The headline on this New York Times piece may be a bit oversold, but it would appear that Berkshire Hathaway (BRK.A) and Warren Buffett are taking a cautious approach to investing in equities now. In fact, fixed income seems to be getting quite a bit of attention from them right now, along with selected stocks. Also, I imagine he is doing some pruning now that many holdings have bounced back from their lows [emphasis added]:

Closely Watched Buffett Recalculating His Bets (New York Times, September 7, 2009, Graham Bowley)

…When so many others were running scared last autumn, Mr. Buffett invested billions in Goldman Sachs (GS) — and got a far better deal than Washington. He then staked billions more on General Electric (GE). While taxpayers never bailed out Mr. Buffett, they did bail out some of his stock picks. Goldman, American Express (AXP), Bank of America (BAC), Wells Fargo (WFC), U.S. Bancorp (USB) — all of them got public bailouts that ultimately benefited private shareholders like Mr. Buffett.

Buffett Beats Out U.S. Treasury on Goldman Deal

I wrote last Fall that the way to bail out the banks was not to have the U.S. Treasury invest directly. Instead, a better plan would have been for the Treasury to create a structured investment with Warren Buffett or Bill Gross or both in charge of structuring the deal.

In this approach, the government would give private investors a significant tax break on any capital invested in approved banks. Then, the government would step aside and let private investors put in capital as they see fit. In this scenario, investors would have gotten a good deal, banks would have gotten the capital they need and the U.S. Treasury would not have been on the hook for anything.

To see why this would have been better, here is a comparison of how Buffett’s Goldman Sachs deal compares to the Treasury’s Goldman Sachs deal. This chart from Barry Ritholtz’s excellent blog illustrates the points made in a fascinating Bloomberg piece (see below):

….read more and see chart HERE (scroll down)