffett 'Failure to Sell' Mistake

What an article! Congratulations! You have won the award of the worst article today!

Listen, before you write anything read at least the history of the company instead of doing a table of earnings and P/E ratios based on a 8 year history.

And sentences like: "The one brilliant move that USG management did was to give its shareholders a rights offering to buy newly issued shares at $40 on July 27, 2006." Yeah right.

Management only had to sort out the asbestos claims, modernize the plants, restructure the business in the process so they could lower the production costs for the future outlook. But hey! The one brilliant thing is that they issued shares at 40 bucks!

What a genius you are. This management is fabulous if you only understand the nature of low cost production in this housing downturn. They continued the vertical integration of the business and that will give a competitive advantage for years.

No wonder Buffett bought it and will continue to do so. I don't own USG but I am looking at it.

When judging Warren's investment decision at least try to understand that a year or two years or 5 years for a man who says that the ideal is to own a stock forever... really means nothing to him if the stock dips.

I guess its easy to look at the stock and see Buffett owning it and then rant about how bad his timing was... instead of understanding the business. But hey! That's why there's value in the first place!