Comments on: Buffett Vs Paulson

By: Gunnar

Gunnar — Mon, 20 Oct 2008 16:06:35 +0000

“but I think my representative should have started from the Buffett term sheet, or something closer to it.”
Well there are a lot of people on Wall St that do this stuff for a living and Buffett has been sitting out in Omaha and getting a better deal than all the New York people for many decades, so I don’t think there is any shame in a bureaucrat not being able to get as good a deal.
The real question in my mind is why after so many decades of Buffett outperforming Wall St, why dont they learn?
Great quote in Barron’s this w/e from Jeremy Grantham:
Q. Do you think we will learn anything from all of this turmoil?
JG. We will learn an enormous amount in a very short time, quite a bit in the medium term and absolutely nothing in the long term. That would be the historical precedent.

By: Chris

Chris — Sat, 18 Oct 2008 22:14:59 +0000

“Your representative”. Assuming facts not in evidence, your honor!
:^(

By: Adam

Adam — Sat, 18 Oct 2008 15:28:49 +0000

Gunnar, Mike, Paulson gave the companies no choice about accepting his cash. See for example, http://www.nytimes.com/2008/10/15/business/economy/15bailout.html "As they heard more of the details, some of the bankers began to realize how attractive the program was for them." or http://volokh.com/posts/1224036197.shtml Now, maybe the terms were that good so that the banks would just shut up and get re-capitalized, but I think my representative should have started from the Buffett term sheet, or something closer to it.

By: Mike

Mike — Sat, 18 Oct 2008 14:56:06 +0000

Well, which money is also more attractive to a firm, dollar for dollar: US government or Buffett money? If I were a CEO, I’d go with Buffett money.
There’s smart and dumb money in private equity and venture capital; why is this surprising?

By: Gunnar

Gunnar — Sat, 18 Oct 2008 13:38:18 +0000

Not too surprising, only an economist would be surprised that Buffett got a better deal. He always does. Then again most economists believe in Efficient Market Theory and the probably the tooth fairy as well. As Buffett says, if markets were efficient I would be a bum on the street with a tin cup.
Btw, speaking of getting a good deal, yesterday Buffett recommended(*) for us to buy stocks – nao! Paulson can’t exactly do that, but the rest of us can. Game on.
* http://www.nytimes.com/2008/10/17/opinion/17buffett.html

By: beri

beri — Sat, 18 Oct 2008 09:34:57 +0000

Maybe Paulson didn’t know the difference. After all,the company he headed is now out of business.