The Oracle of Omaha was on the move again today. Last week he stuck $5 billion into Goldman Sachs. This time he took advantage the credit crunch and General Electric (GE) to sink $3 billion into GE preferred stock. GE will pay him 10% on the shares every year and he has an option to buy $3 billion more over the next five years.
Tonight the world waits with bated breath to see if the U.S. Congress will pass the proposed bailout of the United States financial system. Buffet has made two very large bets that this legislation will pass. I believe it will pass simply because Buffet wouldn’t take that kind of chance with that much money if he didn’t have a pretty good idea it would as well. The larger question is will this be the cure that ails us? I doubt it, but it will provide a short term stimulus.
The Thoroughbred Folio took some lumps over the last week. Nevertheless, here we sit in almost the same position with very little change. There were several dividends distributed over the last week. Bank of America (BAC) kicked out a nice return despite all the turmoil in the financial industry.
There is a shake up at the top this week as WM Wrigley (WWY) runs out in front. Family Dollar (FDO) slid back into second place losing ground from +42% down to +31%. Rohm and Haas (ROH) stays strong in third place.
After a nice run, our old friend Regions Financial (RF) has fallen all the way to the bottom again. It replaces Gannett (GCI) which moves into the second spot. Fifth Third (FITB) also slid back down into third place. If the bailout legislation goes through, then we should see a big pop for these regional banks.
Thoroughbred Performance (Week 41 of 52): $-174.76 (-5.83%) Dividends To Date: $73.69
Top 3 Stocks
- WM Wrigley $24.78 (33.04%)
- Family Dollar $23.41 (31.21%)
- Rohm and Haas $21.90 (29.20%)
Bottom 3 Stocks
- Regions Financial $-40.18 (-53.57%)
- Gannett $-37.82 (-50.43%)
- Fifth Third Bancorp $-33.96 (-45.28%)
Stocks used in this post:
- (FDO: 25.07, 0.00%, Yield: 1.95%)
- (FITB: 7.71, 0.00%, Yield: 15.30%)
- (GCI: 6.09, 0.00%, Yield: 26.27%)
- (RF: 7.66, 0.00%, Yield: 16.19%)
- (ROH: 71.25, 0.00%, Yield: 2.25%)
- (WWY: 0.00, N/A, Yield: N/A%)
October 2nd, 2008 at 11:38 am
I find the GE move fascinating. Since GE has froze the dividend through 2009, I have backed off them, then again I am not earning 10% on the common dividend.
Best Wishes,
D4L