Warren Buffett Watch
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Warren Buffett: Some Berkshire Derivatives Will Lose Money
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Reuters quotes him at the question-and-answer session as saying, "We have run into far more bankruptcies in the last year than is normal." On contracts tied to credit defaults, Berkshire will probably "lose money."
"I would expect those contracts to show a loss before investment income, and perhaps after investment income."
Those money-losing contracts are smaller, and expire sooner, than Berkshire's derivatives that, in effect, insure the buyer against long-term stock market declines.
Buffett is still optimistic on those contracts. "I personally think that the odds are extremely good that on the equity put options, we will make money." Those contracts expire between 2019 and 2028.
Some critics have accused Buffett of not following his own advice, recounting that he once famously called derivatives "financial weapons of mass destruction."
Current Berkshire stock prices:
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Class A: [US;BRK.A
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Class B: [US;BRK.B
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Data is a real-time snapshot *Data is delayed at least 15 minutes
