Berkshire Hathaway Credit Risk, Index Puts Are Overblown Worries [View article]
1. You say worst case his indexes are down 40% since the put sell. You sure? Did he sell Russian/Icelandic/Hong Kong? India? Plenty of indexes are off WAY more than 40%. He may well need a 150-200% market run in the intervening years.
2. No way this was a 1:1 bet. You don't hand over $5 billion in cash if you only need want a 6% return.
3. What currencies are involved? He is not the oracle of currencies.
4. The equities within Berk are down plenty.
Methinks you are overcome by Buffetts recent Narcissistic tendencies.
Buffett's Gamble: $40 Billion Bet on Volatility
[View article]
BTW, his deal with Goldman and GE wasn't that great. His warrants are well out of the money and his debt is still at risk.
You can get 9% tax free from select MLP's right now. These are companies with no debt that make money from transportation of energy, not the actually price it trades. I'd go with MLP's like WMZ. I bought it today, yielding over 9% tax free. Can't beat that with a stick.
Buffett's Gamble: $40 Billion Bet on Volatility
[View article]
About a month ago? You might want to check your dates on that. I believe he sold those puts many months ago, when the indexes were near their peak.
He needs a 100% return bull market for those puts to not be in the money. Very doable, I agree, but keep in mind the crash in 1932 took some 15 years to return the previous peak.
Berkshire Hathaway Credit Risk, Index Puts Are Overblown Worries [View article]
2. No way this was a 1:1 bet. You don't hand over $5 billion in cash if you only need want a 6% return.
3. What currencies are involved? He is not the oracle of currencies.
4. The equities within Berk are down plenty.
Methinks you are overcome by Buffetts recent Narcissistic tendencies.
Buffett's Gamble: $40 Billion Bet on Volatility [View article]
You can get 9% tax free from select MLP's right now. These are companies with no debt that make money from transportation of energy, not the actually price it trades. I'd go with MLP's like WMZ. I bought it today, yielding over 9% tax free. Can't beat that with a stick.
Buffett's Gamble: $40 Billion Bet on Volatility [View article]
He needs a 100% return bull market for those puts to not be in the money. Very doable, I agree, but keep in mind the crash in 1932 took some 15 years to return the previous peak.
Buffett's GE Warrants Quickly Trade Out of the Money [View article]
Goldman Sachs: Buffett's the Milkman and He Always Delivers [View article]
Given the cost of that capital, I would expect a serious decline in share price over time.
Why Is Warren Buffett Buying $2.1 Billion of Super-Junky TXU Debt? [View article]