Buffett Watch

Skepticism Greets Times Report Buffett Talking to Bear Stearns About Minority Stake

Today's New York Times report that Warren Buffett is among several investors talking about taking a minority stake in Bear Stearns is being greeted with a lot of skepticism.

Appearing on Closing Bell, our Charlie Gasparino said it just doesn't make sense for Buffett to buy into Bear.  (The video clip of Charlie's appearance appears to the left.)

And a few minutes later during a discussion of the Bear Stearns situation he came back to say "the more calls I make, the less I believe that this is true."  He stresses that he could be wrong, but he just doesn't think Buffett is seriously interested.

Doug Kass of Seabreeze Partners Management writes to CNBC, "I will bet anyone that Buffett has no interest in the company" because Buffett has consistently said he made a mistake by investing in brokerages in the past.  "No way, no how."

At TheStreet.com, Senior Writer Mark DeCambre starts his piece by saying, "Don't hold your breath for the announcement of Warren Buffett's big investment in Bear Stearns."  he quotes market watchers as saying it would be "uncharacteristic" for Buffett to get involved with the brokerage because he usually likes simple, easy-to-understand businesses.  The inner workings of many Wall Street brokerages are anything but simple, especially with the complex securities they've been churning out in recent years.

The Associated Press quotes Buffett-book author Andy Kilpatrick as saying it feels to him like only one in 12 rumors about what Buffett might buy turns out to be true.  But the AP also says, "This time there's a connection: Buffett and Bear Stearns Chief Executive James Caybe are friends and have played bridge together in the past."  Kilkpatrick tells the AP he would believe Buffett is talking to Bear because of that friendship, "but how far it's gone who knows."

On 24/7 Wall Street, however, Douglas McIntyre thinks there may be something to it: "For those who think it is far-fetched, recall that Buffett took control of Salomon Brothers in 1991, and pushed out 'King of Wall Street' John Gutfreund."

And the Times piece itself notes that while the Salomon investment "is not known to be one of Mr. Buffett's better ones" his "nose for value" could make Buffett see Bear Stearns as an "attractive investment."  Plus, "Unlike Salomon, Bear is not known for taking big trading risks with its capital."

Questions?  Comments?  Email me at buffettwatch@cnbc.com