Buffet Bets $19 Billion Against Dollar

[bln]

I personaly think he will be a looser in the intermediate term scope, dollar is currently completing a large bearmarket correction which started from the bottom in february 2004, this correction is not yet completed and the Dollar will move higher in the next 3-6 months.

Opposite ofcouse holds true for the Euro, it is correcting in a bullmarket and should drop to atleast 1.14 in price before continue its longterm bull climb.

Ofcouse nobody knows the future, but this is what Elliott Wave Theory say's is the most probable outcome for the Dollar and Euro.

[bln]

Things are finaly starting to move in the expected direction regarding my bearish intermediate EUR/USD call. We are still in the inital stage of the down leg and the next two weeks will be interesting to watch with a anticipated increase in selling pressure to get the ball rolling..

Holding short from 1.2370 with the stop at 1.2420.

[Mr 50%]

You place your bets and take your chances, whether its with $19 billion or $19. Only thing that counts if one profits from the move or not, all else is noise.

As for me, my short was stopped out seconds ! and I MEAN Seconds before the drop ! And no I don't blame the broker for running my stop, I blame myself for being stupid ! Eventhough I know this happens still that few pips, in my case 3 PIPS ! of GREED COST me today !!!!! EERRRRRRRRRRRRREGHHHHHHHHHHHHH !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Theres nothign more infuriating then doing everything right and still bloody losing !

Got to add a rule, if a news event passes through an open position to widen the stop for the period of the event !

[peaches]

looks like Mr. Buffet is winning

[forextrades]

He's not winning anything. He's basically hedged with all the T-Bonds he's long.

[OrlandoFlyBoy]

I am just wandering around, reading threads because I am new here.

Interesting to see what people were saying back in August and Sept.

And Buffet - $19Billion Short the U.S. Dollar - I bet he is laughing all the way to his G4.

Brings up a good point though. Perhaps he is satisified with his profit, and will get out, selling it all. Maybe it is time to Short the EURUSD (USD Long)?

[novice]

Originally posted by greentea777
That move is going against the most basic principle of trading in any market, BUY LOW SELL HIGH. Warren Buffet, go back to your ABC's.

You still around greentea777?

Lets say his average price was 1.2750 on EUR/USD and similar on related currencies (e.g. 425 XAU/USD). That may well look really cheap if the EUR/USD goes to ? and XAU/USD goes to ?

Just wish I had the capital and the nerve to hold such a large and long term position. After all it is hard to take a paper loss of over 300 million earlier this year (what Buffet did) and still hold a position (even if you are sure its going to be right).

[novice]

The Oracle does it again:

http://reuters.com/newsArticle.jhtml...toryID=7816697

Berkshire Profit Rises 40 Pct
Sat Mar 5, 2005 04:55 PM ET

By Jonathan Stempel
NEW YORK (Reuters) - Berkshire Hathaway Inc., the holding company run by billionaire Warren Buffett, said on Saturday that quarterly profit surged 40 percent, helped by a $1.63 billion gain on a successful bet the U.S. dollar would fall.

For the year, profit fell 10 percent. Buffett, in his annual letter to Berkshire shareholders, said he increased his stake in foreign currency contracts, and wants to deploy more of Berkshire's $43.4 billion of cash.

Fourth-quarter net income for the Omaha, Nebraska-based company rose to $3.34 billion, or $2,172 per Class A share, from $2.39 billion, or $1,553 per share, a year earlier. Revenue increased 1 percent to $20 billion. The per-share figures are high because Berkshire has few shares outstanding.

Berkshire's Geico auto insurance unit in 2004 posted low double-digit percentage growth in premiums, offsetting similar declines at its General Re Corp. reinsurance unit.

"Berkshire's operating companies did just fine," said Keith Trauner, a portfolio manager at Fairholme Capital Management in Short Hills, New Jersey. The firm invests $1.4 billion, including more than 20 percent in Berkshire shares.

"Geico has been shooting the lights out," he said. "General Re is deliberately slowing its business, preferring to maintain underwriting profit rather than premium volume. That's the right way to run an insurance business as competition rises."

Berkshire's many businesses sell such things as paint, mobile homes and underwear. The company also has big stakes in such companies as American Express Co., Coca-Cola Co. and Gillette Co., which agreed in January to a takeover by Procter & Gamble Co.

Buffett, who is 74 and known as the "Oracle of Omaha," is the world's second richest person according to Forbes magazine, with a net worth of about $42 billion. Microsoft Corp. Chairman Bill Gates, a Berkshire director, is the richest.

CURRENCY BET

In his annual letter, Buffett said Berkshire increased its stake in foreign currency contracts to $21.4 billion, in 12 currencies, from $20 billion on Sept. 30 and $12 billion the previous December.

Buffett has wagered against the U.S. dollar since 2002 amid concern about rising U.S. trade and budget deficits.

Last year the trade deficit rose 24 percent to a record $617.7 billion, while the budget shortfall was a record $412.3 billion. President Bush last month projected the budget deficit will rise to $427 billion in fiscal 2005.

"The evidence grows that our trade policies will put unremitting pressure on the dollar for many years to come," Buffett said. "As W.C. Fields once said when asked for a handout: 'Sorry, son, all my money's tied up in currency."'

As of Dec. 31, the greenback bought 8.3 percent fewer euros and 6.9 percent fewer Japanese yen than it did on Sept. 30.

Buffett said promptly fixing the trade deficit would likely cause currency losses for Berkshire. But he said this might be offset by the benefits of a strong dollar and low inflation to the company's big stake in dollar-based assets.

"I STRUCK OUT"

Buffett also lamented Berkshire's inability to deploy its $43.4 billion of cash, which grew 21 percent last year. "Not a happy position," he called it.

"My hope was to make several multi-billion dollar acquisitions that would add new and significant streams of earnings," he said. "But I struck out." He said he will seek acquisitions in 2005, including one of at least $5 billion.

Berkshire also said the liquidator of two failed Australian insurers plans to assert claims against two subsidiaries whose deception it said helped cause the insolvencies. U.S. regulators are already examining whether some General Re policies improperly helped companies smooth earnings.

For the year, profit fell to $7.31 billion, or $4,753 per share, from $8.15 billion, or $5,309 per share. Revenue increased 16 percent to $74.4 billion.

Berkshire Class A shares closed on Friday at $89,300, and its Class B shares closed at $2,979, both on the New York Stock Exchange.