LOL!!! you hit my funny bone with that. I wish everyone always spoke like that. That'd be my kind of world.
I'll tell you why Buffet didn't hedge his huge positions. Too expensive. He's a value guy. Of course, right now he wishes he'd paid up + a cherry on top. No do overs Warry. How much will a starving man pay for a Big Mac? A lot more than its 'worth'. $1,000,000,000,000,000,000,000.00 Bon apatite
But once those put option contracts get in the money they can be excercised any time. Or is the euro method you can only excercise those contracts in the final month of expiration?
Doesn't scare me. I wish he'd fold tomorrow. Because, it is obvious, the drunk hasn't hit bottom. Until he does, until he shakes the idiots in DC to their very roots, and it has to be, obviously, something of that magnitude. Until then, this rally a 'brewin' is only a pause in the suffering.
remember, i think last year, when she flew on his jet with him on a trip and she was in her jammies? it was kinda creepy. she kinda has that 'i'd blow him cause he's powerful (or to get the exclusive story)' look about her. can't blame the Buff for taking the bait- hell, i'd fuck her. in fact, i'll go on record that i'll fuck Becky Quick in return for the exclusive story of how i imploded my account by 2/3 in 6 months by trading like a fucking idiot. PM me if you're game, Becky... as to the options: i'd be really surprised if he takes questions like that. this is going to be a lovefest of admiration. i seriously doubt we'll actually see critical questions- except for the softball variety.
From going through this whole thread, it seems from buffet's prospectus there are no or little collateral requirments and no requirement to mark these to current market value.
Warren Buffett will personally explain his derivatives to you in excruciating detail (as of Feb 27 2009) starting on page 18.
So if everything falls to $ 0, they owe $ 37 billion. At the end of 2008, they owe $ 5 billion as per mark to mark. However, they only had to put up 1% non callable. If the market recovers before end of put, then they made a great bet. If the market is down around the same % as end of 2008, they do lose double the premium. Personally, I like their 10% preferred stock deals better since assuming the company does not go bankrupt, they make back 100% of the cost by just receiving the dividend over 10 years. Since he only needs to put down 1%, he could basically just write another $ 4.9 billion in puts right now to help pay off the possible loss assuming the market stays the same price or higher as of today when the puts expire. He could have hedged his risk by buying 1 year out puts while writing the farther out puts or by buying gold. Anyway. looks like he finally made a mistake, but not one that will blow up his entire company.