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@Baltimore

You are definitely right.

cosmoyx(My way)
I guess there is a miscommunication here: when I said "conflict", I didn't suppose to mean conflict between Warren Buffett's decision making. I was talking about the conflict in your boss' statement.

I agree with the first part of his statement ("He will mortgage his real estate 10 times to put into this deal as the terms are so good for Buffet."). But I disagree with the second part ("his conclusion is that sell everything if there is any rally in the market.").

Even if the desperate GS files chapter 11 tomorrow, we don't need to sell everything, right? Stocks like Wal-Mart, Constellation Energy, Intel, Microsoft are somewhat "safe-heavens" now, right?

Cash is king. True. For individual investor with half a million, it's safer to hold all cash at hand now. However, for a fund with 10 billions, you think they could buy back their position if they sell all now?
(#699@52)
Last Updated: 2008-9-25
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Replies, comments and Discussions:

  • Buffet Returns to Wall Street and to Invest $5 Billion in Goldman -specialday(Joyce); 2008-9-24 (#672@52)
    • 偶像都出手了,Goldman Sachs肯定有希望啦 -appleclassical(自然醒); 2008-9-24 (#673@52)
    • The timing is pretty good, market almost touches the bottom, he, investment legend, acts now -gotocan(gotocan); 2008-9-24 (#676@52)
      • "market almost touches the bottom",这个"bottom"怎么判断啊?是靠经验法则,还是有绝对数据?单凭股指,for example, DJIA,往下还有一万多点的空间的哈... -appleclassical(自然醒); 2008-9-24 (#678@52)
        • 象所有IB Analyst一样, 这个是我估计分析后的结果:) -gotocan(gotocan); 2008-9-25 (#691@52)
          • lol..................that's cool! -appleclassical(自然醒); 2008-9-25 (#695@52)
      • my boss's view is jus the opposite. -sannin99(雷蒙咨询); 2008-9-24 {352} (#680@52)
        The terms of the financing reflects how desparate GS is. My boss said if he had the chance to invest with Buffet. He will mortgage his real estate 10 times to put into this deal as the terms are so good for Buffet. The option alone is worth a lot.

        So his conclusion is that sell everything if there is any rally in the market.

        Agree or disagree?
        • Yap, cash is the king. -serveok_3.0(Kick S); 2008-9-24 (#681@52)
        • Likely there is a self-conflicting in your boss' reasoning: -cosmoyx(My way); 2008-9-24 {617} (#684@52)
          obviously he believes that Warren Buffett made a right decision in investing in GS, of course with a fat term. On the other hand, your boss also believes the market will collapse even though Buffett made such a investing at this stage.

          The thing is: if the market collapse, then Buffett's investing will also be wiped out after the failure of GS, although being wiped out after the Common Shareholders. In other words, Buffett made a wrong investing decision.

          Now, which point your boss is really with? Buffett made a right decision or wrong decision?

          Maybe he just want to make some points sounds contrary.
          • Buffett's term is not everyone can get. -sannin99(雷蒙咨询); 2008-9-24 {726} (#686@52)
            he has 5 years to wait out on the already in-the-money option.
            But ordinary investor won't be able to get that. To Buffet, it's a good deal. Of couse, he still face the ultimate risk being the company bankruptcy. But his margin of safety and huge upside potential is obvious compared to regular investors.

            So I don't see the conflict here. The unbelievable terms tells how desparate GS is right now, which is a warning sign for the investors. On the other hand, Buffet is makeing another good investment based on his potential return/risk. Situation is bad, but there is still value in GS's equity. WB is definitely getting his investment/money's worth relative to the risk taken while it is not available to others.
            • You are definitely right. -cosmoyx(My way); 2008-9-25 {894} (#699@52)
              I guess there is a miscommunication here: when I said "conflict", I didn't suppose to mean conflict between Warren Buffett's decision making. I was talking about the conflict in your boss' statement.

              I agree with the first part of his statement ("He will mortgage his real estate 10 times to put into this deal as the terms are so good for Buffet."). But I disagree with the second part ("his conclusion is that sell everything if there is any rally in the market.").

              Even if the desperate GS files chapter 11 tomorrow, we don't need to sell everything, right? Stocks like Wal-Mart, Constellation Energy, Intel, Microsoft are somewhat "safe-heavens" now, right?

              Cash is king. True. For individual investor with half a million, it's safer to hold all cash at hand now. However, for a fund with 10 billions, you think they could buy back their position if they sell all now?
            • 你的解释好像还是说不过去。因为这不是个钱多钱少的问题，而是赚不赚钱的问题。你老板如果真认为这是笔好买卖，那就是说他认为老巴氏会赚到钱的，没错吧？ -57604884(旱天雷); 2008-9-27 {624} (#792@52)
              如果不赚钱，那叫什么好买卖呢？还至于现在他就甩卖？说不通啊！把能赚钱的项目甩卖了，那你老板打算买什么呢？


              您看您说的理由，巴菲特钱多，持有时间长等等，这都不是我们小散户，也可能包括你老板不能买或不能长期持有的理由，我们买不了多，难道还不能买少吗？她巴菲特钱多，他赚大钱，我们钱少，可以赚小钱嘛。买不了50个亿，那买一千总行吧？他巴菲特能捂多久，我就能捂多久，我还拼不过他了？她是靠赚钱吃饭的，踏赚不到钱，就要关系到他饭碗的问题。而我是拿这俩钱来消遣的，怎么就不能比他持有的更久，就不能比他更不怕赔呢？他有钱，他赔50个亿也得上上火吧？我赔一千就全当半个月不上班了。下月接着打累博就是了，完全不用为生计发愁。您说是不是？赫赫。
          • The value of the option alone is much more than $3 bln and he is puting in only $5 bln in pref shares with 10% rate. -sannin99(雷蒙咨询); 2008-9-24 (#687@52)

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