Those pundits who think guru investor Warren Buffett's time has come and his magic faded away are bolstered by a Bloomberg report that says shares in Berkshire Hathaway (NYSE: BRK.A) slumped some 19% since mid-December. Buffett has been hurt by large investments in both insurance and banks, industries that have suffered tremendously.

Lest you think this short-term lack of performance has swayed investors into looking elsewhere to park their money, many investors are looking at the fall in Berkshire stock as a buying opportunity.

According to Bloomberg, Frank Betz, a partner at Warren, New Jersey-based Carret Zane Capital Management said he'd "put a new client in Berkshire right now. [...] It's probably the highest-quality collection of individual companies that's ever been assembled. Long slides are not in the Berkshire Hathaway lexicon."

With the stock market drop, many contrarian investors think that stocks have hit bottom and are very cheap. Buffett, who is sitting on such a large cash position, may be able to take large stakes in solidly profitable yet beaten up companies.

If he decides to put his cash to work, he has the ability to get deals that happen only once or twice in a lifetime. He may end up providing returns that make his previous track record look just average. For the Buffett investors, the best may is yet come.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/1/08.

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Six months of 2008 are now behind us and the stock market has not been a friendly place to most investors. Stability that was once found in household names that were industry giants is gone, and they have now been brought to their knees.

Many of them were the stocks we might have looked to in the past for stability, so you can be sure I put forward my five candidates with a little trepidation, but forward I go anyway. First a little review is in order.

Citigroup Inc. (NYSE: C) dropped from around $53 per share last year to around $30 in January and we can buy it today for around $17. Even at that price Goldman Sachs (NYSE: GS) has downgraded it to a sell and thinks there is more bad news to come. Citigroup was the largest bank in the world. Not any more.

General Motors (NYSE: GM) was the largest car maker in the world. That was before the stock tumbled from $43 to its current $11 range. A crushing blow to long time investors hoping that someone in the company could stop the ship from sinking.

Goldman Sachs (NYSE: GS) itself is down from $250 to a very soft $177 (it's traded as low as $161.21 today) and does not appear to be at risk as much as some of its competitors, companies that do not look as competitive any more. Bear Stearns is gone, Lehman Brothers Holdings (NYSE: LEH) is on the ropes and Merrill Lynch (NYSE: MER) and Morgan Stanley (NYSE: MS) are teetering.

Reliable software giant Microsoft Inc. (NASDAQ: MSFT) is down from $37.50 to $27 and is so desperate for some traction that it is wasting its time with something called the Zune and made an unsuccessful offer to acquire Yahoo! (NASDAQ: YHOO), which is also down on its luck; 50% down since it rejected the offer.

I do not own any of these stocks, and I could list a thousand stocks to keep them company. Some that I do own as "core holdings" that are down include Huaneng Power Intl ADS (NYSE: HNP) that was trading as high as $57 and is now a more affordable $27 per share. Another one of my favorites, Intuitive Surgical Inc (NASDAQ: ISRG), is down from $360 to $260 and may drop further as hospitals look to conserve capital the rest of the year and into the uncertainty of a new presidential administration and economy. Even that old standby for tough times Berkshire Hathaway (NYSE: BRK.B) has shown weakness dropping 20% from around $5,000 to $4,000 a share.

I could point to some energy and food stocks that have done well this year but those could lose their footing as well if oil prices do not hold up. There are those that think we are in a short term speculative bubble and they could give back some of the this year's gains.

So where to hide? What if anything has been stable? The following five companies made the grade.

1) Johnson and Johnson (NYSE: JNJ): This one is probably not any surprise. There was no money to be made here but you would not have lost any either. Year to date it has traded between $68 and $64 and that is about where it has been for quite some time. It does pay almost a 3% dividend yield and that's mighty fine these days.

2) Teva Pharmaceuticals ADR (NASDAQ: TEVA): Pharmaceuticals have long been a safe haven in troubled times and the world's largest maker of generic drugs is sitting pretty these days with expanding markets everywhere it looks. This Israeli company has traded roughly between $43 and $47 for quite some time, pays a 1% yield and looks to have plenty of upside going forward.

3) Chubb Corp (NYSE: CB) the conservative insurance company has held up better than most of its peers. Over the past six months and going back two years it has hovered between $49 and $54, all the time paying about a 2.6% yield.

4) Xcel Energy (NYSE: XEL) is a holding company for numerous utilities. Over the course of the past twelve volatile months it has been trading in a 10% range between $20 and $22 while paying a huge yield, which today stands at 4.8%.

