Warren Buffett stocks up on foreign government bonds

Warren Buffett stocks up on foreign government bonds

Warren Buffett has increased his holdings of foreign government bonds as the billionaire investor's spending on equities fell to its lowest in more than five years.

Published: 8:23AM BST 10 Aug 2009


Mr Buffett's Berkshire Hathaway owned about $11.1bn in foreign government bonds in its insurance units at the end of June, up from $9.6bn three months months earlier, Berkshire said in a regulatory filing, according to a report on Bloomberg.

In the second quarter, Mr Buffett spent $2.6bn on bonds compared with $350m on shares. The billionaire investor, whose views on financial markets are closely followed around the world, has benefitted as equity markets rallied over the past three months.


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“Some of the normal places he’s gotten the cash to invest are just getting killed in the recession,” Gerald Martin, a finance professor at American University’s Kogod School of Business in Washington, told Bloomberg News.

“So he’s locking in these guaranteed returns, moving from the volatility of stocks to a steady stream of income that, in some cases, is almost at the return you normally get from the stock market.”

Mr Buffett booked a $4.1bn (£2.5bn) paper profit on the $5bn he invested in Goldman Sachs at the height of the financial crisis.

Known as the "Sage of Omaha" for his money-making ability, has made the return in one of the bleakest periods for investing in decades, benefiting from the recent uptick in Goldman's share price.


http://www.telegraph.co.uk/finance/markets/6003042/Warren-Buffett-stocks-up-on-foreign-government-bonds.html