So Buffet came out and endorsed GS. While I have always been a big fan of Buffet, he has a disdain for speculating with derivatives and has always said he doesnt invest in securities he doesnt understand, like the .Com boom. Since GS has a way with understanding and pricing complex derivatives, does this make Buffet a hypocrite?
I was at the meeting when he explained the transaction and he basically said it was political. SEC voted 3-2 to sue GS. It might not have been morally right but it was not illegal from his explaination.
Berkshire both owns and sells derivative securities. The same ones he called “weapons of mass financial destruction” years ago.
CFA Jay Wrote: ------------------------------------------------------- > I was at the meeting when he explained the > transaction and he basically said it was > political. SEC voted 3-2 to sue GS. It might not > have been morally right but it was not illegal > from his explaination. I have heard this explanation before and I dont get it. The SEC board is comprised of 2 Dems, 2 Repubs, and a POTUS appointee, the Chairman I believe. So the same thing could be said of the decision not to sue them in the last administration. What does this mean? Everytime the SEC in a Democratic Administration decides to pursue action its political, but not under a Republican Administration? This argument makes absolutely no sense. By definition every decision that the board makes is political. So what?
King_Tut Wrote: ------------------------------------------------------- > Berkshire both owns and sells derivative > securities. The same ones he called “weapons of > mass financial destruction” years ago. This. It was politcal in the timing of the SEC filing. By some strange coincidence congress was trying to pass new derivative legislation that same week. Weird huh?
Buffet has a nice chunk of GS preferred. I like Buffet but his opinion is not objective on this one.
joemontana Wrote: ------------------------------------------------------- > Buffet has a nice chunk of GS preferred. I like > Buffet but his opinion is not objective on this > one. But his preferred his close enough to a debt instrument that he’s more of a creditor than an equity holders (warrants notwithstanding). I’ve yet to hear anyone focus on the substance of Buffett’s argument. He may have made the political point, but his larger point was that it’s irrelevant who is on the other side of the trade. More importantly (my POV now), the structure of a syn CDO requires that someone is short the deal, and given the size of the deal you can expect that counterparty to be relatively sophisticated.
I don’t like Buffet as much as I used too. The media has basically canonized him because of his success, philanthropy, and good quotes. If you look at his track record, he is just as greedy as everyone else on Wall Street, and will do almost anything legal to make more money.
The guy gave most of his money to charity. He can’t be a hypocrite.
He can be a hypocrite if he says one thing and does another, by the most pure definition.
It appears he’s got a pretty good grasp of 10% preferred stock in GS, which is what he invested in. BRK’s derivative activities are pretty plain vanilla - although an insurance contract is essentially an option, so from that POV they’ve got extensive derivative experience. Lost in the conversation is that Buffett was 100% correct about these derivatives.
On CNN today there is an article of govt business that is considering leaving GS and Nevada Public Employee Retirement System already did in March.
On CNN today there is an article of govt business that is considering leaving GS and Nevada Public Employee Retirement System already did in March.
BizBanker Wrote: ------------------------------------------------------- > He can be a hypocrite if he says one thing and > does another, by the most pure definition. Sure, but can’t people change their views about things?
Duplicate.
Duplicate.
Sure you can change your mind, but if you predict something, then it happens, then you change your mind in the opposite direction? That sounds like the Dislexic Historian of Omaha, not the Oracle of Omaha.
BizBanker Wrote: ------------------------------------------------------- > CFA Jay Wrote: > -------------------------------------------------- > ----- > > I was at the meeting when he explained the > > transaction and he basically said it was > > political. SEC voted 3-2 to sue GS. It might > not > > have been morally right but it was not illegal > > from his explaination. > > > I have heard this explanation before and I dont > get it. The SEC board is comprised of 2 Dems, 2 > Repubs, and a POTUS appointee, the Chairman I > believe. So the same thing could be said of the > decision not to sue them in the last > administration. What does this mean? Everytime the > SEC in a Democratic Administration decides to > pursue action its political, but not under a > Republican Administration? This argument makes > absolutely no sense. By definition every decision > that the board makes is political. So what? Buffet is a Democrat and publicly supported Obama during the 2008 elections.
^^ But what does that have to do with post? I thought everyone knew that. As did a majority of super wealthy individuals, even GS yet the SEC is pursuing charges. So wouldnt it be political if BO didnt pursue charges and swept this thing under the rug? You cant have a heads you lose tails you lose situation.
My bad, I thought you were implying he was Republican because he thought it was political that when there’s a Democrat administration, they decide to go after GS.