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Buffett on CNBC this Morning


Evolveus

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Interesting..

 

"Buffett said he's "salivating" at the prospect of buying some companies after two potential $20 billion acquisitions fell through earlier this year over disagreements on price. Berkshire has $40 billion in cash on hand, but prices are difficult right now, he said, and Berkshire won't get into bidding wars.

Warren Buffett on CNBC's "Squawk Box"

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He's planning to look at the financials of a $6 billion company he's been offered, but he didn't name that potential acquisition.

 

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Brooklyn's in the houze!!

 

http://brooklyninvestor.blogspot.com/2012/10/buffett-on-cnbc.html

 

Banks business model has two factors: Return-on-assets (ROA) and assets-to-equity (leverage).

Return on assets won't go up.  WFC earns 1.4%-1.5% ROA and USB does 1.7%.  This won't change.

In the past, (some) banks had 20x assets to equity.  With an ROA of 1.5%, 20x leverage gives you a ROE of 30%.  This won't happen in the future.

Banks used to earn 25% return on tangible equity and that's a crazy number.  We won't be going back to that.

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My take from it: those chairs look awfully uncomfortable!

 

 

Oh, and, don't shoot me here, him mentioning good farms and good rentals sure sound a lot like Kyle Bass and some others.    Did he previously use these two examples?

 

Yea Buffett has mentioned these examples before... especially the farm one for years.

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