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Banking, finance, and taxes

Buffett Heads To Switzerland (BRK-A)

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By Douglas A. McIntyre Updated Published
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Buffett_imageWarren Buffett and Berkshire Hathaway Inc. (NYSE: BRK-A) have been out making fairly large bets in recent months.  It seems that distressed prices are tempting the Oracle of Omaha.  But what is interesting is that Mr. Buffett has invested roughly $2.5 billion into diversified Swiss Reinsurance Co. Ltd.

This is one of the top global brands in reinsurance.  But the topbrands are not immune.  The company claimed strong underwriting andhedging programs for its portfolio, but mark to market losses put the company in the red for 2008.

The company is dropping its financial market activities and willrefocus on asset management to bolster its books.  Swiss Re has alsoentered into an adverse development pact with Berkshire Hathaway on itsProperty & Casualty reserves, and that amount looks to be up to 5billion Swiss Francs.  Swiss Re also noted that its board isconsidering another 2 billion Swiss Francs in a capital raise and isrecommending a cut to its dividend.

Warren Buffett is investing in a 140-year brand and the company issticking to its long term goals of 10% earnings growth and 14% returnon equity.  Whether or not those are attained will be found out as timepasses.  The mark to market losses may continue for some time andit seems no one is immune from the financial fallout.  And reinsuranceprofits, those are mostly up to mother nature.

Jon C. Ogg
February 5, 2009

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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