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Notes from Buffett's meeting with students on March 11, 2011


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Very interesting, I think it's the first time that he commented on a windfall profit tax and on the odds for a pay out on the index puts:


If oil prices have a sustained increase, there will be a windfall profits tax in the U.S.  Therefore, higher oil prices are not a signal to buy oil stocks.


Berkshire sold equity puts due in 15 – 20 years. They were in four different indices around the world.  It was an insurance type transaction and they were sold on an uncollateralized basis.  Berkshire did not want to receive calls for collateral along the way.  He made the judgment that the odds were about 80% that Berkshire would not have to pay out anything.  This looked good then and it still looks good now.

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