5) Walt Disney (NYSE: DIS) may be a great place to hide if you want to forget your troubles, whether you chose the new Pixar hit movie "WALL-E" or Disneyland, or a trip down memory lane renting or downloading any one of its countless hits from its film library. The stock is currently trading in the neighborhood of $30.62, mid-point in its 52 week range. Over the past six months it has spent most of the time drifting between $30 and $33 per share with a few drops and pops here and there. The 1.1% yield is not as generous as the others but it I would be happy to take it.

What do they have in common? They are diversified among their industries, have growth horizons, and of course they all pay dividends. But the standout at this juncture seems to be that they all have shrewd conservative management teams -- and they have been in the right place, at the right time, and prepared.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of BRK.B, HNP, ISRG, JNJ.

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This Bud may not be for Anheuser-Busch Cos. (NYSE: BUD) for much longer.

InBev, the Belgian mega brewer, has told the King of Beers that it won't wait forever for it to make up its mind about whether to accept its unsolicited $46.3 billion offer. In the third and probably not the last letter to Anheuser-Busch CEO August Busch IV, InBev CEO Carlos Brito points out that his company's offer, which represents an 18% premium on its all-time high in 2002, is a generous one.

"The market reaction to our proposal has been extremely positive," Brito writes. "We believe this confirms our view that our proposal is the best way to achieve this transformational combination for all constituents."

InBev has already lined up financing for its $65 per share offer and has even paid about $50 million in commitment fees to its bankers. Budweiser's long-time headquarters in St. Louis will be maintained as will its senior management team. It does not get any better than this for a company about to be acquired.

The Busch family, though, reportedly is divided about the InBev offer. Andrew Busch, an uncle of the CEO, has urged the company to remain independent, while Adolfus Busch, another uncle, has urged Anheuser-Busch to take the offer. The company continues to study the proposal, which the Busch family lacks enough stock to block on its own.

There is no doubt that CEO August Busch, who has recently unloaded shares, is also seeking the advice of another "uncle," Warren Buffett. His Berkshire Hathaway Inc. (NYSE:BRK.A) has been one of Anheuser-Busch's biggest shareholders for years.

Like beer drinkers, stock holders would prefer to see things bubbly rather than flat. If the company does not take InBev's offer, Anheuser-Busch's stockholders will be emptier than a keg after a college fraternity party.

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On Friday, the board of Anheuser-Busch Cos. Inc. (NYSE: BUD) met and discussed the $46.3 billion unsolicited bid from rival InBev NV. However, there was nothing announced to its eager shareholders.

But, hey, why speed things up? Might as well keep InBev guessing, right?

And, there's much for the rumor mill to chomp on. For example, Carlos Fernandez said he has resigned from Anheuser's board. He is the CEO of Grupo Modelo, which is half-owned by Anheuser.

One possibility is that Anheuser will buy the rest of Grupo, making it tougher for InBev to pull off its buyout. So, does the resignation mean that Anheuser and Grupo are talking about such an arrangement?

It's really tough to tell. Perhaps Grupo is actually talking to InBev? After all, it looks like Grupo wants to remain independent.

Yet, all this stuff seems more of a sideshow. The fact remains that Anheuser can't ignore InBev and is under lots of pressure to sell out (especially in light of its sluggish operating performance over the past few years).

Actually, Adolphus A. Busch IV sent a letter to Anheuser's board urging negotiation with InBev to get a deal done. He's the uncle of the CEO, August A. Busch IV.

Finally, there is another interesting dynamic: Warren Buffett. His company, Berkshire Hathaway (NYSE: BRK.A), owns 5% of Anheuser's shares. No doubt, it should be interesting to get his views on the matter.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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There aren't many defenses to InBev's mega $46.3 billion unsolicited bid for Anheuser-Busch (NYSE: BUD).

Though, there are is one interesting option: the "scorched earth" approach. Essentially, this is when a company takes a transformative move -- such as a huge dividend or a major acquisition -- to make itself unattractive. Yes, it's brutal and shareholders don't like it. But, it does happen.

In the case of Anheuser, it may decide to make a bid for Grupo Modelo, which is the largest beer company in Mexico (and controls the Corona brand). In fact, Grupo Modelo Anheuser already owns half the company's shares and it looks like talks are already in progress (according to a report in the Wall Street Journal, which is a paid publication).

