Thursday, 13 August 2015

What is Warren Bufett buying these days?

Warren Buffett, chairman of Berkshire Hathaway Photographer: Norm Betts/Bloomberg News
Warren Buffett, chairman of Berkshire Hathaway,
Another grand announcement and media chase for Warren Buffett in his economic castle building pursuit with his mega-spending exercise. $37 Billion for Precision Castparts? He clearly paid premium in this case and that is not normal as he much rather deep discount value investing, but this time around he is talking about earning growth. Funny he is into the airline business again.
I recall him talking about calling a 1-800 number to get counsel on not getting into the airline business again. This time is different and surely don't rhyme with his last airline business investment. The barriers of entry is huge and the aerospace industry requires massive human capital for any possible competition to get a leg up on Precision Castparts.
My interest would to see how this mega merger is structured. In a low interest environment Mr. Buffett has secured a $10 Billion loan to assist with acquisition and just maybe the rest will come from insurance float.
Buffett is constantly growing the Berkshire Hathaway conglomerate and mapping up some ordinary business with extraordinary economic defense around their economic castle. His personal jet "The Indefensible" now has a home and Net Jet has a sugar daddy to take care of them both.