Focus On Value Investing

Buffett explains the Goldman investment and the financial crisis.

It looks as if Warren Buffett has found some value in Goldman Sachs (GS). Berkshire announced today that it has made a $5 billion investment in Goldman perpetual preferred stock.

Per the WSJ.com: "The $5 billion preferred shares pay a 10% dividend and can be bought back by Goldman at a 10% premium. The warrants give Mr. Buffett the right to buy $5 billion worth of Goldman stock at $115 a share, which is 8% below Goldman's closing share price on Tuesday of $125.05. At Goldman's current $50 billion market capitalization, exercising those warrants would give roughly Mr. Buffett 10% of the company."

It has been quite a week for Goldman; from a huge drop in its stocks price, to becoming a bank holding company, and now the Buffett investment. Hopefully this deal will mark the begining of some much needed stability in the financials.

Sectretary of the Treasury and former CEO of Goldman Sachs, Henry Paulson, talks about the financial crisis and where your tax dollars are headed. Also, Michael Bloomberg is interviewed on the same issue.

You can also read the Paulson Newsweek article referenced in the interview here.

MidAmerican CEO David Sokol discusses the acquisition of Constellation Energy. MidAmerican is a subsidiary company of Berkshire Hathaway which agreed to buy struggling Constellation for $26.50 a share.

If you know anything about Jim Rogers, you know he wasn't in favor of the Fannie Mae and Freddie Mac bailouts.

Rogers states in the video: “This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I’m not quite sure why I or anybody else should be paying for this.”