Buffett's stock picks in the aftermath of the Credit Crunch

In the aftermath of the credit crunch, speculation was rife that Buffett would purchase stock of ailing mortage lender country wide financials and come to the rescue of Bear Sterns.In fact,quite the opposite has taken placed.Looking at Buffett's most recent purchases in Wells Fargo and US Bankcorp, Buffett has stayed within his circle of competence and stuck with companies with good ,rational managements who avoided playing risky financial instruments.In fact, a line from the 2004 BRK Shareholder meeting gives us some insight into Buffett's thought process regarding his recent stock purchases...

On Wells Fargo and Its Derivatives Risk [A shareholder asked why Buffett felt comfortable owning Wells Fargo stock, and even buying more, given its exposure to derivatives. Buffett replied:]

WB:I don’t have Wells Fargo’s annual report here, but I’d bet that J.P. Morgan Chase is far larger [in terms of exposure to derivatives]. I don’t think of them [Wells Fargo] as being a big player in the derivatives game.

It's clear that Buffett has made use of Mr Market's recent mood swings to buy well managed good businesses at attractive prices.With his cumulative knowledge built up over the years reading annual reports, it seem almost intuitive to purchase these companies..

Here is a link to his most recent stock purchases

In addition, here are his most recent comments about the recent turbulence in the financial markets and how he approaches it

WB:It is the nature of capitalism to periodically have recessions. People overshoot. So, it isn't the end of the world. I mean, as a matter of fact, for an investor, you know, it turns out to be the times when you make your best buys. I made by far the best buys I've ever made in my lifetime in 1974. And that was a time of great pessimism and the oil shock and stagflation and all those sort of things. But stocks were cheap.

Guess it's time to start digging through all those 10ks and 10qs

Cheers,
Manpreet