Income investors who are looking for a little speculation are taking a closer look at private equity firms and business development corporations. Private equity firms invest in the equity and often the debt of private companies. Usually private equity firms are not available to the general public.
Warren Buffett just announced that Berkshire Hathaway (BRK-A) (BRK-B) has purchased 64 million shares of International Business Machines (IBM) for a total of $10.7 billion. Buffett started buying in March and now owns 5.5 percent of IBM.
If a company has debt, it can be beneficial if the company can earn far more than the interest expense. But there are drawbacks to incurring debt. When times get tough, earnings drop, and the business can't afford the debt service, then the viability of the company is at risk.
Warren Buffett, chairman and CEO of Berkshire Hathaway (BRK-A) (BRK-B) and the third richest man in the world, at least this week, invested $23.9 billion during the third quarter.
1.877.440.ZING (9464)
