Top 15 For 2008 (No. 15): Warren Buffett Bets Big In 2008 Despite Collapse
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StreetInsider.com has put together its 'Top 15 Items of 2008' which chronicles our view of the most significant news on Wall Street during the tumultuous year.
Number 15: Warren Buffett Bets Big In 2008 Despite Collapse
With the stock market collapsing around him, The Oracle of Omaha - Mr. Warren Buffett - had an active year. Buffett was busy evaluating companies and putting his money to work in a number of different deals. Buffett stuck to his mantra "be greedy when others are fearful."
Mr. Buffett made a $3 billion perpetual preferred investment in GE (NYSE: GE) and a similar $5 billion deal with Goldman Sachs (NYSE: GS), two of the most beaten up stocks for 2008. The common shares of both have done horrible since Buffett has been involved but Buffett has positioned himself well, collecting a cool 10% dividend on his preferred stock and has warrants to buy common shares.
In October, in a rare move, Mr. Buffett penned an op-ed piece in the New York Time's entitled "Buy American. I Am". Buffett said the financial world is a mess and problems are leaking into the general economy and the headlines will continue to be scary, but he said he is buying American stocks.
One stock in particular Mr. Buffett loaded up on in 2008 was food company Kraft (NYSE: KFT). Buffett now owns 138 million shares, or 9.4%, in the company.
Buffett was also a big buyer in rail stocks, building up his stake in Burlington Northern Santa Fe (NYSE: BNI) above 20%.
Mr. Buffett owns a lot of financial stocks, which suffered huge in '08. Some of the big losers he owns includes: Wells Fargo (NYSE: WFC), American Express (NYSE: AXP), US Bancorp (NYSE: USB) and Bank of America (NYSE: BAC).
Mr. Buffett was also involved with the $23 billion takeover of Wm. Wrigley Jr. Company by Mars. Inc and the takeover of Rohm & Haas (NSYE: ROH) by Dow Chemical (NYSE: DOW), in a deal that is still pending.
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