BRK.A) history, Burlington Northern Santa Fe Railroad. This bet, Buffett explained, would benefit Berkshire Hathaway long after he was gone. This is not the first time Buffett has offered up praise for the government's controversial decision to step in and save the financial industry either. As he explained in this week's article and also in the past, Buffett believes that the government's decision to step in and inject hundreds of billions of dollars into the economy was necessary at the time, and saved the U.S. and the rest of the global economy from suffering a far more painful blow. Buffett's gratitude also likely stems from his personal benefits resulting from the government's actions during those bleak times. As he highlights early on in his op-ed piece, his company was included among those dominos on the verge of falling.
Buffett's portfolio was heavily dependent on the government's decision to save the financial industry. At the time of the crisis and today, the Berkshire portfolio includes a number of financial firms. As the industry stood on the brink of collapse, holdings such as Wells Fargo ( WFC), US Bancorp ( USB) and American Express ( AXP) were seriously threatened. Also, it is difficult to forget Buffett's bet on Goldman Sachs ( GS). Like other financial institutions, Goldman was on the verge of collapse as Buffett was stepping in. Thanks to government intervention and the shuttering of competitors, the company was able to survive and grow, earning the crown as King of Wall Street. Buffett's first rule for investing is "don't lose money" and in the event that the financial industry was allowed to crumble, Buffett's company would have likely suffered a massive loss. Instead, as a result of the government's decision to step in, Buffett was able to pocket billions. Ultimately, it is not surprising that Buffett has good things to say for those responsible for saving the financial industry. Being a long-term investor and strong proponent of the U.S. economy, his success hinges on the nation's ability to maintain stability and work towards recovery. While controversial, the investor believes that the actions taken were necessary to ensure this. Written by Don Dion in Williamstown, Mass.
Readers Also Like: