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Warren Buffett Wins, Goldman Sachs Loses In Big Loan Sell-Off

The Huffington Post  |  By Posted: 04/12/2012 12:14 pm Updated: 04/12/2012 5:33 pm

Warrenlloyd

Warren Buffett always seems to be one step ahead.

Buffett, the billionaire CEO of Berkshire Hathaway, has recently come out looking like a major winner in Goldman Sachs' big loan sell-off of last year, according to The Wall Street Journal. Among the debts that Goldman unloaded in 2011 was about $85 million of loans in Lee Enterprises, an Iowa-based newspaper publisher.

If the reports are accurate, then the Lee loans represent another sneaky payoff for Buffett, who once famously counseled that investors should "try to be fearful when others are greedy and greedy only when others are fearful."

Goldman took about a $13 million loss on that sale, according to the WSJ. And the buyer in that sale, reportedly a unit of Berkshire Hathaway, has since cleaned up nicely.

Buffett has a history of making surprising decisions that work out in the end, from his 1964 bet on a scandal-tarnished American Express to his 1988 investment in a lackluster Coca-Cola. The jury's still out on his insistence, in the past year, that America's richest citizens should pay a higher tax rate than they currently do. The crusade has won over President Obama, who has made the so-called "Buffett rule" a centerpiece of his re-election campaign.

Buffett also invested $5 billion in Goldman Sachs itself during the credit crisis of 2008, a time when most investors were giving securities firms a wide berth. That move, too, turned out well for the so-called Oracle of Omaha, as Goldman paid back the loan within three years and sent an additional $1.6 billion to Buffett in dividends.

Goldman, meanwhile, has been struggling of late, losing more revenue than any other investment bank in 2011 and weathering a tsunami of bad press following a damning New York Times editorial written by a departing employee.

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