Warren Buffett is Full of Hops
By Rich BlakeWarren Buffett is full of hops. He bashes investment bankers, and yet he has a former Goldman Sachs i-banker as his personal dealmaking consigliere. He once called derivatives “financial weapons of mass destruction” and then engaged in a massive options transaction that lost him billions. He poured money into Goldman Sachs, which is the Lockheed Martin of derivatives. He says newspapers are lousy investments—well, he owns the Buffalo News. He could be a force of changes at Goldman (reining in risk taking that could one day set off another meltdown) but he doesn’t rock the boat. He says “come Monday it’ll be alright,” but everyone knows that Mondays almost always suck.
Wait. Scratch that last one. Never mind.
Speaking of the world’s greatest money managers, two readers correctly guessed the person who was on the cover of Institutional Investor in spring 1981 under the headline “World’s Greatest Money Manager.” It was indeed George Soros. Copies of “Diary of a Hedge Fund Manager” (which I coauthored) are forthcoming.
I have no beef with Soros. Buffett—well he did inject cash into the system during the crisis when cash was sorely needed so I guess I shouldn’t be ragging on him too much. Still, no one seems to challenge anything he says, so I figured I’d give the Oracle a nose tweak.
Buffett released his annual letter to Berkshire Hathaway Inc. shareholders recently. The full letter is available online at www.berkshirehathaway.com
March 10th, 2010 at 5:48 am
The option trade represents a long equity market exposure with a ten year plus European expiration. The premium collected invested at 10 % will at worst break even. It was free money to BRK. Writing down the premium part of way is a loss to you I guess. Don’t forget the return generated by investing the premium though.
The news papers are bad obviously. Buffalo news is less bad due to 80% market share in a local area allowing for a unique advertising proposition. Similar for the Washington Post.