WARREN BUFFETT Quote : Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.
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Thursday, October 10, 2013

Warren Buffett Converts Crisis-Era Warrants for 2.8% of Goldman Sachs

Warren Buffett 's long-term horizon has enabled him to continue to benefit from deals made five years ago during the financial crisis. GuruFocus Real Time Picks shows that this week his company, Berkshire Hathaway ( BRK.A )( BRK.B ), became 2.8% owner of Goldman Sachs ( GS ) by converting warrants he purchased when the investment bank was verging on meltdown in 2008.

At the time, Buffett became savior to a number of faltering institutions by infusing both cash and his impeccable reputation through similar deals such as with Bank of America ( BAC ), GE ( GE ) and Dow Chemical ( DOWB ).

Buffett's cash commitment toward his crisis-era deals totaled $14.5 billion, he said in his 2008 letter. He had to sell stock in his holdings in Johnson & Johnson ( JNJ ), Procter & Gamble ( PG ) and ConocoPhillips ( COP ) to generate the capital to make them.

"We very much like these commitments, which carry high current yields that, in themselves, make the investments more than satisfactory. But in each of these three purchases, we also acquired a substantial equity participation as a bonus," Buffett wrote

Read more: http://www.nasdaq.com/article/warren-buffett-converts-crisisera-warrants-for-28-of-goldman-sachs-cm285398#ixzz2hJP65EHE