In the past, Mr. Warren Buffett famously described derivatives as weapons of financial destruction. Now, derivatives are partially accountable for a drop in 3Q 2011 Profit reported by Berkshire Hathaway, Mr. Buffett's huge conglomerate. See "Derivatives Cut Into Berkshire Hathaway's Profit" p. B5, col. 1 (Reuters Report published in New York Times Nat'l ed., "Business Day" Section, Saturday, November 5, 2011).
Other factors nibbled at the margins, however. "But Berkshire was hurt, like many other insurance companies in particular, by sharp declines in a broad range of market values." Id.
Reinsurance provides Mr. Buffett's companies with protection against profit-killing policies, however (pun intended). "Profits in the insurance business rose as a rebound in reinsurance results offset sharp declines at the auto insurer Geico." Id.
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