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Tuesday, May 17, 2005

Everybody Makes Mistakes

Even Warren Buffett:
The stubbornly resilient dollar has cost Warren Buffett a lot of money this year and has disappointed many other investors who thought that a weaker dollar would be their friend.

Buffett's bet against the dollar resulted in a $307 million loss for his company, Berkshire Hathaway, in the first quarter.
I was quite surprised to hear he had bet so heavily against the dollar. As a hedge I would understand it, but as speculation it surprised me. The dollar could certainly go lower from here relative to the Euro, but I don't think it's a great bet with the weak economic conditions in Europe and tighter monetary policy in the United States. But we'll see.

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