Category: Money tips Release Date: 2005-12-20
Warren Buffett is not the time decisions are wise, at least dollar investment in his repeated mistakes on.
Dallas City in 2005 U.S. dollars, making Buffett a large number of dollar short positions held by a loss of about 10 million; into 2006, just as Warren Buffett to give up their view, substantially reducing the U.S. dollar short positions when the contract During this period there also happens dollar fell sharply, making stocks God missed a great opportunity to make money.
Buffett's investment company Berkshire H athaway results released last Friday showed that the first quarter of this year, Buffett positions with short positions have been reduced to U.S. dollars 5.4 billion U.S. dollars, only the peak of 21.8 billion U.S. dollars in one quarter. To the second quarter, Warren Buffett once again the U.S. dollar short positions decreased by 42 billion U.S. dollars, only 1.2 billion in positions, only the peak positions of 5.5%.
However, in the second quarter of this year, is used to measure the dollar in the six major currencies, the dollar index (D ollar I ndex) has fallen a cumulative 5.1%, a record two years, the biggest decline in a single season, which means that Buffett missed the lucrative opportunity. Although the U.S. dollar short positions in the second quarter to bring the contract remains at 87 million U.S. dollars Buffett and fetched, but if you do not substantially reduce, then he certainly earns more. A securities analyst has estimated that at least I lose Buffett 5 billion dollars.
From the end of 2002, the Buffett that the U.S. current account deficit widening, it began to look at the dollar, continued to buy short-selling U.S. dollars forward contracts, from 2002 to 2004, within two years, the dollar is found to have larger decreases in Buffett profits from a time nearly 30 billion U.S. dollars.
In early 2005, Buffett's dollar short positions reached a peak of 218 billion dollars. However, those days, because the Fed raising interest rates, international hot money began to flow from other currencies into U.S. dollars, supporting the dollar's continuous rise in the dollar index rose by 13% within a year. Sudden change in the dollar strong case, Berkshire Hathaway's 2005 currency forward contracts in a loss of about 10 billion dollars, Buffett is also forced to close out the year a large number of short dollar contracts to reduce losses.
The first quarter of this year, Buffett made it clear that the reduction in U.S. dollar short positions at the same time, it will increase the intensity of mergers and acquisitions of overseas assets. This year in July, Buffett spent 40 billion U.S. dollars bought Israel a metal processing plant Iscar M etalworking 80% stake in Berkshire H athaway this is the first international acquisition.
However, the acquisition has caused the current concern of investors, because the plant's location and is only 6 miles from the Lebanese border at any time of war would be affected. International rating agency Fitch, said the insurance analyst DonaldThorpe last Friday, the local instability, Iscar risk is increasing.
Despite the investment in the foreign exchange losses, but this did not affect the overall performance of Berkshire H athaway. Second quarter of 2006, the company's net profit increased 62% to 23.5 billion, making 1522 U.S. dollars per share. Excluding 294 million U.S. dollars of investment profits, the net profit reached 1331 U.S. dollars per share. Earnings growth was primarily driven by Buffett invests in blue-chip corporate profits increased significantly.
Results show that, BerkshireHathaway cash holdings in the second quarter amounted to 42.07 billion U.S. dollars, compared with 42.86 billion U.S. dollars in the first quarter was only slightly decreased. Check the U.S. asset management companies, said Steven Check, chief investment adviser, from Berkshire H athaway cash holdings can be seen that Buffett has not yet find a suitable investment target.
