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Berkshire Profit on Goldman Sachs Passes $2 Billion
- Thread starter ASusilovic
- Start date
You make a lot of assumptions and thats naivete (thanks Mr. native speaker). You are confusing a trader who better be right or cut his position early vs. a long-term investor W.B. style who traded vehicles with years to expiry. He also bought GS not to offset the trade within 6 months but to hold onto for >2 years unless he is appoached with a juicy offer to offset.
You seriously believe a guy of such acumen who buys into GS at such time at such conditions will put on such options positions without regard to the larger context of his book? Come on, reading entertaining stories of a fun website and implying thats all there is to the whole story is the same as believing Jim Rogers or the like are in all honesty revealing their true positions which makes you look slightly stupid. All I have to say...
You are glued to this one single option trade and totally ignore the rest of his book which you CANNOT KNOW, nor do I.
You seriously believe a guy of such acumen who buys into GS at such time at such conditions will put on such options positions without regard to the larger context of his book? Come on, reading entertaining stories of a fun website and implying thats all there is to the whole story is the same as believing Jim Rogers or the like are in all honesty revealing their true positions which makes you look slightly stupid. All I have to say...
You are glued to this one single option trade and totally ignore the rest of his book which you CANNOT KNOW, nor do I.
Quote from atticus:
DUDE, he stated the loss in the letter. You think he's going to neglect the rather salient point that he's got a nifty offset in down&out gamma? Right, he left out the netted $10B gain on hedge, sure.
The pro-Buffett responses on this thread are a black-hole of stupidity. What is naivity? I assume you mean naivete.
Quote from asiaprop:
You make a lot of assumptions and thats naivete (thanks Mr. native speaker). You are confusing a trader who better be right or cut his position early vs. a long-term investor W.B. style who traded vehicles with years of expiry. He also bought GS not to offset the trade within 6 months but to hold onto for >2 years unless he is appoached with a juicy offer to offset.
You seriously believe a guy of such acumen who buys into GS at such time at such conditions will leave mentioned position 100% unhedged? Come on, reading entertaining stories of a fun website and implying thats all there is to the whole story is the same as believing Jim Rogers or the like are in all honesty revealing their true positions which makes you look slightly stupid. All I have to say...
You are glued to this one single option trade and totally ignore the rest of his book which you CANNOT KNOW, nor do I.
You're being an idiot out of some absurd stubbornness. He would not mark the loss in the letter w/o netting for the hedge. Whether or not he owned some puts in his KO or other book of business is not relevant. It would be relevant if he assigned a hedge gain to THIS position, which he has not.
It's contrary to SELF and FIDUCIARY interest to DO OTHERWISE with a position of such material-impact.
sorry but you really degrade your reputation here if you seriously believe W.B. just gambled 10B away just because he believed selling vol at 11points was a steal.
Quote from atticus:
You're being an idiot out of some absurd stubbornness. He would not mark the loss in the letter w/o netting for the hedge. Whether or not he owned some puts in his KO or other book of business is not relevant. It would be relevant if he assigned a hedge gain to THIS position, which he has not.
It's contrary to SELF and FIDUCIARY interest to DO OTHERWISE with a position of such material-impact.
Quote from asiaprop:
sorry but you really degrade your reputation here if you seriously believe W.B. just gambled 10B away just because he believed selling vol at 11points was a steal.
Oh jesus, you're right. I am here to impress some anon prop-trader from Bangladesh. I'd rather be right than suck-up under some blind-allegiance based-upon a "vol doesn't matter" and "he must be hedged" argument. To assume he would leave out a material-hedge is so incredibly stupid that I am almost at a loss for words, almost. The marked-loss is NETTED.
He sold duration at 14 [fronts at 11%], for the sake of argument. You don't fill that much paper just to replicate elsewhere. If he did, he wouldn't be sitting on a $10B loss, which is in-line with the move in SPX, isolated from vol-losses.
He neglected his fiduciary duty because his printer ran out of toner, right?
Now please, gfy.
I am not saying he's an insurance co; I'm just saying that he acts as one for purposes of this specific trade. I don't know anything about any global concerns, such as diversification. I don't speak about what I don't know.Quote from atticus:
It's not insurance as the book of underwritten premium is not diversified.
Event-risk in insurance is analogous to an American option.
Your point about distribution makes my point on relative-price/vol-line.
Yes, you're right about event risk, but I am not sure how it applies here. I assume Buffett sold European puts, in which case the only event occurs at expiry.
I am not sure what your point was. All I said is that implied or realized vol during the lifetime of the trade doesn't matter. He might as well have sold these puts if they were priced with a vol of 0. As long as the price is right given the probability of them being OTM at expiry, vol's irrelevant. That's all I am saying...
Quote from Kassz007:
Who else has the capital to make such an investment?! A public offering surely would not have raised nearly the amount required...
Ok wow, you're obviously clueless about the scope of institutional funds. There are plenty of private equity funds that would have jumped at the same deal.
The deal was publicly announced and all details were released. Nobody tried to hide anything in this deal...Of course I don't expect you to buy into this because you are of the "government information is all lies and manipulation" crowd who are likely short the market.
Buffett needed the corrupt bailouts and was lobbying for them with intensity, crying how without them everything will turn doomsday. This is from the same jackass who talks about free markets?
Yeah full of shit he is and so are you.
Go back to your garage and build some computers.
LOL, it is one of many skills, which semi-retarded individuals like you obviously lack. That's why you carry kneepads around, just in case.
Quote from Martinghoul:
I am not saying he's an insurance co; I'm just saying that he acts as one for purposes of this specific trade. I don't know anything about any global concerns, such as diversification. I don't speak about what I don't know.
Yes, you're right about event risk, but I am not sure how it applies here. I assume Buffett sold European puts, in which case the only event occurs at expiry.
I am not sure what your point was. All I said is that implied or realized vol during the lifetime of the trade doesn't matter. He might as well have sold these puts if they were priced with a vol of 0. As long as the price is right given the probability of them being OTM at expiry, vol's irrelevant. That's all I am saying...
You have a right to your opinion, as wrong as it may be. Have a good weekend.
Quote from asiaprop:
you seem to have serious problems to comprehend that all that happened was that your interest was ill represented in Washington. If you have an issue about how your representative spoke for you in D.C. then take it up with him and not the rest of the world. Or did you forget to vote?
You seem to be completely oblivious to the fact that congressmans' phones were flooded with calls demanding that no bailout be given to Wall Street. You also do not realize that I wrote emails directly to my congressman and so did everyone else in our office. Some of these individuals also called congressmen whom they know personally.
But then you probably are oblivious to all these facts while daydreaming in Goldman Sachs' janitorial facilities.
Quote from Anaconda:
Ok wow, you're obviously clueless about the scope of institutional funds. There are plenty of private equity funds that would have jumped at the same deal.
Really? Do you know this or are you guessing again? Given the level of risk and uncertainty in the banks at that point in time, I hardly think plenty of private equity funds would have jumped at the chance to plow billions of dollars into GS.
Buffett needed the corrupt bailouts and was lobbying for them with intensity, crying how without them everything will turn doomsday. This is from the same jackass who talks about free markets?
Yeah full of shit he is and so are you.
LOL, it is one of many skills, which semi-retarded individuals like you obviously lack. That's why you carry kneepads around, just in case.
I will be the better man and not respond to your childish insults...