Daily Beam Blog

During the crisis, Buffett’s share’s will be in the shape of preferred shares (earning only interest at 6%) which are higher up on the capital ladder but better protected than owning the common stock advice), but not stock ownership in the company until he exercises the rights (when the crisis has passed) to buy the shares at a price of $7.14 only. So during the crisis Buffett is protected by buying only preferred shares and being well-protected and once the financial crisis passes and the stock will have probaly doubled, he will exercise the rights for the common stock — and make alot of money, whilst being protected during the crisis and having theright to buy the shares at $7.14. Quite a shrewd businessman! And he pays a very low tax rate on his capital gains!