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Buffett's Uber convertible


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I was amused to read this today.  Seems like Buffett is repeating his trick from the late 90s of trying to generate income for Berkshire by buying convertible preferreds in mediocre businesses since common stock valuations are too high.  Unfortunately this pick sounds all too similar to USAir (cash-sucking transportation company).  In almost every instance where a convertible preferred worked well for Buffett (e.g. Gillette in the 90s, banks in 2008), the common would have worked out very well too.  Buying any type of security in a crappy business is a recipe for pain.  He would be far better off just sitting on his Treasuries and waiting for some attractive common-stock investments.  These sorts of distractions are the reason he missed Google the first time.

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Something to consider here is that this could have well been a Ted or Todd thing. Munger  alluded to this as Berkshire looking at the world with new eyes.

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