Time is making Warren Buffett's investment in Goldman Sachs Group Inc
When Buffett's insurance and investment company Berkshire Hathaway Inc
Soon after, those warrants fell out of the money, as Goldman shares tumbled with the rest of the financial sector. But they have reversed course, and on Tuesday rose above $115 for the first time since October 23.
It shows that long-term has a place in investing, said Michael Yoshikami, president of YCMNET Advisors in Walnut Creek, California, which owns Berkshire stock. Frankly, the strike price was never the thesis for the investment, but was rather an add-on for a 10 percent fixed-income investment.
Shares of Goldman have more than doubled since hitting a record low of $47.44 last November 21, with about two-thirds of the gain coming since March 9, according to Reuters data.
Goldman is eyeing the repayment of the $10 billion it took from the government's Troubled Asset Relief Program, and has said it would like to repay it this year, despite a $2.12 billion fourth-quarter loss.
The New York Times said Goldman has tentatively decided to repay the TARP early and hopes to do so within a month, citing people involved in the process. That report appeared well informed, according to a person familiar with the matter who was not authorized to speak. Goldman declined to comment.
Buffett favors long-term investments, and has downplayed criticism for the timing of his Goldman investment and others.
Warrants attached to a similar $3 billion preferred stock investment by Berkshire last October in General Electric Co
I got 10 percent preferred that I don't think I could get now, Buffett said on CNBC television on March 9. That was a time when both of those companies wanted money immediately and we could structure a preferred that was attractive. But the fact that business is going to get worse does not mean you should wait to buy stocks.
In afternoon trading, Goldman shares were up $1.76, or 1.6 percent, at $113.69, after earlier rising to $115.64. Berkshire's Class A shares were down $50 at $89,950.
(Reporting by Jonathan Stempel, editing by Matthew Lewis)