Buffett’s Due Diligence? There Was None
How did Warren Buffett do due diligence on Goldman Sachs?
By not doing any.
Lloyd Blankfein, Goldman’s chief executive, told the story of Buffett’s “due diligence” before investing $5 billion in the New York bank holding company on Sept. 23. Blankfein said as they were preparing for the investment, he steeled himself to call Buffett. Pointing out that he is an attorney, Blankfein said he mentally prepared to answer any due-diligence questions Buffett might have.
“What would you like to know?” Blankfein said he asked Buffett.
“If I wanted to know something, I wouldn’t do it,” Blankfein said Buffett told him.
Add Goldman CFO David A. Viniar, “Warren’s due diligence was his 77 years.”
As of yesterday, Goldman’s common stock cost about 39% less than Buffett’s preferred shares.
