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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerOvernight, Belgian newspaper De Standaard wrote that, based on its sources, Warren Buffett backs an InBev buy-out of Anheuser-Busch (NYSE: BUD).
Is it any wonder? BUD can try to greatly improve its earnings on its own. With 50% of the US beer market, that may be hard. It can hope that buying the piece of Mexican brewer Grupo Modelo that it does not already own will help profits. More likely it will increase debt or dilute current shareholder.
BUD's problem is that its shares may never see $60 again. They have risen above that on the InBev offer. A look at the company's long-term shock chart shows it has never been this high before.
If Buffett makes his backing of the InBev offer public, most of the BUD investors are likely to follow. He will have done all of them a favor.
Douglas A. McIntyre is an editor at 247wallst.com.
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