Over the past several months Berkshire Hathaway has been allocating funds to preferred stocks with at very good prices. The company has invested billions in preferred shares of companies like Goldman Sachs (GS: 162.73 0.00 0.00%), General Electric (GE: 13.92 0.00 0.00%), Tiffany’s (TIF: 31.49 0.00 0.00%), Harley Davidson (HOG: 22.70 0.00 0.00%) and Dow Chemical (DOW: 22.13 0.00 0.00%). Some of these deals deliver not only solid yields in the low double digits, but also give warrants which could provide solid capital gains if these stocks recover over the next few years.
What this filing does not show however is the fact that Buffett’s conglomerate “goofed on derivatives“. While there may be more buzz than actual news and the SEC issues have been resolved, it is interesting how Buffett talks one thing but then does exactly the opposite of what he preaches. He’s always held a view against derivatives, yet his company has always engaged in options selling, futures and insurance derivatives.
