BUFFETT SAYS WALL STREET ADVICE USUALLY FAVORS MORE DEALS
Taking advice from Wall Street on deals is a bit
like asking “the barber whether you need a
haircut,” according to billionaire Warren Buffett.
Buffett said in his annual letter to Berkshire
Hathaway shareholders last weekend that the
current system of reviewing deals doesn’t always
work well for investors because it almost always
favors the deal that corporate CEOs propose.
Companies should consider hiring two sets of
advisers to argue for and against a deal before
moving forward instead of just hiring a Wall
Street firm that favors the deal, he wrote.
“Don’t hold your breath awaiting this reform:
The current system, whatever its shortcomings
for shareholders, works magnificently for CEOs
and the many advisors and other professionals
who feast on deals,” he wrote.