Investment Lessons Learnt From Warren Buffett: 100+ Pages Of A Ultimate Guide On Everything You Can Learn And Apply From Warren Buffet by Jamie McIntyre

Author:Jamie McIntyre [McIntyre, Jamie]
Language: eng
Format: epub, mobi
Published: 2014-09-08T23:00:00+00:00

General Electric

A month after the Goldman Sachs deal Buffett invested $3 billion in General Electric (GE) after the stock had fallen 42 percent in the past year. The deal costs GE about $300 million each year. After announcing his investment Buffett praised General Electric. “GE is the symbol of American business to the world,” he said in a statement. “They have strong global brands and businesses ... I am confident that GE will continue to be successful in the years to come.”

Analysts said Buffett’s endorsement will mean as much or even more than Berkshire’s cash. “He’s a smart guy and he wouldn’t get involved if he doesn’t think it’s a great company,” said one analyst. “It’s a nice endorsement. He doesn’t make too many mistakes.”

Another analyst said, “I think they’re kind of a win-win situation: great deals for Berkshire and good deals for the other companies. I think in a lot of ways, Goldman and certainly GE, they’re, in effect, buying Buffett’s backing. Companies are willing to accept his capital on better terms than capital from anyone else because of the market psychology of having Warren Buffett investing in their company.”

When GE paid Buffett back, they owed him 10% more than he paid, or $300 million on top of his $3 billion payback. Plus, Buffett will have accumulated $900 million in cumulative dividends. All said and done, Buffett’s $3 billion investment in GE generated a total profit of $1.2 billion.

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