Actually, he did a lot of arbitrage-style trading early in his career, when he was building his initial bankroll. It's discussed in some detail in <i>Trade Like Warren Buffett</i> by James Altucher.
"Berkshire Hathaway 13-F? BH Financial buys and sells quite a bit of stock, another directional bet, too" Yes I have. Their investment and derivatives gains/losses represents about 6% of their earnings for 2010 as of the third quarter. If you look at the nature of their other businesses (insurance, re-insurance, manufacturing, utilities, financial products, etc.) as a composite of net long and net short liabilities, you come to realize that Warren Buffett runs the ultimate relative value portfolio. In fact, he churns out alpha with very little beta exposure in terms of where the cash flows come from. In my mind at least, he's a very good spread trader.
"Actually, he did a lot of arbitrage-style trading early in his career" And arbitrage is the ultimate spread trading play in the purest and most literal form.
Here is the current unique situation for the ES from an open interest stand point, since supply & demand rules the markets. Right now we have the ES all the way back to previous highs (1224's area) but there is still a TON of ES SHORT inventory being held by large liquidity participants. Actually, I have not seen this much held SHORT inventory resting off a new high since November 2007. http://www.charthub.com/images/2010/12/04/ES_HTF_Chart.png I myself did initiate a longer term SHORT trade in the ES late Thursday with the ES trading back to the 1220's area (knowing how much SHORT inventory was still being held in ES - significant inventory resistance). Also, I did not mind working the SHORT trade into Thurday night AH session action ahead of Employment situation #'s (not like everyone is suddenly hiring again....LOL!). When employment #'s hit I cashed out most of the trade with the sell off from news release and was left only holding 3 runners. If the market Sunday night into Monday trades above the 1227.00 level I will be willing to go back into an active ES longer term SHORT trade again (since there is a TON of SHORT inventory still being held). Here is the MAIN thing to watch into Monday's US cash session.....will "Equities" continue to run BUY program runs throughout the day (like if the Euro rallies hard again) causing more of the held ES SHORT position to unwind (BUYING to cover.....up we go in ES). Monday I will be watching the "Equities" like a hawk, if I am back to an active ES longer term trade with any trading at 1227's or higher. If I see the massive ES held SHORT inventory degrade (unwind) throughout the day, reacting to "Equities" BUY program activity, then I will shift to a defensive mode while running my active longer term trade (if we are trading at 1227's or higher). Here is the unique situation we have, with all this held SHORT inventory in the ES there is a LOT of fuel for a mean SHORT COVERING rally ahead (10 to 15 point range extension minimum in only one trade day). I would say to be vigilant and keep your eye on the US cash session Equities BUY / SELL program activity for "the TELL" Monday. After the trade day on Monday, I will review the ES held inventory situation and give you an update as to what I see for Tuesday. BTW, here was the supply & demand events that kept the market from selling off below the 1170's prior to this rally back to new highs (tracking open interest gives the hints); http://www.charthub.com/images/2010/12/04/ES_HTF_Chart_2.png
Correct.....I have open CL's held that are underwater as a result of Friday's action with the position held funded by three days of CL trade profits (that big CL drop from Friday morning news was really nice). Also holding 3 Euro SHORT from EOD Friday at 1.3418 cost basis and holding 3 ES SHORT with 1224.25 cost basis.
Exactly the OP should harden the fuck up and close the trade in the premarket on sunday night. If he cant do it, then he can PM me his login credentials and i will close out the position for him <object width="640" height="385"><param name="movie" value="http://www.youtube.com/v/unkIVvjZc9Y?fs=1&hl=en_GB"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/unkIVvjZc9Y?fs=1&hl=en_GB" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="640" height="385"></embed></object>