Blog > Investment Strategies > Blog article: Currency Trading with Warren Buffett: Save your profits from dollar devaluation
 | Email This Article Email This Article  | 

Currency Trading with Warren Buffett: Save your profits from dollar devaluation

Posted February 22, 2008

“Buffett should have had a second quarter loss in his company (Berkshire Hathaway). However, he reversed that loss into a US$412 million profit just from his currency gains.” — Sean Hyman

by Sean Hyman

Baltimore – (TFN): Warren Buffett has been deemed “the world’s greatest investor.” Why? He’s produced 30% returns on average for the previous 30 years. That’s not a bad track record at all. Of course you may know him as the United States’ second wealthiest man. Right now, he has a net worth of over US$40 billion.

However, five years ago, he noticed the dropping U.S. dollar was taking a toll on his portfolio. At that time, he only owned U.S. assets denominated in dollars…

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

With Only One Select Investment and Less Than $5,000 Dollars in Your Stock Account

You Can Play the Global Markets in Minutes

I’ll Tell you How - With No Excessive Fees… and No High Minimums.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Currency Trading with Warren Buffett: A new asset class to make another billion

So in 2002, he ventured into the world of currency trading. He diversified into various currencies around the world to hedge and protect his assets. Then Buffett realized that he could also profit from them by treating currencies as its own asset class.

In 2003, he increased his currency investing exposure. He bet US$21 billion against the dollar. This was huge for a guy like Buffett because he had a net worth of about US$43 billion at the time. He bet half of that against the buck.

In 2004, it just got better. Buffett should have had a second quarter loss in his company (Berkshire Hathaway). However, he reversed that loss into a US$412 million profit just from his currency gains. At the time, he was shorting the dollar in favor of the euro. Read on to learn what currencies Buffett is using to hedge his bets right now.

****Make sure you sign up for our FREE TFN News Feed for breaking news, special reports and new financial videos. You can pick your favorite reader. Or if you prefer, you can have the feed delivered to your email.


Related Articles


Posted by TFN-Privacy · Filed Under Investment Strategies 

Comments

close Reblog this comment
Powered by Disqus · Learn more
blog comments powered by Disqus