Buffett Winding Down Derivatives

Warren Buffett is facing the expiration of equity-index put options that the Berkshire Hathaway CEO initiated between 2004 and 2008 “to bet that stock prices would rise in the long run”, according to a recent article in Bloomberg. The options, tied to four major equity indexes, are reported to have added a total of $2.4 billion in earnings from 2008 to 2017. They began expiring in June, and the last of them will unwind by… Read More

Mobius Sees Derivatives Leading to Another Crisis

Templeton Asset Management’s Mark Mobius says the continuing use and growth of derivatives in financial markets is going to lead to another financial crisis. “There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius says, according to Bloomberg. “Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.” Mobius says, however, that crises mean opportunity. “With… Read More