FT.com / Companies / Financial services - Buffett bets $2.1bn on utility sector
When I read the news about Berkshire buying into Junk bonds, I though what value does Buffett sees in junk bonds that I missed. I have written before that getting into junk bonds can be a costly mistake right now. I though to myself, did i miss something in my analysis. Then came the CNBC news report that the investment is a bet on utilities and not the Junk bond market. Remember that Berkshire held XTU in 2004 so Buffett knows the risk and potential of the business so the call is akin into buying shares in XTU rather than junk bonds.
Also Buffett reaffirmed that these bonds give a new meaning to the world junk.
I feel relived a bit to have a confirmation to my line of thought, but that does not say much about my investing ability.
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