Buffett goes shopping again

After spending $5 billion on Goldman Sachs last week, perhaps the world's best known investor found $3 billion for GE preferred shares. In doing this, Mr. Buffett is certainly strongly sending a very strong message about great value investments available in the market. Also, you need to add warrants enabling him to purchase for $3 billion of General Electric stock at $22.25.

On CNBC, Warren Buffett said: “Frankly, these markets are offering opportunities that weren't available six months or a year ago. So we're putting money to work.”

Considering Mr. Buffett's track record, maybe it's time to look at what the "experts" are doing (buying) and stop following the panicking herd (selling).

Warren Buffett invests $5 billions in Goldman Sachs

Warren Buffett, the ultimate "value investor", has stepped in the financial sector of the stock market big time. Indeed, Buffett's Berkshire Hathaway bought $5 billions of Goldman Sachs perpetual preferred stock and has 5-year warrants to buy $5 billions of common stock at $115 per share.

Considering that Buffett only invests in "what he knows" (see my last blog for more on that), this news is a big vote of confidence for Goldman. In a way it indicates that the selloff might have been overdone and value has emerged. That can be associated with the panic and overeaction that I have talked about in the past.

Buffett is not a market timer so this doesn't necesseraly signal the bottom but it certainly is an encouraging sign. I suggest readers of this Stock Market Investment Partner blog imitate Warren Buffett: stay calm, analyze and invest in what you know once you discover value.