- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- Amended Berkshire Hathaway Filing Indicates No Secret Stock Stakes at End of Q3
- Buffett's Wealth and Fame Hasn't Helped 'Warren' As a Name
- CNBC VIDEO: Warren Buffett & Bill Gates 'Walk & Talk' at Columbia University
- Warren Buffett to CNBC: Curbing Fed's Independence Could Lead to 'Mischief'
- Warren Buffett to Co-Chair Goldman Sachs Program to Help Small Businesses
- Warren Buffett: 'Reasonable Return is Good Enough' for Long-Haul Railroad Ride
- Warren Buffett's Berkshire Hathaway Almost Doubles Wal-Mart Holdings During Summer
- Warren Buffett's Berkshire Portfolio Snapshot Coming Later Today
- Warren Buffett to CNBC: 'I Haven't Bought American Express In Years'
RSS FEED
MOST SHARED
- Garlic Price Rises Surpass Gold, Stocks in China
- S&P Stocks Trading at New 52-Week Highs
- New-Home Sales Jump 6.2% To Highest Level in Over Year
- Ritz-Carlton ?Struggling? in the US: President
- The Executive Job Search
- US Plans to Reduce Emissions By 17% Within Next Ten Years
- Salvation Army's Kettles Now Credit Card-Ready
- Half of Banks' Losses May Still Be Hidden: IMF Head
- Consumer Mood Improves, But Anxiety Over Personal Finances
- Where Do Pardoned Turkeys Go?
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- S&P Stocks Trading at New 52-Week Highs
- AIG, Ex-CEO Greenberg Reach Pact to Settle Disputes
- Bank of America CEO Search May Extend Into 2010
- 'Cancer of Fraud' Permeates Health Care System: Critics
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Judge Erases Couple's $525,000 Mortgage Payment
- For Many in US, It Will Be a Scaled-Down Holiday Season
- Where Do Pardoned Turkeys Go?
- Jobless Claims Below 500,000, Durable Orders Slip
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
Warren Buffett Watch
Text Size 
Warren Buffett tells Bloomberg today that more information about Berkshire Hathaway's derivative positions will be included in the company's annual report early next year.
In an email sent by his assistant, Buffett says investors will be told about "all aspects of valuation" for the contracts. In addition, the report will discuss "deficiencies in the formula" for pricing the derivatives, "which we nevertheless use."
Berkshire received almost $5 billion for writing the put option contracts. They act as a form of insurance for buyers who want to limit their potential long-term losses on stocks.
Berkshire would have to pay money to the holders of the contracts if, on certain dates well in the future, four stock market indexes from around the world, including the S&P 500, are below where they were when the deals were made in the last few years.
Berkshire wouldn't have to make any payouts for any of the contracts until at least 2019.
In the meantime, however, Berkshire is required to determine the current value of the contracts and include any "gains" or "losses" in its earnings report. With stocks plunging in recent months, the current value of the derivatives has also been falling.
Some investors have questioned how Berkshire determines the current value, and that process is what Buffett is promising to address in the annual report.
 |
If stocks eventually move higher by the end of the next decade, as Buffett expects, the contracts will be produce profits for Berkshire.
Buffett also says the contracts' collateral requirements are "under any circumstances, very minor."
Over the weekend, Barron's said Wall Street's worries about the derivatives are "overblown" and Berkshire's decline of about 50 percent from its highs last December has "created one of the better buying opportunities in years."
Current Berkshire stock prices:
Class A: [US;BRK.A
Loading...
()
]
Class B: [US;BRK.B
Loading...
()
]
Questions? Comments? Email me at
- Berkshire Hathaway Bounces Back By 16% For Best Day In Decades (November 21)
- Berkshire Hathaway Subsidiary Keeps Coachmen Alive By Acquiring RV Business (November 21)
- USG Shares Soar On Warren Buffett's "Expression of Confidence" (November 21)
- Warren Buffett on Market Meltdown: It's Happened Before And It's Been Even Worse (November 21)
- Berkshire Hathaway Down Almost 50% From All-Time High As Stock Sinks Again (November 21)
- Berkshire Hathaway Plunges 12% For Worst Day Since 1987's Black Monday (November 19)
- A Goldman Opportunity: How Average Investors Can "Out-Buffett" Warren Buffett (November 19)
- Buffett's Berkshire Gets A Billion In Beer Bucks (November 18)
- Berkshire Hathaway Shares Close Below $100,000 For First Time In Two Years (November 17)
Data is a real-time snapshot *Data is delayed at least 15 minutes