(Updates with comments on real investment, analyst comment)
NEW YORK Oct 18 Billionaire investor Warren
Buffett said on Thursday he has been buying the Brazilian real
currency, noting that it has doubled in the last five years
against the dollar.
Buffett, who is the biggest shareholder of insurance and
investment company Berkshire Hathaway Inc (BRKa.N)(BRKb.N),
disclosed the stake in an interview on Fox Business Network.
"It's quite unlikely that if you had told me 10 years ago
that I would buy the Brazilian real, I would have thought you
were crazy," Buffett said.
"In the last five years, the Brazilian currency, in terms
of the American currency, has doubled in value," he added.
Buffett once had a bet of more than $21 billion against the
U.S. dollar amid concern over mounting U.S. trade and current
He pared most of that stake. In May, at Berkshire's annual
meeting in Omaha, Nebraska, Buffett told shareholders that
Berkshire was betting on one currency, and that it would
"The surprise is that Buffett made one concentrated large
currency bet in an emerging market that may not always be able
to cope with his scale on one of those notorious days when the
exit door gets clogged," said Alan Ruskin, chief international
strategist with RBS Greenwich Capital, in a research note.
Ruskin added that if Buffett made the Brazilian bet around
the first quarter and early in the second quarter, he stood to
earn a nearly 15 percent return.
At a dinner in Toronto last week, Buffett said it was "very
unsettling" that Brazil is now playing a role in supporting the
faltering U.S. dollar with its purchases of U.S. Treasuries,
the Toronto Star reported on Oct. 13.
Brazil's action would hurt Buffett's real investment
because Brazil is trying to weaken its currency and increase
the competitiveness of its exports.
The real rose to a seven-year high on Thursday to 1.788 per
U.S. dollar after its central bank left interest rates
unchanged when investors were expecting a cut.
(Reporting by Jonathan Stempel, Kevin Plumberg and Chris