Berkshire Hathaway
Why isn't Buffett Buying These?

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By namkato
March 24, 2008

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There have been a lot of financial stock falling knives that have been posted about on this board, such as NFI, DFC, FMD, TMA.

Some well known investors have lost plenty of client money in these black holes, including Pabrai and Dreman (see Miller thread above). There was mention on the Liquid Lounge board of other respected value funds such as Chieftan who had been suffering large financial stock losses recently.

These stocks received a lot of attention from some of the pro money managers who post here (and on the respective stock boards) as well. The same guys who say it's risky to be overweight Berkshire.

Suddenly no one is interested in the lenders even at much lower prices.

I was able to stay out of trouble by asking myself the simple question: "Why isn't Buffett buying any of these?" These particular stocks are too small for Buffett, but he was avoiding all mortgage exposure except from the biggest well capitalized outfits like Wells. Of course he knew the current mess is Conseco writ large.

Or as Yogi Berra said: "It's deja vu all over again."

In fact, Pabrai's DFC adventure may have eliminated him from consideration as a Berkshire CIO, if he were ever a candidate.

Kind of shocking all these value guys getting hit except Buffett.