netnet Posted December 7, 2014 Posted December 7, 2014 Here is a lazy Sunday question (to answer I should look through all of Buffett's early partnership letters myself but I have not, hence "lazy Sunday") In the early years, did Buffett have look for catalysts in his investments? I think he did not, but I am putting the question out to the collective minds of the Corner! The subsequent question would be, if he did not, was that a wise decision. (In answering that question, let's just assume that his early capital was stable, which it seemed to be.)
peter1234 Posted December 7, 2014 Posted December 7, 2014 I believe he had a category called work-outs. They usually worked out over a defined time frame. Quote Our second category consists of “work-outs.” These are securities whose financial results depend on corporate action rather than supply and demand factors created by buyers and sellers of securities. In other words, they are securities with a timetable where we can predict, within reasonable error limits, when we will get how much and what might upset the applecart. Corporate events such as mergers, liquidations, reorganizations, spin-offs, etc., lead to work-outs. An important source in recent years has been sell-outs by oil producers to major integrated oil companies.
LC Posted December 8, 2014 Posted December 8, 2014 He did a bit of merger arbitrage I believe, but back in those days I believe the spreads were far juicier. He also took activist positions.
mpauls Posted January 5, 2015 Posted January 5, 2015 Other than the arbs and a handful of control situations he typically did not.
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