billrosser

Setting the Record Straight on Buffett and Derivatives

Thankfully, someone has finally said the obvious in terms of Buffett's
derivative position. These quarterly "losses" are meaningless until the contracts reach maturity. Nor, do they tie up potential investment capital.
A supposedly sophisticated investor like Kass should be embarrassed
to make such a naive assessment.
However, saying publicly that you are
"shorting Berkshire" certainly gets you attention.... like the December cover article in Barron's with the headline "SELL BUFFETT".
However, in their last issue,
Abelson of Barron's retracted their estimate of intrinsic value at $130,000 made in that issue and instead decided it was actually $156,000..... almost where it was before the article crushed the stock. Unfortunately, this retraction was done under the headline "Cheap Stock" and the introduction was so rambling (long
analogy to Goldilocks and the 3 Bears), that I didn't even realize the article was about Berkshire for almost a page.
The real selling here seems to be about copies of Barron's, "Sell Buffett" being a real attention grabber. A pity they didn't decide to be as high profile when they retracted their December position.
And here's a question for Kass: "Are you really shorting Berkshire (especially since it's already fallen almost 20% from it's high), and is this investment substantial?"
Always good publicity to be controversial, a pity when facts get in the way.