Berkshire Hathaway Inc. said fourth- quarter profit fell 30% on smaller gains from Warren Buffett's portfolio of derivatives. Net income declined to $3.05 billion, or $1,846 a share, from $4.38 billion, or $2,656, a year earlier, Omaha, Nebraska-based Berkshire said on Sunday in its annual report. Buffett, Berkshire's chairman and chief executive officer, is investing in stocks and acquisitions as operating units generate cash. Derivatives bets, made in prior years on long- term gains in stocks and the solvency of borrowers, produced more than $2 billion of profit in the fourth quarter of 2010. "These are contracts that don't expire for another 10 or 15 years and might fluctuate a lot every quarter," said David Kass, a professor at the University of Maryland's Robert H. Smith School of Business. Buffett is "not really bothered by the volatility short term," said Kass, in an interview before results were released. Berkshire has slumped 4% in New York in the last 12 months, compared with a gain of 4.6% for the Standard & Poor's 500 Index.
Source: Economic Times
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