Warren Buffett on the Economy

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Macroeconomics

For you Warren Buffett fans out there, I find it interesting to watch his comments on just about anything. Here are a few from recent days which you may find interesting. According to Forbes, Buffett “went vastly long last year” on several stock market index contracts including the British, European, Japanese and US markets. He made his money by selling derivatives. In addition, Buffett is specifically looking for global opportunities. His first overseas acquisition was ISCAR Metalworking and he continues to look for additional opportunities in Europe, China, Israel and the UK. (This seems counter-intuitive, given where the US dollar is now, but then again, I’m not the richest man in the world). What else does wise Warren have to say? He thinks “the worst of the crisis in Wall Street is over,” according to Bloomberg Television. However, he believes the US dollar will continue to weaken but there is “no need to hedge” against currency risk (he made that comment with regard to buying large companies). I think it is safe to say that anybody in the US who is buying anything from Europe, the UK, China, India etc. ought to seriously evaluate currency hedging strategies. It will be interesting indeed to see what happens when the credit crunch starts to ease.

–Lisa Reisman

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