Salient to Investors:

  • Few businesses are large enough to merit Warren Buffett’s attention. Berkshire Hathaway spent a third of the total from a year earlier on equities in half1 2014, while sales of stock more than doubled. Buffett dislikes paying a dividend and rarely buys back shares.
  • David Rolfe at Wedgewood Partners said Buffett’s list of ‘fat-pitch’ companies is not large and Warren – the best market timer he ever saw – won’t spend for the sake of spending.
  • John Fox at Fenimore Asset Mgmt said it is more difficult, across the board, to find cheap assets.
  • Preqin Ltd said private-equity firms were sitting on a record $1.16 trillion of capital as of July.
  • David Fann at TorreyCove Capital Partners said private equity has record levels of capital to spend.
  • PitchBook Data said transactions of more than $250 million were valued at 10.2 x EBITDA in Q1 2014 versus 9.8 x EBITDA in the prior period. Bain & Co. say a reasonable LBO price is under 8 x EBITDA.

Read the full article at

Click here  to receive free and immediate email alerts of the latest forecasts.