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Casual Articles - Buffett's Big Bet
One of the biggest complaints building owners have with their cleaning services is poor dusting. Inadequate dusting can be one of the factors leading to poor indoor air quality. The Environmental Protection Agency (EPA) lists poor indoor air quality as the fourth largest environmental threat to our country. The American Lung Association also points out that heating, cooling and ventilation systems are often sources of biological substances such as dust, mold, pollen, and dust mites.These substances are inhaled by occupants, and can lead to breathing problems. Dust particl
Starting a carpet cleaning business is one of the most affordable small businesses opportunities. Many homes need to have carpeting done at least at least once a year.Some homes have their carpets cleaned several times a year. This is because they have small children who tend to drop things or they have a pet. Another reason people often hire someone to come in and clean their carpeting is because of allergens. Dust and pet dander can become lodged within the fibers of carpeting and although regular vacuuming helps the problem, having the carpets cleaned really attacks th
“Berkshire is also subject to equity price risk with respect to certain long duration equity index put contracts. Berkshire’s maximum exposure with respect to such contracts is approximately $14 billion at December 31, 2005. These contracts generally expire 15 to 20 years from inception. Outstanding contracts at December 31, 2005, have been written on four major equity indexes including three foreign. Berkshire’s potential exposure with respect to these contracts is directly correlated to the movement of the underlying stock index between contract inception date and expiration. Thus, if the overall value at December 31, 2005 of the underlying indices decline 30%, Berkshire would incur a pre-tax loss of approximately $900 million.” Top 10 Scams for 2001
Excerpt from Internet ScamBusters (tm) The #1 Publication on Internet FraudScams on the Internet are growing -- and with the vast selection, it was hard to only choose ten. We've tried to soften this list with a bit of humor. But please don't let the humor make these scams seem any less serious than they really are.Some of these scams are very dangerous.A word of warning, so to speak. These aren't ranked by dollars lost or people scammed. There's nothing scientific about the list. It's just the ten scams that we find the most disturbing.You'll note therkshire Hathaway’s annual report:
“Berkshire is also subject to equity price risk with respect to certain long duration equity index put contracts. Berkshire’s maximum exposure with respect to such contracts is approximately $14 billion at December 31, 2005. These contracts generally expire 15 to 20 years from inception. Outstanding contracts at December 31, 2005, have been written on four major equity indexes including three foreign. Berkshire’s potential exposure with respect to these contracts is directly correlated to the movement of the underlying stock index between contract inception date and expiration. Thus, if the overall value at December 31, 2005 of the underlying indices decline 30%, Berkshire would incur a pre-tax loss of approximately $900 million.” Thinking of Using St. Vincent and Grenadines as an Offshore Jurisdiction?
This is another example of a good jurisdiction gone bad. Until 2002, SVG called for strict privacy under the Confidential Relationship Preservation (International Finance) Act, 1996, but this was repealed and replaced by the Exchange of Information Act in 2002. This new Act calls for the exchange or disclosure of information between local regulators and foreign regulatory/government officials. Not good, quite bad actually since this will alow for wholesale fishing expeditions to see if there perhaps some sort of tax violation and all privacy is gone.A Financial Intelligen to such contracts is approximately $14 billion at December 31, 2005. These contracts generally expire 15 to 20 years from inception. Outstanding contracts at December 31, 2005, have been written on four major equity indexes including three foreign. Berkshire’s potential exposure with respect to these contracts is directly correlated to the movement of the underlying stock index between contract inception date and expiration. Thus, if the overall value at December 31, 2005 of the underlying indices decline 30%, Berkshire would incur a pre-tax loss of approximately $900 million.” Public Relations for State Gambling Boards
Many citizens are quite angry at the state gambling boards in those states that allow gambling. They say that casinos are able to get away with murder and build giant projects and break all the rules of the city's codes. These same people say that many times environmental impact reports are looked over and cast aside because the casino has so much clout, lobbying dollars and is so ingrained in politics that they cannot be stopped.It is because of the mistrust of government and the gambling boards as well as the huge amounts of money that gambling casinos generate that peoon four major equity indexes including three foreign. Berkshire’s potential exposure with respect to these contracts is directly correlated to the movement of the underlying stock index between contract inception date and expiration. Thus, if the overall value at December 31, 2005 of the underlying indices decline 30%, Berkshire would incur a pre-tax loss of approximately $900 million.” Medical Billing and Practice Management Software: Luxury or Necessity?
Many of us remember the time when you showed up at the doctor’s office and he took care of you right away and told you to just pay when you are ready or that he would settle up with you at some later time. Those days ended when medical cost rose to the unbelievably high level they are now. It is for this reason many of us have taken to using insurance and doctors have been forced to fight for their hard earned dollar from the insurance companies. To the majority of the public the use and for that matter the need for medical practice software and medical billing software is invntract inception date and expiration. Thus, if the overall value at December 31, 2005 of the underlying indices decline 30%, Berkshire would incur a pre-tax loss of approximately $900 million.”
It’s impossible to evaluate what exactly this means for Berkshire or what it tells us about Buffett’s thinking without knowing more details. But, there are a few things I’d suggest you consider when reading the news reports.
First, the $14 billion headline number makes this bet look larger than it really is. According to the above disclosure, a 30% decline in the underlying indices would only create a $900 million pre-tax loss. One article stated that a decline in the indexes to zero was highly unlikely given historical trends. It’s a lot more than highly unlikely. But, since we don’t know the details of Berkshire’s exposure, we can’t evaluate the real risk of a very large loss.
A lot of these news stories have called Berkshire’s “long duration equity index
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