Rational Advisor

A great article from Bloomberg - link below

http://www.bloomberg.com/news/marketsmag/mm_0808_story1.html

Key points

The Omaha investor is taking advantage of the market turmoil to fire up Berkshire Hathaway’s acquisition machine.

In April, he agreed to pay $2.1 billion for an undisclosed stake in Chicago’s Wm. Wrigley Jr. Co. as part of McLean, Virginia-based Mars Inc.’s $23 billion purchase of the gum maker. Buffett, who already owns See’s Candies, is helping to fund the deal with $4.4 billion in subordinated debt.

“This is the kind of market where you would expect the pace of Berkshire acquisitions to pick up,” says Keith Trauner, senior analyst of Fairholme Capital Management LLC in Short Hills, New Jersey. “In a weaker business environment, sellers moderate their expectations.”

Berkshire owns 8.6 percent of Coca-Cola Co., 13.1 percent of American Express Co. and 8.8 percent of Wells Fargo & Co. Those three investments alone amounted nearly $25 billion on June 24.

Insurance firms dominate the list of Berkshire-owned companies. Buffett controls a dozen of them — Berkshire Hathaway Reinsurance, General Re Corp. and Geico Corp. are the biggest — accounting for 31 percent of Berkshire’s 2007 revenue.

What makes Buffett want to buy? He himself says there’s no secret formula, because each company’s dynamic is unique. Berkshire is most active when markets go awry.

20-Year Perspective

“I’m not interested in what happens next quarter,” says Buffett told him. “I’m interested in the next 20 years.”

Now that you know Buffett is buyingk, my question to you is are you?

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