Marketplace has a new podcast for kids, "Million Bazillion!" EPISODE OUT NOW

In tough times, Warren Buffett keeps investing big

David Gura Nov 7, 2011
HTML EMBED:
COPY

In tough times, Warren Buffett keeps investing big

David Gura Nov 7, 2011
HTML EMBED:
COPY

Jeremy Hobson: Well as Europe’s debt crisis sent global markets on a roller coaster ride in recent months, many investors just got out of the way so they wouldn’t lose their money. Not Warren Buffett — his company, Berkshire Hathaway says it invested almost $24 billion last quarter. That was the most in at least 15 years.

Marketplace’s David Gura reports.


David Gura: Warren Buffet is what’s called a “value investor.” Jim Angel teaches finance at Georgetown.

Jim Angel: He likes to buy companies that have a strong franchise, or what the strategy types would call a “sustainable competitive advantage.”

Translation: companies that don’t face much competition. Last quarter he bought a big stake in Mastercard; he owns a lot of Coca-Cola stock; Burlington Northern Santa Fe Railway. Angel says Buffett is really good at buying low.

Angel: He made a big bet on Bank of America.

A $5 billion bet, back in August. The financial firm is still struggling and we’ll see what happens to it. But Angel says that epitomizes Buffett’s investment strategy, which is pretty basic:

Angel: Hm. They need money. They’re cheap. I’ll buy some.

Buffet doesn’t always bat a thousand — who does? But the 81-year-old investor has a really good track record.

In Washington, I’m David Gura, for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.