Friday, August 31, 2007

Giving it 361,156%

Berkshire’s dream is to replicate the success of 2002 when, after the Enron and WorldCom scandals, Buffett jumped into junk bonds, snapping up more than $7bn worth of energy and telecom assets. Many observers thought he had taken leave of his senses; but he was soon to prove them spectacularly wrong.

By the end of 2003, he had pocketed $1.1bn profit on his junk bonds alone. The idea this time around is that he will load up on prime mortgage-backed securities, whose value has been hit by their dodgy sub-prime variants, as well as cheap bonds being offloaded by desperate investment banks.
Full Article
Source: Thanks to Sanjeev from MSN BRK board

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