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Buffett on CNBC this Morning


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"Buffett said he's "salivating" at the prospect of buying some companies after two potential $20 billion acquisitions fell through earlier this year over disagreements on price. Berkshire has $40 billion in cash on hand, but prices are difficult right now, he said, and Berkshire won't get into bidding wars.

Warren Buffett on CNBC's "Squawk Box"




He's planning to look at the financials of a $6 billion company he's been offered, but he didn't name that potential acquisition.



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Brooklyn's in the houze!!




Banks business model has two factors: Return-on-assets (ROA) and assets-to-equity (leverage).

Return on assets won't go up.  WFC earns 1.4%-1.5% ROA and USB does 1.7%.  This won't change.

In the past, (some) banks had 20x assets to equity.  With an ROA of 1.5%, 20x leverage gives you a ROE of 30%.  This won't happen in the future.

Banks used to earn 25% return on tangible equity and that's a crazy number.  We won't be going back to that.

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My take from it: those chairs look awfully uncomfortable!



Oh, and, don't shoot me here, him mentioning good farms and good rentals sure sound a lot like Kyle Bass and some others.    Did he previously use these two examples?


Yea Buffett has mentioned these examples before... especially the farm one for years.

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