Thoughts on Buffett purchases

I have read alot of yip yap about Buffet's buys recently in the U.S. banking sector. Many of these articles like to put the spin on it that it is a vote of confidence in the U.S. banking sector and means we should all jump in and buy. Few thoughts. One if you look at the amount of money he spent compared to how much he has to spend at Berkshire, it was hardly a buying spree. It was a drop in the bucket. It was more picking up a few morsels here and there. Secondly he like anyone else has no idea where the bottom is but because of his cash stash he has to play by different rules. His investment opportunities are limited. So when Bank of America is down 15% he can start buying and picking at it. If he doesn't it may go up 15% and lose the precious opportunity to put at least some of his cash to work. If it goes down 30 to 50% and he really believes in the company, that is when you will see him back up the truck. Someone like me who does not have the high class problem of to much capital can sift through many smaller companies that may have gone down 30 to 50%. There are only so many places and opportunities where he can put 100 million to work. All things equal there would be no one happier than Warren if his investment he just put into B of A went down 50% and he could then put it in a multi billion dollar investment to work. He may be buying things left and right currently. I do not know but to try to say his picking up a few shares of a few banks is a major buy signal is stretching it a little far.

On Dow Jones, that headline caught alot of what in the world? First he may have bought it before the buyout offer. That is possible but my guess is he played the merger arbitrage. People forget how versatile of an investor he is. Everyone just thinks of buy and never sell. He is extremely versatile and has done many merger arbitrage trades over his long investing career especially in the early days. He also bought up something like half of the silver market in the late 90s. He is extremely versatile. When DJ dropped below 50 I would not be surprised at all if he decided to play the arbitrage game.