To The Moon

“Indeed, at Berkshire, I sometimes engage in large-scale derivatives transactions in order to facilitate certain investment strategies.” Warren Buffett That’s right, Warren Buffett is a big user of these weapons of mass destruction. Jest aside, options can be a great tool to complement investing when used appropriately. Buffett’s Thoughts on Options In Berkshire’s 2008 and 2010 annual letter, after highlighting the dangers of derivatives, Buffett explained in detail why he uses options to generate float for investing: “Both Charlie and I believe that Black-Scholes produces wildly inappropriate values when applied to long-dated options.We put our money where our mouth was by entering into our equity put contracts. By doing so, we implicitly asserted that the Black-Scholes calculations use