Is Buffett planning more acquisitions?
He said he was in talks to buy a $15 billion company, but said it’s unlikely to happen and that he’s still in those talks. He also said he’ll be looking overseas for more companies like Iscar. He said U.S. companies are generally too high priced. Remember, with the size of Berkshire, he needs a big acquisition to move the needle, or boost the company’s earnings. [Berkshire] has the unique problem of generating $100 million in cash flow every week, on average. This is worlds away from the cash flow he had 10 years ago. It’s the price of success. This means he has to find acquisitions. He’s trying to find 10% to 15% returns so he’s been sitting on the cash — that’s the reason the share price has been held back. Market conditions have taken away his ability to get high rates of return on cash flow. How are you putting money to work these days? We look at the markets very much the way Buffett does. A lot of assets have reached high prices. This applies to oil, natural gas, commodities, sm
