From the March 2009 issue of Boomer Market Advisor • Subscribe!

Back to Buffett

Talk about extreme value investing. At least he practices what he preaches. Despite the kick to the groin he's taken in his financial stock portfolio (Goldman Sachs and American Express, among others), Warren Buffett isn't backing away. The Financial Times reports the Oracle of Omaha will invest an additional $2.6 billion in Swiss Re. The deal will pay Buffett hefty annual interest and give him the right to raise his stake at an attractive price. The paper quotes Fabrizio Croce of Kepler Capital Markets:

"While the conditions set by Berkshire are outrageously bad for Swiss Re, the company and shareholders will probably have to accept them as there is no alternative."

One of the largest European insurance conglomerates with no choice but to accept terms that are a slight grade above usury. Strange times indeed.

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