I am quoted in a Bloomberg article on Berkshire Hathaway’s increased investment in Chicago Bridge & Iron during the second quarter of 2014:
“Berkshire Hathaway Inc. is betting the best response to a short seller is to go long.
As Chicago Bridge & Iron Co. plunged 22 percent in the second quarter, Berkshire snapped up additional shares of the engineering-and-construction firm. The purchase came days after a short seller drove down the stock price by saying that CB&I had artificially inflated earnings.
The slump was rare for a stock selected by one of Chairman Warren Buffett’s deputies at Omaha, Nebraska-based Berkshire. The backup portfolio managers, Todd Combs and Ted Weschler, beat the market and their boss’s picks in 2012 and 2013. Adding to the CB&I bet follows a strategy that Buffett has used for decades: identifying companies based on long-term prospects and sticking with them through declines.
“This is behavior that I would expect” from Combs or Weschler, said David Kass, a professor at the University of Maryland’s Robert H. Smith School of business who has taken groups of students to meet the Berkshire chairman. “It’s consistent with Warren Buffett’s own thinking.”
The entire article is available at: