What's going on?

Global stocks have taken a bath in recent days, but there�s at least one investor �buying the dip�. News broke late on Wednesday that billionaire Bill Ackman�s investment firm had taken a large stake in that of another billionaire � Warren Buffett�s Berkshire Hathaway.

What does this mean?

It�s a match made in heaven: both Buffett and Ackman are �value investors� who seek out strong, hard-to-compete-with companies they think the market�s underestimating. For Buffett, the latest firm to fall into that category is Amazon: after years of avoiding the ecommerce giant, $500 billion Berkshire upped its stake in the company to more than $1 billion last quarter.

But apart from funding an oil merger, Buffett hasn�t seen many other big investment opportunities recently. Berkshire has built up a record $122 billion cash pile, with Buffett convinced even shares in his own firm look too expensive to justify increasing current buybacks. Bill Ackman, however, begs to differ: in its first big bet since Starbucks last year, his Pershing Square fund has invested $750 million in Berkshire.

Why should I care?

For markets: One wants dry white toast…
Berkshire�s shares rose slightly on Thursday, partially reversing a 7% decline this month. Other investors may trust Ackman�s judgment: Pershing Square has, after all, delivered his investors a 635% return since 2004 � and nearly 50% this year alone. Still, Ackman won�t get a chance to work on his �activist investor� chops with this particular stake: he�s bought Class B shares in Berkshire that don�t carry any voting rights.

The bigger picture: …the other wants four fried chickens and a Coke.
Activist investors were active elsewhere on Thursday: a famous early critic of Bernie Madoff accused industrial giant General Electric of widespread accounting fraud in the wake of its latest earnings report, sending its stock down 11%. The claims were even more extreme than those laid against the door of UK litigation finance firm Burford Capital last week � which initially wiped out 65% of that company�s market value.