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Author: stillwater9999 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 217070  
Subject: Buffett and High Yield Bonds Date: 12/30/2008 1:14 PM
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In late 2007 Buffett bought $2 B of TXU high yield bonds, but at the time he made the statement that this was not an overall endorsement of "junk bonds".

He has effectively made derivative bets that certain junk bonds will not default.

"Derivatives- Berkshire Hathaway owns derivatives contracts that require it to pay up if certain junk bonds default. They expire from 2009 to 2013. According to the company’s latest annual report, the company collected $3.2 billion in premiums on these contracts last year and paid $472 million in losses."

In the past (2002) he has also been known to have taken a large position in high yield bonds in lieu of stocks.

Just wondering if anyone has seen any further recent evidence of Buffett/Berkshire buying high yield bonds.

I recently took a small/medium position in a fund investing largely in these securities (high yield corporates).

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