This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

You're Not Warren Buffett, So Don't Invest Like Him

Earlier this year Buffett took a small stake (3.2%) in Lee. Shortly before this move, the company emerged from bankruptcy. It's still on the hook for the debt, but at elevated interest rates. Can you see the writing on the wall?

Dying industry. Desperate company. There's a chance it could turn things around. If it does -- and small-town newspapers survive and thrive -- Buffett comes out looking like the value investing genius he's well known for. But, even if the bet turns sour, Buffett still wins. Give these firms another chance at life, collect some interest, watch the stock price bounce (often as a reaction to your involvement) and make a load of cash whether the alleged investment thesis wins out or not.

If you follow the media coverage of Buffett's small-town newspaper activity, however, all you hear about is the investment thesis. Every headline and every lead deals with Buffett's belief that small-town newspapers have a future. It's a feel-good story. It's likely to prompt investors, particularly those in awe of Buffett, to jump into a stock like LEE or maybe something similar like Journal Communications (JRN).

While it probably makes more sense to not proceed at all, if you do, move forward with caution. You're not Warren Buffett. You cannot walk into a company, buy a few millions shares and then turn the screws by scooping up warrants or handing out a multi-million dollar high-interest loan.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

At the time of publication, the author held no positions in any of the stocks mentioned in this article.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
MEG $15.54 -2.10%
LEE $1.77 2.30%
AAPL $118.30 0.42%
FB $104.24 -1.15%
GOOG $743.96 -0.84%


Chart of I:DJI
DOW 17,719.92 -78.57 -0.44%
S&P 500 2,080.41 -9.70 -0.46%
NASDAQ 5,108.6660 -18.8590 -0.37%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs