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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Jon Koplik who wrote (8475)	10/11/2008 11:26:41 PM
From: Jon Koplik	Respond to of 33421

(the "great") Warren Buffett blows 5 years of gains in 1 week ...................................... According to the following two articles, after being wrong, wrong, wrong for a long time on his 5-year long bet against the U.S. Dollar, (the "great") Warren Buffett did apparently "grease out" a gain of about $2.3 billion. (And -- the U.S. Dollar has surged recently, so ... he was lucky to ever get out with a gain (?)) But now, he has already "dropped" well over $2.3 billion by betting that stocks would not go down (!) And, by using long-dated, and presumably incredibly illiquid derivatives (!) --------------------------------------------- From : thestreet.com March 7, 2008 "For his part, Buffett reports that Berkshire's direct currency positions have yielded $2.3 billion in pretax profits over the past five years." From : online.barrons.com October 13, 2008 "Berkshire has written, or sold, long-dated put options on some $40 billion of equity indexes, including the S&P 500. Those put sales, which amount to a bullish market bet, are deep in the red, although Berkshire doesn't have to post collateral against any paper losses. We estimate those puts could have cost Berkshire as much as $2 billion in the third quarter and several billion more dollars this quarter, with the S&P down over 20%. Berkshire ultimately may score with these puts if they expire worthless at maturity between 2019 and 2027. But the normally savvy Buffett made a mistake investing in financial derivatives, about which he has long warned. Berkshire had no comment." -------------------------------------------------------------- Put options out to the year 2027 ??? Yikes ! Jon.