The problem: basically, Grupo Modelo might not want to sell out. If anything, the company may see the InBev's mega deal as a way to buy back the 50% stake from Anheuser.

But, interestingly enough, Warren Buffett may be the ultimate power broker. After all, his firm, Berkshire Hathaway (NYSE: BRK.A) owns 5% of Anheuser. And, according to a report in the Guardian, it looks like Buffett is going to meet with August Busch IV, who is the CEO of Anheuser.

I'm sure it will be an uneasy conversation, since it looks like Busch wants to keep his company independent.

On the other hand, Buffett wants to make a buck for his shareholders. After all, Anheuser shares have been languid for seven years or so. Plus, the company hasn't been aggressive with its growth strategies, and the cost structure is fairly bloated.

In other words, Busch will need to have some good arguments for the Oracle of Omaha.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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• DJIA 12141.58 (+57.81)
• S&P500 1339.87 (+4.38)
• NASDAQ 2404.35 (+10.34)
• 10YR T-NOTE 4.205% (+0.132%)
• Major list of 52-Week Lows
• Top 10 Analyst Calls
• 2008 IPO's up 50% or more

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22 Mid-Cap Marvels
These top-ranked dividend-paying stocks are also expected by S&P analysts to rise in price during the next 12 months.
Smart Dividend Plays: 22 Mid-Cap Marvels - BusinessWeek

The Rock Star of Money
The world's richest man is having an E.F. Hutton moment. Warren Buffett, dubbed the Oracle of Omaha by Wall Street, is making his voice heard these days. The billionaire investor is out talking to cable TV anchors. To magazines. To shareholders. To Congress. To foreign investors. To a former Wall Street analyst who is writing a book about him. He's even popped up in a CNBC documentary, The Billionaire Next Door: All Access, which delves into all things Buffett. Not to mention a recent guest appearance on the daytime soap opera All My Children. People are really listening to what Buffett has to say more than ever.
Warren Buffett hones rock-star status - USATODAY.com

Wal-Mart, Your Friendly Drugstore
The retailing juggernaut is set to move more aggressively into pharmaceuticals and health care, much as it did with groceries 20 years ago.
Wal-Mart, Your Friendly Drugstore - BusinessWeek

America's Most Time-Draining Airports
Flight delays are a summer travel nightmare. These airports have the worst waits. Topping the list is Chicago's O'Hare which is the nation's worst. In three categories: late aircraft, air traffic control and cancellations it ranked last out of 100 airports. To translate that into time lost, O'Hare flights in 2007 were delayed by a cumulative total of 2.5 million minutes due to a late aircraft.
America's Most Time-Draining Airports - Forbes.com
20 Worst Airports for Delays

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The stock market was down today and the financial sector was hit as hard as anything else. These are the days you want to have your watch-list ready or perhaps your stock alerts triggered. I have been watching Wells Fargo (NYSE: WFC) for quite some time. Today at $27.00 I received an alert and decided to buy some.

As a value investor I am seeking not to just make a profit but to have as large a margin of safety as possible. That means I do not want to just buy a discounted stock but I want to "steal it". Patience is always in order, and usually is rewarded. That was the case when we watched Tiffany & Co. (NYSE: TIF) go from the low $40's to $57 per share and think we had missed the train, only to keep our eyes open as it fell back down to $36 where we pulled the trigger.

Last week TIF did us proud (see: Chasing Value: Tiffany's -- all that glitters) and although I am wrong way too often, I would be greatly surprised to see TIF anywhere near $36 ever again. It has reached $50 since we purchased it in April. The following chart illustrates the recent path of Wells Fargo.

At $27 a share we have acquired a solid company at far below its five year average. We got it near its five year bottom. A stock that was on sale because others reported bad news:

• Lehman Bros. (LEH) gets triple-whammy of bad news
• Before getting fired, Wachovia CEO Thompson got gobs of money
• S&P cuts investment bank ratings

Wells is paying a 4.5% dividend yield and all my regular readers know how I like dividend paying stocks! There have been rumors that "my pal Warren", Buffett that is, of Berkshire Hathaway (NYSE: BRK.B) has been buying more and also that he has been selling. Right now I haven't the foggiest idea, but there has been no conversation about Wells cutting it's dividend, or management problems, or hidden sub-prime losses so I am comfortable. That does not mean I will not be ever watchful because I have been burned before. However, from what I can glean this was a safe bet and I am in good company.

