Last week Goldman Sachs Group Inc. settled its US$10B debt with the US taxpayer; now, what will they do about Warren Buffett? Last year, Buffett’s Berkshire Hathaway Inc. invested US$5B in Goldman and acquired preferred shares and warrants to buy common stock, making Buffett’s presence large, because of his reputation for integrity and as one of the world’s savviest investors. So what will Buffett, now the 2nd wealthiest man in the United States do? “Basically not much,” said Vahan Janjigian, author of the book ‘Even Buffett Isn’t Perfect.’”He has a history of making fairly large investments in these kinds of companies and sitting back and letting the management team run the company.” Janjigian expects Buffett to sit tight as Berkshire collects US$500M of annual dividends on the preferred shares and earns paper profits on accompanying warrants to buy an additional US$5B of common stock at $115 per share for up to five years.
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