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

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.

Comments

[BeerLover]

10:13 AM on 04/13/2012

If we only had more Buffets in our world. Smart and sensible...... seem to truly be a thing of the past.

[Regal Royal]

09:27 AM on 04/13/2012

I see a lot of people being critical of Buffett in the comments. I can promise you that if everyone in the City has the morals, investment attitude and brains of Buffett we would not be in any crisis now.

People like Buffett, an old school buy and hold investor, are truely job creators. The chase for the quick buck merchants at the expense of everyone else, including ones clients, is exact opposite of Mr Buffett and are the problem in finance.

[scndchnchtr]

11:36 AM on 04/13/2012

Yep, I man that covers his investments with a raise in Insurance premiums. But, I do like the man. A genius when it came to looking for a way to upgrade the equipment at a textile mill he bought. Instead of going to a bank he bought an insurance company and used the insurance premiums to do it. Genius, I tell you pure genius. One could say he start the trend of companies like GMAC and GE having a Insurance division

[Torn Pec]

08:43 AM on 04/13/2012

Its easy to strike up some wins when you do not pay 1 BILLION DOLLARS IN TAXES.

Buffet Rule: Everyone else pays their Fair Share....... except me.

[BeerLover]

10:14 AM on 04/13/2012

And you get this from? Oh, oh.....you're confusing Buffet....with Romney. Yeah, they're spelled a little differently.

[Torn Pec]

11:13 AM on 04/13/2012

It is funny how insulated you are from all of the news not just the news that makes conservatives look bad.

How silly!!!

whahahahahahahahah

[schatsie]

07:53 AM on 04/13/2012

You forgot to mention Buffett's shady dealings with Moody's, one of our crap ratings agencies and also Wells Fargo......

[whitemale08]

03:04 AM on 04/13/2012

Hahaaaa!

This article is so full-of-it, it's hard to begin where the BS starts.

It's already been proven that any so-called "pay back" by Goldman Sachs was nothing more then money from the Federal Reserve or another pool of bailout funds from taxpayers.

That's what Buffet knew...that the government was going to bail out Goldman Sachs.

There's nothing 'clever' about Buffet or any reason to marvel at this con-man.

He himself said that if your profits are double more then the stated inflation rate by the Fed you're in a sense 'stealing'.

You can safely assume that all of his billions in paper-fortunes was made exactly the way he just said, but, for the American SUCKER, it doesn't matter because they like the feeling of being bamboozled and SUCKERED to death; especially the American taxpayer.

PS - the financial crisis that started between 2007 and 2008 never stopped, as a matter-of-fact, it's ongoing and what's happening in Europe is a reminder of that.

Just admit that the bailouts failed and that you were wrong and don't try to be slick and say "the crisis is over but has the potential to come back" - the crisis never ended in the first place.

[RobJames]

04:17 AM on 04/13/2012

The crisis actually started when Alan Greenspan refused to raise interest rates in 03/04 before housing prices got out of control. The reason we are not in the same boat as Europe is because of the bailout.

[schatsie]

07:54 AM on 04/13/2012

Silly you, we have much more debt than the Euros and now the banks are refusing to Refinance because we are alll underwater.....Try it and find out....So we are stuck with interest rates that are atrocious and a pitiful tax writeoff......

[opus1dog]

07:33 AM on 04/13/2012

Let's see YOU go out and create thousands of jobs. Let's see you turn profits in companies that everyone else gave up on. You sound like a frustrated worker-bee who is angry that someone knows how to run a business and overacheives the DOW, year after year.

[schatsie]

07:55 AM on 04/13/2012

Good Lord, you try starting out with $500,000 in your pocket when you are 22 years old....

[blackranger]

09:50 AM on 04/13/2012

Buffet also keeps his money in US banks and invests in US companies. He does not live an extravagant lifestyle, works because that is what he really loves to do. Is he a hero, no, he is just an American who works hard and plays to win. I don't see him running for office to gain more power, his power comes from his abilities at his job. I have to have some respect for him if, for no other reason, he is solid about what he believes.

[Michigan Joe]

11:25 PM on 04/12/2012

Devouring other peoples money is despicable. Goldman is a vulturistic model of Capitalism at is it's worst hour. Buffet calls their bluff and wins and the far right vomits. It's good day for America.

[ImaNichols]

01:01 AM on 04/13/2012

I was going to comment but then I saw yours. Love it! Couldn't agree more.

[schatsie]

07:56 AM on 04/13/2012

We start taxing interest income at 50% and a wealth tax of 2% and see how he disappears......

[blackranger]

09:52 AM on 04/13/2012

Do people actually forget that we had a vibrant functioning economy and a far stronger middle class when the tax structure made the wealthy pay a much higher percentage on their taxes?

[Django48]

07:55 PM on 04/12/2012

When Goldman loses, America wins.

[mistykane]

08:29 PM on 04/12/2012

America loses when U.S. business lose. You should know that. Are you rooting for other countries businesses to be successful?