Wells Fargo closed today at $27.11 scooping me up and leaving me with a small profit for the day. Where will it be tomorrow? I do not know, but today it was a buy.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of WFC, TIF and BRK.B.

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After five months of tracking my 2008 picks, it is rewarding to finally have a breakthrough -- topping the three major stock indices and Berkshire Hathaway (NYSE: BRK.B) too. It has been painful to have to report each month that I was being bested. However, since I have not seen anything contradicting my original rationale for my eight picks I stood my ground.

This past month saw great improvement. For the first time since I posted the original story Chasing Value: Final list -- 8 stocks for 2008, five of the eight stocks are up:

Moving into positive territory by pennies was Loews Corporation (NYSE: LTR). Among its holdings is a 51% stake in Diamond Offshore Drilling, Inc. (NYSE: DO) that has been doing well as the world remains desperate for more oil and natural gas.

Bunge Limited (NYSE: BG) was the other stock to cross the line into the black, while Valero Energy Corp. (NYSE: VLO), although improving, remains my worst performer. It is still down almost 28% after five months.

The gap between the Dow Jones Industrial Average, Standard & Poor's 500 Index and the technology heavy NASDAQ Composite Index narrowed substantially so that the three are tracking each other very closely. Stocks like Apple, Inc (NASDAQ: AAPL) and Google Inc. (NASDAQ: GOOG) continue to gain significantly and their outlooks have not been shaken amid overall pessimistic economic forecasts.

Most of my picks improved. Last month's three winners stayed on track with continued higher energy and commodity prices along with the war. Raytheon Co. (NYSE: RTN), the high tech defense contractor, Reliance Steel & Aluminum (NYSE: RS) and Anglo American plc (ADR) (NASDAQ: AAUK) do not show any signs of wavering. All three continue to be mentioned in M&A conversations with RTN on the buying side, AAUK on the selling side and RS on both.

In January, I added Newcastle Investment Corp. (NYSE: NCT) and Huaneng Power (NYSE: HNP) to my holdings. In April, as HNP hit new lows, I acquired more stock, happy to collect the 5.6% dividend yield. I did not add anything in May.

Through May, the average return for the eight picks amounted to a loss of -3.36%; a major improvement from last month's -8.96% or March's -15.96% depressing lows. This outperformed the average return of the indices: -5.47%. This year's stalking horse, Berkshire Hathaway (NYSE: BRK.B), while gaining a little during May and still besting all the indices, is down -4% for the first five months. I can't remember the last time I was ahead of 'my pal Warren' -- oooh, maybe I'm learning something!

I am Including dividends for my picks, that averaged an overall 3.91% yield through the first quarter. However, this is being adjusted because of NCT's reduced dividend to 2.99% going forward. Therefore, I will be adding 0.978% for the first three months and 0.249% (2.99% / 12) for each additional month. Through May, the loss was -3.36 + 0.978 + 0.498 = -1.88%. Using 1.8% for the average dividend of the indices times 5/12 adds 0.75%, and reduces the loss to -4.72%.

After five months I have overtaken all of the indices and BRK.B, to my surprise, even without the help of the dividends . BRK.B does not pay a dividend.

I continue to hope that 2008 does not end up being about who loses the least. The following are my eight picks with the starting share price as of December 28, 2007:

• Anglo American plc (ADR) (NASDAQ: AAUK) from $30.79 is Up to $34.28 for a gain of 11.33%.
• Bunge Limited (NYSE: BG) from $119.03 is Up to $119.37 for a gain of 0.29%.
• Huaneng Power International (ADR) (NYSE: HNP) from $41.75 is down to $33.74 for a loss of -19.19%.
• Loews Corporation (NYSE: LTR) from $49.35 is Up to $49.57 for a gain of 0.45%.
• Newcastle Investment Corp. (NYSE: NCT) from $13.08 is down to $9.92 for a loss of -24.16%.
• Raytheon Company (NYSE: RTN) from$61.51 is UP to $63.86 for a gain of +3.82%.
• Reliance Steel & Aluminum (NYSE: RS) from $54.32 is Up to $67.97 for a gain of +25.13%.
• Valero Energy Corporation (NYSE: VLO) from $70.55 is down to $50.84 for a loss of -27.94%.

The Indices:

• Dow Jones Industrial Average: 13,365.87 dropped to 12,638.32 for a loss -5.44%
• NASDAQ Composite Index: 2,674.46 dropped to 2,674.46 for a loss -5.68%
• Standard & Poor's 500 Index: 1,478.49 dropped to 1,400.38 for a loss -5.28%

This year's "stalking horse" Berkshire Hathaway (NYSE: BRK.B) (I am tracking the 'B' shares, not the more expensive 'A' shares) saw its B shares down from $4,685 to $4,498 for a loss of -4.0%.

