Is Goldman Sachs another Salomon for Warren Buffett?
Posted on 27 April 2010 with no comments from readers
Anybody who has read the excellent recent biography of the world’s greatest investor, Warren Buffett (see the book recommendations section on this website), must be concerned that buying into Goldman Sachs at the height of the global financial crisis repeated his biggest ever mistake of investing in Salomon Brothers in the late 1980s.
Now that Goldman Sachs is being sued by the Securities and Exchange Commission the integrity of this Wall Street legend is under the microscope, and it risks becoming everybody’s kicking ball for what went wrong in the financial markets, probably with some justification as it was the largest player.
In the late 80s Buffett came to the rescue of another financial titan of its time, Salomon Brothers. But the opportunity to make a great return by buying its stock while others were fearful and the stock cheap proved to be a poisoned chalice indeed.
In the end Warren Buffett ended up running Salomon himself and only just managed to avoid losing his shirt. Could it be that the curse of Wall Street has once again returned to haunt Buffett?
Did Buffett ‘fall in love’ with Goldman Sachs the same way his biographer says he fell for Salomon Brothers? Wall Street can be highly seductive and particularly rolls out the red carpet for its biggest clients. Did Goldman finally part Buffett from his money just at the wrong moment?
Certainly some of Buffett’s closest confidants seem to think so as this brief video clip demonstrates:
