23rd September 2019

If Warren Buffet was a fund picker, would he pick our fund?

We would all like a bit of Warren Buffet’s stardust to rub off on us. The Fund uses a similar strategy to the Sage of Omaha. We have been doing some research into one of the strategies that Berkshire Hathaway uses; from 2006 onwards, they have been a massive seller of put options. Because Berkshire Hathaway are who they are, they were able to sell vast amounts (almost £40bn) of naked at the money puts to the banks with no margin requirements. We implement the same strategy in a different way. We buy defined return investments. It’s the short put embedded in these notes that drives the high payoff that they offer.

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