What happens when you write $40 billion of equity index puts and the market tanks? Probably nothing, for another 14-18 years. According to the derivates disclosure section from Warren Buffett’s Berkshire Hathaway’s June 2008 10-Q, the Oracle of O sold approximately $40 billion worth of index put options between 2005 and 1Q 2008, receiving nearly $5 billion in premium. This morning on CNBC, O Cubed told Becky Quick that a financial-themed Pearl Harbor would occur if the Fed did nothing. Sounds like someone who wrote a bunch of index puts recently to DB. (Granted, indexes would have to be below 2007 levels in 14-18 years for him to have to take losses.)
Though many are psyched at the idea of Buffett diving into bed with Blankfein, is this the best idea right now? “Value plays” in financials have destroyed more than a few smart investors in the last 6 months and The Big O didn’t even consult with the Charlie Munger on this one, much less his favorite girl at Scores (Very) West. (She is his usual confidant on such matters, you know.) To this pessimism, the Oracle of O would probably say “When people are greedy, be fearful. When they are fearful, be greedy.” But he is also prone to give advice on nipple clamps and genital piercing, so your mileage may vary.
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Bess,love the pearl neckless reference. But it begs the question, do you like a pearl neckless? sorry, had to ask
neclace?
innocent typo gets a pass. two genius commenters who can’t get “necklace” right — FAIL.
Actually, the Pearl Neckless is a move in which you shoot cum on someone’s face and then decapitate them in one fell swoop.
You’ll have to excuse Bess for the typo because she had my cum in her eye.
Right back into the gutter with those idiotic comments
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Chimps
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WTF with all the perv’ allusions to Warren Buffett? The guy is like a million years old and looks as harmless as Wilfred Brimley in a diabetic coma — is he some kinda sex maniac or something? What’s the dealio, cookie?
@7- are you joking? buffett makes sex references in every interview, including this morning’s on cnbc.