No. of Recommendations: 20
Context for my comment was “in times of distress”.
Has he gone in big during times of distress?
The BNSF deal was struck in the fall of '09, coming out of the Great Financial Crisis. He served as a bank of last resort during the earlier part of that period, providing capital at terms advantageous to Berkshire when credit markets were largely frozen. He famously called Treasury Secretary Hank Paulson to recommend the government funnel money directly into banks rather than buying their assets. Paulson took his advice, which is widely credited for avoiding a worse crisis. He played a big enough role in this time of distress to be portrayed by Ed Asner in the movie version of Andrew Ross Sorkin's book Too Big To Fail. His transactions were good for Berkshire; his advice was good for the country. Even if you count only the railroad purchase coming out of this period, he went in pretty big.
"Times of distress" is a subjective term, but I assume in this context it is a 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 to keep the economy running, but for a Depression baby (born 1930) his frame of reference was understandable.
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. Today Berkshire holds a 26% stake in OXY common stock worth about $14 billion, mostly if not entirely through open-market purchases, and some $8-9 billion worth of preferred shares that Occidental has been recently buying back at a 10% premium owing to their 8% yield. So he went in pretty big on this particular time of distress.
