Jump to content

Buffett said BAC deal is reminiscent of his youth. GEICO & AmEx


claphands22
 Share

Recommended Posts

Buffett said BAC deal is reminiscent of his youth. GEICO & American Express trades

 

http://www.cnbc.com/id/44207362

   

QUICK: JUST GOING ON REAL QUICKLY TO POINT OUT THAT THIS IS KIND OF LIKE SOME DEALS BUFFETT HAS DONE IN THE PAST SOME OF THE MAJOR DEALS HE'S IN HIS YOUTH. HE SAYS THIS IS LIKE GOING BACK TO HIS YOUTH WHERE NOT ONLY AMERICAN EXPRESS, WHERE HE GOT IN BACK IN THE 1960s, BUT THEN WITH GEICO BACK IN 1970. GEICO WAS IN TROUBLE, TOO. I BELIEVE BECAUSE OF SOME ACCOUNTING ISSUES. HE BOUGHT INTO THAT COMPANY, TOO AND BOUGHT A MAJOR STAKE AT THAT POINT, BUT IT'S THE IDEA OF BUYING INTO THE COMPANIES THAT LOOK LIKE THEY ARE IN TROUBLE, TAKING SOME MAJOR BETS AND BUYING BIG INTO THEM. THIS IS REMINISCENT OF SOME OF THE DEALS HE'S DONE IN THE PAST.

 

If you are a Buffett nerd you know how profitable his old American Express and GEICO trades were.  This isn't an analysis of BAC, but I'm sure the Buffett nerds will find this statement really interesting. Of course, this is a second hand report and I'm not sure if he is being misquoted here, but this was said by Becky Quick, one of the few talking heads I like (and have a crush on.)

 

(note: saying BAC could be another AXP or GEICO home run is really too hyperbolic and scary to say. I think people should level his BAC investment with the fact he was also dead wrong on the Irish banks. For historical reasons, I think it's interesting he would say he finds the current investment reminiscent, but I sure as heck wouldn't include it in my thesis) 

Link to comment
Share on other sites

As a side note, I find his attachment to Becky Quick a bit cute. He doesn't come on air when she is not on when he always comes on air otherwise?

 

/creepy Perez Hilton mode off

 

If you have soldiered through Alice Schroeder's weighty tome Snowball, you would quickly deduce that Quick must be the latest addition to WEB's circle of women; the same "harem" that features Susan Buffett, Astrid Menks, Kate Graham, Sharon Osberg, Schroeder etc. etc.

 

Not that there's anything wrong with it. More power to the guy.  ;D

Link to comment
Share on other sites

As a side note, I find his attachment to Becky Quick a bit cute. He doesn't come on air when she is not on when he always comes on air otherwise?

 

/creepy Perez Hilton mode off

 

LOL... I've been calling Becky Quick "Buffett's main squeeze" for a while now...  ;D

 

But seriously, the whole "Snowball" episode (i.e. letting Alice Shroeder write it) tells us what his little weakness is.

 

I've allowed myself to sometime wonder how wonderful that book would have been if he had given the job to Lowenstein; As far as I'm concerned Lowenstein's earlier work is still the best Buffett biography out there, and he didn't even have access to both Buffett and all his files for 4-5 years.

Link to comment
Share on other sites

Buffett said BAC deal is reminiscent of his youth. GEICO & American Express trades

 

http://www.cnbc.com/id/44207362

   

QUICK: JUST GOING ON REAL QUICKLY TO POINT OUT THAT THIS IS KIND OF LIKE SOME DEALS BUFFETT HAS DONE IN THE PAST SOME OF THE MAJOR DEALS HE'S IN HIS YOUTH. HE SAYS THIS IS LIKE GOING BACK TO HIS YOUTH WHERE NOT ONLY AMERICAN EXPRESS, WHERE HE GOT IN BACK IN THE 1960s, BUT THEN WITH GEICO BACK IN 1970. GEICO WAS IN TROUBLE, TOO. I BELIEVE BECAUSE OF SOME ACCOUNTING ISSUES. HE BOUGHT INTO THAT COMPANY, TOO AND BOUGHT A MAJOR STAKE AT THAT POINT, BUT IT'S THE IDEA OF BUYING INTO THE COMPANIES THAT LOOK LIKE THEY ARE IN TROUBLE, TAKING SOME MAJOR BETS AND BUYING BIG INTO THEM. THIS IS REMINISCENT OF SOME OF THE DEALS HE'S DONE IN THE PAST.

 

If you are a Buffett nerd you know how profitable his old American Express and GEICO trades where.  This isn't an analysis of BAC, but I'm sure the Buffett nerds will find this statement really interesting. Of course, this is a second hand report and I'm not sure if he is being misquoted here, but this was said by Becky Quick, one of the few talking heads I like (and have a crush on.)

 

(note: saying BAC could be another AXP or GEICO home run is really too hyperbolic and scary to say. I think people should level his BAC investment with the fact he was also dead wrong on the Irish banks. For historical reasons, I think it's interesting he would say he finds the current investment reminiscent, but I sure as heck wouldn't include it in my thesis)

 

It reminds me more of the preferred stock deals he did in the late 1980's (Salomon in '87, Champion, Gillette and USAir in '89, and GE and Goldman in '09).  Even those had a higher rate than the BAC deal, the BAC deal has a higher premium in relation to the 10 yr Treasury.  My opinion would change if he were to begin buying BAC common, but right now the BAC deal is not on par with GEICO or American Express.  This is a more conservative move than either GEICO or Amex were.  Low risk with a good kicker.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...