DislikedJust a note that Warren Buffet was long on USD two years ago, just when it made a nose drive against all major currencies. He lost millions of dollars, along with Bill Gates, who was long USD with him. Of course they have enough money to lose several times over that. But my point is that Warren Buffet is not always right.Ignored
Warren Buffet believes that the U.S. dollar will lose value in the long run. He views the United States' expanding trade deficit as an alarming trend that will devalue the U.S. dollar and U.S. assets. As a result it is putting a larger portion of ownership of U.S. assets in the hands of foreigners. This induced Buffett to enter the foreign currency market for the first time in 2002. However, he substantially reduced his stake in 2005 as changing interest rates increased the costs of holding currency contracts. Buffett continues to be bearish on the dollar, and says he is looking to make acquisitions of companies which derive a substantial portion of their revenues from outside the United States. Buffett invested in PetroChina Company Limited and in a rare move, posted a commentary[17] on Berkshire Hathaway's website why he would not divest from the company despite calls from some activists to do so. (He did, however, sell this stake, apparently for purely financial reasons.)
2002: (72 years old)
- Buffett entered in $11 billion worth of forward contracts to deliver US dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion.
Trading is 80% Emotional, 20% Technical
