Buffett's profits at a blow-out 62 per cent

Kowabunga! Berkshire Hathaway, the investment group run by Warren Buffett, the multi-billionaire, saw its profits soar 62 per cent in the second quarter of the year - and would have recorded even higher gains were it not for a mistimed bet on the dollar.

Net income at the group climbed to $2.35bn (£1.2bn) from $1.45bn last year, boosted by rising US interest rates and strong growth in its reinsurance business. But Berkshire slashed its exposure to forward currency contracts by $4.2bn during the quarter to $1.2bn, just before the dollar began its steepest decline in 18 months. The dollar index fell 5.1 per cent over the quarter.

Buffett has been betting since 2002 that the US current account deficit would hurt the dollar and made gains of almost $3bn in the first three years. In the first half of this year Buffett's bet against the dollar made him $238m, compared with a loss of $926m last year. But only $87m of that came in the second quarter, after much of the position had been unwound.

Analysts described the results as a "blow-out quarter"…….

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/08/06/cnbuff06.xml