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Buffett: 'We Are Not Out of Problems Yet'

Investor looks to clean up on crisis, but is moving out of stocks

By Jason Farago, Newser Staff

Posted Sep 8, 2009 6:38 AM CDT

(Newser) – Even Warren Buffett had a bad financial crisis: The Omaha sage personally lost $25 billion in 2008, enough to put him behind Bill Gates on the worldwide rich list. But while many investors hunkered down as markets tanked, Buffett recalibrated, pouring billions into companies—Goldman Sachs, GE, BofA, Amex—that got federal bailouts and saw their stock prices soar. Buffett's conglomerate Berkshire Hathaway looks headed for a massive payday, reports the New York Times—enough to cement his reputation as the best investor of all time.

“He put a ton of capital to work,” one analyst tells the Times. “The crisis gave him the ability to put one last and lasting impression on Berkshire Hathaway." Still, Buffett tells the Times that "we are not out of problems yet." By the end of the second quarter, Berkshire was selling more stock than it was buying and moving into corporate and government debt. Buffett's value-oriented approach to buying hasn't changed: "If it’s going to keep me awake at night, I am not going to go there."

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Warren Buffett, CEO of Berkshire Hathaway, speaks to a reporter before the annual Berkshire Hathaway shareholders meeting in Omaha, Neb. (AP Photo/Nati Harnik, file)

Warren Buffett, CEO of Berkshire Hathaway, right, and Charlie Munger, his vice chairman, during the annual Berkshire Hathaway shareholders meeting in Omaha, Neb. (AP Photo/Nati Harnik, file)

Berkshire Hathaway CEO Warren Buffett plays bridge with shareholders at the annual Berkshire Hathaway shareholders meeting in Omaha, Neb., Sunday, May 3, 2009. (AP Photo/Nati Harnik)

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It has been an incredibly interesting period. Just the drama. Watching the movie has been fun, and occasionally participating has been fun too, though not in what it has done to people’s lives. - Warren Buffett

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Buffett: 'We Are Not Out of Problems Yet'