gk today Over the past few days, there have been several stories written about Warren Buffetts $14 billion bet on global stock markets. I believe these stories are all in reference to this excerpt form Berkshire Hathaways annual report: “Berkshire is also subject to equity price risk with respect to certain long duration equity index put contracts. Berkshires maximum exposure with respect to such contracts is approximately $14 billion at December 31, 2005. gk in hindi 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. Berkshires 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.” gk hindi
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