Warren Buffett purchases his native newspaper Omaha World-Herald

Warren Buffett has again been seen shopping this week. The world’s second richest person recently bought one more company to his personal portfolio.

The newest enterprise, now under his leadership, is newspaper giant, Omaha World-Herald. The Omaha’s Oracle seems to have a change of mind in recent years.

Earlier this month, Buffett purchased a huge stake in IBM, one belonging to the same dotcom industry, he disdainfully despised as a business in late 90s.

The reason why this recent purchase has caught the media attention is that Mr. Buffett was quoted at several occasions that the newspaper industry will see a dip in foreseeable future.

On one hand, the predictions had been correct since 2008, when the steep slope in paper industry started a never-ending slide down the road. Although a flat plummet is still to be seen, the losses incurred in recent times are not far from the grid.

The main reason, as described by Buffett, is the boom in blogs and e-news portals. The invention of contemporary tablets has not been a help either. Now main stream newspaper companies like the New York Times Co. and Washington Post Co. are forced to develop
applications for Android OS and iOS.

The Omaha World-Herald under new management, or at least new leadership, is a good sign for a sinking company though. World-Herald is no small-scale newspaper either, its readership is spread all over the US and countries like Canada and Mexico.

Now the paper can work liberally in a new environment whilst the money matter will be left to Buffett wizardry, which is renowned for turning lead into gold.

The World-Herald stock position in the market was below the satisfactory level and according to Buffett chronicler Jeff Matthews it “probably cost next to nothing and will deliver solid profits.”

Buffett’s business dogma, be fearful when others are greedy and greedy when others are fearful, might actually bring profits to a tumbling company and bring new job opportunities when he waves his wand and casts his business spell.

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Posted by Usman Khalid on Dec 1 2011. Filed under Business, USA. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry