How Buffett Made Money From “Workouts”

In the early years of the Buffett Partnerships, Warren Buffett made a lot of money for his investors by buying "oil and gas producing companies."

But he wasn't buying any old oil and gas companies. He was acquiring shares in businesses in the process of selling themselves to a larger competitor.

These situations fell into what the young investor called his "workouts" or "securities with a timetable." These were generally undervalued businesses in the process of progressing with a corporate transaction with the goal of unlocking value.

Q1 2023 hedge fund letters, conferences and more

These transactions included mergers, acquisitions, reorganizations, and spin-offs. Buffett informed his partners in the early years while...