Investor Warren Buffett has recently gone on a stock spending spree, purchasing some $20 billion in stocks in the past quarter.
Buffett’s company, Berkshire Hathaway (BRKA), spent the billions on these stocks in the three months preceding Sept. 30, which also was the worst quarter for the United States since the financial crisis, according to CNN.
Purchases included $8.7 billion of the specialty chemical company Lubrizol Corp., which was all of the company’s outstanding shares, $5 billion in preferred shares and warrants of Bank of America, and $6.9 billion in general U.S. Stocks.
The high spending quarter for Buffett came after spending just $3.6 billion the second quarter and less than $1 billion in the first quarter. Buffett is known for his tendency to look for bargains, which likely led to his high spending this quarter, according to CNN.
Buffett, during an August 15 interview with PBS show host Charlie Rose, said that his company’s highest spending day was the day after the U.S. credit downgrade.
“It’s like buying on sale,” Buffett added during the interview.
Business students seem to agree that his strategy is based in sound economic principles.
“I mean, you can never really tell what is going to happen, but it makes sense to buy when the stocks are low. Even if we weren’t in a pretty serious economic crisis right now, buying low is always a good strategy for investors,” said junior economics major Rob Zito.
Others also believe that stock purchases in general will help to lead our economy in the right direction.
“Part of the reason our economy is doing so poorly right now is because no one trusts our companies enough to invest in them right now. Really wealthy people like Buffett can help restore this trust in American companies by invest large amounts of money,” said junior business student Sean Krysic.
Buffett has been publicly campaigning for the richest men in the country, like himself, to work together to find ways to ease American economic woes. Most notably, he has proposed increasing taxes on the wealthy or those with large fortunes that are represented in investments.