After our Federal Reserve Chairman Ben Bernanke announced a cut in the discount rate of a quarter point to 2% last month, he changed his stance and intimated it would probably be the last cut. Now we are hearing noise there actually could be a raise in the rate depending on inflation fears. The market seems to believe that story in the long term, but not the short term one.

I still think investors should be looking at the defense sector Chasing Value: General Dynamics & Raytheon: The defense does not rest.

May Recap:

• 2008 picks: -1.88%
• BRK.B: -4.0%
• Major Indices: -4.72%

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of AAUK, BRK.B, HNP, NCT, and VLO.

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A story yesterday in Business Week, A Mideast Valley of Peace discussed how the development of a $3 billion canal from the Red Sea to the Dead Sea is gaining some traction. There is both Arab and Israeli support for the idea which would bring industry, tourism, and most importantly water through desalination plants to a very thirsty location.

According to the report the ambitious project is being energized by 60-year-old billionaire Itzhak Tshuva, who was born into a poor family of 11 who crammed into a single room after immigrating to Israel from Libya in the 1940s. He went on to build a global real estate empire that includes New York's Plaza Hotel, as well as a recently announced $8 billion luxury hotel, retail, residential, and casino complex on the Las Vegas Strip.

Equally important, the project is getting a warm reception in parts of the Arab world. This so-called Valley of Peace is part of a 520-kilometer (323-mile) corridor being proposed by Israeli President Shimon Peres for regional economic development. Peres says he has received letters of support from both Palestinian President Mahmoud Abbas and Jordan's King Abdullah II. And according to Israeli press reports, Saudi Prince Alwaleed bin Talal -- known for his investments in Western icons such as Apple (NASDAQ: AAPL) -- recently told Tshuva that he will support the project through Jordan.

Nothing is mentioned about Hamas in the story, but the scope and scale of the project would offer economic opportunity and even prosperity to those that have found it hard to come by, so promoters while not naive, are hopeful.

Among the Israeli industrialists who support the project is Stef Wertheimer, founder of Iscar Metalworking, which sold 80% of its shares to Warren Buffett's Berkshire Hathaway (NYSE: BRK.A).

Since a major purpose of the project involves water and power I could envision companies like General Electric (NYSE: GE) and privately held Bechtel becoming involved.

It is envisioned that the project would be "green" and in that vein, environmental studies are under way to determine the repercussions of mixing water from the two sources and other issues. Currently the potash industry, which generates billions of dollars of revenue for Israel and Jordan at the Dead Sea, is also a factor receiving attention.

Nothing seems to move very fast when so many parties are involved. However, Perez said that the project could be built in as little as two years once it was agreed to do it.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of BRK.B.

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These past weeks, the deteriorating stock market that responds to expectations of slower or no economic growth in 2008, continued high oil prices, sagging housing market, high debt consumers and the financial industry quagmire, got me thinking about "my pal Warren" again.

It's times like these, when we are looking for a solid footing in the investment world, the few people with positive track records -- measured in decades, not years -- are worth examining once more.

Last year I started a series of stories on Warren Buffett's very basic investment cornerstones. Buffett's Berkshire Hathaway (NYSE: BRK.A) has such a track record. Today, given how many companies are up to their penthouse executive suites in debt, I thought I would continue.

The subject of debt is a simple one. Companies that carry excessive debt on their books are not as good as companies that have cash sitting around. Debt can be a drag on earnings, reduce the company's flexibility and opportunity in a slowing economy, and has all the negative impacts to a company that it does to an individual household.

Is debt always bad? No. Sometimes it pays to take on some debt if money is cheap and a company has demonstrated that it can earn far beyond the cost of funds based on its proven return on invested capital. Sometimes, a company's stock is cheap and based on net profit margins being higher than interest rates and insider knowledge of the company's projections, it pays to borrow to buy back stock.

While high levels of debt are not a good sign in general, the levels of debt should not be viewed equally from industry to industry. For example, in real estate, a 50% long-term debt (loan-to-value) is considered quite conservative where it might be very high in an established software company where the common metric would be long-term-debt-to-equity.

