Buffett's Bottom-Fishing For Fun and Profit

Last Updated Oct 2, 2008 12:14 PM EDT

Warren Buffett at TED ConferenceIs it too soon for bottom fishing? Not if you're Warren Buffett.

The Sage of Omaha, through his Berkshire Hathaway Inc. firm, may invest between $3 billion and $6 billion in General Electric Co. and perhaps $2 billion in Goldman Sachs Group Inc.
As usual, Buffett is pouncing when prices are low for properties he believes are good bets. GE and Goldman seem to fit that bill since GE has remained profitable during the turmoil and Goldman so far has positioned itself far more successfully than its sister (and former) competitors.

According to his deal with GE, Buffett gets $3 billion in preferred stock paying $300 million in annual dividends and gets rights to buy $3 billion in common stock at $22.25 a share.

Not to get ahead of ourselves, but is this the silver lining at last? The U.S. Senate did easily approve a modified version of the $700 billion bailout that ups deposit insurance guarantees and offers other "common man" goodies. The House of Representatives is now under much pressure to OK the package on Friday.

We'll know in the next few days.

(Image by TEDizen via Flickr, CC 2.0)