Two Ways: Are Investors Still Betting on Buffett?

Tags: BRK, A, MCO, SPX, B, DBA

Terry Woo February 27, 2009, 8:30 am Watching Warren Berkshire Hathaway (BRK.A, BRK.B) is set to report earnings this weekend, and CEO Warren Buffett is about to learn just how committed his investors are to his long-term view. According to the Wall Street Journal, over the last few years the company has sold long-dated put options -- basically insurance contracts -- on foreign and US equities to the tune of $4.5 billion. These options have an expiration period lasting from 15 to 20 years, and since Berkshire Hathaway has sold them, equity markets have plunged (the S&P 500 is down over 50% from its apex). For more on the macro front, see Fil Zucchi’s From Deflationary Spiral to Inflationary Spout? From the Bull Pen: We noticed the agriculture plays trading dry yesterday. If you’re in the longer-term inflationary camp, consider the Ag ETF (DBA). A sell stop can be set below $23. From the Bear Cave: One play in Buffett’s portfolio is a real conundrum: Moody’s (MCO). What exactly is the long-term value that he sees? Bears playing the downside can set a 2% buy stop above entry. ... Read entire article