Story
Warren Buffett's $5B Goldman investment during 2008 crisis — and why money wasn't the point
During the financial crisis, Buffett invested $5B in Goldman preferred stock after a brief phone call, comparing the potential loss to 'not even a bad hurricane.' Blankfein reveals the money was irrelevant — what Goldman needed was the confidence signal Buffett's backing provided to the world.
“I love the fact that, yes, that was actually the flow of the conversation. But he's a pretty rigorous guy and he knows that we're pretty rigorous people. And, and he, at one point he said, you know, and I said, you know, I would feel better telling you all the things, you know, before you make this investment, I would feel better telling you all the things I'm worried about. And he said, you know, Lloyd, I know you well enough to know that you worry enough for the both of us.”
Billy
Harold Alfond invented the outlet store, then sold Dexter Shoe to Buffett for $433M
Billy of the Week Harold Alfond went from shoe-store boy to factory owner, and turned imperfect factory seconds into the first outlet store, spawning outlet malls. He sold Dexter Shoe to Berkshire Hathaway for $433 million in an all-stock deal.
“And so that was kind of like one of his inventions. Anyways, he ends up selling the company to Berkshire Hathaway. So he sells it to Warren Buffett for $433 million. In an all-stock deal of Berkshire. And I think you added some notes here, but all I know is that later on, um, Warren Buffett apparently said like, you know, this was one of the worst investments I ever made.”
Story
Buffett: we set up Berkshire so we can never run out of money
Ramit recounts that at Berkshire's conference, Buffett and Munger said they structured the company so they can never run out of money, which Ramit finds more inspiring than squeezing out an extra 1.5% return at far higher risk.
“When I went to Omaha to see Warren Buffett at his conference, one of the things that he and Charlie Munger said was, we set up Berkshire so we can never run out of money.. And to me, that is way more inspirational than I eked out an extra 1.5% return at a much higher risk rate.”
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Munger on Musk: never underestimate the man who overestimates himself
Shaan relays Charlie Munger's take on Elon Musk: he may overestimate himself but when he's right he's right very big. Yet Munger says he'd never hire Musk for a Berkshire company — he wants the prudent person who understands his limitations over the delusional one who occasionally wins huge.
“never underestimate the man who overestimates himself. I think Elon Musk is peculiar in that he may overestimate himself, but he's not wrong all the time. And when he's right, he seems to be right very big.”