Warren buffett buys big 'bargains' in muni bonds

What's Warren Buffett buying?  We ask that question every three months when Berkshire Hathaway releases its quarterly snapshot of its stock holdings. But in recent months, we

haven't seen a lot of equity purchases. Instead, Buffett has been buying municipal bonds. Bloomberg notes today that regulator filings reveal Berkshire's muni-bond holdings almost

doubled in just nine months, rising to $4.05 billion as of March 31, compared to $2.05 billion on June 30, 2008. The article recalls Buffett's own amazement at sky-high muni yields as

the credit crunch was at its worst late last year and early this year.  In his February letter to shareholders, Buffett wrote: "The investment world has gone from underpricing risk to

overpricing it.  A few years ago, it would have seemed unthinkable that yields like today's could have been obtained on good-grade municipal or corporate bonds even while risk-free

governments offered near-zero returns on short-term bonds." _Dear Mr. Buffett _author Janet Tavakoli points out that smart investors don't limit their search to Wall Street when

they're looking for bargains.  Referring to the muni bond market, she says, "There have been some excellent bargains for people like Warren Buffett, who understands that the

principle of value investing don't change, no matter the circumstances." Current Berkshire stock prices: Class A: Class B: _For more Buffett Watch updates ._ _Questions?  Comments?

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