Pursuits
Buffett Says Derivatives ‘Time Bomb’ May Elude Auditors' Reviews
- Concentrated derivative bets are a `time bomb,' he warns
- Berkshire invested in BofA, Wells Fargo but avoids most banks
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Warren Buffett said banks’ holdings of derivatives make it unattractive to invest in most large financial firms and that the contracts still contain hidden risks.
“Some of these things get so complicated that they’re very hard to evaluate,” Buffett said Saturday during the annual meeting of his Berkshire Hathaway Inc. in Omaha, Nebraska. “They can be extraordinarily hard to mark,” he said. “The auditors, I don’t think, are necessarily capable of holding that behavior in check.”