August 21, 2017

On Monday, the S&P 500 was up 0.1% while Toronto was unchanged.

CRH Medical was down 4.3%. There were no other particularly noteworthjy moves in the stocks on our list.

News reports today indicate that Warren Buffett / Berkshire “lost out” in its bid to acquire a large utility out of bankruptcy of the parent for some $9 billion. I am not sure Buffett would consider it a loss. He does not engage in bidding wars. Berkshire likely spent very little money or even time preparing their bid because the value that they would pay is very obvious to them from the financial statements. They never spend much if anything on consultants when they make a purchase offer. Buffett has cemented his reputation here for not upping his original offer. Companies learn that if you get an offer from Berkshire it is a take-or-leave it deal. He does not negotiate up. Usually it is the company that wishes to sell to Berkshire that must name a price and Buffett usually takes it or leaves it. Buffett is perfectly happy to pass on deals that are too expensive. He does not wish to suffer from “winners curse”.

And, oh yes, it seems Berkshire will get a $270 million breakup fee from the utility. For the financial press to view this as a loss to Berkshire merely illustrates how much smarter Buffett is than the financial press.