The One Time Betting Against Buffett Makes All the Sense in the World


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The One Time Betting Against Buffett Makes All the Sense in the World

BIOTECH, HEALTHCARE, WARREN BUFFETT
 

Could this be Warren Buffett’s Valentine’s Day Massacre?

On February 14, Berkshire Hathaway filed a 13-F form with the SEC, updating the market on its quarterly holdings.

It showed a surprising fourth-quarter acquisition – Israel’s Teva Pharmaceutical Industries, Ltd. (NYSE: TEVA). Berkshire bought 18.9 million shares for $358 million. Following the stock’s inevitable “Buffett Bounce,” the stake is now worth closer to $400 million. It makes Berkshire the ninth-largest shareholder in Teva (1.9%).

First of all, it’s surprising because Buffett has traditionally avoided biotech companies.

Second – and more significantly – Teva is a train wreck. Buffett loves a bargain, but the company has some big problems…

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