In his 2006 annual report Buffett said "the days of lush profits from our newspaper are over." Buffett, whose Berkshire Hathaway will now own 81 companies after this purchase for $150 million.
Buffett said "I wouldn't do this if I thought this was doomed to some sort of extinction," adding that the World-Herald "delivers solid profits and is one of the best-run newspapers in America."
The deal was perhaps driven by sentiment from Buffett. The investor said the company will make merely acceptable returns. People asked why he did not purchase the papers from his personal account but he said permanence of the company was handled better under Berkshire. Which should make shareholders wonder what was the reason for the purchase. Though Buffett's record allows him to make these kind of decisions.
The deal was perhaps driven by sentiment from Buffett. The investor said the company will make merely acceptable returns. People asked why he did not purchase the papers from his personal account but he said permanence of the company was handled better under Berkshire. Which should make shareholders wonder what was the reason for the purchase. Though Buffett's record allows him to make these kind of decisions.
It seems like a sentimental purchase to me as well. When you think of how much capital Berkshire manages, what's $150 million? There are things more important than money and Buffet knows this.
ReplyDeleteYa, I just don't like the purchase out of Berkshire's wallet. But I guess it makes decent returns so he could do the right thing.
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