Buffet sticks to guns on greenback in spite of loss

OMAHA - Berkshire Hathaway chairman Warren Buffett has maintained a more than US$21 billion ($28.6 billion) bet against the greenback even after it cost the insurance and investment company about US$310 million in the first quarter.

Buffett, who has been betting against the dollar since 2002, told the Berkshire annual meeting that the company kept slightly more than US$21 billion in foreign currency forward contracts through the first quarter even as the US dollar rose 4 per cent against other currencies.

He said he would buy more contracts if it were not for the skepticism of vice-chairman Charles Munger. "Charlie is less enthusiastic about our foreign currency position than I am," Buffett told shareholders.

"I might have somewhat more if I didn't know I'd have him sitting next to me here next year."

Buffett, 74, is making the US dollar wager on concern that widening American trade and budget deficits will erode its value. The New York Board of Trade's dollar index, which measures the US dollar against six other currencies, fell 7.5 per cent in the fourth quarter, leading to a US$1.63 billion gain for Berkshire.

Buffett also said the company would be announcing an insurance acquisition of almost US$1 billion in the next few weeks.

Berkshire was also set to announce first-quarter profits before tax had risen 24 per cent or US$400 million compared with the same period last year.

- BLOOMBERG