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Buffett Jumps in Where Others Fear to Tread

Berkshire Hathaway starts underwriting terrorism policies--and investors approve

Warren E. Buffett has seen the future of America's security, and it is a scary sight indeed. Buffett, chairman and CEO of Berkshire Hathaway Inc. (BRK ), made headlines at his company's annual meeting in May by predicting that terrorists one day will detonate a nuclear bomb on American soil. "It will happen," he said.

Despite his dire prophecy, Buffett was in exceptionally good cheer throughout his shareholder weekend. So extreme a disconnect between message and mood would be unseemly in a government official. But Buffett is a businessman, and he believes that his company is well-positioned to profit from the chaotic post-September 11 market in terrorism insurance. "We're selling more terrorism coverage than anybody," he told his investors, "but it does not endanger Berkshire Hathaway."