The whole thing will be up on BRK website on Mar 8th but here is a sneak peek: http://www.fortune.com/fortune/investing/articles/0,15114,427751,00.html
Bah, Buffet is just a guy that got lucky a few times and now he thinks he understands investing. I'm a Cramer man myself.
Warren is not talking about what we generally know as derivatives. He's talking about things like total return swaps that require no margin, executive running up earnings and stock price to increase the value of options given as compensation, and strange derivatives that are so hard to value that the writer is just hoping castrophe doesn't strike until long after he's been paid his bonus.
:eek: some <a href="http://www.elitetrader.com/vb/showthread.php?s=&postid=212642#post212642">headlines</a> that crossed the tape this pm regarding The Oracle of Omaha.
Funny each time they want to frighten the market they use him as "The Sage has said ..." It is since 20 years that Buffet says that about derivatives it is not new so why do they release that kind of opinion when market is at critical juncture huh ? Do you remember also the "100% probability of nuclear terrorism act" just at the super Top of the Dow last year ? What's funny to hear that threat in the mouth of Buffet ... and about 2 weeks before FBI said exactly the same thing. I didn't know that Buffet was an expert in nuclear threat ...
I bet they will soon talk again about nuclear terrorism threat now that we are near the top... haha !
I seem to remember the following about WB (please correct if I misquote). He once summed up his wisdom about handling money as follows: RULE #1: Never loose money; RULE #2: Never forget RULE #1. I thing this pair would be not bad for derivatives as well nononsense
"At the start of the silver manipulation I was flat. I had taken all profits and closed out all short positions. Silver was trading around $4.29 when PhiBro walked across the ring and handed to my broker an order to buy 1,000 lots of silver every penny down for as far as you could see. <B><FONT COLOR=GREEN>They intentionally showed me the Buffet order</FONT></B>. Later Bob Gotlieb from Republic Bank call me and tried to get me to join the manipulation. He said, "Something big is coming down in silver," and when I asked who was behind it, he said, "Your friends in Connecticut." After being approached several times to join the manipulation, I reported to my clients that "they" were back. I would not have used the term "they" if it had been someone other than the same crew as in 1995. I was told that the silver price target was $7. I reported that information on our website. I was NOT short. I knew what they were capable of doing. Then I left the country for my usual fall tour. I was invited by the government of China to discuss the Asian crisis. I visited the government there in December 1997. Upon my return silver was at $6.40 and everyone indeed had been led to believe that it was me because the orders were routed through Republic to give the market the impression that I was the one buying the silver. In fact, it was Republic buying the silver itself and moving it to London. "
Some in clandestine companies combine; Erect new stocks to trade beyond the line; With air and empty names beguile the town, And raise new credits first, then cry 'em down; Divide the empty nothing into shares, And set the crowd together by the ears. âDefoe Yours humbly, nononsense