[Django48]

08:37 PM on 04/12/2012

Global banking behemoths like Goldman don't owe their allegiances to any country. Only to their own greed. Goldman is like an infestation of termites eating away at the foundations of the world economy.

[French Toast]

12:24 AM on 04/13/2012

False dichotomy fallacy. America doesn't win anything when Goldman extracts money without giving any value in return.

Learn to think at an adult level.

[stevenurke]

10:43 PM on 04/12/2012

Normally I would agree with you, but this time is different. So now Goldman lost a boat load of money and was able to deduct it on their tax return saving more 1%er's income taxes. Buffett already has a $37 BILLION deferred tax liability on BRK's books so he will just add another billion to it and owe the US Government $38 BILLION next year, but he never pays it and when the IRS tries to collect he sues and ties it up for 10 years in court. So NO we all lost this time.

[K August]

05:24 AM on 04/13/2012

"when the IRS tries to collect he sues"\

You are confusing one business BH owns with the whole Berkshire Hathaway company.

[BigBearcatBill]

07:44 PM on 04/12/2012

You know when someone as rich as Buffet basically says hey my taxes should be different and higher then I have a feeling he has very little luggage that could burn him in his transactions history and knowledge of any scams or illegal activities, all the way to environmental pollution, proper permitting, keeping spotless records...he probably has all requirements taken care of for all regulations....do you think all the billionaires would be that confident?

[schatsie]

08:01 AM on 04/13/2012

Are you kidding me, read Free Lunch and Lowenstiens book about Warren....the man started out with a fortune of about $500,000 in our dollars when he was in his 20s and never had a real job, just spent his time investing.......NO REAL JOB and NO income taxes because it was ALL Capital Gains.....

[henrysdream]

07:21 PM on 04/12/2012

Warren Who??? Warren, by virtue of his incestuous relationship with GS is irrelevant, very rich but irrelevant.

[jkkFL]

09:32 PM on 04/12/2012

You probably think Romney made his money by working hard, too!

[stevenurke]

10:43 PM on 04/12/2012

What did this article have to do with the 5 Romney boys?

[iflew]

07:10 PM on 04/12/2012

Warren and Jimmy Buffett. Two winners. Warren made the money score, Jimmy got a relaxed looking life style with his music scores.

[84BADGER]

10:40 PM on 04/12/2012

http://media.caglecartoons.com/media/cartoons/77/2011/08/17/96969_600.jpg

[MichaelMcKLA]

06:54 PM on 04/12/2012

One of his recent buys was, to the surprise of many, a railroad:

http://www.huffingtonpost.com/2009/11/03/buffetts-berkshire-burlin_n_343418.html

You rock, dude.

[jkkFL]

09:33 PM on 04/12/2012

f/f

[K August]

05:28 AM on 04/13/2012

Maybe that's why Romney was saying he wanted to end railroad subsidies?....even though moving freight by railway is energy efficient and costs far less than trucking everything.

[Smeagel4T]

06:33 PM on 04/12/2012

Buffett's an investor of the old traditional school. Goldman and most of the rest of Wall Street needs to relocated to Las Vegas and be done with it. Take Wall Street Mitt with you. The Wall Street gamblers have been gutting America to reap in their huge short term profits for far too long now. America was built on the backs of hard working Main Street American workers, not Wall Street leeches.

[84BADGER]

10:43 PM on 04/12/2012

Wait a minute, I live in Vegas. First you try to dump the country's nuclear waste here (Yucca Mtn.) and now the Wall St. waste? We ain't no dumping ground, at least literally.

[BeerLover]

10:21 AM on 04/13/2012

I agree. Dump 'em in Texas!

[jistinnkees]

06:31 PM on 04/12/2012

Loaned 5 billion and got an additional 1.6 billion in three years, that's better than a loan shark could hope for. Some one do the math for me but that doesn't smell right.

[hlmorin]

07:15 PM on 04/12/2012

32% return in 3 yrs. roughly 10% per year, this is about what Warren expects as a return on a loan. More a skilled businessman's return than a loanshark, although I'd like to consistently get 10%.

[jistinnkees]

07:39 PM on 04/12/2012

Hey thanks, but we get 4% on our invest ment. And the banks did borrow at zero. Buffet probably toke a loan of 5 billion with o interest at the time then made 1.6 billion. This had to be a government constructed deal. What say you?

[Vyslichajici]

09:43 PM on 04/12/2012

no it is not 10 percent. it is just a skosh over five percent per year.

[SueZbell]

06:25 PM on 04/12/2012

WELL DESERVED bad press.

[bleedingheartliberal218]

06:10 PM on 04/12/2012

Warren Buffett is a Savvy Businessman.

Lloyd Blankfein is a thief and liar who should be doing "GOD's work" on the worldwide lifelong prison tour with his fellow thieving Wall Street billionaire buddies..

I wish Obama and Holder knew the difference.

[yesssman]

07:29 PM on 04/12/2012

I know a lot of thieves and liars who would resent being classified with Lloyd Blankfein................. :-)