Warren Buffett: "I Can Spend Money Faster than Imelda Marcos"
With asset prices falling and the markets in turmoil, there's been lots of speculation that this could very well be Warren Buffett's 'opportunity time' as the "last buyer standing."
Just last week, before hosting an Omaha fundraiser for Barack Obama, he told CNBC's Becky Quick the current market ups and downs "will probably present more opportunity to us because when dislocations occur things get more mispriced and that sort of thing." (You can see and read the entire exclusive interview in this WBW post.
Today, the Wall Street Journal focuses on Buffett's potential opportunities in its "Heard on the Street" column. It includes a trademark Buffett's non-committal comment about his buying plans. He tells the Journal, "I can spend money faster than Imelda Marcos when things are right." Marcos, of course, is the former Philippines first lady famous for spending a great deal of money on fun things like shoes.
And the Journal quotes Buffett as hinting that he's getting approached by a lot of people lately, trying to convince him to come to their rescue with a well-time discount purchase. "I'm definitely more popular than I was a few months ago. But I started from a low base."
Since, as the Journal puts it, "Mr. Buffett hews to Berkshire's policy of not discussing potential transactions," the article does some speculating.
It points out that Buffett has nearly $50 billion in cash, after a few years of not doing a lot of buying thanks to competition from free-spending hedge-funds and private equity buyers.
Among the possibilities:
- Countrywide Financial. Its stock price is down amid the subprime carnage. The Journal says some of its assets, "including its debt-servicing business and its portfolio of high-quality mortgages and mortgage-backed securities, could be attractive," according to "some investors."
- TXU Corp. The Texas utility that's trying to push through its sale to some private equity firms "would complement Berkshire's stable of companies," including MidAmerican Energy Holdings. But "the trick would be getting a good price if the deal falls through" which might be tough since TXU's performance has improved lately. And, since "Berkshire doesn;t participate in auctions .. any deals would have to be privately negotatiated."
- USG Corp. Buffett already owns a 17% stake, buying shares in the past year at prices as high as $46. The Journal points out that at its current price in the high 30s, it could look like a very nice bargain.
I can't stress strongly enough that all this is speculation. It's guessing what Buffett might be doing or thinking about based on his past buying patterns and philosophy. The only person who knows for sure is Mr. Buffett himself. Last week, Becky asked him about the "people on our air .. saying Warren Buffett would be buying here, I know he'd be looking around."
His laughing response: "Good. Tell me what they say I'm buying, and maybe I'll buy some." (You can hear him say it in the video clip above.)
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