2. Buffett's investment company will not sell its shares even if the share price falls seriously;
3. Buffett doesn't care about the stock price, and even some stock prices will buy at the peak before starting;
4. Buffett will not buy stocks with a price-earnings ratio of more than 20%;
5. Buffett will also acquire non-listed companies;
6. Buffett will set very complicated acquisition conditions.
The above six points are Buffett's investment style.
Hundreds of billions of cash have come in handy again! In the troubled times of the global market, Buffett, who is good at exploiting market turmoil, keeps looking for opportunities: only this time it is not crude oil, but the insurance industry that Buffett is familiar with.
Berkshire Hathaway said before the US stock market opened on Monday that it agreed to buy insurance company Alleghany for11600 million US dollars (about 73.7 billion RMB) in cash, totaling 848.02 US dollars per share. Berkshire Group said that the transaction is expected to be completed in the fourth quarter of this year.
This is the biggest M&A transaction since Berkshire acquired precision castings for $37.2 billion in 20 16 years. Berkshire currently holds nearly $654.38+05 billion in cash, but Buffett has been difficult to find attractive investment targets and has been buying back shares in recent years. It was not until the beginning of this month that he began to increase his stake in western oil companies.
As of press time, Alleghany rose 36% compared with the previous closing price of $676.75.
Buffett zooms in! Bought more than 70 billion in one hand!
So, what does Buffett see in this insurance company?
Judging from the valuation, the transaction is equivalent to the book value of Alleghany 1.26 times, which is 25% higher than the recent closing price, in line with Buffett's consistent principle of low valuation of value investment.
In addition, Buffett has a special relationship with this company: in a statement, he said: Berkshire will be the perfect permanent home of Allegheny, and he has been paying close attention to this company for 60 years.
Alleghany, the current CEO, worked in an insurance company owned by Berkshire's General Motors for eight years and took office in June+10 this year. This merger is reminiscent of Microsoft's acquisition of Blizzard, when the CEO of Blizzard worked for Microsoft for more than 20 years.
From the business point of view, Allegheny mainly conducts business through three departments-insurance, reinsurance and Allegheny Capital.