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| Buffett firm loses $1.5 bn in Q1 as asset values tumble |
| AFP/PTI / Washington May 09, 2009, 12:40 IST |
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Warren Buffett's investment firm Berkshire Hathaway said it lost $ 1.5 billion in the first quarter amid market turmoil as the value of its assets fell by $ 6.1 billion. The investment company controlled by Buffett, the world's second richest person, took a hit from its insurance holdings and a loss as it sold a big stake in oil giant ConocoPhillips.
Berkshire said it set aside a reserve of $ 3.7 billion dollars for potential losses from insurance firms that offer credit default swaps, which insure against a default of bonds or other investments. The company has big stakes in General Re, a reinsurance firm, as well as US insurer GEICO. It also has stakes in the energy sector and Washington Post newspaper.
In the past year, it acquired stakes in investment bank Goldman Sachs and conglomerate General Electric as well as gum maker Wrigley and the insurer Swiss Re. Last month, ratings agency Moody's Investors Service downgraded the "AAA" rating the billionaire investor's Berkshire Hathaway, citing damage from falling stocks on its insurance business.
The firm posted a net profit of $ 4.99 billion for 2008, despite a deepening US recession and a global economic and financial crisis. Its assets, however, have lost nearly 10 per cent of their value, a performance unusually weak for Buffett, known as the "Oracle of Omaha" for his astute investment decisions.
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