Tuesday, January 19, 2010

Alice Schroeder on Buffett and Kraft

What really jumps out at me is that Buffett arranged something like one of his classic "no-lose deals." These are deals in which Buffett can't lose no matter how events turn out. Buffett spends a lot of time finding ways to reduce risk, and it's worth studying the myriad techniques he uses. Here the only scenario in which Buffett could look bad is if he had killed the deal over price, and it turned out to be a home run for someone like Hershey. People would say that he made Rosenfeld drink the Gatorade.

Continue Reading