Buffett's Latest Far-Flung Investments - TheStreet

Buffett's Latest Far-Flung Investments

The Oracle's Berkshire Hathaway is setting up a new venture in India and recently won a wager on the World Cup.
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NEW YORK (TheStreet) -- Warren Buffett managed to make headlines this week with his plans to enter the Indian insurance industry as well as his interesting wager on the outcome of the 2010 FIFA World Cup.

Throughout these historically tumultuous times, Warren Buffett has maintained an optimistic outlook towards the U.S.'s future as an economic superpower.

In a 2008

New York Times

op-ed piece famously titled, "Buy American. I Am," the investor said overwhelming fear in the markets had driven down stock prices, making U.S. equities attractive.

In recent years, he has followed up this bullish rhetoric with action, saving

Goldman Sachs

(GS) - Get Report

from the brink of collapse, betting on the recovery of

General Electric

(GE) - Get Report

, and making an all-in bet on the future of the U.S. economy by buying up the remaining shares of Burlington Northern Santa Fe Railroad.

Other members of the global economy, however, have not gone unnoticed. The Oracle of Omaha currently holds positions in a number of international companies including South Korean steelmaker

Posco

(PKX) - Get Report

and British supermarket retailer

Tesco

.

One of Buffett's most popular non-U.S. investments is his stake in the Chinese battery maker-turned-electric car company,

BYD

. Since first buying 10% of the company's shares in fall 2008 the company has taken off, earning the investor a particularly impressive return.

This week, the

Economic Times

uncovered Buffett's plans to expand his international reach even further with a new venture into India's markets. At the start of the week, the magazine reported that

Berkshire Hathaway

(BRK.A) - Get Report

had taken an interest in the emerging nation, and is planning to set up a subsidiary designed to sell auto insurance policies. In the U.S., Berkshire sells auto insurance through its Geico branch.

For now, Buffett appears reserved in his approach to enter the Indian markets. However, it will be interesting to see if this new venture leads to bigger moves in the future.

Don't Miss Warren Buffett Is a Hypocrite

Other Bets in Sports

Since the start of June, people around the world have their eyes fixated on the 2010 FIFA World Cup in South Africa in hopes of seeing their home nation's team take home the gold. Ajit Jain, the head of one of Berkshire Hathaway's insurance units, has watched the tournament for other reasons.

Months prior to the tournament, the unit under Jain's watch sold an insurance contract to a client which stated that, if France came out of the competition on top, Buffett's firm would be required to pay out $30 million.

On Tuesday, Berkshire Hathaway learned that it has won its bet, thereby avoiding the multi-million dollar loss, thanks to Les Bleus' poor performance on the pitch. The 1998 champions were officially knocked out of competition after losing to host nation South Africa.

Berkshire Hathaway is not a sports betting house. However, this was not the first time Buffett's firm has sold a guarantee against an unusual event. In

Bloomberg

this week, readers were reminded of other interesting Berkshire deals, including one in which the firm insured against the cancellation of a college basketball tournament.

Buffett's bet on the World Cup outcome indicates yet another instance where the investor has turned to derivatives as a way to make money. Although in the past Buffett has labeled these instruments as "financial weapons of mass destruction" in recent months, he has fallen under a considerably amount of scrutiny for Berkshire Hathaway's nearly $70 billion derivative portfolio.

-- Written by Don Dion in Williamstown, Mass.

At the time of publication, Dion Money Management did not own any equities mentioned.

Don Dion is president and founder of

Dion Money Management

, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.