Investment author Jon Markman says in his Nov. 19 “Trader’s Advantage” newsletter that the losses Warren Buffett and Berkshire Hathaway have recently incurred because of the plummeting market may be only the start of their problems. “If you want to talk about problems that are not fully discounted by the market yet, let me just throw one bombshell out there. … What if Berkshire Hathaway, the most respected insurance company in the world, were to suffer a large loss on derivatives, much like American International Group did?” Markman, a former financial reporter and columnist who wrote for the L.A. Times, CNBC, and MSN Money, asks.

“The details are a little fuzzy,” he continues, “so I need to do some more research, but it’s beginning to look like BRK chief Warren Buffett might have made a wrong-way directional bet on a long-term advance in the U.S. and foreign stock markets last year that could end up costing his firm a ton — as much as $20 billion by one estimate. His play, called “naked puts” in the trade, may have tangled up Goldman Sachs as well, which could be one reason that the two stocks are plunging in tandem this week like skydivers caught in each others’ nets. A derivatives loss of more than $10 billion, if it were to occur, would not sink Berkshire, but it would certainly tarnish Buffett’s reputation and, as a result, would result in a cut of the super-premium valuation that investors put on the company.”