Goldman, the most profitable Wall Street firm, fell 1.7 percent Thursday in New York trading to US$113. That leaves Goldman, for the first time, below the price at which Buffett can buy US$5 billion of shares. When the deal was announced last month, Goldman closed at US$125.05, meaning Buffett was up US$437 million.

Goldman and GE also sold Buffett a combined US$8 billion in preferred shares that pay a 10 percent dividend, allowing his Berkshire Hathaway Inc. to earn US$800 million a year without the warrants unless the companies collapse. In exchange, the firms got Berkshire’s cash and endorsement by the “Oracle of Omaha” at a time when stock prices are falling on concern that a tightening credit market may hobble even the largest companies.

Buffett “doesn’t have a two-week time horizon,” said Frank Betz, a partner at Warren, New Jersey-based Carret Zane Capital Management, which holds Berkshire and GE shares. “Just because these prices drop below the strike price, it doesn’t suggest that either of them are not exceptionally good investments.”

GE, the world’s biggest maker of jet engines, agreed Oct. 1 to give Berkshire warrants to purchase US$3 billion in shares at US$22.25 apiece. As with the Goldman deal, Buffett’s warrants for GE stock are good for five years. The shares, which closed at US$24.50 the day of the agreement, have for five days ended trading below Buffett’s strike price.

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