Subject: Re: Rational Walk on retained earnings test
That is a pretty good summary of the opportunities in the last 15 years. And I think that you could say that the answer to "Has he gone in big during times of distress?" is a pretty resounding no.


The BNSF deal was struck in the fall of '09, coming out of the Great Financial Crisis.

Yes, well out of the crisis, far enough for the stock of BNSF to have already redoubled before the purchase. When Buffett announced the deal, the crisis was already pretty much dead and buried.


He famously called Treasury Secretary Hank Paulson to recommend the government funnel money directly into banks...

Yes, this was helpful for the USA, but not helpful for Berkshire particularly. Going big, in this context, would have been buying bank shares. Buffett has said that in investing, there are no called strikes, but this was definitely a pitch in the strike zone that could have been swung at, and wasn't.


...complaint about his inaction during the Covid-related crash in the spring of 2020, which he explained quite thoroughly in his Great Depression soliloquy at the virtual annual meeting that May. His fears proved unfounded, mostly because of unprecedented government intervention...

Yes, that was another sweet pitch. Is COVID a super-big deal, enough to send us into a depression, or not? Buffett clearly thought it might be, and sat on his hands, and even sold the airline shares, at about their lowest point. It turns out it was not the beginning of a depression, either because of government intervention (not my view) or because the pandemic was way over-hyped to begin with, and we didn't have a depression DESPITE the government-induced disruption. In either case, no swing, and no home run.


The spring of 2019 was a time of distress for Occidental Petroleum, when it overextended itself outbidding Chevron for Anadarko. Mr. Buffett stepped in on short notice, as he had during the GFC, to provide $10 billion of capital, receiving preferred shares and common stock warrants.

This was a good deal, but it was small, and not very risky. When your market cap is $500b and you invest $10b in preferred shares, you are not going to change the prospects of your conglomerate very much, one way or the other. If you really have contrarian conviction about oil and gas, you invest in a big way when oil is sub-$40 (2015-2016, most of 2020), not in 2019 when oil is at $60 and the economy is doing fine, and you buy shares, not bonds with conversion options.


I'm not saying I did any better - crises are scary, and most people's instinct is to keep their hands away from the falling cutlery. But it turns out that Buffett is just like most people, in that sense, and the idea of being greedy when others are fearful is not something he has talked about, but not put into practice, at least not recently.

dtb