An autopsy of Berkshire's big derivatives portfolio trade

[ETJ]

Buffett's derivatives bonanza doesn't prove that Taleb is wrong; An autopsy of Berkshire's big derivatives portfolio trade
Pablo Triana - Financial Times
Between 2004 and 2008, Warren Buffett sold an absolute boatload of derivatives contracts. Back in 2013 I tried to dissect the trade - an analysis Alphaville covered here and here - but now that the positions have all been closed out it makes sense to do a final autopsy. Remember, the size of the positions was humongous. At the peak the nominal size of Berkshire Hathaway's positions was about $40bn of equity index puts and $30bn of credit-default swaps, many of which were long-term, volatile exposures.
/jlne.ws/3XH6beN

 

[TheDawn]

Buffett's derivatives bonanza doesn't prove that Taleb is wrong; An autopsy of Berkshire's big derivatives portfolio trade
Pablo Triana - Financial Times
Between 2004 and 2008, Warren Buffett sold an absolute boatload of derivatives contracts. Back in 2013 I tried to dissect the trade - an analysis Alphaville covered here and here - but now that the positions have all been closed out it makes sense to do a final autopsy. Remember, the size of the positions was humongous. At the peak the nominal size of Berkshire Hathaway's positions was about $40bn of equity index puts and $30bn of credit-default swaps, many of which were long-term, volatile exposures.
/jlne.ws/3XH6beN

Paywall. Good article though.

 

[newwurldmn]

Buffett's derivatives bonanza doesn't prove that Taleb is wrong; An autopsy of Berkshire's big derivatives portfolio trade
Pablo Triana - Financial Times
Between 2004 and 2008, Warren Buffett sold an absolute boatload of derivatives contracts. Back in 2013 I tried to dissect the trade - an analysis Alphaville covered here and here - but now that the positions have all been closed out it makes sense to do a final autopsy. Remember, the size of the positions was humongous. At the peak the nominal size of Berkshire Hathaway's positions was about $40bn of equity index puts and $30bn of credit-default swaps, many of which were long-term, volatile exposures.
/jlne.ws/3XH6beN

Poorly written article.

he said they were mispriced and the article didn’t explain why they were mispriced. Take argument is that derivatives are underpriced (because of the tails). Buffet saw them are overpriced and he earned despite two significant financial shocks.

 

[cruisecontrol]

archive link: https://archive.li/BCdLe

 

[RedDuke]

It is a known fact Buffet was going broke in 2008. Had the rules of marked to Market have not been changed.

totally get it. The usual shit of different rules for different people. Same old story. Not sain it is a bad thing, just how the world works.

 

[newwurldmn]

It is a known fact Buffet was going broke in 2008. Had the rules of marked to Market have not been changed.

totally get it. The usual shit of different rules for different people. Same old story. Not sain it is a bad thing, just how the world works.

not bankrupt but it had messed with his ability to buy BNF.

 

[mervyn]

WB bought General Re, which was in the game, among with Swiss Re, AIG etc. He was lying to the teeth, lot of premium took in and then got bailout from the government.

 

[nitrene]

Buffet is biggest scammer on Bubblevision. He was just a beneficiary of a rising bond market. That game is over now. I doubt his endless buying of railroads & financials is going to work anymore.

 

[newwurldmn]

Buffet is biggest scammer on Bubblevision. He was just a beneficiary of a rising bond market. That game is over now. I doubt his endless buying of railroads & financials is going to work anymore.

yeah. For the last 50 years bonds have endlessly gone up.

His new guys have done pretty well so far. not many people here worth 300mm in their rollover IRA’s.

 

[mervyn]

His new guys have done pretty well so far. not many people here worth 300mm in their rollover IRA’s.

This can be done only with insider trading.