Free cash flow (cash flow from operations minus capital expenditures) has been deemed by many to be the gold standard metric to measuring the profitability of a company's operations. Free cash flow does not tell the whole story, but it is harder to manipulate than net income or earnings per share. By establishing how much cash a company has after paying its bills for ongoing activities and growth, FCF is a measure that aims to cut through the arbitrariness and "guesstimations" involved in reported earnings. It signals a company's ability to pay debt, pay dividends, buy back stock and facilitate the growth of business. For more specifics see Investopedia.

You can find more in Buffett's letters on the company's website, or refer to Everything Warren Buffett for this year's letter, and past years' as well.

Previous stories in the series:

• Serious Money: The page on Buffett -- Part I: Your understanding
• Serious Money: The page on Buffett -- Part II: Dividends
• Serious Money: The page on Buffett -- Part III: Price-to-book
• Serious Money: The page on Buffett -- Part IV: Durable Competitve Advantage
• Serious Money: The page on Buffett -- Part V: Company Management

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of BRK.B.

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MAJOR PAPERS:

• Last December Chemtura Corporation (NYSE: CEM), a specialty chemicals company with a market cap of about $1.9B, said it might sell itself, and now The Blackstone Group LP (NYSE: BX) and Apollo Management are in talks to buy the company, the Wall Street Journal reported.
• In part one of a series to help explain the reasons why The Bear Stearns Companies (NYSE: BSC) collapsed, the Wall Street Journal said that the troubled firm was torn apart by executives who couldn't agree on what course to take, including raising capital and slicing mortgage and related bonds from its inventory. And each of about six attempts to raise capital fell part.

• The American investor and Berkshire Hathaway Inc (NYSE: BRK.A) chief Warren Buffett said the United States is already in a recession that is deeper and will last longer than the public expects, the Economic Times reported.
• According to the Telegraph, Barclays Plc (NYSE: BCS) is planning to sell Barclays Life Assurance Company, its life assurance arm, which has over GBP7B of funds under management. Sources believe potential bidders for the unit may include Pearl, Swiss Reinsurance Company (OTC: SWCEY), General Re, Canada Life and XL Re. Market commentators believe that on an embedded value basis, the unit is currently valued at around GBP1B.

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This past week, Wrigley Co. (NYSE: WWY) filed a proxy statement for its $23 billion sale to Mars. And, if you go to page 18, you'll see an account of the transaction -- and how Goldman Sachs Group (NYSE: GS) was a key player.

Actually, it was back in 2006 that Goldman arranged a meeting between Wrigley and Mars. After signing confidentiality agreements, the parties talked about possible business arrangements (although, a buyout was not mentioned -- but, I'm sure, it was something everyone was thinking about, especially Goldman).

However, by August 2007, Mars and Goldman talked about possible strategic options. One suggestion: buy Wrigley. To this end, Goldman arranged a meeting with Berkshire Hathaway (NYSE: BRK.A) to explore financing possibilities.

By April 2008, Mars had made an overture to William Wrigley, Jr., to discuss a possible transaction. The result: Mars offered $75 per share.

Of course, the price was not enough. As a result, there were several more bids -- with the final one at $80 per share.

Goldman would not only provide advisory services on behalf of Mars, but also finance part of the bid. No doubt, this was a potential conflict of interest, but the parties consented to the arrangement. After all, Goldman had longstanding relationships with Wrigley and Berkshire Hathaway. Besides, the parties wanted to maintain confidentiality and make sure the deal would not slow down.

Throughout the deal process, Goldman demonstrated it's new-fangled model of investment banking -- that is, playing the role of adviser and funder. It's tricky but can be helpful in major deals.

Moreover, it was well worth the effort. Goldman snagged an advisory fee of roughly $46 million.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Warren Buffett continued his tour of Europe, leaving media excitement in his wake. Earlier this week he said the U.S. recession would be deep and long.

To keep the daily excitement going, he made a statement that U.S. banks were to blame for the current credit crisis. According to Reuters, "The banks exposed themselves too much, they took on too much risk .... It's their fault. There's no need to blame anyone else," he said.

While this may be true, it is odd that Buffett uses his search for investments in Europe, which is almost certainly combined with a little vacation time, to give his opinions on the state of the economic world.

If anything, Buffett's view of the current conditions is marked by pessimism. He was not as negative at the Berkshire Hathaway (NYSE: BRK.A) annual meeting just a few weeks ago. Either he has too much time on his hands as he travels or he believes that the financial world is falling apart fast.

Douglas A. McIntyre is an editor at 247wallst.com.

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