Warren Buffett’s latest quarterly Berkshire filing recently hit the wires.
For starters, he upped his stakes in both Wells Fargo and U.S. Bancorp. If you listened to Buffett’s comments during the annual shareholder meeting recently, he basically said he’d like to buy them outright. So no surprise here.
What was more interesting is the fact that Buffett also restructured his big derivatives bets on major stock exchanges. I explained these bets in great detail in a recent issue of Dividend Superstars, but the gist is that they are very long-term bullish positions. Apparently, he rejiggered the S&P 500 contracts to make them breakeven at levels about 15% higher than where we are right now. That’s a a lot better than the previous terms, which would have required a 70% gain. And Buffett told CNBC that he didn’t pay anything for the privilege. He also reportedly altered the terms of one of the foreign index bets, but wouldn’t get specific.
I continue to think these bets are going to work out for Berkshire, especially since they have many years to work out. And I do not take Buffett to task for using the very same instruments he deemed “financial weapons of mass destruction.” He is simply using whatever investments are available, regardless of his personal opinion.
The rest of Buffett’s moves were relatively minor. Like the market, it seems as though Buffett is largely in a holding pattern for now.
Related posts:
- Berkshire Hathaway Is Now “Optionable” I have written a lot about Warren Buffett’s Berkshire Hathaway, including details on the company’s own options positions. And in...
- Foreigners Just Say No to Treasuries Foreign demand for U.S. Treasuries dropped at the greatest rate in history during December, according to Washington. Could this be the...
- The General Electric dividend cut … In the latest issue of Dividend Superstars I said a second-half GE dividend cut was possible. Well, it came sooner than...
{ 2 comments… read them below or add one }
I noticed in your text article:
“Social Security Situation Worsening; What to Do …”
This person came up:
“Ernest Ackerman put in one nickel to Social Security, retired a day later, and got back a $0.17 lump sum payment. Need I say more?”
That would have been totally meaningless unless I had not read this recently:
http://en.wikipedia.org/wiki/Ackerman_function
“Ackermann numbers”
An attempt to express the fourth Ackermann number, 4|4, using iterated exponentiation as above would become extremely complicated. However, it can be expressed using tetration in three nested layers as shown below. Explanation: in the middle layer, there is a tower of tetration whose full length is and the final result is the top layer of tetrated 4’s whose full length equals the calculation of the middle layer. Note that by way of size comparison, the simple expression already exceeds a googolplex, so the fourth Ackermann number is quite large.
===========
Akerman numbers get massive quickly!
In an nutshell, Social Security will very instantaniously become hypermassivly bankrupt.
===========
Brilliant post!
Nilus