Warren Buffett & Countrywide Speculation Ripples
Countrywide shares are cooling off substantially today after jumping 10% yesterday on the Wall Street Journal's speculation that the troubled mortgage company could be looking very attractive to Warren Buffett. Current real-time quote:
Today, Bloomberg's David Wilson writes that while Countrywide is "at least the sixth company this year to have Warren Buffett's name attached to speculation on a purchase, (it) stands out from the rest of the pack." Wilson cites its 49% stock plunge for the year, the second biggest among the S&P 500, and Buffett's "clear preference for financial holdings."
But on Seeking Alpha, Todd Sullivan doesn't agree, urging his readers to "ignore" the pundits when the predict Buffett will buy a mortgage lender. "Can anyone name the last time Buffett bought shares in a company on the open markets when people thought he would?" Sullivan does expect Buffett will "buy dirt cheap mortgage backed securities he deems risk advantaged" .. perhaps in a private transaction.
Remember, as Mr. Buffett told our own Becky Quick, and as we've been stressing here on Warren Buffett Watch, all the speculation is just speculation.
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