Never Doubt old experience investors.Another Example of experience is needed in the investing game.
Warren Buffett has once again proven the naysayers wrong.
Some thought he was crazy to, essentially, bail out Goldman to the tune of $5 billion exactly one year ago.
Yet today the $5 billion in preferred shares he received looks safe and sound, while earning enviable 10% dividends.
Still, the real beauty of the deal was that he also received the option to buy $5 billion of Goldman stock for $115 per share at any time over the next five years, via warrants.
That’s the part where, today, he’s just laughing. With Goldman at $186, these warrants are worth about $3.1 billion already. Not bad for a $5 billion dollar investment. Before considering any dividends, that equates to a 62% one-year return.
Even when Goldman shares broke below $48 last year, and criticism of his skills intensified, Mr. Buffett was still sitting pretty since the shares would have had to hit zero before his preferred stock’s principal was even remotely threatened.
Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.
Readers also follow Kyith to learn how to plan well for Financial Security and Financial Independence.
Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Fee-only Wealth Advisory firm Providend.
You can view Kyith's current portfolio here, which uses his Free Google Stock Portfolio Tracker.
His investment broker of choice is Interactive Brokers, which allows him to invest in securities from different exchanges all over the world, at very low commission rates, without custodian fees, near spot currency rates.
You can read more about Kyith here.
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