How Buffett Survived the Recession

It may have seemed like Warren Buffett was going soft, but the legendary investor said his reluctance toward big deals during "the economy's big belly flop" gave him the gusto to strike his biggest deal yet: Berkshire Hathaway Inc.'s $26.3 billion purchase of railroad Burlington Northern Santa Fe Corp. Straying from the cycle of rejecting deal after deal was not easy, Buffett told The Wall Street Journal in a series of interviews about his negotiations over the past year. Buffett says he may have missed huge opportunities by staying so cautious, but he was being asked for money from some of the most ailing institutions on Wall Street during the run-up to the financial crisis. In March 2008, Buffett was propositioned by Lehman Brothers Holding Inc., and after analyzing the company's annual financial report, chose not to invest. He did, however, agree to invest $5 billion in Goldman Sachs and $3 billion in General Electric Co. "I made plenty of mistakes," he says. "I didn't maximize the opportunities offered by the chaos. But in the end, it worked out OK."