Berkshire Profit on Goldman Sachs Passes $2 Billion

You can huff and puff all you want but it doesn't change a thing. You're pathetic and obviously desperate... we were talking about the equity index puts and as I said... ONLY the price on the final day matters to Berkshire.

Here it is in Buffett's own words. Call him from your mommy's basement and tell him he has it all wrong:

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2516635>

Quote from atticus:

You are without a doubt the dumbest mofo alive.

Bottom of page 9, where I mention the counterparty trade was "phenomenal". I mention the buyer's billions in gains no less than a dozen times on this thread.

http://www.elitetrader.com/vb/showt...6&perpage=6&highlight=put buyers&pagenumber=9

Buffett's counterparties book billions, top of page 19:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=170996&perpage=6&pagenumber=19

I suggest you stop quoting acolyte and steal a dictionary. You'll want to avoid the chart comparing the SPX against the remaining indices in that trade:

The SPX outperformed all but the FTSE in 2008. Meaning that the MTM is far worse when adding the remaining indices.

So the foreign market additions increase the marked-loss. You're done.
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I'm not an expert in options like you pretend to be but I can tell this is wrong just by looking at it.
Quote from atticus:

he's carrying a $delta of approx. 1.6MM per tick on SPX.
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Quote from atticus:

Buffet states a 9 billion dollar liability if indices lose 25% from inception. The contracts were atm, so 1135.50 on SPX would result in a 4.1 billion net-loss at expiration.

Buffett's talk of a $10B liability in the annual letter infers an SPX valuation <1135 and we're currently trading at 980.

Anyone can solve for convexity at locale, and he's carrying a $delta of approx. 1.6MM per tick on SPX. He's still short a lot of convexity to arrive at a loss of 37B at 0.00 on SPX. At 970 he's carrying a liability [including the prem] of ~$11.5B if the contracts were to expire on 7/24/09.

No mention of an attenuation of the liability is mentioned anywhere in the letter. No hedge.
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Anti-Hershey troll on ignore.

The 1.6MM figure is accurate, but the outperformance of the SPX in 2008 relative to the remaining index-trades leaves Buffett's reserves against the position inadequate under GAAP. I estimate that he's light by at least $2B on stated-reserves when assigning a 75% weighting to SPX at a price of 980. The actual SPX weighting is likely much less, making the $2B figure conservative. I used a vol-line 500bp UNDER 5Y SPX vol as quoted by DB.

The inadequate reserve figure relates to the "1514" position addressed in the annual letter, and not the adjustment into the "994" position, which added to losses.
 
Wrong. You wrote the following which WAY overstates it and it's obvious just from looking at it.

he's carrying a $delta of approx. 1.6MM per tick on SPX

Let's see your numbers... lay them out clearly without hiding behind jargon. You're worse than Hershey.

Quote from atticus:

The 1.6MM figure is accurate
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This is typical of your misinformation and inability to admit when you're WRONG. Here's what Buffett actually wrote in the 2008 letter.

There is no $9B liability at 1135. Three other indexes must also decline exactly 25% and exchange rates must remain unchanged. What part of that can't your B- brain understand?

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2516524>

Quote from atticus:

Buffett's own admission marked the $9B liability to 1135
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Quote from atticus:

Buffett states that a 25% drop in the SPX will result in a $9B liability
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+ a dividend?

sounds like a steal to me.


Or perhaps neither company loses at all (goldman + berkshire) ?

Goldman, generate CDS products, sell them to AIG. AIG, bankrupt, gets money from gov. gives it to Goldman.

Goldman then gives a slice of the pie to Berkshire. = Everyone wins.

?

Dunno, but people thinking Berkshire got a good one on Goldman, reality seems more like a partnership.


-troll
 
Buffett will have to add >$2B to reserves in 2009 if we're sitting at current index levels. Buffett needs to see a 14% gain across all four index markets to avoid adding to the reserve pool.
 
This is stupid on so many levels. The $10B liability in the annual letter doesn't "infer" any such thing, either for the reporting date or the future.

The ACTUAL S&P 500 valuation on the reporting date, which was yearend, was 903. Period. And the $10 billion liability was actually a mark-to-market loss of $5.1 billion after accounting for the premium.

With respect to inferences about the future, FOUR indexes are involved and you have NO IDEA how Berkshire's exposure is weighted among them. Nor do these indexes move in lockstep and even if they did, you don't know when each of the contracts expires... from the portion of the letter I've attached, there's an 8+ year window. Not to mention exchange rates. So it's clear that once again, you don't know what you're talking about.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2516923>
Quote from atticus:

Buffett's talk of a $10B liability in the annual letter infers an SPX valuation <1135 and we're currently trading at 980.
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Atticus still does not get that the 9b or 10b he is talking about is gross and not including premium.

Nor does he understand the trade within the proper context, in fact he behaves as if WB's life depended on this single trade. I stopped engaging with this guy directly as he put forth lies and could not sustantiate any of his earlier claims. I recommend to stop feeding this guy. He knows options, fair enough, but when he gets agitated and especially when he gets something wrong he simply cant get beyond his arrogance and starts calling people names and starts lying. He is absolutely not in control of his temper. He even sent me PMs thats how much he was on fire, lol. But above all he fucked up on several issues and simply cannot admit....go figure...




Quote from Trader666:

This is stupid on so many levels. The $10B liability in the annual letter doesn't "infer" any such thing, either for the reporting date or the future.

The ACTUAL S&P 500 valuation on the reporting date, which was yearend, was 903. Period. And the $10 billion liability was actually a mark-to-market loss of $5.1 billion after accounting for the premium.

With respect to inferences about the future, FOUR indexes are involved and you have NO IDEA how Berkshire's exposure is weighted among them. Nor do these indexes move in lockstep and even if they did, you don't know when each of the contracts expires... from the portion of the letter I've attached, there's an 8+ year window. Not to mention exchange rates. So it's clear that once again, you don't know what you're talking about.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2516923>
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Quote from asiaprop:

while you seem to be pretty accurate with your unrealized p&l evaluation you still stubbornly ignore the trade in its larger context.

I sent one PM thanking your for your contribution to this thread. You sent me an unsolicited PM two months ago, while my first PM to you was last night... so more BS from asiaprop.
 
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