icandoitdon

Buffett's Gamble: $40 Billion Bet on Volatility

dlaw has it right.

i chuckle at the notion that there is little risk in these trades.

we're in a liquidity squeeze.

capital raising is all but impossible unless you have gilt-edged credit.

the economy is contracting at the most rapid pace in modern history.

financial markets have tanked

volatility is the highest in history.

junk bond yields are approaching historical levels. spreads have never been wider.

treasury yields are the lowest in recorded history as a consequence of the lack of confidence in our very financial system.

bank stocks are crumbling...and not just the Cs of the world. or haven't you noticed what's happened to share prices of the "leaders" (i use the term lightly) over he last 2 months...BAC WFC, GS, USB

insurance stocks with heavy investment portfolios have lost half or more of their market value in recent weeks...not months...weeks. BRK itself has been the latest victim of intense selling.

maybe BRK overcomes all this and their sale of puts works out as intended. but i'd be willing to bet that buffet would not make the same trade today. the world has changed since he put that position on.

Buffett and the Limits to 'Awaiting Better Times'

i've made a point of listening to pundits of varioius persuasian...bullish or bearish...and i've come to conclude that those most passionate about their beliefs have the poorest track records. i'll give buffett this...over the years he has demonstrated patience, never chasing stocks that he believes are not attractively priced. if anything buffett buys too soon. this market has been, and remains, a falling knife, and just because buffet thinks its time to buy doesn't mean it will stop falling.

as for the eternal optimists...you know who they are...the CNBC crowd and various pundits whose blogs or comments aren't worth the time it takes to write them because they are incapable of adjusting their mindset to new facts and circumstances.....i'll only say this: you were wrong every step of the way down, all the while insisting you were right. jason c's absurd notion that "you haven't lost a dime" in the face of a 40% decline from the peak speaks for itself. as if the holder of intel at $70 in the summer of 2000 hasn't lost a dime 8 years later because he still holds it at $15. not only has he lost capital, he has lost the opportunity of making positive returns elsewhere by refusing to sell. those with that kind of mindset belong in savings accounts...not stock markets.

Goldman Sachs: Buffett's the Milkman and He Always Delivers

"This effectively sets a floor price on the common stock of GS"

this is nonsense. buffet is a world apart from a GS shareholder. he owns preferred with a huge dividend payout. he put a gun to the head of that company and they caved because they were desperate for capital and nobody else would provide it. good for buffet but not so good for GS.

i'd also point out that our "world's greatest inverstor" admitted he wouldn't have done this deal absent a backstop from the taxpayer. you're welcome, warren.

way to go, warren...