Here’s a great video from the WSJ in which Warren Buffett discusses the 2008 financial crisis, how he was approached by both Lehman Brothers and AIG when they asked for help, and why he turned them down. Buffett recalls being contacted by AIG saying:
On Friday, preceding the weekend, I got a call from AIG. AIG was going to run out of money the following week. They’d done some very foolish things in their financial products operation. I looked at this and finally decided there’s no way I could come up with a cash offer that could be done in the following week, or probably the following month. So I called them back late that night. I wanted to convey to them properly that I just wasn’t a prospect.
There was nothing that could be done. AIG was just going to run out of money… Big Time!… in the next day or two… and Lehman was going to go under unless something was happening that I didn’t know about.
One of the lessons from the 2008 experience was the fact that every company in the United States was a domino. And those dominos where placed right next to each other. So when they started toppling, everything was inline, and they were very very close to it.
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