contraxism

Buffett's Gamble: $40 Billion Bet on Volatility

Good point Roger,

Buffett and Nassim are on a much different wave length. Buffett believes that America will bounce back, his generation of rewarding experience has taught him to trust in the system.

Nassim simply understands it is impossible to predict this. The problem is just too complex to forecast the outcome.

I would prefer Simmons over Buffett when it comes to risk management.


On Nov 21 07:27 PM Roger Knights wrote:


> But he sold puts near the peak, apparently, so the "stock" has been
> <b>falling</b... And there's no guarantee that it will get back up
> either, any more than the Nikkei has since its peak. Buffet was doing
> what Taleb Nassim warned against in his two books: collecting what
> he thought was risk-free "free money."
>
> He had better hope inflation will save him. So far he's had to "write
> down" his balance sheet considerably. That counts as "taking a bath."

Buffett's Gamble: $40 Billion Bet on Volatility

BRK shareholders better hope a decade is enough time, it may not be. I think too much money betting on too few places with counter party risk. Wasn't it Warren who said derivatives were weapons of mass destruction? Why not sit tight and wait for the end of the credit crises before acting? Is Warren being influenced by all the recent media attention?