With the stock market hovering around a 12-year low, Warren Buffett is back on the hunt for U.S. acquisitions.The Berkshire Hathaway (NYSE: BRK.A) mogul told Bloomberg that the depressed U.S. market and lack of cash available to fund deals is making the domestic market attractive in a way that it hadn't been in years. "The way things are going, there's a lot of things that may be happening in the United States," he said.
Buffett has already made preferred stock and convertible bond deals with a number of distressed companies with strong long-term prospects, taking fat yields along with a chance to profit from turnarounds. Buffett also told Bloomberg that his GEICO business is doing well as cost-conscious consumers look for better deals on car insurance, but added that Berkshire's other consumer-oriented companies are flailing along with the broader economy.
"The change in the American consumer's behavior in the last six months is like nothing that's ever happened," Buffett said. "They won't go in our jewelry stores. They've got the money, but when Valentine's comes along, they think: 'I still love my wife, you know, but I'll just tell her this year."
Buffett makes no claims to being a market timer, and it would be a mistake to think that his announcement that he's on the prowl means that we've reached a bottom. It does mean, however, that he is bullish on the long-term outlook, and believes that there are a lot of attractive long-term opportunities out there. Long-term investors could do a lot worse than to follow him back into the stock market.
Meanwhile, Forbes reports that Buffett has fallen to number two on the billionaire list -- his net worth declined 40% to just $37 billion.
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