I think the correct question about Berkshire Hathaway's recent investments in GE and GS is whether this move is a good blunder? I have been asking this question from the very beginning and here are my initial views:
I like GE. It's such a big conglomerate with a wide variety of businesses including alternative energies. The company is one that represents the future development of 21st century industries. The pity is that GE has businesses in financials that drag itself down. Well, this is the good work of the deadly Bear Flu virus released from Wall Street.
The specific doubt that I have about GE is why is the investment only $3 billion? It was about a week before GE that BRK had a deal involving $5 billion with GS. So why was GE only $3 billion? The basic terms of the two deals look like very similar to me. Why is it different for GE? Does that mean BRK doesn't like GE as much as GS? Or GS has just got the first bite and so GE can only eat less?
Personally I like GE much more than GS. Why? GE did not create the toxic debts and dirts or as much toxic debts and dirts as the devils in Wall Street had done. Its businesses and production are of practical use to humanity. When we compare this aspect with the Financials bearing in mind the deadly Bear Flu virus and toxic debts that Wall Street's devils have created, I certainly believe that GE is a company that deserves great respect and higher investment amount.
I don't have to say that I don't like GS. Well, if you look at the fat checks and fat cats in Wall Street and the toxic debts there, then you know why no one should seriously invest in financials that are responsible for the disasters that we are experiencing. I don't mean GS or you should not invest in GS. What I mean is I am disappointed to see BRK investing in GS during these difficult times. But business is business; BRK certainly has its own plan in mind and some wise reasons for putting $5 billion in GS.
By the way, I must declare that I am hold some shares in Berkshire Hathaway and GE, but have recently sold off my GS shares.
Wednesday, October 15, 2008
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